Shipman et al v. The Dominion of Canada General Insurance Company; Greenbird, Intervenor [Indexed as: Shipman v Dominion of Canada General Insurance Co.]

73 O.R. (3d) 144

[2004] O.J. No. 4160

Docket: C40625

Court of Appeal for Ontario,

Labrosse, Goudge and Blair JJ.A.

October 14, 2004

Insurance -- Automobile insurance -- Uninsured automobile coverage -- Pedestrian claiming entitlement to coverage for personal injury under uninsured automobile provisions of owner's policy after being struck by motor vehicle which was being driven without owner's consent -- Policy excluding coverage where automobile was operated without owner's consent -- Motion judge erring in finding that s. 265 of Insurance Act provided complete code for uninsured automobile coverage and that neither Regulation 676 nor exclusion provisions of owner's policy had any impact on issue -- Pedestrian's claim excluded under policy -- Insurance Act, R.S.O. 1990, c. I.8, s. 265 -- R.R.O. 1990, Reg. 676.

The plaintiff was injured when she was struck by a motor vehicle that was being driven without the owner's consent. She brought an action for a declaration that she was entitled to coverage for personal injury under the uninsured automobile provisions of the owner's policy. The insurer argued that the plaintiff's claim was properly against the Motor Vehicle Accident Claims Fund. The motion judge found for the Fund. The insurer appealed.

Held, the appeal should be allowed.

The motion judge erred in finding that s. 265 of the Insurance Act provided a complete code for uninsured automobile coverage and that neither Regulation 676 nor the exclusion provisions of the insurer's policy had any impact on the issue. The Act, the Regulation and, inter alia, the exclusion provisions of the policy must all be considered in answering a question like the one in this case. The exclusion clause in the insurer's policy excluded coverage "if the automobile is used or operated by a person in possession of the automobile without the owner's consent". There was no basis for rewriting the scope of the policy to limit its exclusionary effect only to occupants. As there was no difficulty in applying the exclusion clause as written, there was no basis to decline to do so based on the opening words of s. 10 of Regulation 676. The exclusion clause excluded coverage for the plaintiff under the policy.

APPEAL from a decision of McLean J., [2003] O.J. No. 5527, [2003] O.T.C. 1161 (S.C.J.), in an action for a declaration of entitlement to coverage under the uninsured automobile provisions of an insurance policy. [page145]

Cases referred to Ortiz v. Dominion of Canada General Insurance Co. (2001), 2001 24093 (ON CA), 52 O.R. (3d) 130, 196 D.L.R. (4th) 732, [2001] I.L.R. para. I-3943, 10 M.V.R. (4th) 21 (C.A.) Statutes referred to Insurance Act, R.S.O. 1990, c. I.8, s. 265 Rules and regulations referred to R.R.O. 1990, Reg. 676 (Insurance Act), s. 10 [as am.]

D'Arcy McGoey, for appellant. Ronald R. M. Strike, for respondents/plaintiffs. Robert E. Seabrook, for respondent/intervenor.

The judgment of the court was delivered by

[1] GOUDGE J.A.: -- On July 26, 1998, the plaintiff and her daughter were pedestrians who were struck by a motor vehicle owned by Constance Carey. Tragically, the plaintiff was seriously hurt and her daughter was killed. It is agreed that at the time of the accident the vehicle was being driven without Ms. Carey's consent.

[2] Ms. Carey's vehicle was insured by the appellant, the Dominion of Canada General Insurance Company. It is agreed that under the Insurance Act, R.S.O. 1990, c. I-8 (the "Act"), the Dominion policy is required to provide statutory accident benefits to the plaintiff and the appellant has done so. In this respect, it is agreed that the plaintiff is an insured under the policy.

[3] In this action, the plaintiff seeks a declaration that she is entitled to coverage for personal injury under the uninsured automobile provisions of the Dominion policy. Dominion opposes this and says that the plaintiff's claim is properly against the Motor Vehicle Accident Claims Fund (the "Fund"). The Fund, acting for the driver, intervened in the action to join issue with Dominion on this question.

[4] The real debate, then, is between Dominion and the Fund as to which of them is to respond to the plaintiff's claim for damages for personal injury. Each is subject to the same $200,000 limit.

[5] The motion judge decided in favour of the Fund, finding that the provisions of s. 265 of the Act provide a complete code for uninsured automobile coverage and that neither Regulation 676 nor the exclusion provisions of the Dominion policy have any impact on this issue.

[6] The appellant's simple position is that the motion judge erred in this regard. The appellant argues that s. 265 of the Act, Regulation 676 and the exclusion in s. 1.8.2 of the policy must all be considered and applied. The appellant submits that this exclusion provision excludes coverage (including that provided by s. 265 of the Act) if the automobile is operated without consent.

[7] The relevant part of s. 1.8.2 is as follows:

1.8.2. Excluded Drivers and Driving Without Permission -- Except for certain Accident Benefits coverage, there is no coverage (including coverage for occupants) under this policy if the automobile is used or operated by a person in possession of the automobile without the owner's consent . . . [page146]

[8] The Fund agrees that the position of the motion judge cannot be sustained. It acknowledges that s. 265 of the Act, Regulation 676 and, inter alia, the exclusion provisions of the Dominion policy (including s. 1.8.2) must be read together to determine if the plaintiff is entitled to coverage under the Dominion policy. However, it says that s. 10 of Regulation 676 gives s. 1.8.2 of the policy effect only "so far as applicable" and as a result, the exclusion only applies to eliminate coverage for occupants.

[9] In our view, the respondent was correct to concede that the motion judge erred in finding that the question before him must be answered without reference to the Regulation or the exclusion provision in the Dominion policy. The jurisprudence of this court has made clear that the Act, the Regulation and inter alia the exclusion provisions of the policy must all be considered in answering a question like the one in this case. See, for example, Ortiz v. Dominion of Canada General Insurance Co. (2001), 2001 24093 (ON CA), 52 O.R. (3d) 130, 196 D.L.R. (4th) 732 (C.A.).

[10] Moreover, we see no basis for rewriting the scope of s. 1.8.2 of the Dominion policy to limit its exclusionary effect only to occupants. The language of the exclusion says exactly the opposite. Since there is no difficulty in this case in fully applying the exclusion clause as written, there is no basis to decline to do so based on the opening words of s. 10 of Regulation 676.

[11] The exclusion clause therefore excludes coverage for the plaintiff under the Dominion policy. This leaves her to resort to the Fund.

[12] The appeal must therefore be allowed, the order below set aside and the plaintiff's action for a declaration dismissed.

[13] As agreed, costs of the motion and of the appeal to the appellant payable by the fund in the amounts of $8,200 and $3,000 respectively. No costs of the trial.

Appeal allowed.