Court File and Parties
COURT FILE NO.: 09-44200A1
DATE: 20120423
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jesse Barzo, Plaintiff
AND:
Robert Lanari and Kyoung A. Ryu, Defendants
AND:
Perth Insurance Company, Third Party
BEFORE: Hackland R.S.J.
COUNSEL: Helmut R. Brodmann, for the Defendant Robert Lanari
Mitchell K. Kitagawa, for the Third Party Perth Insurance Company
ARGUED: April 5, 2012 (Ottawa)
ENDORSEMENT
[1] The defendant Robert Lanari moves for summary judgment claiming a declaration that his policy of motor vehicle insurance with the third party Perth Insurance Company was in full force and effect on September 14, 2007 when he struck the plaintiff (a pedestrian), while operating his vehicle. Perth Insurance Company claims that it had validly terminated Mr. Lanari’s coverage for nonpayment of premiums and brings a cross-motion for summary judgment seeking a declaration to that effect.
[2] I am of the opinion that Perth Insurance Company validly terminated coverage effective August 4, 2007, one month and ten days prior to the accident giving rise to this proceeding and summary judgment granting a declaration to that effect will issue.
[3] The defendant argues that the policy termination was invalid because (1) Perth Insurance Company purported to charge premiums in excess of the contractual agreement between the parties and (2) the notice of policy termination was not compliant with section 237 of the Insurance Act and section 11 of Ontario Regulation 777/93 because 30 days written notice of cancellation by registered mail was not provided.
[4] The excessive premium argument is without merit. On January 23, 2007 the defendant purchased a policy of automobile insurance from Perth Insurance Company and the Application (standard Ontario Application for Automobile Insurance) estimated the premium to be in the amount of $1,823.10. After Perth Insurance Company processed the application and became aware that the defendant was an at fault driver in a previous accident, the premium was set at $2,805 with a monthly payment of $258.92 rather than the originally contemplated $152.31. Payments in the sum of $258.92 were made by automatic withdrawal from the defendant’s spouse’s bank account on the first days of March, April and May 2007. The June and July 2007 payments were returned NSF and the bank account was then closed. Perth Insurance Company cancelled the policy for non-payment of premiums effective 12:01 a.m. on August 4, 2007.
[5] On this evidence I find that the defendant agreed to the premiums charged and which were paid without objection for three months until the default occurred following which no further payments were made and the defendant’s bank account was closed. The defendant Mr. Lanari has not filed an affidavit in this proceeding and counsel advise his whereabouts is unknown. I find that the premiums charged were agreed to by implication in that they were paid without complaint. The insurance application is exactly that – an application. The contract arises when the policy is issued.
[6] The defendant also submits that Perth Insurance Company failed to comply with Statutory Conditions 11 (1.2) (a) governing automobile insurance. This subsection requires an insurer give notice of cancellation for non-payment of premiums in accordance with certain time requirements. In particular, the notice of termination must specify a termination date that is “no earlier” than the 30th day after the insurer gives notice by registered mail. Further, statutory condition 11 (5) provides that for this purpose the day on which the insurer gives notice by registered mail shall be deemed to be the day after the day of mailing.
[7] The parties dispute the calculation of the 30 day period. The defendant asserts that Perth Insurance Company’s stated policy cancellation date of August 4th is only 28 days written notice i.e. 2 days short of the statutory requirement. I reject this and instead accept the calculations placed before the court by the insurer (Tab 9 of Perth Insurance Company Book of Authorities). I respectfully adopt this explanation for the insurer’s calculation (paragraphs 40 to 42 Perth Insurance Factum).
It is Perth’s position that it gave the requisite 30 days notice as specified in the regulation. The date of notice is deemed to be the day after the day of mailing. That day commences at 12:00 a.m. on July 6th. Therefore notice was deemed to be given to Lanari at 12:00 a.m. on July 6.
The date of termination is to be no earlier than the 30th day after notice is given. The 30th day from 12:00 midnight on July 6th (the date of notice), commences at 12:00 midnight on August 4th. Therefore, the date of notice can be no earlier than August 4th at 12:00 midnight and this is the reason the cancellation letter lists the date of cancellation as August 4th 12:01 am.
The letter of termination to Lanari indicated that 12:01 on August 4th was the date and time the insurance policy would terminate. This date and time falls within the 30th day after notice of termination was given to Lanari on July 6th, 2007. Therefore, the termination provisions in the regulation were followed and cancellation of the policy was valid. A chart setting out the manner of calculation is attached at Tab 9 of the Responding Party’s Book of Authorities.
[8] I would note as well that the defendant Lanari never attempted to pay up the premium default to re-instate his coverage. The accident in this case occurred more than one month after the date of termination specified in the notice letter. Accordingly, even if the notice of termination was short served, by the time the accident occurred the notice had “ripened”, or become effective, as the court held in Clapp v. Traveller’s Indemnity Co., [1932] O.R. at pp 2-3.
[9] In the circumstances summary judgment is granted to the Third Party Perth Insurance Company and a declaration will issue that the policy of insurance was validly terminated effective August 4, 2007 in accordance with the notice of termination. The summary judgment motion of the defendant Linari is dismissed.
[10] Costs of the motions are awarded to the Third Party Perth Insurance Company, fixed in the sum of $5,000 plus $750 for disbursements plus applicable HST, payable within 30 days of the release of this endorsement.
Mr. Justice Charles T. Hackland
Released: April 23, 2012
COURT FILE NO.: 09-44200A1
DATE: 20120423
BETWEEN:
Jesse Barzo, Plaintiff
AND:
Robert Lanari and Kyoung A. Ryu, Defendants
AND:
Perth Insurance Company, Third Party
ENDORSEMENT
HACKLAND R.S.J.
Released: April 23, 2012