The Minister of Finance was successful in appealing a decision allowing an Ontario resident (“Young”) to collect no fault statutory accident benefits under a Fund created by the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41. The court held that Part VI of the Ontario Insurance Act did not apply as the accident occurred in New Mexico and Young’s insurance policy, purchased in New Mexico, did not need to comply with the mandatory coverage provisions of Ontario’s Compulsory Automobile Insurance Act.

Young v. Ontario (Minister of Finance), [2003] O.J. No. 4832

Young grew up in Toronto and attended Trent University in Peterborough. In April 1995, she moved to New Mexico to work as a veterinary nurse. While she was in New Mexico, she obtained a New Mexico driver’s licence and owned a pick-up truck that was registered and insured in New Mexico. Young did not obtain first party medical coverage. On February 10, 1996, Young was involved in a single vehicle accident and suffered catastrophic injuries that rendered her a quadriplegic. Young had no recourse against her own insurer and made application in Ontario to receive statutory accident benefits under the Fund created by the Motor Vehicle Accident Claims Act. On November 26, 1997, the Minister of Finance denied this application on the basis that the Fund was not required to make any payment with respect to accidents occurring outside Ontario and that Young was not entitled to such benefits because she was not ordinarily resident in Ontario when the accident occurred. Young was successful in an action brought pursuant to section 281 of the Insurance Act, R.S.O. 1990, c.I.8 and obtained a declaration that she was entitled to payment of the statutory accident benefits from the Fund. The trial judge found that sufficient factors existed to find that Young was not ordinarily resident outside of Ontario including the fact that Young maintained both an address at her parents’ home in Toronto and her Canadian Social Insurance. Young also considered her internship in New Mexico as temporary. The Minister of Finance appealed this decision.

The Court of Appeal refused to overturn the trial judge’s finding that Young was not ordinarily resident outside Ontario, holding that the trial judge made no “palpable and overriding error” in assessing the factors relating to Young’s connection with Ontario. However, the court overturned the trial judge’s decision with respect to the availability of statutory benefits under the Fund. The court noted that Part VI of the Ontario Insurance Act, which provides that all motor vehicle liability policies are deemed to provide for statutory accident benefits, did not apply to a contract providing insurance in respect of an automobile not required to be registered under the Highway Traffic Act, R.S.O. 1990, c. H.8. Extra-provincial or foreign vehicles are exempted from the requirement of Ontario registration but are required to have the mandatory insurance coverage prescribed by the Compulsory Automobile Insurance Act if driven in Ontario. In this case, Young’s vehicle did not need to be registered in Ontario, nor did Young’s insurance policy need to comply with the mandatory coverage provisions of the Compulsory Automobile Insurance Act as the vehicle was not being operated in Ontario. These findings, together with the fact that the motor vehicle accident did not occur in Ontario, led the court to hold that Part VI of the Insurance Act had no application to Young or her vehicle. The only way in which Young could qualify for Ontario Statutory Accident Benefits for an accident in New Mexico would have been if she were an insured person in respect of a particular liability policy issued in Ontario. In the result, the appeal by the Minister of Finance was allowed.

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