The occupant of a stolen car claimed damages against the insurer under the uninsured motorist provisions of his mother’s automobile insurance policy. Applying the rules of statutory interpretation, the Court of Appeal overturned the ruling of the motions judge and held that the exclusion clause in question excluded coverage under the policy for the occupant of a stolen vehicle.
Mr. Simison was injured in a motor vehicle accident while riding as a passenger in a stolen car when he was 14 years old. Following the accident he claimed damages against Western Assurance Company ("Western") under the uninsured provisions of his mother’s automobile insurance policy. On a motion to determine the meaning of an exclusion clause in the policy, the motions judge held that the clause did not exclude coverage for an occupant of a stolen vehicle.
Western submitted that Mr. Simison’s claim was excluded under the second clause of paragraph 1.8.2 in the Ontario Standard Automobile Policy which read as follows:
Excluded Drivers and Driving Without Permission
Except for certain Accident Benefits coverage, there is no coverage (including coverage for occupants) under this policy if the automobile is used or operated by a person in possession of the automobile without the owner’s consent or is driven by a person named as an excluded driver of the automobile.
Except for certain Accident Benefits coverage, there is no coverage under this policy for an occupant of an automobile used or operated by a person in possession of the automobile without the owner’s consent.
It is important to note that "the automobile" is a defined term under the policy and that it would not encompass the stolen vehicle in which Simison was riding at the time of the collision.
Western claimed that while the exclusion set out in the first clause related specifically to "the automobile" as defined in the policy, the exclusion set out in the second clause was more general and excluded coverage for the occupants of any automobile driven without consent. It was therefore not limited in its effect to occupants of "the automobile" as defined in the policy. Western also contended that the phrase "an occupant of an automobile" was the governing language and that the subsequent use of the words "the automobile" was an obvious reference back to that phrase.
Mr. Simison submitted that the second clause must be interpreted as excluding claims for occupants of "the automobile" as defined in the policy. He relied on the fact that the words "the automobile" appeared within the second clause and on the basic principle of interpretation that the same words must be given the same meaning throughout a document. Mr. Simison also relied on the following principles of interpretation: i) the contra proferentum rule; ii) the principle that coverage provisions should be construed broadly and exclusion clauses narrowly; iii) the desirability of giving effect to the reasonable expectations of the parties; and iv) the rule that where there is "doubt in the legislation establishing and governing the cover, and there are two possible interpretations of any aspect of the cover, the one more favourable to the insured should govern."
The motions judge found that the reference to "the automobile" in the second clause could mean any automobile or could refer only to a motor vehicle qualifying as "the automobile" under the policy. Adopting the reasoning in Benjamin v. Al Islam et. al. (2001), 51 O.R. (3d) 412 (S.C.J.), the motions judge held that because the latter interpretation was the one more favourable to the insured, it was the one to be applied.
Applying the modern rule of statutory interpretation requiring the determination of the meaning of legislation in its total context, the Court of Appeal concluded that the second clause of paragraph 1.8.2. referred to an occupant of an automobile rather than to an occupant of "the automobile" as defined in the policy, and that it therefore excluded Mr. Simison’s claim.