Dennis Yiu Tong Ong

An appeal concerning the determination of priority between overlapping insurance policies following a motor vehicle collision.

The central issue was the identity of the "lessee" of a rental truck under section 277(1.1) of the Insurance Act.

The application judge found that the driver was the lessee based solely on the face of the rental agreement.

The Court of Appeal reversed, holding that agency principles must be considered when determining the identity of the lessee, and concluded that the company for which the driver was working was the true lessee based on the surrounding circumstances and the longstanding arrangement with the rental company.

The applicant and respondent insurers disputed priority over a personal injury claim arising from a motor vehicle accident involving a rented truck.

The driver, who was delivering furniture for his employer, rented the truck in his own name, though the employer's credit card was used for payment.

The court applied a straightforward contractual analysis to determine the 'lessee' under section 277(1.1) of the Insurance Act, concluding that the driver was the lessee because he signed the rental agreement and was the party the rental company could sue for enforcement.

Consequently, the applicant, as the insurer for the rental company, was declared the first loss insurer.