In Royal & SunAlliance Insurance v. Wawanesa Mutual Insurance Company, Superior Court Justice Frank Newbould has ruled that a loss transfer claim by one Ontario insurer against another, arising out of a car accident that took place in Vermont, is governed by Ontario law. In so finding, Justice Newbould rejected the submission of Royal & SunAlliance Insurance, that the claim should be governed by the lex loci delicti– the law of the place where the tort occurred.
Justice Newbould was hearing an appeal from the decision of an arbitrator. The arbitrator had also found for Wawanesa, upholding its right to pursue loss transfer against Royal for accident benefits paid to the driver of a heavy commercial vehicle who had been injured while driving through Vermont.
Royal had argued for the applicability of Vermont law because there is no right of loss transfer in that state. So, had that argument succeeded, Wawanesa would have had no right to be reimbursed by Royal for the accident benefits that it had paid out.
However, Newbould J. declined to apply the lex loci delicti of Vermont because he found that Wawanesa’s claim was not one in tort. Thus, the “law of the place where the tort occurred” was irrelevant:
Rather, the claim by Wawanesa is a statutory claim under section 275 of the [Ontario Insurance] Act that is a separate and distinct claim from any underlying tort claim that might be brought between the parties involved in the accident. There would be no purpose served in this case by looking to the law of Vermont to settle a dispute between two Ontario insurers arising from a claim made under the Act, an Ontario statute.