Sekhon v. RBC General Insurance Company, 2008 ONSCDC 65751

Sekhon v. RBC General Insurance Company [Indexed as: Sekhon v. RBC General Insurance Co.]

93 O.R. (3d) 472

Ontario Superior Court of Justice,

Divisional Court,

Marshman, Aitken and Swinton JJ.

November 28, 2008

Insurance -- Automobile insurance -- Interpretation and construction -- "Accidental loss" -- Insured's vehicle damaged when it crossed three lanes of traffic and struck tree while being driven by insured's daughter -- Daughter apparently experiencing psychotic episode at time of collision -- Trial judge not erring in finding that daughter did not understand nature and consequences of her actions and had no conscious or deliberate physical control of vehicle at time of collision -- Loss "accidental" -- Insured entitled to coverage in any event as incident occurred without her foresight or expectation and was not reasonably foreseeable consequence of any action or inaction on her part.

The insured's vehicle was damaged when it crossed three lanes of traffic, went through a fence and struck a tree while being driven by her daughter. The daughter stated after the incident that she had caused the collision "to test her mortality". She was involuntarily committed to hospital. In the days after the incident, she was observed acting in a bizarre fashion. A doctor considered the most likely provisional diagnosis to be an acute psychotic episode of unknown origin. The trial judge found that the insured's loss fell within the confines of "direct and accidental loss" under s. 7.1.1 of the standard Ontario Automobile Policy and that the insurer was required to pay the insured for collision damage. The insurer appealed.

Held, the appeal should be dismissed.

The trial judge correctly instructed himself on the meaning of the words "accident" and "accidental loss". "Accident" is a non-technical term that is to be understood in its popular and ordinary sense as denoting an unlooked-for mishap or an untoward event which is not expected or designed. There was evidence upon which the trial judge could conclude on a balance of probabilities that the insured's daughter had no conscious or deliberate physical control of the vehicle, despite her comments immediately following the event that she intended to test her mortality. It was open to the trial judge to conclude that the daughter did not understand the nature and consequences of her actions when she drifted off the road and that the collision was "accidental". In any event, the insured, as the innocent owner of the damaged vehicle, was entitled to coverage as the accident [page473] occurred without her foresight or expectation and was not a reasonably foreseeable consequence of any action or inaction on her part.

APPEAL from the judgment of Crane J. dated February 26, 2008 requiring the insurer to pay the insured for collision damage. [page474]

Cases referred to Budai v. Canadian General Insurance Co., 1990 13879 (ON CA), [1990] O.J. No. 2834, 1 C.C.L.I. (2d) 171, 21 A.C.W.S. (3d) 1296 (C.A.), affg 1987 9954 (ON SC), [1988] O.J. No. 1036, 29 C.C.L.I. 203 (Dist. Ct.); Candler v. London & Lancashire Guarantee & Accident Co. of Canada, 1963 155 (ON SC), [1963] 2 O.R. 547, [1963] O.J. No. 763, 40 D.L.R. (2d) 408, [1963] I.L.R. Â1-110 at 537 (H.C.J.); Co-operative Fire & Casualty Co. v. Saindon, 1975 180 (SCC), [1976] 1 S.C.R. 735, [1975] S.C.J. No. 52, 56 D.L.R. (3d) 556, 4 N.R. 343, 10 N.B.R. (2d) 329, [1975] I.L.R. Â.1-669 at 1152; Duggan-Rowlands v. CAA Insurance Co. (Ontario), 2007 8642 (ON SC), [2007] O.J. No. 1024, 46 C.C.L.I. (4th) 274, 45 M.V.R. (5th) 231, 156 A.C.W.S. (3d) 449 (S.C.J.); Fenton v. J. Thorley & Co., [1900-3] All E.R. Rep. Ext. 1161, [1903] A.C. 443, 72 L.J.K.B. 787, 89 L.T. 314, 52 W.R. 81, 19 T.L.R. 684, 5 W.C.C. 1 (H.L.); Forbes Chevrolet Oldsmobile Ltd. v. Home Insurance Co., 1990 4065 (NS SC), [1990] N.S.J. No. 426, 107 N.S.R. (2d) 203, 1 C.C.L.I. (2d) 273, [1991] I.L.R. Â1-2714 at 1186, 24 A.C.W.S. (3d) 1280 (S.C. (T.D.)); Francey v. Wawanesa Mutual Insurance Co., 1991 ABCA 251, [1991] A.J. No. 867, 84 D.L.R. (4th) 575, [1992] 1 W.W.R. 52, 82 Alta. L.R. (2d) 339, 117 A.R. 318, 29 A.C.W.S. (3d) 91 (C.A.), affg 1990 5558 (AB KB), [1990] A.J. No. 703, 72 D.L.R. (4th) 544, [1990] 6 W.W.R. 329, 75 Alta. L.R. (2d) 257, 108 A.R. 82, 46 C.C.L.I. 240, [1990] I.L.R. Â1-2652 at 10421, 22 A.C.W.S. (3d) 348 (Q.B.); Gerigs v. Rose (Guardian ad litem of), [1979] O.J. No. 40, 9 C.C.L.T. 222, [1979] 1 A.C.W.S. 86 (H.C.J.); Greenway v. Saskatchewan Government Insurance Office, 1967 404 (SK QB), [1967] S.J. No. 191, 59 W.W.R. 673 (Dist. Ct.); Henckel v. State Farm Mutual Automobile Insurance (1997), 1997 12129 (ON SC), 33 O.R. (3d) 253, [1997] O.J. No. 1439, 145 D.L.R. (4th) 765, 31 O.T.C. 230, 43 C.C.L.I. (2d) 38, [1997] I.L.R. I-3458, 27 M.V.R. (3d) 59, 70 A.C.W.S. (3d) 696 (Gen. Div.); H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401, [2005] S.C.J. No. 24, 2005 SCC 25, 251 D.L.R. (4th) 604, 333 N.R. 1, [2005] 8 W.W.R. 1, J.E. 2005-845, [2005] R.R.A. 275, 262 Sask. R. 1, 24 Admin. L.R. (4th) 1, 29 C.C.L.T. (3d) 1, 8 C.P.C. (6th) 199, 138 A.C.W.S. (3d) 852; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; Perri v. Allstate Insurance Co. of Canada, 1984 5972 (ON SC), [1984] O.J. No. 2359, 8 C.C.L.I. 40, [1984] I.L.R. Â1-1804 at 6952 (Co. Ct.); Stats v. Mutual of Omaha Insurance Co., 1978 38 (SCC), [1978] 2 S.C.R. 1153, [1978] S.C.J. No. 56, 87 D.L.R. (3d) 169, 22 N.R. 91, [1978] I.L.R. Â1-1014 at 1188, [1978] 2 A.C.W.S. 393; Trynor Construction Co. v. Canadian Surety Co., 1970 938 (NS CA), [1970] N.S.J. No. 85, 10 D.L.R. (3d) 482, 1 N.S.R. (2d) 599, [1970] I.L.R. Â1-356 at 1033 (S.C. (A.D.)); Turner v. Co-operative Fire and Casualty Co., 1983 2945 (NS CA), [1983] N.S.J. No. 412, 147 D.L.R. (3d) 342, 58 N.S.R. (2d) 1, 1 C.C.L.I. 1, [1983] I.L.R. Â1-1678 at 6440, 123 A.P.R. 1, 19 A.C.W.S. (2d) 320 (S.C. (A.D.)); Veinot v. Maritime Life Assurance Co., 1976 2468 (NS SC), [1976] N.S.J. No. 534, 22 N.S.R. (2d) 84, 31 A.P.R. 84 (S.C. (T.D.)); Voisin v. Royal Insurance Co. of Canada (1988), 1988 4736 (ON CA), 66 O.R. (2d) 45, [1988] O.J. No. 3115, 53 D.L.R. (4th) 299, 29 O.A.C. 227, 33 C.C.L.I. 1, [1988] I.L.R. Â1-2358 at 9112, 11 A.C.W.S. (3d) 394 (C.A.); Waxman v. Waxman, 2004 39040 (ON CA), [2004] O.J. No. 1765, 186 O.A.C. 201, 44 B.L.R. (3d) 165, 132 A.C.W.S. (3d) 1046 (C.A.); Whaley v. Cartusiano (1990), 1990 6650 (ON CA), 72 O.R. (2d) 523 at 533, [1990] O.J. No. 246, 68 D.L.R. (4th) 58 (C.A.), affg (1990), 72 O.R. (2d) 523 (Gen. Div.)

Lee Samis, for appellant, RBC General Insurance Company. Ben Fortino, for respondent, Rajinder Sekhon.

Endorsement of the court was delivered by AITKEN J.: -- Issues Under Appeal

[1] The appellant appeals from the judgment of Crane J. dated February 26, 2008 requiring the appellant to pay to the respondent $37,000 for collision damage under her automobile insurance policy with the appellant. The respondent's vehicle was damaged when the vehicle, driven by the respondent's daughter, struck a tree after having crossed three lanes of traffic and gone through a fence. No other vehicles were involved. It was an agreed fact that, immediately following the incident, the respondent's daughter said that she had caused the collision "on purpose" "to test her mortality" or "to test her immortality". The issue at trial was whether the respondent's loss fell within the confines of "direct and accidental loss" under s. 7.1.1 of the standard Ontario Automobile Policy that governed the parties' rights.

[2] Section 7.1.1 of the Ontario Automobile Policy reads:

7.1.1 Coverage for Loss of or Damage to Your Automobile

We agree to pay for direct and accidental loss of, or damage to, a described automobile and its equipment caused by a peril such as fire, theft, or collision if the automobile is insured against these perils.

[3] The trial judge determined that the issue of whether the incident had been accidental had to be considered from the point of view of the respondent's daughter, not the respondent herself. He found on the totality of the evidence that, "on a balance of probabilities [the respondent's daughter] was suffering from an acute psychiatric disorder, such that she had no conscious or deliberate physical control of the operation of the motor vehicle due to the absence of a sane and deliberating mind". He concluded that the loss sustained by the respondent as a result of the damage to her vehicle fell within the meaning of "direct and accidental loss" under s. 7.1.1.

[4] The appellant argues that the trial judge erred in law in concluding on the evidence that the claimed damages were the result of a "direct and accidental loss" as defined in s. 7.1.1. More specifically, the appellant argues that there was insufficient evidence to support the trial judge's findings that the daughter's acute psychiatric disorder negated her ability to consciously or deliberately control the vehicle and that she [page475] involuntarily lost the ability to operate the vehicle at the time of the incident.

[5] The respondent submits that the trial judge made no palpable and overriding error in reaching this conclusion and that, in any event, the question of whether the loss was the result of an accident rather than an intentional action must be viewed from the perspective of the "insured". In this case, the insured was the respondent, the vehicle's owner, not the respondent's daughter, the vehicle's driver. The evidence was that the respondent had no forewarning that her daughter might intentionally cause damage to the vehicle. There was no evidence of any negligence or wrongdoing in any respect on the part of the respondent in lending her vehicle to her daughter.

[6] The trial judge found that this alternative argument could not succeed due to the specific wording of s. 7.1.1 of the policy. The respondent cross-appeals this ruling in the event that this court allows the appellant's appeal. Standard of Review

[7] The standard of review on a question of law is correctness. The standard of review for findings of fact is "palpable and overriding error" (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, at paras. 8, 10, 28; Waxman v. Waxman, 2004 39040 (ON CA), [2004] O.J. No. 1765, 186 O.A.C. 201 (C.A.), at paras. 296-97, 300). The standard of review for inferences of fact is "palpable and overriding error" (H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, [2005] S.C.J. No. 24, at para. 10).

[8] In Waxman v. Waxman, supra, the Ontario Court of Appeal provided the following guidance regarding the meaning of "palpable and overriding error" [at paras. 296-97, 300]:

The "palpable and overriding" standard addresses both the nature of the factual error and its impact on the result. A "palpable" error is one that is obvious, plain to see or clear: Housen at 246. Examples of "palpable" factual errors include findings made in the complete absence of evidence, findings made in conflict with accepted evidence, findings based on a misapprehension of evidence and findings of fact drawn from primary facts that are the result of speculation rather than inference.

An "overriding" error is an error that is sufficiently significant to vitiate the challenged finding of fact. Where the challenged finding of fact is based on a constellation of findings, the conclusion that one or more of those findings is founded on a "palpable" error does not automatically mean that the error is also "overriding". The appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in the face of that error: Schwartz v. Canada, 1996 217 (SCC), [1996] 1 S.C.R. 254 at 281. . . . . . [page476]

[T]he "palpable and overriding" standard applies to all factual findings whether based on credibility assessments, the weighing of competing evidence, expert evidence, or the drawing of inference from primary facts. . . . Appellant's Appeal

[9] The trial judge correctly instructed himself on the meaning of the words "accident" and "accidental loss", referring to such authorities as Stats v. Mutual of Omaha Insurance Co., 1978 38 (SCC), [1978] 2 S.C.R. 1153, [1978] S.C.J. No. 56. "Accident" is a non-technical term that is to be understood in its popular and ordinary sense as denoting an unlooked-for mishap or an untoward event which is not expected or designed (See Fenton v. J. Thorley & Co., [1903] A.C. 443, 52 W.R. 81 (H.L.), at p. 448 A.C.). In Voisin v. Royal Insurance Co. of Canada (1988), 1988 4736 (ON CA), 66 O.R. (2d) 45, [1988] O.J. No. 3115 (C.A.), at para. 8, "accident" was defined as follows:

The word "accidental", like "accident", is, as the cases demonstrate, not susceptible of precise definition. In the context of an accident insurance policy which contains no express definition, it is well-established that these words are to be given their ordinary, usual and popular meaning as indicating an unlooked for mishap or an untoward event which is not expected or designed; or as an event which takes place out of the usual course of events without the foresight or expectation of the person injured; or as an injury happening by chance unexpectedly, or not as expected. In determining whether a certain result is accidental, the occurrence is to be viewed from the standpoint of an ordinary reasonable person to see whether or not, from his or her standpoint, it was unexpected, unusual and unforeseen.

[10] In Perri v. Allstate Insurance Co. of Canada, 1984 5972 (ON SC), [1984] O.J. No. 2359, 8 C.C.L.I. 40 (Co. Ct.), Perri drove his vehicle into another vehicle in an attempt to commit suicide. Allstate denied collision coverage under Perri's policy of insurance on the ground that the damage to his vehicle was not an "accidental loss" under the terms of the policy. Zalev J. determined that no loss resulting from the wilful act of the insured could be considered accidental within the meaning of the policy. He accepted the definition of "wilful" in Black's Law Dictionary as [at para. 13]: "proceeding from a conscious motion of the will; voluntary. Intending the result which actually comes to pass; designed; intentional; not accidental or involuntary". Zalev J. placed the burden on Perri to prove on a balance of probabilities that by reason of mental infirmity, Perri was unable to appreciate the nature and consequences of his acts in order to establish that the collision had not been the result of his wilful actions but instead had been accidental. In this regard, he referred [at para. 18] to Gerigs v. Rose (Guardian ad litem of), [1979] O.J. No. 40, 9 C.C.L.T. 222 (H.C.J.), at para. 68, per Eberle J.: [page477]

In the phrasing of the test, "was the defendant able to appreciate the nature and consequence of his act?" it appears to me that the word "nature" focuses on the physical aspects of the act. "Consequence" focuses on what may follow from it, in this sense, that is, what will a bullet do if it is fired from a gun and hits someone, what will it do to that person?

[11] Zalev J. found as a fact that Perri had been aware of his actions up to the moment of impact; he had realized that by not steering he would hit the car in front of him and he did exactly that; and at the time, Perri was suffering from a psychotic depression or schizophrenia. Zalev J. found that Perri had not been able to restrain his impulse to commit suicide. However, in that he had appreciated that driving the car with his hands off the wheel would result in a collision, he was able to appreciate the nature and consequences of his actions. Consequently, his actions were not accidental.

[12] In Whaley v. Cartusiano (1990), 1990 6650 (ON CA), 72 O.R. (2d) 523 (Gen. Div.) affd (1990), 72 O.R. (2d) 523 at 533, [1990] O.J. No. 246 (C.A.), the defendant, after an argument with his wife, got a gun from his house, went across the road, and shot and seriously injured the plaintiff, whom he did not know, saying something to the effect: "It's all your fault, take this." In criminal proceedings, the defendant was acquitted by reason of insanity. The defendant admitted liability to the plaintiff in a civil action for damages for assault. Third-party proceedings against the defendant's insurer were unsuccessful. The policy excluded liability for bodily injury intentionally caused by the insured. On the basis of the statements made by the defendant at the time of the shooting, the evidence of two psychiatrists to the effect that the defendant would have appreciated that if he shot the plaintiff he would injure him, and the defendant's admission of liability, Holland J. found that the defendant's actions in shooting the plaintiff had been intentional.

[13] The trial judge in the case at hand reviewed the evidence from the ambulance attendants, police officers, nurses, emergency room attendants and doctors who tended to the respondent's daughter immediately after the incident, and the psychologists who assessed her in the following months. In addition to the evidence that the respondent's daughter had told several people following the incident that she had caused the collision to test her mortality or immortality, there was the following evidence: -- A witness described the respondent's vehicle as drifting (not veering) across the lanes of traffic, through the fence and into the tree, giving the witness the impression that the driver had fallen asleep or had passed out. When the [page478] respondent's daughter exited the car, she told the witness that she could be the Queen of England. -- The respondent's daughter told the ambulance attendants that she lived several lives and could not die. One ambulance attendant described her as appearing to be removed from reality. -- She told the emergency room physician that she became immortal and needed to test her powers by driving her car at high speed and running into a tree. -- She told hospital staff on the day of the incident that she was or felt immortal and was on "another plane". -- She told a nurse on the day of the incident that the collision was an impulse action, that she always wanted to see what speed was like, that she might go to a better place and that this just came over her. -- She told a physician the day after the incident that she had been under stress, that she had decided to take a joy ride to reduce her stress, that she probably was trying to test how far she could go without gas, and that while she was on the highway she felt as if she had lost her concentration. The next thing she knew, there were ambulance attendants and police officers standing around her. -- The physician considered the most likely provisional diagnosis to be an acute psychotic episode of unknown origin, and possibly a hypo-manic episode. -- The respondent's daughter was involuntarily committed to hospital. -- In the days following the incident, the respondent's daughter was observed in hospital acting in a bizarre fashion. She was disorganized, was unable to follow simple instructions and was talking to herself. She showed symptoms of paranoia and had visual and auditory hallucinations as well as delusions of grandeur. -- The respondent's daughter told a psychologist during interviews two to five months after the incident that when she was driving something happened, but she could not recall what. She recalled looking up into the blue sky and just closing her eyes. She kept her eyes closed, but could feel herself going through the fence. [page479]

[14] In my view, there was evidence upon which the trial judge could conclude on a balance of probabilities that the respondent's daughter had no conscious or deliberate physical control of the respondent's vehicle, despite her comments immediately following the event that she intended to test her mortality or immortality. I reject the appellant's argument that, in order to succeed, the respondent had to adduce expert medical evidence to the effect that, at the time of the incident, the driver was suffering from an acute psychiatric disorder that prevented her from having conscious or deliberate physical control of the operation of the vehicle and that prevented her from understanding the nature and consequences of her actions. It was open to the trial judge to conclude, after weighing all of the evidence, that the respondent's daughter did not understand the nature and consequences of her actions when she closed her eyes and drifted off the road. The trial judge made no palpable and overriding error in inferring this fact from the totality of the evidence (including the Agreed Statement of Facts) tendered at trial. Respondent's Cross-Appeal

[15] If the appellant's appeal were successful, the respondent, on the cross-appeal, submitted that the trial judge erred in law in finding that the respondent, the innocent owner of the vehicle that was damaged, was disentitled to compensation for loss under her standard automobile insurance policy as a result of an intentional act (if so found) of her daughter to whom the respondent had innocently and without any negligence lent her vehicle. Although the appellant's appeal was not successful, I will consider the merits of the cross-appeal because, in my view, it provides an additional reason why the outcome at trial must stand.

[16] In a number of cases, an innocent insured has been found entitled to collect under the accidental loss provisions in his or her automobile insurance policy even though the loss occasioned was the result of the intentional actions of a third party.

[17] In Turner v. Co-operative Fire and Casualty Co., 1983 2945 (NS CA), [1983] N.S.J. No. 412, 58 N.S.R. (2d) 1 (S.C. (A.D.)), operators left a vehicle owned by the insured near the top of a gravel pit when they went for lunch. When they returned, the vehicle was at the bottom of the pit, extensively damaged. The trial judge found that this had happened during an act of theft or vandalism by unnamed third parties. The insured was covered against "direct and accidental loss of or damage to the automobile" from any peril other than collision. The issue was whether [page480] the loss had been accidental. The trial judge found that it had not been accidental because the insured had been aware of problems with vandalism in the area and had "courted the risk" by leaving the vehicle unattended over the lunch hour. On appeal, the appeal division found that the evidence did not support a finding of wilful neglect or courting of the risk by the insured [at para. 34]:

A theft is, of course, a deliberate and non-accidental act. What we are here concerned with, however, is not whether the taking was accidental qua the taker but whether it is accidental qua the insured owner. An accidental theft insofar as the insured is concerned may be said to be a taking of his vehicle by another without his permission, knowledge or consent. Conversely, a non-accidental theft would be one where the circumstances were such that the theft was not unexpected, unlooked for or unusual but rather was an event that was courted by the insured. The statutory requirement of the proof of loss recognizes the non-accidental situation in providing, as it in effect does, that losses that occur through the wilful act or neglect, procurement, means or connivance of the insured are not accidental losses for which indemnity is provided. In my view, these words of exclusion aptly express the concept of courting the risk.

[18] In Forbes Chevrolet Oldsmobile Ltd. v. Home Insurance Co., 1990 4065 (NS SC), [1990] N.S.J. No. 426, 107 N.S.R. (2d) 203 (S.C. (T.D.)), a car leasing company leased a vehicle to a lessee who deliberately collided with another vehicle in an attempt at suicide. The lessee had obtained a policy of insurance in which he and the leasing company were both named as insured parties. The policy covered against direct and accidental loss. The question before the court was whether the leasing company was precluded from recovering its losses because the damage to the vehicle had been caused by the intentional conduct of the lessee, a named insured. The leasing company had no knowledge of nor was it in any way involved in the lessee's actions that resulted in the damage to the vehicle. In deciding that the leasing company was entitled to recover its losses under the policy, Davison J. stated [at para. 12]:

From this plaintiff's point of view, it was "fortuitous" that it should lease the vehicle to a man who decided to take the conscious decision to use it as an instrument in his own death. From the plaintiff's point of view, the event was accidental to the same extent as if the intentional act was done by any other third party. Acceptance of the insurer's position would result in precluding recovery under a policy when the property was intentionally damaged by another. The fact that the lessee who had intentionally caused the damage was also a named insured did not preclude recovery by the leasing company in that its interests and those of the lessee were separate and not joint and several. The two were not involved in any common enterprise. [page481]

[19] The cases relied on by the appellant as authority for the proposition that the loss sustained by the respondent insured in this case was not an accidental loss are all cases where the person whose actions were found not to be accidental was the named insured, and the person seeking recovery under the insurance policy in question (See Co-operative Fire & Casualty Co. v. Saindon, 1975 180 (SCC), [1976] 1 S.C.R. 735, [1975] S.C.J. No. 52; Perri v. Allstate Insurance Co. of Canada, supra; Whaley v. Cartusiano, supra. See, also, Candler v. London & Lancashire Guarantee & Accident Co. of Canada, 1963 155 (ON SC), [1963] 2 O.R. 547, [1963] O.J. No. 763 (H.C.J.); Greenway v. Saskatchewan Government Insurance Office, 1967 404 (SK QB), [1967] S.J. No. 191, 59 W.W.R. 673 (Dist. Ct.); Veinot v. Maritime Life Assurance Co., 1976 2468 (NS SC), [1976] N.S.J. No. 534, 22 N.S.R. (2d) 84 (S.C. (T.D.))). They were not cases involving an innocent insured who, through no intentional, reckless or negligent conduct, had suffered an unexpected or unforeseen loss. This type of situation was dealt with in Trynor Construction Co. v. Canadian Surety Co., 1970 938 (NS CA), [1970] N.S.J. No. 85, 1 N.S.R. (2d) 599 (S.C. (A.D.)), Budai v. Canadian General Insurance Co., 1987 9954 (ON SC), [1988] O.J. No. 1036, 29 C.C.L.I. 203 (Dist. Ct.), affd 1990 13879 (ON CA), [1990] O.J. No. 2834, 1 C.C.L.I. (2d) 171 (C.A.) and Francey v. Wawanesa Mutual Insurance Co., 1990 5558 (AB KB), [1990] A.J. No. 703, 108 A.R. 82 (Q.B.), affd 1991 ABCA 251, [1991] A.J. No. 867, 84 D.L.R. (4th) 575 (C.A.). In all of these cases, the innocent insured recovered under the accidental loss provisions in their policies.

[20] Allowing coverage for an innocent insured against an unexpected and unforeseen loss occasioned by the intentional acts of a third party is consistent with case law dealing with the interpretation of provisions in standard automobile insurance policies in regard to third parties operating an insured's vehicle while not authorized to do so under the law.

[21] In Duggan-Rowlands v. CAA Insurance Co. (Ontario), 2007 8642 (ON SC), [2007] O.J. No. 1024, 46 C.C.L.I. (4th) 274 (S.C.J.), an insured lent her car to her teenage son, who was named as an occasional driver under her policy, so that he could go to a party on his birthday. She told him to have fun, be good and stay over at his friend's home -- not drive home. She had no reason to suspect that he would drink and drive, and she did not specifically tell him not to do so. The son was in a single-vehicle collision in the wee hours of the morning. Milanetti J. concluded that the son had exceeded the consumption of alcohol allowed under his G2 licence and therefore his operation of his mother's vehicle had not been authorized by law. The insurance policy denied coverage if the insured or a third party with the permission of the insured operated the vehicle while not authorized by law. [page482] Milanetti J. found that the mother had not permitted her son to drink and drive and therefore the unlawful acts of the son did not act as a bar to the innocent mother's recovery under the insurance policy. Any ambiguity in an insurance policy must be construed against the insurer. Clearer language was required if an innocent insured was to be denied coverage.

[22] The same result occurred in Henckel v. State Farm Mutual Automobile Insurance (1997), 1997 12129 (ON SC), 33 O.R. (3d) 253, [1997] O.J. No. 1439 (Gen. Div.), where McWilliam J. found that an insured who had lent his car to his son not knowing that his son had not renewed his driver's licence on time, and who had advised his son not to drink and drive and to drive carefully, was entitled to recover under the collision provisions in his standard automobile insurance policy after the son was in a single- vehicle accident and the vehicle was destroyed. McWilliam J. found that the insured father had taken all reasonable and prudent precautions to see that his son would not be driving his vehicle while not authorized by law to do so.

[23] The incident causing the loss in the case at hand occurred without the foresight or expectation of the respondent and was in no way a reasonably foreseeable consequence of any action or inaction on her part. Consequently, the loss the respondent incurred fell within the meaning of "accidental loss" in s. 7.1.1. of the standard Ontario Automobile Policy. Disposition and Costs

[24] For these reasons, the appeal is dismissed. Costs in the agreed amount of $3,000 are awarded to the respondent.

Appeal dismissed.