Jonathan Heeney

Enterprise Rent-A-Car appealed a decision finding it was the first loss insurer in a motor vehicle accident claim.

The insured was a listed driver under her father's standard Ontario Automobile Policy issued by Intact Insurance, but not a named insured.

The policy provided rental vehicle coverage only when rented by a named insured or their spouse.

The court held that the priority rules under the Insurance Act depend on the existence of coverage under the policy.

Since no coverage was available to the insured for rental vehicles under Intact's policy, the priority provisions did not apply, and Enterprise's insurer was responsible as the first loss insurer.

The applicant, Royal & Sun Alliance Insurance Company (RSA), sought an order compelling the respondent, Intact Financial Corporation (Intact), to contribute its proportionate share to the settlement of an underlying personal injury claim.

The core issue was whether Intact's liability for coverage was estopped by a previous decision by Mew J., which held Intact's policy to be excess coverage.

The court found that while the duty to defend was estopped, the ultimate question of coverage was not, as it was collateral to Mew J.'s earlier decision.

Applying Supreme Court and Court of Appeal guidance, the court determined that RSA's and Intact's policies provided primary coverage for different risks and were complementary, not overlapping, thus making "other insurance" clauses inapplicable.

Intact was ordered to reimburse RSA for its proportionate share of the settlement.

The applicant rental car company sought a declaration that the respondent insurer was the first loss insurer for a driver involved in an accident while driving a rental car.

The driver was a listed driver, but not a named insured, under her father's policy with the respondent.

The court interpreted section 277(1.1) of the Insurance Act harmoniously with the standard Ontario Automobile Policy 1 (OAP1), finding that the respondent's policy did not provide coverage for a listed driver driving a rental car unless an OPCF 27 endorsement was purchased.

The application was dismissed, and the applicant's insurer was deemed the loss insurer.

Wal-Mart Canada Corp. sought a declaration that Intact Insurance Company had a duty to defend and indemnify it in a negligence action.

The underlying tort action involved a plaintiff tripping over cracked pavement in Wal-Mart's parking lot.

Intact argued that its policy, which named Wal-Mart as an additional insured under a contract with C.L. & Sons Property Maintenance, did not cover the claim as C.L. & Sons was only contracted for litter pick-up, not pavement repair.

The court found that the maintenance agreement's scope of work included reporting deficiencies affecting pedestrian safety, and the insurer's own description of C.L. & Sons' business operations included "Maintenance and inspection." Therefore, the court declared that Intact had a duty to defend Wal-Mart.

However, Wal-Mart's request to appoint its own counsel due to a potential conflict of interest was dismissed, with the court directing standard insurer procedures for separate counsel and adjusters for Wal-Mart and C.L. & Sons.

Costs were awarded to Wal-Mart.

Following the dismissal of the plaintiffs' action on a summary judgment motion, the successful defendant sought partial indemnity costs of $42,469.53.

The plaintiffs opposed the costs award, arguing that special circumstances justified denying costs to the defendant.

The court rejected the plaintiffs' arguments, finding no unreasonable conduct by the defendant.

The court reduced the claimed fees slightly due to some duplication of work and awarded the defendant $29,000 in fees, plus HST and $6,650 in disbursements, subject to clarification on a potential setoff claimed by the plaintiffs.

Following an unsuccessful motion by the third party, the defendants sought substantial indemnity costs, arguing the motion was hopeless.

The court rejected the claim for substantial indemnity costs, finding the third party was entitled to pursue the motion.

Applying principles of reasonableness and proportionality, the court awarded the defendants partial indemnity costs fixed at $13,000 plus HST and disbursements.