British Columbia Insurance Blog : Canada Insurance Lawyer & Attorney : Michael Thomas of Harper Grey Law Firm : British Columbia, Vancouver

Sekhon's vehicle was damaged when the vehicle, driven by her daughter, struck a tree after having crossed three lanes of traffic and gone through a fence.  No other vehicles were involved.  It was an agreed fact that, immediately following the incident, Sekhon's daughter said that she had caused the collision "on purpose" and to "test her mortality".  The matter went to trial on the issue of whether or not Sekhon's loss fell within the confines of "direct and accidental loss" under section 7.1.1 of the Standard of Ontario Automobile Policy.  At trial, the judge determined that the issue of whether the incident had been accidental had to be considered from the point of view of Sekhon's daughter not from the point of view of Sekhon herself.  He found on the totality of the evidence that Sekhon's daughter was suffering from an acute psychiatric disorder such that she had no conscious or deliberate physical control of the operation of the motor vehicle due to the absence of the sane and deliberating mind.  As a result, he concluded the loss fell within the meaning of "direct and accidental loss" under section 7.1.1.  RBC appealed this decision on the basis that there was insufficient evidence to support the trial judge's findings that the daughter's acute psychiatric disorder negated her ability to consciously or deliberately control the vehicle.  Sekhon cross-appealed on the basis that the trial judge should have viewed the question of whether the loss was a result of an accident rather than an intentional action from the perspective of the insured owner rather than the driver.

The Court of Appeal dismissed RBC's appeal finding that there was evidence upon which the trial judge could have concluded, on a balance of probabilities, that Sekhon's daughter had no conscious or deliberate physical control of Sekhon's vehicle, despite her comments immediately following the event that she intended to test her mortality or immortality.  The court rejected RBC's argument that, in order to succeed, Sekhon had to adduce expert medical evidence to the effect that, at the time of the incident, the driver was suffering from an acute psychiatric disorder that prevented her from having conscious or deliberate physical control of the operation of the vehicle and that prevented her from understanding the nature and consequences of her actions.  It was open to the trial judge to conclude, after weighing all of the evidence, that Sekhon's daughter did not understand the nature and consequences of her actions when she closed her eyes and drifted off the road.  The trial judge made no palpable and overriding error in inferring this fact from the totality of the evidence.

With respect to the cross-appeal, the court noted that there were a number of cases where an "innocent insured" had been found entitled to collect under the accidental loss provisions in his or her automobile insurance policy even though the loss occasioned was the result of the intentional actions of a third party.  The court stated that allowing coverage for an innocent insured against an unexpected and unforeseen loss occasioned by the intentional acts of a third party was consistent with case law dealing with the interpretation of provisions in the standard automobile insurance policies in regard to third parties operating an insured's vehicle while not authorized to do so under the law.  In this case, the incident causing the loss occurred without the foresight or expectation of Sekhon and was in no way a reasonably foreseeable consequence of any action or inaction on her part.  Consequently, the loss incurred by Sekhon fell within the meaning of "accidental loss" in section 7.1.1. of the Standard Ontario Automobile Policy.

This case was originally summarized by jmeadows@harpergrey.com and originally edited by dpilley@harpergrey.com