Executive Summary: Key Legal and Evidentiary Issues

• Priority of insurer for statutory accident benefits turned on whether the claimant was a “deemed named insured” under Gore Mutual’s policy via s. 3(7)(f)(i) of the Statutory Accident Benefits Schedule.
• Evidence about the Silverado’s actual use (farm commuting, hay transport, parts pickup) versus its declared “pleasure/commute” use was central to finding the truck was a commercial “company car” regularly used for Korel Farms’ business.
• The arbitrator’s treatment of equivocal examination-under-oath testimony from the claimant, contrasted with objective records such as mileage and tax treatment of vehicle expenses, was attacked but ultimately upheld.
• Interpretation of “corporation or other entity” and “other entity” (including a family unit or informal joint venture) under s. 3(7)(f)(i) was pivotal in deciding whether the Silverado was “made available” to the claimant by an entity rather than by an individual.
• Application of the appellate standard of review—correctness for pure questions of law and palpable and overriding error for mixed fact and law—framed the court’s deference to the arbitrator’s factual and mixed findings.
• Arguments attempting to limit the deeming provision based on earlier authority (e.g., Axa v. Markel) were rejected in favour of later jurisprudence (e.g., Kingsway v. Gore) emphasizing that the insurer of the regularly-used vehicle should bear primary accident benefits responsibility.

Background and parties

This case arises from a priority dispute between two automobile insurers over which company must pay statutory accident benefits to an injured driver. The appellant, Gore Mutual Insurance Company, insured a 2004 Chevrolet Silverado truck owned by the claimant’s elderly mother, Zofia Krolczyk. The respondent, Hamilton Township Mutual Insurance Company (HTM), insured vehicles co-owned by the claimant, John Krolczyk, and his wife, and also insured a Ford F-250 truck used in the operations of Korel Farms Inc., where the claimant was a director, manager and vice-president. The dispute was first determined by an arbitrator, who found that Gore Mutual was the priority insurer by operation of the Insurance Act and the Statutory Accident Benefits Schedule (SABS). Gore Mutual appealed to the Ontario Superior Court of Justice.

Facts of the accident and vehicle ownership

The claimant was injured on 11 October 2020 in a head-on collision while driving the Silverado. At that time, the truck was owned by his mother, insured with Gore Mutual, and used by him as the principal user. The Krolczyk family operated two farms: a crops farm at the Baltimore property, co-owned by the claimant, his wife, and his mother, where Ms. Krolczyk lived; and a cattle farm at the Cobourg property, owned by the claimant and his wife, where they resided. The farms were approximately 15 to 20 kilometres apart. The Silverado had originally been purchased as a commercial vehicle by the claimant’s late father in 2005 and transferred to Ms. Krolczyk after his death in 2016. When Ms. Krolczyk ceased driving in 2014 because she no longer had a licence, the claimant began using the Silverado and later obtained commercial plates for it, although the vehicle remained registered in his mother’s name and was classified on the Gore Mutual policy as a “pleasure or commute” vehicle.

Use of the Silverado and farming operations

In practice, the Silverado was heavily integrated into the family’s farming enterprise. The claimant used it daily to travel between the Baltimore and Cobourg farms as part of his role managing Korel Farms Inc. The truck was used to transport bales of hay from the crops farm to feed cattle at the Cobourg farm, and occasionally to retrieve parts for farm equipment and perform other farm-related tasks. Evidence such as the VIN mileage history showed usage inconsistent with a short-distance pleasure or commute vehicle. Farm-related expenses for fuel, maintenance, and repairs on the Silverado were claimed by Korel Farms as business expenses for tax purposes. While the claimant testified that he also used the Silverado to drive his mother to medical appointments and run personal errands, he indicated that he relied more on his personally owned Nissan Murano and Chrysler Sebring for personal activities, reinforcing the characterization of the Silverado as predominantly a work vehicle for the farming operations.

Insurance arrangements and statutory framework

The statutory framework centres on Ontario’s Insurance Act and the Statutory Accident Benefits Schedule. Under s. 268(5.2) of the Insurance Act and s. 3(7)(f)(i) of the SABS, an individual can be deemed to be a named insured under the policy insuring a vehicle if, at the time of the accident, the vehicle is being made available for that individual’s “regular use” by a corporation, partnership, sole proprietorship, unincorporated association, or “other entity.” This deeming rule matters because it determines which insurer must respond first to an accident benefits claim when multiple policies might apply. The claimant applied to HTM for statutory accident benefits because HTM insured the vehicles he co-owned with his wife and the Ford F-250 used for Korel Farms’ operations. HTM, however, served notice disputing priority and initiated arbitration, taking the position that Gore Mutual, as the insurer of the Silverado regularly used in the farm business, was the priority insurer under the deeming provision.

The arbitration decision on regular use and “other entity”

The arbitrator considered written submissions, documentary evidence, transcripts of examinations under oath, and oral argument. The core issues were whether the Silverado was being made available for the claimant’s “regular use,” and whether it was made available by a qualifying entity such as a corporation or “other entity” within the meaning of s. 3(7)(f)(i) of the SABS. The arbitrator found that the claimant used the Silverado daily to commute between the two farms and to carry out farming tasks, including frequent transport of hay bales for the cattle. This pattern was characterized as periodic and routine, not irregular or out of the ordinary, satisfying the requirement of “regular use.” On the second limb of the test, the arbitrator held that the Silverado was made available to the claimant in his capacity as general manager of Korel Farms. Although ownership remained with Ms. Krolczyk, the arbitrator concluded on the “totality of the evidence” that she effectively provided the truck in her capacity as an owner and officer of Korel Farms, not merely as a private individual, and that the claimant, as vice-president and general manager, had control over how the vehicle was used. The arbitrator also found, in the alternative, that the vehicle was provided by an “other entity” in the form of a family unit or informal joint venture operating the two farms. On either analysis, s. 3(7)(f)(i) applied, making the claimant a deemed named insured under the Gore Mutual policy and rendering Gore Mutual the priority insurer.

Appeal grounds and standard of review

Gore Mutual appealed on two main grounds. First, it argued that the arbitrator misdirected himself on the onus of proof, effectively shifting the burden away from HTM. Second, it claimed the arbitrator erred in finding that the Silverado was made available to the claimant by a corporation or other entity, contending instead that it remained simply his mother’s personal vehicle made available by her as an individual. Gore Mutual also asserted that the arbitrator’s factual findings conflicted with the claimant’s own examination-under-oath statements, particularly his description of the Silverado as his mother’s car that he used mostly for personal purposes with only occasional business-related tasks. Both parties accepted that the applicable standard of review was the conventional appellate standard: correctness on questions of law, and palpable and overriding error for questions of fact and mixed fact and law, consistent with Northridge General Insurance Corp. v. Jevco Insurance Co.

Court’s analysis of onus, evidence, and factual findings

The Superior Court rejected the contention that the arbitrator had reversed or ignored the onus of proof. The arbitrator had expressly cited prior authority confirming that the onus lay on HTM, and the judge found that he weighed the evidence as a whole before concluding that HTM met its burden on a balance of probabilities. On the evidentiary record, the court accepted that the arbitrator was entitled to treat the claimant’s testimony as “equivocal” and to rely on objective indicators—such as high annual mileage, commercial plating, the tax treatment of expenses, and the claimant’s admission of daily farm-related use—to determine that the Silverado’s dominant character was a business vehicle used regularly for Korel Farms. The court underscored that appeals on mixed questions of fact and law require deference; the mere possibility of a different factual inference is not enough to overturn an award absent a clear, outcome-determinative error.

Interpretation of ‘corporation or other entity’ and policy rationale

On the legal interpretation of s. 3(7)(f)(i), Gore Mutual relied on older arbitral authority suggesting that when an individual owner simply permits a business to use a vehicle, the deeming provision should not be triggered because the car is made available by the individual, not by the corporation. The court found this out of step with later jurisprudence, including the Court of Appeal’s decision in Kingsway General Insurance Co. v. Gore Mutual Insurance Co., which emphasized that the purpose of the provision is to treat the regular user of a vehicle made available by an entity as a named insured under that vehicle’s policy, thus placing primary responsibility for accident benefits on the insurer of the vehicle most closely connected with the claimant’s regular use. The judge held that the arbitrator reasonably concluded that Korel Farms, acting through its principals, effectively made the Silverado available to the claimant for regular business use. The court also endorsed the arbitrator’s reliance on authorities holding that “other entity” can include a family unit or informal joint venture where a small number of people combine resources and vehicles to pursue shared objectives, even without a formal commercial structure. In this case, the family’s coordinated management of the two farms, the mother’s ownership of one property, and the claimant’s operational control supported treating the family farming enterprise as an “other entity” for the purposes of the deeming rule.

Outcome and monetary consequences

The court concluded that the arbitrator had committed no reviewable error in his application of s. 3(7)(f)(i) or in his assessment of the evidence. It upheld the findings that the Silverado was regularly used in a commercial enterprise, that it functioned as a “company car,” and that it was made available to the claimant either by Korel Farms as a corporation or by a qualifying “other entity” comprised of the family farming operation. As a result, the claimant was properly deemed a named insured under the Gore Mutual policy, and Gore Mutual remained the priority insurer for the claimant’s statutory accident benefits. The appeal was therefore dismissed. In terms of monetary relief, the decision did not award damages for the accident itself—those arise under the statutory benefits regime outside this appeal—but it did address costs. The successful party, Hamilton Township Mutual Insurance Company, received a costs award of $6,500 pursuant to the parties’ agreement, and no further quantum of damages or benefits payable to the claimant was determined in this judgment.