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 Insured brought a motion for a determination of a question of law.  The insured had been driving his car when he was involved in a single car accident whereby his vehicle left the roadway, became airborne, and eventually came to rest in a ditch after impacting with a tree.  His girlfriend at the time was a passenger.  He had purchased the optional protection for losses caused by unidentified motorists up to his own liability limit.  The Insured therefore issued a statement of claim claiming damages from his Insurer pursuant to the unidentified provisions of his policy.

The endorsement the Insured purchased included a section which limited the ability of individuals to make claims against their policy for claims involving unidentified vehicles if there was no independent evidence to corroborate the involvement of a vehicle whose driver or owner could not be ascertained.  The individual who corroborated the evidence of the claimant could not be the spouse or dependent of a claimant.  The narrow issue before the Court was whether the Insured's girlfriend at the time was a spouse or dependent of the Insured.  The Court found that she was not.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

The issue before the Court was whether one of two parties had a duty to defend the Insured.  The Insured was in the business of providing motorcycle lessons to students.  It had a commercial insurance policy with Lloyd's Underwriters and third-party liability policies with ICBC covering its motorcycles and other vehicles.

The issue arose out of a claim advanced by a Ms. Robertson against the Insured.  In the statement of claim filed by Ms. Robertson, she alleged that while participating in a motorcycle course that was offered by the Insured, she fell and sustained injury while pushing the motorcycle of another student at the instruction and behest of the Insured.  She alleged that the accident was caused or contributed to by the negligence of the Insured.

ICBC argued that the injury claims did not arise out of the use or operation of a vehicle by the Insured and as a result, it had no duty to defend.  Lloyd's conceded for the purposes of the petition that the underlying action alleged that bodily injury was caused by an occurrence which would come within the policy's coverage, but argued that the policy's automobile exclusions operated to exclude coverage.

The Court found that the essence of Ms. Robertson’s claim against the Insured was that she fell and was injured when pushing a motorcycle as part of a motorcycle training course which was offered by the Insured for remuneration.  The Court concluded that it was an ordinary and well-known use of a motor vehicle to use it for instruction in the operation of a vehicle. In addition, the judge noted that it was not unusual to see a motocyclist pushing a motorcycle and training students on how to push a motorcycle was therefore part of the training provided by the school.  Thus, the Court held that ICBC had a duty to defend and Lloyd's did not.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

The insured had an automobile insurance "storage policy" with Insurance Corporation of British Columiba ("ICBC"), insuring the vehicle against a number of risks, including theft, but only if the vehicle was stored. The vehicle was stolen from a privately owned lot where it was parked. The lot was available for use by customers of Kal Tire and TCJ Auto Group. The lot had 200 spaces marked on an asphalt surface. The insured vehicle was parked in one of the spaces. The lot was not gated and there were no signs posted indicating any parking restrictions. There were four public entranceways to the lot from adjoining streets and a laneway.

The insurance policy did not apply to vehicles parked on a "highway". The question before the court was therefore whether the insured vehicle was parked on a "highway" when it was stolen. The term "highway" is not specifically defined in the Insurance (Vehicle) Act or Regulations. But Part 1 defines "highway" to mean "a highway as defiend in the Motor Vehicle Act". The insured argued that the definition in Part 1 only applied to the three types of compulsory insurance coverages and not optional coverages such as a storage policy. It further argued that as the term was not otherwise defined, it should be given its plain ordinary meaning. The insurer argued, and the court agreed, that the certificate of insurance stated on its face that "except as otherwise provided…all terms, including definitions, of the Insurance (Motor Vehicle) Act and Regulations apply to this policy." Further, paragraph 2.2. of Division 2 of the Policy stated: "Unless otherwise defined in this policy, words and phrases used in this policy have the meanings given to them by sections 1 and 1.1 of the Insurance (Vehicle) Act…and apply to this policy even if in the context of the Act or Regulation they apply only to universal compulsory insurance." The court found the section to be dispositive of the insured's argument.

Having found that the definition of "highway" in the Motor Vehicle Act applied to the storage policy, the court went on to examine whether the area where the insured vehicle was parked at the time of the loss fell within the definition.The definition of "highway" in the Motor Vehicle Act includes: (a) every highway within the meaning of the Transportation Act; (b) every road, street, lane or right of way designed or intended for or used by the general public for the passage of vehicles, and (c) every private place or passageway to which the public, for the purposes of the parking or servicing of vehicles, has access or is invited. The court found that the parking lot was a "highway". Although it was a private place, in that it was privately owned, it was not used exclusively for parking for customers. There were no signs restricting parking to customers of the business. The area was not gated. The court found that the owner of the lot where the vehicle was kept clearly intended the public to have access to any of the marked parking stalls. The fact that the public had unresticted access to the area where the vehicle was parked changed the nature of the risk that the insurer was insuring. The court found that there was therefore no coverage under the policy.

This case was digested by Natasha D. Morley and edited by David W. Pilley of Harper Grey LLP. 

Insureds, Mr. and Mrs. McRae, owned a business, Triack Resources Ltd. ("Triack"). They insured several vehciles leased by Triack with ICBC.  When a claim was made for damage to their 2006 Kenworth tractor, ICBC denied coverage on the basis that there was a material misprepresentation in the application for coverage relating to the intended use of the vehcile and the proper class rate. This was because the vehcile was insured as a class rate 120 (vehicle desinated and used for delivery and dumping of materials) instead of class rate 114 (vehicle used for the delivery of logs).

Prior to 2006, Triack's business was 95% logging. However, in the spring of 2006, Triack began to transition into a wood wasting company. Mr. McRae was aware that he required a higher class rate (114) if a vehicle was to be covered for hauling logs as well as other materials. He had previosly insured a 1992 Kenworth tractor, for the purpose of "delivery of logs", at class rate 114. However, in 2006, Mrs. McRae attended at the insurance broker to purchase insurance for a newly purchased 2006 Kenworth tractor.  The vehicle was only insured as a class rate 120. At trial the insureds admitted that although it was used primarily for dumping materials, the tractor was also used sometimes (less than 10%) for hauling logs.

ICBC argued that by using the tractor for hauling logs, Triack was operating it for a use contrary to "delivering and dumping materials" and thereby breaching s. 55(2)(a) of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, and forfeiting its coverage pursuant to s. 19(1) of the Insurance (Motor Vehicle) Act.  The insured argued that the description "vehicle designated and used for delivering and dumping materials" was wide enough to to encompass hauling and delivering of logs and that if ICBC meant to exclude the hauling and delivery of logs from "delivering and dumping materials" , it should have said so. The court, however, looked at the policy as a whole, including the schedule of Vehicle Rate Classes. Since there was a separate rate class for "vehicles used for delivery of logs", the court found that the the phrase "delivering and dumping materials" did not include the hauling and delivery of logs.

The court then went on to determine whether the insurance broker had been negligent in arranging coverage or giving advice to the insureds. It found that the evidence supported a finding that Mrs. McRae told the broker that the truck would be used for dumping. Further, the court found that it was reasonable for the broker to accept that the truck was only used for dumping, even though other vehciles in the fleet were also insured for logging purposes. The broker was aware that the area of the business was changing and the broker's focus was not on the overall business but on the particular vehicle being insured.  On a balance of probabilities, the court found that the broker had not been negligent in the provision of its services.  

This case was digested by Natasha D. Morley and edited by David W. Pilley of Harper Grey LLP.

Rachel Noonan rented a Honda Civic from Choice Car and Truck Rental ("Choice").  At the time, she purchased optional insurance provided by Zurich Insurance ("Zurich") pursuant to a fleet insurance endorsement.  In November 2004, Ms. Noonan allegedly struck an individual with the Honda Civic.  That individual commenced an action against Ms. Noonan and Tracmount/Glojack Leasing ("Tracmount").  Zurich denied a duty to defend and indemnify Ms. Noonan or Tracmount on the basis that Choice did not have coverage for that particular car because Choice did not identify the Honda Civic in its monthly fleet report.  Choice leased the Honda Civic from Tracmount pursuant to a written lease.  The form of the lease obliged Choice to provide insurance.  As a precaution, Tracmount also maintained a contingent lessor's liability insurance policy with Lombard Canada Ltd. ("Lombard").  It was agreed as between Zurich and Lombard that if the Zurich insurance contract did not respond to the claim, the Lombard policy would respond to provide coverage.

Lombard applied to the court for a declaration that the Zurich policy covered the Honda Civic driven by Rachel Noonan.  The application was dismissed on a number of grounds including the fact that it did not appear that the vehicle was "described" and "specifically shown" on the certificate of insurance as required.  Lombard appealed this decision.

With respect to the standard of review, the court noted that to the extent that the interpretation of an insurance contract is purely a question of law, the appropriate standard is correctness, see Dunsmuir v. New Brunswick, [2008] 1 SCR 190.

In interpreting the insurance contract, the court noted that any insurance contract must be considered in the light of its purpose.  In the case at bar, the purpose of fleet insurance was not in dispute.  Fleet insurance provides coverage to the driver, a rental company and lessor for a fleet of cars.  The court recognized that rental cars in a fleet change frequently by reasons of addition and attrition.  The court further recognized that rather than reissuing a certificate of automobile insurance on a monthly basis to accommodate such a changeover, a fleet Endorsement substitutes a requirement for the filing of a monthly fleet report with the insurer.  In this case, the court held that the Endorsement adding fleet coverage to the policy did not use language of specificity and instead indicated coverage was based on the number of vehicles rather than the particulars of the specific cars in the fleet.  The court also found that Choice and Zurich had opted against two other choices for rate calculation printed on the form, receipts and mileage.  The parties clearly decided to assess the risk based on the number of cars in the fleet rather than the amount of rental income or rental mileage for the relevant month.  In the court's view, this choice also informed the interpretation of the words of the insurance contract.  The parties' deliberate decision on the plain language of the contract left no room for ambiguity.

In the result, the court allowed the appeal and granted a declaration that, as between Zurich and Lombard, the Zurich insurance contract provided coverage for the leased cars, the number of which Choice was obliged to report to Zurich in the monthly report described in the Endorsement.  The determination of whether Choice appropriately reported the number of leased cars was to be determined in further proceedings, if necessary.

This case was digested by Jonathan D. Meadows and edited by David W. Pilley of Harper Grey LLP.

This was an appeal of an application regarding the availability and priority of automobile insurance with respect to a tort claim against the owner and driver of a rented vehicle involved in a single vehicle accident.  The vehicle was owned by Enterprise Rent-a-Car Canada Ltd. and was insured under a policy issued by ACE INA.  The renter of the vehicle, who was not driving at the time of the accident, held a standard automobile policy with respect to his own vehicle, issued by Meloche Monnex.  The driver was driving with the consent of the renter.  He did not hold any insurance.  The renter and another passenger were both injured in the accident and brought an action against the driver and Enterprise, as the owner of the vehicle.

The provisions of the Insurance Act provided that insurance available to the lessee of a vehicle would respond first to a claim, insurance available to the driver of an automobile would respond second, and insurance available to the owner of an automobile would respond third to any claims with respect to liability arising from or occurring in connection with the ownership or, directly or indirectly, the use or operation of the automobile.  The renter’s automobile liability policy provided that available insurance would respond in the same order.

At issue was whether the renter’s automobile liability policy was “available” with respect to the claims, which would make it the first policy to respond to the claims.  The Court of Appeal found that the renter's insurance was not “available”.  With respect to rented or leased vehicles, his standard automobile policy provided that coverage was available to the policy holder with respect to rented vehicles but only with respect to the liability of the person renting the automobile arising from the negligence of the driver of that automobile.  The Court of Appeal interpreted this to mean that the policy provided coverage where a liability claim is asserted against the renter either as a driver or, where the vehicle was being driven by someone else with the renter’s consent, as the renter.  The policy would have provided coverage for the renter with respect to any claims brought against him directly with respect to the negligence of the driver of the rented vehicle but provided no coverage with respect to other claims.  In other words, although the policy would be “available” to the renter had a claim been brought against him, it was not available in this action as no claims were made against him and therefore, none of the allegations were capable of triggering an obligation on the part of his insurer to respond.

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

The insureds had brought an action with respect to injuries they suffered in an motor vehicle accident.  Prior to beginning the lawsuit, the plaintiffs requested accident benefits through their own insurer and were denied.  The plaintiffs commenced the civil action claiming damages against the tortfeasor and entitlement and payment of various accident benefits against their insurer.  As the civil action progressed, the plaintiffs continued to request benefits and attend mediations with their insurer as required by the Insurance Act.  The insurer paid some benefits but continued to deny most of the plaintiffs’ claims.  On the first day of trial the plaintiffs brought a motion to amend their Statement of Claim to claim aggravated damages.

The insurer resisted the motion on the basis that the proposed amendment was a new cause of action and the two year limitation period set out in the Insurance Act had expired.  It argued that, as the limitation period had expired, there was a presumption of prejudice that would result from the amendment that could not be compensated for with costs or an adjournment.  The judge rejected the insurer’s argument and allowed the amendment.  He found that a claim for any type of damages, including aggravated damages, is not a cause of action but rather is a remedy and “does not stand alone”.

To determine if a pleading raises a new cause of action one must look at whether substantially all of the material facts giving rise to the cause of action have previously been pleaded or whether new facts are sought to be added that are relied upon to support a new cause of action.  A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded.  In this case, the factual situation that entitled the plaintiffs to assert their claim against the insurer was the existence of a policy of insurance issued by the insurer, the plaintiffs' entitlement to claim accident benefits under this policy, the insurer’s handling of the claims, and its decision to deny the benefits.  The proposed amendment to claim aggravated damages was founded upon the same factual situation.  The fact that the claim for aggravated damages would focus more on the insurer’s handling of the claims and the basis for the denial did not mean that the claim for aggravated damages should be treated as a new cause of action.

The insurer also relied on an earlier decision in which a plaintiff brought a claim for damages for “the insurer’s bad faith conduct in prematurely terminating her weekly benefits”.  However, the wording of the applicable limitation provision had changed since that time.  The earlier limitation provision read:

A proceeding in a court or an arbitration proceeding in respect of no-fault benefits must be commenced within two years after the insurer’s refusal to pay the benefit claimed or within such longer period as may be provided in the No-Fault Benefits Schedule.

In that case, the Court of Appeal upheld the motion judge’s finding that the plaintiff’s characterisation of the insurer’s refusal as bad faith conduct was merely an attempt to circumvent the mandatory requirements of the dispute resolution scheme in the Insurance Act through the guise of linguistic reformulation.  It found that her allegations, distilled, were that the refusal was inappropriate in the circumstances, which was the very issue contemplated for resolution under the No-Fault Benefits Scheme and that her claim was clearly subject to the two year limitation period.

In the instant case, the applicable limitation provision was:

A mediation proceeding or evaluation under section 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.

The judge specifically noted that the phrase “in respect of”, present in the earlier limitation provision and also in the current provision regarding dispute resolution, was notably absent from the current limitation provision and provided good reason not to follow the earlier case.  In addition, he noted that no action had been started within the limitation period as it had been in this case.

Finally, the judge noted the practical implications of accepting the insurer’s argument that all claims must be commenced within two years of the denial of benefits.  Given that an insured is statutorily required to mediate before bringing an action, there could well be delay in moving a civil action forward.  An insured might not obtain sufficient disclosure about the insurer’s conduct until well after the expiration of the two year period.  Particulars necessary to justify a claim for punitive or aggravated damages might not be revealed until documentary or oral discovery in the civil action.  Alternatively, the conduct that might cause an insured to consider such an amendment might arise later in the relationship and again well after the limitation period had expired.

In the result, the judge allowed the amendment and granted the insurer a right of further examination for discovery dealing solely with the amendment.

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

The Plaintiff was involved in a motor vehicle accident in which he sustained catastrophic injuries.  As a result, the Plaintiff received benefits under the no fault provisions of the Automobile Accident Insurance Act, R.S.S., 1978, c. A-35 (the "Act”).  This included income replacement benefits, living assistance benefits and reimbursement for certain expenses.  The amount of the benefits the Plaintiff received under the no fault provisions were less than the maximum entitlement under the Act.  The Plaintiff commenced an action claiming for the difference between the amount he would have been awarded as damages at common law and the amount he had been paid and would continue to be paid under the Act.  It is in relation to that claim the Plaintiff sought a determination of law with respect to a number of issues.

Firstly, the Court was asked to assess whether a claim for “economic loss” could be pursued pursuant to s. 103(1)(a)(iii) of the Act where the benefits of Division 3 and Division 7 do not and will not exceed the maximum benefits prescribed in s. 112(3) of the Act.  The Court answered that question in the negative.  The aggregate limit for expenses must be exceeded before the right to claim for economic losses will arise.  The claims for those losses are limited to the scope of Part VIII of the Act.  The Court rejected the argument that the Plaintiff had a right to claim for economic losses if any portion of his claim was not paid for by the insurer.

The Plaintiff also sought to recover benefits from the Defendants which were not paid by the Insurer.  The Court held that the appropriate mechanism to seek reimbursement for such additional costs was within the appeal provisions in the legislation.

The Court found that the Plaintiff was not in a position to pursue a benefit to fund a substitute worker to carry out the work on his farm.  He had opted to receive an income replacement benefit based upon his employment earnings rather than pursuing a benefit to fund a substitute worker.

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