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

The two Plaintiffs were injured when they were shot at while driving their vehicle.  They retuned home in their vehicle after a weekend away and were confronted by the two Defendants, who had broken into their home.  The Defendants ran from the home, brandishing shotguns, and shouted at the Plaintiffs to get out of the car.  The male Plaintiff instead tried to back the car away and the Defendants fired their shotguns multiple times, seriously injuring both Plaintiffs.  The Plaintiffs brought this action against the Defendants and obtained default judgment.  The Plaintiffs then sought to recover the judgment from a fund set up under the Motor Vehicle Accident Claims Act, which permits a person to recover an unsatisfied judgment if the tortfeasor is uninsured or unknown.  The Plaintiffs brought this motion for a special case to determine if they were entitled to recover the judgment under the fund.

The relevant provision of the Motor Vehicle Accident Claims Act, R.S.A. 2000, c. M-22 (the "Act") provides:

5(1) When a person recovers in a court in Alberta a judgment for damages for bodily injury to or the death of a person arising out of the use or operation within Alberta of a motor vehicle, the person may, on the determination of all proceedings, including appeals, apply to the Administrator in the prescribed form for payment under this section of the amount of the judgment or of the amount of the unsatisfied portion of it.

At issue was whether s. 5(1) requires the use or operation of a motor vehicle by a tortfeasor or whether it simply requires the use or operation of a motor vehicle by either the plaintiffs or a tortfeasor.

Based on earlier Supreme Court of Canada jurisprudence, the Court concluded that where indemnity is sought under a motor vehicle liability policy or an underinsured motorist endorsement to that policy, barring wording in the policy to the contrary, the determination of coverage is focused on whether the tortious acts arose from the tortfeasor's use or operation of a motor vehicle. Where no-fault benefits are sought pursuant to an insured's own policy, the focus is on the use and operation of a vehicle by the insured who is seeking those benefits. 

The Court held that the wording of s. 5(1) was clear and requires the judgment against the tortfeasor to arise out of the tortfeasor's use or operation of a motor vehicle.  That is, the judgment for damages must arise out of the use or operation of a motor vehicle, which necessarily means that the tortfeasor's liability must arise out of the tortfeasor's use or operation of a motor vehicle.  It was irrelevant whether the Plaintiff was engaged in the use or operation of a motor vehicle at the time the injuries were sustained.  Where the tortfeasor's liability does not arise out of the use or operation of a motor vehicle, any judgment against the tortfeasor will not be for damages arising out of the use or operation of a motor vehicle.  The Court also examined the meaning of s. 5(1) within the context of other provisions of the Act and noted that provisions relating to an unknown owner or operator required that person to be the tortfeasor.  Those provisions in combination demonstrated the legislative intent that the fund apply only where the judgment is for damages arising out of the tortfeasor's use or operation of a motor vehicle.

In this case, the parties had agreed that the tortfeasors were liable to the Plaintiffs in tort for the losses and damages sustained by the Plaintiffs as a result of an assault and battery and the injuries "did not arise out of the use or operation of the motor vehicle owned or operated by either or both of the Defendants".  As there was no chain of causation linking the use or operation of a motor vehicle by the Defendants to the injuries suffered by the Plaintiffs, they were not entitled to be indemnified by the fund under the Act.

This case was digested by Emily M. Williamson and edited by David W. Pilley of Harper Grey LLP.

The Plaintiff brought an action against the Insurance Corporation of British Columbia ("ICBC") under s.24(1) of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 ("Act").  She claimed for damages for injuries she sustained when her purse was snatched by an unidentified passenger in a vehicle driving by.  Section 24(1) creates a statutory cause of action against ICBC for damage which arises out of the use or operation of a vehicle by an unidentified vehicle owner or driver.

ICBC unsuccessfully brought an 18A application to have the plaintiff’s claim dismissed.  ICBC appealed that decision and the Court of Appeal considered whether (i) the intentional acts of assault and conversion came within the ambit of s. 24(1) of the Act; (ii) the motor vehicle in question was being used as a motor vehicle, and not for some other purpose; and (iii) the use or operation of the motor vehicle caused the Plaintiff's injuries and loss.

The appeal was dismissed.  Section 24 of the Act is not restricted to cases in which the cause of action is based in negligence; intentional acts are not excluded from ambit of the section.  The vehicle was being used as a motor vehicle despite the fact that it was being used to effect a criminal purpose.  The Court agreed with the judge’s conclusion that there was a continuous chain of causation stretching between the use of the motor vehicle and the injuries sustained by the Plaintiff.

This case was originally summarized by Kim Yee and originally edited by David Pilley of Harper Grey LLP.

The Plaintiff Insured operated a recreational vehicle dealership and had its building and contents insured against loss by fire under a policy of insurance with the Defendant.  In the late hours of October 19 and early hours of October 20, 2000 a fire destroyed the property of the Insured.  The Insurer denied coverage alleging that the principal of the Insured, together with his father, deliberately started the fire with the intention of making a claim against the insurance provided by the Insurer.  The principal and his father were charged criminally with committing arson with the intent of defrauding the Insurer.  The Crown proceeded to trial against the father of the principal, who was acquitted and the Crown withdrew the charge against the principal.

The issue before the Court was whether the Insurer had established the defence of arson thereby depriving the Insured of recovery under the policy.  The Court found that the Insurer had established on a balance of probabilities that the principal of the Insured and his father had intentionally started the fire.  Circumstantial and conflicting evidence at trial did not offer another cause of the fire.  As a result the Insured's action was dismissed.

This case was originally summarized by Cameron B. Elder and originally edited by David Pilley.

The Insured/Defendant O'Connor was driving a van to Canadian Tire to replace a windshield wiper blade when he collided with a vehicle driven by the Plaintiff.  The van  the Insured was driving was leased by a client of his employer.  Unbeknownst to him, the insurance on the van had been cancelled.  However, the Insured was also a named driver on a policy of automobile insurance issued to his common law spouse by the third party Wawanesa Insurance Company("Wawanesa").

Some months after the accident, the Defendant Dominion of Canada Insurance Company ("Dominion") brought a subrogated action in the name of the Plaintiff against the Insured to recover the Plaintiff's property damage and car rental paid by Dominion.  Default Judgment was entered and the Insured paid the Judgment personally.

The Plaintiff later retained counsel and commenced an action against the Defendant/Insured and the other Defendants for personal injuries resulting from the accident.  Wawanesa applied to be added as a third party.

There were two motions before the Court.  The first was brought by Wawanesa seeking summary dismissal of the Plaintiff's claim on the basis of res judicata.  The second motion was brought by the Plaintiff asking for a determination of whether Dominion and/or Wawanesa should respond and indemnify her with respect to her personal injury claim.

The issues before the Court were as follows:

1.  Was the Insured insured under the Wawanesa policy at the time of the accident;

2.  Was the Plaintiff entitled to claim section D coverage against Dominion; and

3.  Was the Plaintiff's action res judicata?

The Court found that the Insured was insured under the Wawanesa policy at the time of the accident.  The key finding was that the Insured had only occasionally used the van which was within the risk contemplated by the extension of coverage under Wawanesa's policy.  As a result, the Court found that the Plaintiff was not entitled to claim under section D of her policy with Dominion.  Section D provides the uninsured motorist provisions prescribed by the Insurance Act in Nova Scotia.  These provisions only apply with respect to uninsured motorists.

Finally, the Court found that the doctrine of res judicata operated as a bar to the Plaintiff's second action against the Defendant/Insured.

This case was originally summarized by Cameron B. Elder and originally edited by David Pilley.

The estate of the deceased daughter brought an action seeking recovery of death benefits following the earlier death of the deceased's mother.  Both the deceased and her mother were injured in a motor vehicle accident.  The mother died immediately whereas the deceased lived for several months before succumbing to her injuries.  The deceased was 42 years old at the time of her death and suffered from significant mental and physical impairments.  She received a disability benefit of approximately $7,7074 per year and lived full-time with her mother.

The deceased’s estate submitted a claim to the Wawanesa Mutual Insurance Company for the death benefit payable upon the mother’s death.  Wawanesa denied the claim on the basis that the deceased was not a dependent under the policy.  The issue was whether the deceased was “principally dependent” upon her mother for financial support.  Wawanesa did not dispute that the deceased suffered from a mental or physical infirmity and the trial judge found that she did suffer from a physical or mental infirmity that made her dependent on her mother for financial support to some degree.  The issue was whether the degree of support provided by the mother satisfied the criteria of “principally dependent”.

The trial judge relied on the test as set out in Wormell v. Royal Insurance Company, (2001), 234 N.B.R. (2d) 236 namely, that the level of dependence that must be proven in order to establish that a person is principally dependent on another, is such that establishes that the dependence upon that person is greater than on another or other sources of dependence.  The reasonable value of goods and services provided can be taken into account when considering financial dependence.

The evidence established that the deceased and her mother had pooled their limited incomes and this had allowed the deceased to maintain a lifestyle that was far superior to that which she would have enjoyed if relying solely on her own income.  The trial judge also observed that, though the deceased had lived independently for a number of years before moving back in with her mother, that she had relied on the financial support of her family and others in order to subsist during that time.  On that evidence, the judge found that the deceased had been principally dependent on her mother for financial support at the time of the mother’s death and that accordingly, the deceased was a dependent within the meaning of the policy and was entitled to the benefit.

This case was originally summarized by Emily M. Williamson and edited by David W. Pilley of Harper Grey LLP.

This matter concerns two appeals which we heard together challenging the province’s addition of s. 113B of the Insurance Act, R.S.N.S., c. 231 (the “Act”) and the corresponding regulations. The legislative changes capped non-monetary damages for “minor injuries” at $2,500.00.

The appellants in the first appeal appealed a dismissal of their challenge of the minor injury legislation on the following bases:  (1) the definition of a minor injury discriminates against individuals with certain types of pain and discomfort, and is therefore contrary to s. 15(1) of the Canadian Charter of Rights and Freedoms (the “Charter”); (2) s. 113B(1)(a) of the Act discriminates on the basis of gender by disproportionately affecting women with minor injuries as a result of an automobile accident; (3) the Limitation Regulations discriminate against individuals suffering from certain forms of chronic pain, as compared to individuals who are not deemed to have minor injuries; and (4) the regulations expand beyond what the legislation intended.

The government’s position was that the legislation is constitutionally valid and reflects public policy designed to contain sky-rocketing insurance premiums.

The Court dismissed the first appeal and held that the legislation is valid and is not discriminatory as contemplated by the Charter. The regulations do not run afoul with the Act. The Court found that the Appellants were treated differently from other automobile accident victims who avoid the cap on the enumerated ground of a physical disability. The Appellants are disadvantaged by the minor injury cap because of the monetary limit and because they will be denied an independent judicial assessment and the right to seek full recovery for their injuries from a wrongdoer. However, the disadvantages do not trigger s. 15 of the Charter. The evidence fell short of establishing that the legislation perpetuates or is a result of prejudice or stereotyping sufficient to trigger s. 15 of the Charter. The legislation is sufficiently attentive to the appellants’ needs, capacity, and circumstances. The Appellants’ ability to seek recovery for wage loss, costs of future care, legal costs and/or aggravated and punitive damages remains intact.

With respect to discrimination on the basis of gender, the Court held that any disadvantages in that regard are due to pay equity issues unrelated to minor injury cap. The legislation does not trigger s. 15 of the Charter in this respect.

The regulations' expansive definition of the scope of a minor injury was consistent with the Insurance Act and the clear legislative intent to reduce rapidly rising premiums.

In the second appeal, the Appellant asserted that individuals who have purely mental injuries, such as post-traumatic stress disorder, would be discriminated against because of the wording of the legislation which could be read to mean that mental injuries would automatically be deemed to be a “minor injury”. The Court of Appeal denied her leave to appeal on the basis that her appeal was moot. The Chambers judge in the court below had found that her post-traumatic stress disorder was a physical rather than a mental injury.

This case was originally summarized by Kim Yee and originally edited by David W. Pilley.

The Respondent had unprotected sex with three women and contracted genital herpes and a rare complication of that condition called transverse myelitis which resulted in total paralysis from his mid abdomen down. The Respondent was not aware that any of the women that he had intercourse with had herpes. However, he did know that contracting a sexually transmitted disease was a potential risk of having intercourse. He claimed for compensation under a group insurance policy on the basis that the paralysis resulted “directly and independently of all other causes from bodily injuries occasioned solely through external, violent, and accidental means, without negligence” on his part. The policy did not contain a definition of the word “accident”.

The trial judge found in the Insured’s favor and held that the paralysis was accidental as the Insured did not expect to become a paraplegic as a result of engaging in unprotected sexual intercourse. The Court of Appeal upheld the trial judge’s decision and found that the Respondent’s condition did not arise “naturally”, but rather it was a result of an external factor or “unlooked-for mishap”.

The Supreme Court of Canada allowed the appeal and held that the loss was not covered by the policy. The Court considered the meaning of the term “accident” and held that it should be given its ordinary meaning as it would have been understood by the average person applying for insurance. In ordinary speech the term “accident” does not include ailments which flow from natural causes. The causal chain which led to the injury was the sexual transmission of herpes which led to the development of transverse myelitis. Transverse myelitis is a rare complication, but is a normal incident of herpes. To conclude that the acquisition of herpes was an “accident” despite the absence of any mishap or trauma would be contrary to the intent of the policy which was not intended to be a comprehensive health insurance policy for infectious diseases.

This case was originally summarized by Kim Yee and originally edited by David W. Pilley.

The Plaintiff stated that ICBC had initially paid some chiropractic and physiotherapy expenses under Part 7 of the Act, but then discontinued benefits on the basis that the accident did not cause the injuries. The Plaintiff argued that the application was therefore an abuse of process and the Defendant should be stopped from seeking the deduction.The Plaintiff was injured in a motor vehicle accident and received a tort award from the Defendant. The Defendant sought a deduction from the cost of future care award pursuant to s. 83(5) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 (the “Act”). The Defendant argued that the costs of future care covered by Part 7 of the Act are to be deducted from an award of damages regardless of whether the Plaintiff has claimed for or received benefits under Part 7. The Defendant took the position that all of the items enumerated in the cost of future care award, except for $5000 which was awarded for upkeep of the family cabin, were expenses which fell under s. 88 of the Act. Section 88 of the Act outlines which benefits ICBC will pay for the event that an insured is injured. An adjuster for ICBC deposed that the Plaintiff had received $7,859.00 as a reimbursement for physiotherapy and an advance of $20,000.00.

The Plaintiff stated that ICBC had initially paid some chiropractic and physiotherapy expenses under Part 7 of the Act, but then discontinued benefits on the basis that the accident did not cause the injuries. The Plaintiff argued that the application was therefore an abuse of process and the Defendant should be stopped from seeking the deduction.

After reviewing a number of authorities, the Court held that Plaintiff’s entitlement to s. 7 benefits had to be estimated and that amount deducted from the tort award. Certain contingencies must be taken into account in doing so. Section 88(1) of the Act states that ICBC is only obliged to pay for “all reasonable expenses incurred by the insured.” The fact that ICBC has the ability to deem certain expenses as unreasonable despite the Court’s award for such items as part of a tort award must be considered. According to the legislation and payment schedules, the amounts permitted for treatments and the frequency of visits for treatments was significantly less than the amounts awarded to the Plaintiff for these items. It was not known whether ICBC would in fact make payments to the Plaintiff beyond the amounts and frequency specified in the legislation and payment schedules. Taking these things into account, the Court held that $25,000.00 was deducted from the award as well as $20,000.00 for the advance.

This case was originally summarized by Kim Yee and originally edited by David W. Pilley.

The Applicants sought a Declaration of Coverage, as mortgagees, under the Standard Mortgage Clause in a fire insurance policy. The policy was issued by the Respondent Insurer to an Insured who was not a party to the proceedings. The Insurer had denied coverage on the basis of a Tenant Exclusion Endorsement which provided that loss and damage caused directly or indirectly by vandalism or criminal or malicious acts was excluded. The fire had been deliberately set by the property's tenant. The Applicants argued that the Standard Mortgage Clause was all encompassing and should prevail over the Tenant Exclusion Endorsement. The Court agreed finding that while the Tenants Exclusion Endorsement expressly excluded coverage for loss or damage resulting from malicious or criminal acts, it was inconsistent with the Standard Mortgage Clause which protected the Applicants from any act of the occupants and expressly stated that it superseded any policy provisions in conflict with it. The Tenant Exclusion Endorsement was therefore unenforceable.

This case was originally digested by Cameron B. Elder and originally edited by David W. Pilley.

This appeal raised the question of whether the subrogation right of an insurer under the Standard Mortgage Clause in a home insurance policy may be exercised simply on the insurer paying the loss award to the mortgagee without the insurer establishing that it has no liability to the insured.

The Respondent Insurer had insured the home of the Appellant Insureds. The Insureds had a mortgage with the Bank of Montreal. The Insureds submitted a claim to the Insurer seeking indemnity for repairs to the house, damage to its contents, and additional living expenses following a fire. The Insurer denied their claim on two grounds:

1)         the Insureds had voided the policy by failing to notify the Insurer of a material change in the risk, namely, a change in the heating system of the premises; and

2)         the Insureds had made wilfully false statements with respect to their contents claim and their claim for alternative living expenses, thus vitiating their right to recover.

The Bank of Montreal submitted a Proof of Loss seeking payment of the mortgage under the Standard Mortgage Clause and the Insurer paid that claim. The Insurer then, relying on its right of subrogation under the Standard Mortgage Clause, claimed the sum it had paid to the Bank of Montreal from the Insureds. The motions judge granted summary judgment against the Insureds in the amount paid by the Insurer to the Bank of Montreal. The Insureds appealed seeking an Order dismissing the Insurer's Motion for Summary Judgment directing that the two Actions be tried together (the Insureds had commenced a separate proceeding against the Insurer seeking a Declaration that the policy was valid and enforceable).

The Court of Appeal held that there are two preconditions to the Insurers' entitlement to subrogation under the Standard Mortgage Clause. First, the Insurer must make payment of the loss award, or part of it, to the mortgagee. Second, the Insurer must establish a claim that it has no liability to the mortgagor insured. The Court found that this conclusion flows from the construction of the Standard Mortgage Clause and is not dependent on the specific facts of the case.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.