Hauck v. Dominion of Canada General Insurance Co. [2005] A.J. No. 513 Alberta Court of Appeal

This is the appeal of a trial finding that an insurer was liable to indemnify the insured owner of a trailer when an uninsured tractor pulling the trailer was involved in a fatal collision. At issue was whether the trial judge erred in his application of the Amos decision of the Supreme Court of Canada, and/or in his interpretation of that decision. The Court of Appeal upheld the trial decision, albeit with different reasoning, and held that there was a causal relationship between the use of the trailer and the collision triggering a duty to indemnify.

The owner of a tractor and a trailer hauling gravel had third party liability coverage for the trailer but, by oversight, neglected to obtain such coverage for the tractor. While hauling a trailer full of gravel on a roadway, the tractor was involved in a two-vehicle collision and its gas tank caught fire, killing three occupants in the other vehicle. In an action against the owner/driver, default judgment was granted. The owner/driver commenced an action against the insurer of the trailer seeking a declaration of indemnification. The trial judge adopted the reasoning in Amos v. Insurance Corporation of British Columbia, [1995] 3 S.C.R. 405, and held that the loss arose from the ownership, use or operation of the trailer, and ordered the insurer to indemnify.

On appeal, the insurer first argued that the correct standard was not that the loss "arose out of" the operation of a vehicle, but rather "arose from" which was a narrower test. The Court of Appeal, in applying the rules of statutory interpretation, held that the two terms were in fact used interchangeably in the leading decisions, and no real distinction should be made. The second ground of appeal was that there was no nexus or causal relationship between the operation of the trailer and the loss complained of. The insurer argued that it was the uninsured tractor, not the use of the trailer, that was causally linked to the accident. The Court of Appeal also rejected this argument, holding that the causal test set out in Amos was not a direct, proximate test or a continuous chain of causation, rather it was used in the sense that "the loss at issue was more than fortuitous or incidental to the use of the vehicle". The Court of Appeal found that the reasoning of the trial judge was insufficient to support a finding that the nexus of causation was met, but the facts supported that finding. The only reason the tractor was on the roadway was to haul gravel, and without the trailer the tractor would not have been hauling gravel. Therefore its use was more than fortuitous or incidental and causation was made out, resulting in a duty to indemnify.

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