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Decision highlights how spouse is defined

Focus on Insurance Law
|Written By Shannon Kari
Decision highlights how spouse is defined
Justin Necpal says he thinks the Superior Court of Justice was correct to quash the decision of an arbitrator, after a woman sought benefits through her male partner’s policy.

The definition of spouse may have evolved and expanded in the family law context, but that does not affect how it should be interpreted in the Insurance Act, an Ontario Superior Court of Justice judge has concluded.

“The fact that both statutes both use the word ‘spouse’ or ‘conjugal relationship’ does not mean that they have the same contextualized meaning,” stated Justice Edward Morgan in his decision in Royal and Sun Alliance v. Desjardins.

The findings of an arbitrator were quashed on judicial review in litigation over which insurer was a higher priority to pay the accident benefit claims of a woman injured in a car accident in the parking lot of where she worked.

The woman sought benefits from Royal and Sun Alliance Insurance Company of Canada through her male partner’s policy. The court heard that the couple were in a relationship for five years but maintained separate residences and finances. It was about one year before the accident that they actually moved in together.

A “spouse” under the Insurance Act is defined as “two persons” who are married to each other or have lived together in a conjugal relationship outside marriage for a period of not less than three years.

 A relationship of “some permanence” — such as being the joint parents of a child — also qualifies under the definition of spouse.

In her decision, the arbitrator examined family law definitions of spouse and used “a more global or unitary” approach, noted Morgan, which the Superior Court judge found to be an error.

Some of the cases included those related to benefits for same-sex couples, such as the Supreme Court of Canada’s 1999 decision in M. v. H.

“Much of this, the court indicated, turns on how the couple is socially perceived — especially in the context of a same-sex relationship which was at issue in M v. H — as different types of relationships may be subject to varying social perceptions,” Morgan wrote in his decision issued July 9.

“The arbitrator embraced a body of Family Law Act cases that eschew a literal interpretation of the phrase ‘live together in a conjugal relationship,’ in favour of an interpretation that plugs that phrase into the distinctive policy context of spousal support. She then applied those cases to the Insurance Act without explaining why a policy interpretation from family law should apply there,” stated Morgan.

He added that the Ontario Court of Appeal found in a ruling two decades ago that the meaning of spouse is not the same in the two statutes.

Lawyers for both parties were unavailable for comment.

Desjardins did not file an appeal of the Superior Court ruling. After it was issued, however, it generated some legal commentary because the definition of spouse under the Insurance Act has not been explicitly addressed by the courts in 20 years.

Justin Necpal, a Toronto-based civil litigator, says he thinks the Superior Court was correct to quash the decision of the arbitrator.

“For policy reasons, there might be legitimate reasons to have a more narrow definition of spouse under the Insurance Act” than under the Family Law Act, says Necpal, who heads Necpal Litigation.

“The two pieces of legislation are directed at two very different purposes. It is not surprising they would have different definitions for spouse,” he notes.

If aspects of a term are not clearly defined, he says, looking to other statutes or areas of the law may be appropriate.

“But you don’t look at another act to find out what a defined term is. You can’t import another definition,” says Necpal.

The definition of spouse requires “two persons” who are not married to have lived together for at least three years, so it applies equally to same-sex and opposite-sex couples. “It [is] not discriminatory to require you to have to live together” to meet the definition, Necpal says.

Despite finding that the arbitrator erred in her ruling, the Superior Court judge concluded that the standard of review was reasonableness. 

“Even if the Arbitrator’s approach was wrong, was it unreasonable?” he asked.

Morgan found that it was unreasonable because of a lack of proper analysis and inconsistency with underlying legal principles.

“The arbitrator failed to articulate reasons why Family Law Act cases should apply to the Insurance Act other than to point to the literal similarity of the words used. There might be a reason to apply family law concepts to an insurance law context other than a coincidence of wording in the legislation, but the arbitrator did not provide one,” wrote Morgan.

“The outcome of the decision was to find persons who admittedly have not lived together for three years to have notionally lived together for three years,” he added.


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