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

The Claimant operated a clothing store that had three laminated glass windows broken by vandals.  The Claimant had insurance coverage which provided a “glass contract” with a local glass contractor. in the event of breakage.  The original glass contractor had gone out of business, and a second, Broco Auto Glass and Upholstery Ltd. (“Broco”) had assumed the obligations under the glass contracts.

The Claimant sued the broker who sold the insurance policy and the glass contractor for replacement of the laminated glass.  In the meantime, the Claimant had replaced the windows at its own expense with non-laminated glass, because it could not afford laminated glass.  Broco argued that it was not obliged to replace laminated glass because laminated glass was excluded by the glass contract.  However, Broco was unable to point to any language in the contract excluding laminated glass.  The court held that the Claimant was entitled to recover the cost to install laminated glass at its store.  The Claimant was not entitled to recover the expense the Claimant incurred to install non-laminated glass, because “if a person’s own impecuniosity is the cause of the damage, then that damage is not recoverable

Ms. Ashcroft was involved in two motor vehicle accidents and was awarded $400,000 for her injuries at trial. The first accident was very serious, and Ms. Ashcroft had not yet recovered from the first accident at the time that the second motor vehicle accident occurred. The second accident was not as serious, but aggravated and exacerbated the injuries sustained in the first accident. Because the second accident was relatively minor, Ms. Ashcroft settled with that tortfeasor prior to the trial. The trial judge directed that the net proceeds from the settlement of the second accident be deducted from his award to ensure that Ms. Ashcroft would not be overcompensated for her loss. The trial judge did not know the amount of the second settlement. In addition, the trial judge determined that if he were wrong in deducting the settlement funds, he would follow the percentage method of apportionment initially set out in Pryor v. Bains (1986), 69 B.C.L.R. 395 (C.A.) and apportion 70 percent of the total loss to the first tort motor vehicle accident and 30 percent to the second.

After the decision, it was revealed that Ms. Ashcroft had recovered $315,000 from the second tortfeasor, which was significantly more than the 30 percent that the trial judge attributed to the fault of the second tortfeasor. On appeal, Ms. Ashcroft argued that the court should ignore settlement proceedings in the circumstances to encourage the settlement of claims. When Ms. Ashcroft settled with the second tortfeasor, they estimated the amount remaining to be recovered from the first tortfeasor. By settling with the second tortfeasor, Ms. Ashcroft took the risk of undercompensation, that the trial judge would make a less favourable award against the first tortfeasor than the settling parties had anticipated.  In addition, Ms. Ashcroft also took a risk of settling for too little against the second tortfeasor. The British Columbia Court of Appeal noted that the converse of this risk is that a trial judge can make a more favourable award against the first tortfeasor than the settling parties had anticipated, and thus Ms. Ashcroft would be overcompensated for her loss. Ms. Ashcroft argued that, in order to encourage settlement, she must be entitled to profit from overcompensation in order to offset the risk of undercompensation if settlement is to be encouraged in multiple tortfeasor situations. The British Columbia Court of Appeal disagreed with this argument and noted that it would be wrong to promote settlement by encouraging parties to seek out double recovery in breach of the fundamental privilege of damages. The British Columbia Court of Appeal noted that this was consistent with their decisions in Dos Santos v. Sun Life Insurance Company of Canada, 2005 BCCA 4, Dixon v. British Columbia (1980), 24 B.C.L.R. 382 (B.C.C.A.), and Bryanston v. Finance Limited and DeVries, [1975] Q.B. 703 (C.A.).

The result of Ashcroft is that injuries suffered by a person from a tortious act could be taken into account, and result in a reduced award many years after a settlement has occurred. In certain circumstances this could place the risk of being undercompensated in a settlement solely on the plaintiff’s shoulders, and bar the plaintiff from receiving the reciprocal benefit of being overcompensated by the settlement.

The ramifications of Ashcroft are that a plaintiff’s counsel should be careful in agreeing to a settlement in a situation where their client has been injured by more than one tortfeasor. If your client settles with one tortfeasor, the second tortfeasor may reap the benefit of that settlement, whereas your client may pay the cost of underestimating the impact of the other accident on her injuries. 

Insurance counsel should be sure to inquire and insist on full disclosure of all past settlements and claims to ensure that they will be deducted from current claims.

The Insurance Corporation of British Columbia ("ICBC") brought an application for summary judgment dismissing the Plaintiff's claim against ICBC, which was brought pursuant to British Columbia's "Hit and Run" legislation.

The Plaintiff had been shopping and was returning her shopping cart to the stall when a van drove past her. As it did so, the passenger reached out of the window grabbed her purse strap and, as the van accelerated away, the Plaintiff was pulled backwards and hit her head on the pavement.  The van did not run into or bump her. The Plaintiff was dragged a short distance before the purse ripped.

ICBC's main argument was that the injuries to the Plaintiff did not arise out of the use or operation of a motor vehicle as those terms are used in the relevant legislation and case law.

The court reviewed the law  in some detail. Particular attention was paid to the reasons of the Supreme Court of Canada in the joint cases of Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46 and Lumberman's Mutual Casualty Co. v. Herbison, 2007 SCC 47. The court found that the act of dropping rocks from an overpass was severable from the use or operation of the motor vehicle, even though the motor vehicle had been used to transport the rocks to the overpass.  Similarly, in Lumberman's, the tort feasor had used his vehicle to travel to hunting grounds, and en route, stopped the vehicle, got out and shot what he thought was a deer, but turned out to be another hunter. The Supreme Court of Canada found that the act of shooting the hunter was severable from the act of driving to the location where the hunter was shot.

The court distinguished these decisions and found that in the present case, the motor vehicle was used as a motor vehicle, notwithstanding that it was used in the commission of the offence of robbery and the civil tort of assault.  The court found that unlike in Citadel and Lumberman's, the act causing the alleged injury to the Plaintiff was directly caused, and not isolated from, or severed from the use of a vehicle as a vehicle.  In this case, the evidence was that the passenger in the vehicle grabbed the Plaintiff's purse, which she was carrying on her shoulder, the driver accelerated the vehicle, and it was that acceleration in combination with the passenger's grip on the Plaintiff's purse that caused her to fall to the ground and to be dragged by the vehicle as it accelerated away. The court found that there was a clear causal link between the use of a motor vehicle as a motor vehicle and the injuries alleged by the Plaintiff.

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

Wingtat is in the business of slaughtering, processing, and packaging poultry and meat.  In 1999 Aviva underwrote policies for Wingtat including a Commercial Building Equipment and Stock policy as well as a Multi Peril Extension Endorsement.  Over the years Wingtat had operations in different locations.  Location 1 was its poultry plant, Location 2 was a cold storage facility, and Location 3 was its retail shop.  In July, 2005 a fire started at a warehouse where Wingtat had stock stored.  This wharehouse was owned by another company, and was not listed in the Aviva policies.

Clause 2b of the policy showed Location 1 as having limits of $1,015,600.00 for Equipment and Stock, while Location 2 had limits of $1,000,000.00.  There was no mention of Location 3 for the material policy period.  Clause 2b covered "Temporary Locations", "Newly Acquired Locations", and "In-transit" coverage.

Aviva sought to apply a $25,000.00 limit per paragraph 10 of the multi peril extension endorsement which read: 

"The limits applicable to the following extensions are in addition to the limits provided elsewhere.  Temporary locations on stock and equipment while located at temporary locations not owned, rented or controlled in whole or in part by the insured.  Limit of loss:  $25,000.00 any one occurrence." 

Wilson J. held that if this paragraph was intended to restrict coverage, it was a "limit masquerading as an extension" of coverage, and the ambiguity should be resolved in favour of the insured.  There was no deductible or co-insurance clause in the Multi Peril Extension Endorsement.  There were also no limits on coverage of items at the temporary locations.  The insurer is in a position to exclude coverage for property at a specific location, but that was not done in this case.  Since the Multi Peril Extension Endorsement was intended to provide additional coverage it should not be limited to the amount of $25,000.00 per occurrence.  The application of the Plaintiff Wingtat for declaration that it was entitled to full indemnity for the value of stock which it had in storage at the warehouse, was granted.  The application of the Defendant Avivia, that the action against it be dismissed, was dismissed.

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

The Respondent, who was the plaintiff in the underlying action, was a minor when he was injured in a collision involving a motor vehicle and the bicycle he was riding. Several years after the accident, the appellant, ICBC, denied funding for recommended treatments for the Respondent’s head injury on the basis that the Respondent had become disentitled to statutory ICBC benefits because the Respondent had not commenced a legal action in a timely way.

ICBC applied to strike the Respondent’s action on a pre-trial motion. The chambers judge dismissed ICBC’s motion and ICBC appealed that ruling. ICBC had raised two issues in its motion. The first was whether the Respondent’s claims were statute barred by section 103 of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, which imposed an absolute two-year limitation period for commencing an action in respect of statutory benefits. The Respondent had argued that the Limitation Act, which provides for the postponement of the running of time while a prospective plaintiff is a minor, should prevail. The Court of Appeal affirmed the decision of the chambers judge, holding that while section 103 was a contractual provision limiting the right of the insured to sue the insurer, it was only applicable in contract actions. Justice Tysoe, writing for the unanimous court, held at para. 27: “[i]t is my view that section 103 does not apply to a non-contractual claim against ICBC as long as the claim is not an indirect attempt to enforce the contractual right to benefits”. As the Respondent’s claim was framed in negligence, and not in contract, that portion of ICBC’s appeal was dismissed and the Respondent was allowed to rely on the Limitation Act provision postponing the running of time while the Respondent was a minor.

The second issue was whether the Respondent’s action should be dismissed because it was bound to fail. The Respondent had pleaded against ICBC in negligence alleging that an ICBC adjuster’s failure to advise the Respondent about the availability of statutory benefits constituted a breach of a duty of care ICBC owed to the Respondent. ICBC had alleged in its motion that it was plain and obvious that ICBC did not owe the Respondent a duty of care in the circumstances. The Court of Appeal affirmed the chambers judge’s decision that the Respondent’s action was not certain to fail, and thus should not be dismissed summarily.

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

The appellant, ICBC, insured the respondent under a "Garage all-risk policy".  It included coverage for loss and damage to customers' vehicles.  The engine of a truck which the insured had repaired  exploded and caused extensive damage to the truck.  The insured rebuilt the engine for the owner and claimed indemnity from ICBC.  The insurer paid only a portion of the claim because it contended that the remainder of the damage consisted of or was caused by "mechanical fracture, failure or breakdown of [a] part" of the truck and was excluded by s. 132 of the then applicable regulations under the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231.  The regulation at issue read:

"The Corporation is not liable to indemnify any person under comprehensive or collision coverage for loss or damage . . . consisting of or caused by, mechanical fracture, failure or break down of any part of a motor vehicle . . . unless the loss or damage is coincidental with other loss or damage for which indemnity is provided . . . "

The trial judge held that the exclusion in s. 132(1) did not apply.  He concluded that the engine had oversped because oil had contaminated the air system of the truck's turbo charger, which occurred because an employee of the insured failed to properly inspect and clean the air system.  The judge held that the  damage to the truck was caused by the employee's negligence and not as a result of mechanical fracture, failure, or breakdown of any part of a motor vehicle. 

The Court of Appeal held that insofar as determining whether the loss or damage consists of mechanical fracture, failure or breakdown, causation is not relevant.  The focus is on the nature of the damage.  It is in determining whether the exception under s. 132(1) applies that causation is relevant. 

The Court of Appeal asked itself whether the negligence of the employee or the flying parts of the engine were the legal cause of the damage in the context of the exception in s. 132(1).  The Court of Appeal held that the truck damage was legally caused by the engine damage and therefore the exception does not apply.  The Court held that the engine damage was not "coincidental with other loss or damage for which indemnity is provided".  In the context of this case the exception to the exclusion under s. 132(1) would have been engaged only if the truck damage neither consisted of nor was caused by mechanical fracture, failure or breakdown of any part of the truck.

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

The Court of Appeal was asked to consider whether the trial judge had estimated the deduction for Part 7 benefits appropriately under the regulations to British Columbia’s Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231.  Part 7 benefits apply in respect of injury or death caused by an accident arising out of the use or operation of a vehicle regardless of who is at fault in the accident.  The benefits cover medical and rehabilitation costs, disability benefits, and death benefits.  Part 7 benefits are deducted from any tort award.

At trial the judge had allowed a deduction for future benefits based upon trial counsel’s statement in written submissions that the Insurance Company of British Columbia (“ICBC”) would pay the full amount of the proposed deduction to the plaintiff.  In allowing the appeal, the Court of Appeal held that it was impermissible for the trial judge to take into consideration counsel’s opinion of what position ICBC would take as to future claims under Part 7.  The Court was clear that this was not to be taken as “suggesting evidence as to ICBC policy is not acceptable on a [Part 7 benefits] application.”  Rather, it is unacceptable for the court to consider ICBC counsel’s representation as to what ICBC would cover.

This case was originally summarized by Jay Havelaar and edited by David Pilley.

Co-plaintiff driver was involved in an accident while driving under a suspended licence due to impaired driving. He was found negligent in causing the accident, and as a result was ordered to pay ICBC back on third party injury claims they paid out.

The driver initially sought to be determined an uninsured driver under section 21 of the Motor Vehicle Act. ICBC was successful in arguing that the driver fell under section 21 which applied where there was insurance in place, but where the owner or driver breached the terms of the policy, and under section 30.1 which dealt with ICBC recovering on "motor vehicle indebtedness" as it applied to section 21. Both section 21 and 30.1 have since been repealed.

The driver is an "uninsured motorist" under section 20(1)(a) of the Act only if there is neither a driver's certificate nor an owner's certificate in place. Neither of these applied in this case. Under section 30.1, ICBC was entitled to cancel the driver's licence until the liability dispute was adjudicated upon. ICBC was authorized to deny issuing a driver's licence until the matter was settled.

The life insurance company appeals the Supreme Court decision ruling the paraplegia fell within the meaning of the insurance policy. In an agreed statement of facts prepared for the Supreme Court, item 4 stated "the plaintiff was insured for accidental disease/ dismemberment benefits including a $200,000 payment if the plaintiff furnishes proof of paraplegia, resulting directly and independently of all other causes from bodily injuries occasioned solely through external, violent and accidental means, without negligence on the plaintiff's part." Item 11 agrees "the plaintiff did not intend or expect to contract HSV-2 or develop transverse myelitis when he engaged in unprotected sexual intercourse with the women." And that "the plaintiff was aware that there is a risk of contracting a sexually transmitted disease when having unprotected sexual intercourse."

Citing Martin v. American International Assurance Life Co., 2003 S.C.C. 16, [2003] 1 S.C.R. 158, the court applied a generous meaning to accidental, and concluded Gibbens transverse myelitis did not arise naturally, but arose from an external factor or "unlooked for mishap". While finding it close to the line, the court felt that the injury Gibbens sustained was unintended or unexpected and therefore caused by accidental means as required by the insurance policy.

In May 1988, the Insured sustained an injury to her right hand caused by freezing during the course of her employment with the Government of Manitoba. She received total disability benefits for a total of 12 months, pursuant to a long term disability plan. After this time, her employer discontinued benefits on the basis that the Insured was no longer "totally disabled" from any employment for which she was suited.

By the Spring of 1989, the Insured had not returned to her employment with the Government but had chosen to become a foster parent together with her husband. The evidence at trial was that the Insured and her husband had fostered many children over the years, sometimes as many as 5 children at a time, and that they were paid for their efforts in this regard. 

In 1991, the Insured advanced a claim for disability benefits to the adjudicator of the plan. She was seen by a number of physicians in 1991, most of whom concluded that while the Insured would not be capable of repetitive use of her right hand, she was capable of some other suitable occupation. Several physicians also concluded that there was likely a psychological component to the Insured's continued complaints. In January 1993, a medical review panel, established pursuant to the workers compensation legislation, concluded that the Insured did not continue to suffer any physical effects from the incident in May 1989. 

At trial, the Insured argued that she suffered from a total disability as defined in the plan because she was unable to use her right hand following the incident. She maintained that being a foster parent was not an "occupation or employment for remuneration or profit" and the fact that she engaged in this activity should not detract from her position that she was "totally disabled" from employment. The Government maintained that, based on the medical evidence, the Insured was not totally disabled from any employment for which she was suited after May 1989. The Government also argued that, from 1989 onwards, the Insured had engaged in the occupation of foster parenting and had received remuneration for her efforts in this regard.

The Court considered the relevant case law and noted that in cases such as this, the plaintiff bears the initial onus of establishing disability after which the evidentiary burden shifts to the defendant to demonstrate the availability of work that can reasonably be performed by the plaintiff.  

The Court concluded that the Insured had failed to prove a prima facie case that she was, on May 12, 1989, or thereafter, totally disabled within the definition in the plan. Neither the medical evidence nor the testimony offered at trial demonstrated that she was completely unable to engage in any occupation or employment that was reasonably suited to her.  The Court further concluded that even if  a prima facie case had been proved, the Insured's claim would have failed because the Government had met the onus of showing that there was suitable employment available to her, namely as a foster parent.