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

In this case, a homeowner ("Johnson") brought an action against his insurer ("AXA").

Following a fire at his house, AXA denied coverage for a fire loss because it alleged Johnson failed to disclose the presence of a massage parlor in his basement suite and, further, that Johnson himself had started the fire.

The court held that Johnson had made a material misrepresentation in the application for insurance and had committed arson with respect to the fire loss at issue, and upheld the denial of coverage.

In doing so, the court reaffirmed that morally blameworthy civil conduct, such as arson, need only be proved on a balance of probabilities.

Johnson v. AXA Pacific Insurance Co., [2011] B.C.J. No. 414, March 14, 2011, British Columbia Supreme Court, T.C. Armstrong J.

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In a case concerning coverage under a motor truck cargo insurance policy, a truck driver locked a truck and secured the two flatbed trailers, but left the keys under the floor mat inside the cab of the truck.

Following a theft, Lloyd's Underwriters ("Lloyd's") argued that this loss was not covered, because the policy in place only applied to trucks subject to such trucks "having all their openings closed, securely locked and all keys removed…."

The Plaintiff’s action against Lloyd's with respect to the disappearance of cargo on one of its truck trailer units was allowed.  The court held that "all keys removed" created ambiguity as to whether the keys were intended to be removed from the locks or from anywhere in the truck.  The Court found the wording of the Unattended Truck Endorsement was ambiguous, and interpreted the policy wording against Lloyd's.

421205 Alberta Ltd. (c.o.b. Schroeder Transport) v. Lloyd's Underwriters, [2011] A.J. No. 311, March 17, 2011, Alberta Court of Queen's Bench, J.M. Ross J.

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This case concerns the priority as between insurers.

At issue was whether a car loaned to the customer of a car dealership while his vehicle was being repaired was a "loaner" or a rental car.  If it was a rental car, the customer's insurer would be the primary insurer responsible for the loss.

The insurer of the car dealership was found to be the primary insurer with respect to collision damages. There was no written agreement between the car dealership and its customer pertaining to the use of the vehicle and no real terms of use for the vehicle.

Coachman Insurance Co. v. Lombard General Insurance Co. of Canada, [2011] O.J. No. 1236, March 23, 2011, Ontario Superior Court of Justice, M.J. Quigley J.

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In this case, the Saskatchewan Court of Appeal considered a number of issues surrounding payments that Saskatchewan Government Insurance had made to the mother of a brain-injured infant as "income-replacement," to allow her to stay home and care for her daughter.

SGI had attempted to characterize these payments as "ex gratia", and argued that it had no obligation to continue them.

The Automobile Injury Appeal Commission (the "Commission") disagreed, holding that the payments must have been authorized under the relevant legislation, as "you can't spend money you are not authorized to spend."

The appeal by SGI from a decision of the Commission ordering SGI to pay income replacement benefits to the mother of an injured child was dismissed where the Commission properly concluded that benefits paid to the mother were covered by Personal Injury Benefits Regulations and were not merely ex gratia payments.

Saskatchewan Government Insurance v. Becker, [2011] S.J. No. 154, February 23, 2011, Saskatchewan Court of Appeal, R.G. Richards, G.A. Smith and R.K. Ottenbreit JJ.A.

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