Executive Summary: Key Legal and Evidentiary Issues

• Dispute over which insurer—Aviva, TD, or Sonnet—is liable for statutory accident benefits following a motorcycle accident.

• Central issue was whether the injured claimant, Tony, was principally financially dependent on his sister or parents.

• Arbitration applied the four-part Miller test for dependency, focusing on income, needs, duration, and self-support capacity.

• Arbitrator concluded that Tony was more than 51% dependent on his sister, the named insured under a Sonnet policy.

• Sonnet appealed on grounds of legal and factual error in the dependency analysis, particularly the application of the Miller test.

• The Superior Court upheld the arbitration decision, finding no error of law or palpable and overriding error in the arbitrator’s reasoning.

Facts and outcome of the case

Tony, a 25-year-old man, sustained catastrophic injuries in a 2018 motorcycle accident. The motorcycle was still insured under the seller’s TD General Insurance policy because legal title had not transferred. Tony lived with his parents and two sisters. The parents were insured by Aviva, while one sister, Sarah, held a Sonnet insurance policy. Tony sought statutory accident benefits (SABS), which Aviva paid under protest, later asserting that either TD or Sonnet should be the responsible insurer.

At arbitration, the key issue was whether Tony was a dependent and, if so, on whom. Under Ontario’s Insurance Act and SABS regulations, an individual is deemed insured under the policy of a person upon whom they are “principally dependent for financial support.” The arbitrator applied the Miller v. Safeco test, which involves assessing the amount, duration, and nature of support, and whether the individual had the capacity to be self-supporting.

Evidence showed Tony had no regular income or employment history. He performed odd jobs and lived at home without contributing to household expenses. His sister Sarah regularly gave him money, covered his credit card bills, and paid for shared household expenses like utilities and food. She earned $75,000 annually and contributed approximately $2,100 per month to household costs. His parents relied on government assistance (ODSP) and had limited means.

The arbitrator found that Tony did not earn enough to meet 51% of his needs and was thus principally dependent on Sarah. Therefore, Sonnet, as her insurer, was the priority insurer for the SABS. Sonnet appealed, arguing the arbitrator failed to properly apply the Miller test and erred in law by not quantifying dependency or accounting for potential sources of income like an old insurance payout.

The court rejected these arguments. It emphasized that appellate review of mixed fact and law applies a “palpable and overriding error” standard, a high threshold requiring obvious and outcome-altering mistakes. The court found the arbitrator had properly considered each element of the dependency test and made reasonable inferences based on the limited and inconsistent evidence. The arbitrator's conclusion that Tony was dependent on Sarah was logically supported by her financial contributions and his lack of self-sufficiency.

The appeal was dismissed. Sonnet remains responsible for paying Tony’s statutory accident benefits.