Gore Mutual Insurance Co. v. 1443249 Ontario Ltd. [Indexed as: Gore Mutual Insurance Co. v. 1443249 Ontario Ltd.]

75 O.R. (3d) 477

[2004] O.J. No. 4822

Docket: C41751

Court of Appeal for Ontario

Goudge, Sharpe and Gillese JJ.A.

November 29, 2004

Insurance -- Automobile insurance -- Excluded Driver Endorsement -- OPCF 28A Excluded Driver Endorsement issued by automobile insurer not bearing signatures of insured or excluded driver -- OPCF 28A Excluded Driver Endorsement form approved by Superintendent not creating legal requirement for signatures of named insured and excluded drivers -- In absence of signatures insurer bearing onus of satisfying court that insured agreed to amend insurance policy to exclude coverage for driver who was otherwise driving with consent of insured -- Excluded Driver Endorsement not operating to amend contract and not relieving insurer of obligation to provide insurance coverage where insurer failed to establish that insured understood that he had agreed to amend insurance policy by excluding driver.

NOTE: The catchlines above relate to a decision of the Superior Court of Justice. An appeal of this judgment to the Court of Appeal for Ontario (Goudge, Sharpe and Gillese JJ.A.) was dismissed on November 29, 2004 27736 (ON SC), 2004, 70 O.R. (3d) 404. The endorsement of the court was as follows:

Lawrence M. Foy, for appellant.

Paul J. Lo Presti, for respondents.

Christopher R. Dunn, for intervenor Royal & Sun Alliance Insurance Company.

Amanda E. Bafaro, for intervenors Cheng-I Lee and Ching-Fen Chang.

[1] BY THE COURT: -- The application judge concluded that, in the circumstances of this case, the OPCF 28A Excluded Driver Endorsement did not operate to amend the contract of insurance. Thus, the insurer was not relieved of its obligation to provide insurance coverage. In our view, she was correct and for the reasons that she gave.

[2] There must be an agreement between the insurer and insured that the contract of insurance be amended in order to exclude coverage for a driver who was otherwise driving with the consent of the insured since an exclusion changes the terms of the contract of insurance. We share the application judge's view that the best evidence of such an agreement is a properly executed OPCF 28A form but agreement can be proven by evidence other than a signed form. As the application judge wrote in para. 17 of the reasons:

In my view, the form itself does not create a legal precondition requiring signatures. The requirement that insurers only use the form approved by the Superintendent does not give the Superintendent authority to create new obligations not otherwise authorized by law. The form itself is not set out in regulation. The approval of the form by the Superintendent ensures implementation of the legal requirements but also permits consistency and the reflection of sound policy and practical considerations. The fact that the form is written in plain language and requires the written acknowledgement of the insurer and the excluded driver are prudent policies that ensure the insured and excluded driver understand the serious impact of the exclusion. It also provides evidence of agreement and assists in preventing disputes such as have arisen in the instant case. There are good [page478] practical policy reasons why the endorsement should be acknowledged and signed by both the insured and the excluded driver.

[3] Indeed, both the respondent and the intervenor conceded at the oral hearing of this appeal that the signature of the insured was an evidentiary rather than a legal requirement.

[4] There was ample evidence upon which the application judge could find, as she did, that in the absence of a signed form, the insured had not agreed to such an amendment.

[5] Accordingly, the appeal is dismissed with costs to the respondent fixed at $7,500, inclusive of disbursements and GST.