Vogler v. Lemieux; Allstate Insurance Company of Canada, Statutory Third Party

[Indexed as: Vogler v. Lemieux]

Ontario Reports

Ontario Superior Court of Justice,

Divisional Court,

Leach J.

July 8, 2013

116 O.R. (3d) 513 | 2013 ONSC 4512

Case Summary

Insurance — Automobile insurance — Uninsured automobile coverage — Insured injured in single-vehicle accident involving his own vehicle — Insured claiming that another person without valid driver's licence was driving vehicle at time of accident — Insured seeking to amend his [page514] statement of claim to assert claim against his own automobile insurer under OPCF 44R family protection endorsement — Motion judge not erring in dismissing motion — Claim under OPCF 44R endorsement not tenable in law in any possible alternate scenario in this case.

The plaintiff was injured in a single-vehicle accident involving his own vehicle. He was charged with drinking and driving. Before his criminal trial, the defendant L came forward and stated that he had been driving the car immediately prior to the accident. L had no valid driver's licence. The plaintiff was acquitted at his criminal trial. He moved to amend his statement of claim to assert a claim against his own automobile insurer under the OPCF 44R family protection endorsement. The motion judge dismissed the motion on the basis that the claim was not tenable in law as the plaintiff could not establish that L was an "inadequately insured motorist" within the meaning of s. 1.5 of the endorsement. The plaintiff appealed.

Held, the appeal should be dismissed.

The motion judge erred in dismissing the motion on the basis that the plaintiff could not establish that L was an "inadequately insured motorist". In finding that the "total motor vehicle liability insurance . . . obtained by the owner or driver" referred to in s. 1.5(a) necessarily referred to the nominal third party limits set forth in the original policies of insurance obtained by either (and in this case the plaintiff owner), without consideration of whether those limits were actually available to respond to the claim of the injured motorist, the master focused unduly on the wording of s. 1.5(a) in isolation, without having sufficient regard to the endorsement in its entirety, and ss. 1.7, 1.8 and 4 in particular. "Obtained" in the phrase "total motor vehicle liability insurance . . . obtained by the owner or driver" should be interpreted as referring to the actual amount of liability insurance made available to the owner or driver to address the claims of the injured party, and not to the nominal amounts of third party liability coverage originally stipulated in the owner or driver's insurance policy.

Despite that error, the motion was properly dismissed as the claim was not viable in any of the possible factual scenarios in this case. If the plaintiff was actually the driver at the time of the accident, he could not advance a claim without targeting himself, and no person may sue himself. If L was operating the vehicle without the plaintiff's permission, there is no third party liability coverage whatsoever extended by the policy if the otherwise insured vehicle is being used or operated without the owner's consent. The plaintiff had no recourse to his own automobile policy or the OPCF 44R endorsement even if he was entirely blameless for the accident. If L were driving with the plaintiff's permission, and there was no breach of a statutory condition, the full $1 million in third party coverage limits of the plaintiff's policy would be available to L in response to any claim against him by the plaintiff, but the indemnity would flow from the provisions of the standard automobile policy, and not from any application of the OPCF 44R endorsement. If L were driving with permission, but there was a breach of a statutory condition of which the plaintiff could not reasonably have known, the breach of statutory condition 4(1) could not be asserted by the insurer as against the "plaintiff as owner" and named insured, so as to deny or limit the third party liability coverage otherwise available to the "plaintiff as owner" to respond to the claim of the "plaintiff as claimant". In that scenario, there was no shortfall between the $1 million of family protection coverage extended by the OPCF 44R endorsement and the $1 million in third party liability limits available to the "plaintiff as owner" to address the formal claims of the "plaintiff as claimant", and the endorsement accordingly had no application. Finally, if L was [page515] driving with permission, and there was a breach of a statutory condition that the plaintiff knew of or ought reasonably to have known of, the OPCF 44R endorsement had no application. The "plaintiff as owner" and named insured was party to the breach of a statutory condition. Pursuant to basic principles of contract law, that entitled the insurer to rescind its contract of insurance vis-à-vis the "plaintiff as owner" and named insured (including the OPCF 44R endorsement), even though the insurer might still have obligations to the "plaintiff as claimant" pursuant to s. 258 of the Insurance Act, R.S.O. 1990, c. I.8.

Patriquin v. Gogo, [2009] O.J. No. 304, 2009 78 (ON CA), affg [2007] O.J. No. 149, 154 A.C.W.S. (3d) 947 (S.C.J.), consd

Other cases referred to

A. Mantella & Sons Ltd. v. Ontario Realty Corp., [2009] O.J. No. 457, 2009 115 (ON CA), 75 R.P.R. (4th) 210, affg (2008), 2008 23953 (ON SC), 91 O.R. (3d) 449, [2008] O.J. No. 2024, 69 R.P.R. (4th) 303, 168 A.C.W.S. (3d) 508 (S.C.J.); Abela v. Ontario, [1988] O.J. No. 246 (Div. Ct.); Almrei v. Canada (Attorney General), [2012] O.J. No. 5323, 2012 779 (ON CA), 11 Imm. L.R. (4th) 175, 223 A.C.W.S. (3d) 214; Beausoleil v. Canadian General Insurance Co. (1992), 1992 8679 (ON CA), 8 O.R. (3d) 754, [1992] O.J. No. 954, 92 D.L.R. (4th) 152, 55 O.A.C. 383, 7 C.C.L.I. (2d) 165, [1992] I.L.R. Â1-2846 at 1872, 35 M.V.R. (2d) 133, 33 A.C.W.S. (3d) 620 (C.A.); Brissette v. Westbury Life Insurance Co., 1992 32 (SCC), [1992] 3 S.C.R. 87, [1992] S.C.J. No. 86, 96 D.L.R. (4th) 609, 142 N.R. 104, J.E. 92-1622, 58 O.A.C. 10, 13 C.C.L.I. (2d) 1, 47 E.T.R. 109, [1992] I.L.R. Â1-2888 at 2051, 36 A.C.W.S. (3d) 449; Chilton v. Co-operators General Insurance Co. (1997), 1997 765 (ON CA), 32 O.R. (3d) 161, [1997] O.J. No. 579, 143 D.L.R. (4th) 647, 97 O.A.C. 369, 41 C.C.L.I. (2d) 35, 69 A.C.W.S. (3d) 359 (C.A.); Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888, [1979] S.C.J. No. 133, 112 D.L.R. (3d) 49, 32 N.R. 488, [1980] I.L.R. Â1-1176 at 595, 1 A.C.W.S. (2d) 169; Co-Operative Fire & Casualty Co. v. Ritchie, 1983 155 (SCC), [1983] 2 S.C.R. 36, [1983] S.C.J. No. 61, 150 D.L.R. (3d) 1, 50 N.R. 106, 61 N.S.R. (2d) 437, 2 C.C.L.I. 215, [1983] I.L.R. Â1-1697 at 6530, 22 A.C.W.S. (2d) 5; Craig v. Allstate Insurance Co. of Canada (2002), 2002 44956 (ON CA), 59 O.R. (3d) 590, [2002] O.J. No. 2124, 214 D.L.R. (4th) 103, 161 O.A.C. 140, 39 C.C.L.I. (3d) 91, 25 M.V.R. (4th) 143, 114 A.C.W.S. (3d) 304 (C.A.); Dionisi v. Dionisi (1983), 1983 1863 (ON SC), 42 O.R. (2d) 597, [1983] O.J. No. 3121, 149 D.L.R. (3d) 563, 1 C.C.L.I. 268, [1983] I.L.R. Â1-1677 at 6438, 21 A.C.W.S. (2d) 67 (H.C.J.); Fletcher v. Manitoba Public Insurance Co., 1990 59 (SCC), [1990] 3 S.C.R. 191, [1990] S.C.J. No. 121, 74 D.L.R. (4th) 636, 116 N.R. 1, J.E. 90-1652, 71 Man. R. (2d) 81, 44 O.A.C. 81, 1 C.C.L.I. (2d) 1, 5 C.C.L.T. (2d) 1, [1990] I.L.R. Â1-2672 at 10547; Fosker v. Thorpe (2004), 2004 33358 (ON SC), 72 O.R. (3d) 753, [2004] O.J. No. 4187, 244 D.L.R. (4th) 434, [2004] O.T.C. 883, 15 C.C.L.I. (4th) 100, 10 M.V.R. (5th) 99, 134 A.C.W.S. (3d) 500 (S.C.J.); Grand River Enterprises v. Burnham, 2005 6368 (ON CA), [2005] O.J. No. 952, 197 O.A.C. 168, 10 C.P.C. (6th) 136, 137 A.C.W.S. (3d) 940 (C.A.); 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; Ontario (Public Trustee) v. Guaranty Trust Co. of Canada, 1980 52 (SCC), [1980] 2 S.C.R. 931, [1980] S.C.J. No. 106, 115 D.L.R. (3d) 513, 33 N.R. 271, 19 C.P.C. 157, 7 E.T.R. 287, 5 A.C.W.S. (2d) 260; R. v. MacIntosh (1995), 1995 124 (SCC), 21 O.R. (3d) 797, [1995] 1 S.C.R. 686, [1995] S.C.J. No. 16, 178 N.R. 161, J.E. 95-457, 79 O.A.C. 81, 95 C.C.C. (3d) 481, 36 C.R. (4th) 171, 26 W.C.B. (2d) 201; Reid Crowther & Partners v. Simcoe and Erie General Insurance Co., 1993 150 (SCC), [1993] 1 S.C.R. 252, [1993] S.C.J. No. 10, 99 D.L.R. (4th) 741, 147 N.R. 44, [1993] 2 W.W.R. 433, J.E. 93-230, 83 Man. R. (2d) 81, 13 C.C.L.I. (2d) 161, 6 C.L.R. (2d) 161, [1993] I.L.R. Â1-2914 at 2206, 37 A.C.W.S. (3d) 1267; [page516] Somersall v. Friedman, [2002] 3 S.C.R. 109, [2002] S.C.J. No. 60, 2002 SCC 59, 215 D.L.R. (4th) 577, 292 N.R. 1, J.E. 2002-1464, 163 O.A.C. 201, [2002] R.R.A. 679, 39 C.C.L.I. (3d) 1, [2002] I.L.R. I-4114, 25 M.V.R. (4th) 1, 115 A.C.W.S. (3d) 695; Tut v. RBC General Insurance (2011), 107 O.R. (3d) 481, [2011] O.J. No. 4509, 2011 644 (ON CA), 285 O.A.C. 100, 19 M.V.R. (6th) 188, 342 D.L.R. (4th) 464, 1 C.C.L.I. (5th) 186, 208 A.C.W.S. (3d) 573; Vandepitte v. Preferred Accident Insurance Co. of New York, 1932 319 (UK JCPC), [1933] 1 D.L.R. 289, [1933] A.C. 70, [1932] 3 W.W.R. 573 (J.C.P.C.); Vogler v. Lemieux, [2012] O.J. No. 1262, 2012 ONSC 1692, [2012] I.L.R. I-5273 (S.C.J. -- Master); Wawanesa Mutual Insurance Co. v. S.C. Construction Ltd. (2012), 108 O.R. (3d) 762, [2012] O.J. No. 316, 2012 ONSC 353, 28 M.V.R. (6th) 91, [2012] I.L.R. I-5250, 7 C.C.L.I. (5th) 95, 213 A.C.W.S. (3d) 465 (S.C.J.); Wigle v. Allstate Insurance Co. of Canada (1984), 1984 45 (ON CA), 49 O.R. (2d) 101, [1984] O.J. No. 3422, 14 D.L.R. (4th) 404, 6 O.A.C. 161, 10 C.C.L.I. 1, [1985] I.L.R. Â1-1863 at 7152, 30 M.V.R. 167, 29 A.C.W.S. (2d) 56 (C.A.), affg (1984), 1984 1817 (ON SC), 44 O.R. (2d) 677, [1984] O.J. No. 2642, 5 D.L.R. (4th) 327, 4 C.C.L.I. 163, [1984] I.L.R. Â1-1742 at 6719, 23 A.C.W.S. (2d) 355 (H.C.J.) [Leave to appeal to S.C.C. refused [1985] 1 S.C.R. v, [1985] S.C.C.A. No. 136, 14 D.L.R. (4th) 404n, 59 N.R. 73n, 8 O.A.C. 320n, 10 C.C.L.I. 1n]

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1) (c)

Highway Traffic Act, R.S.O. 1990, c. H.8, ss. 1(1) [as am.], 192(2)

Insurance Act, R.S.O. 1990, c. I.8, ss. 239 [as am.], (1), 251, 258, (1), (4), (11), (14), 265(1), (2)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 5.04(2), 26.01

Authorities referred to

Newcombe, John, The Standard Automobile Policy Annotated (Toronto: Butterworths, 1986)

Swan, John, and Barry J. Reiter, Contracts: Cases, Notes and Materials, 2nd ed. (Toronto: Butterworths, 1982)

Treitel, G.H., The Law of Contract, 9th ed. (London: Sweet & Maxwell, 1995)

Waddams, Stephen M., The Law of Contracts, 6th ed. (Toronto: Canada Law Book, 2010)

APPEAL from an order dismissing a motion to amend a statement of claim.

Alan L. Rachlin, for plaintiff (appellant).

Respondent, not participating.

R. Shawn Stringer, for statutory third party (respondent).

[1] LEACH J.: — This is an appeal to a single judge of the Divisional Court, pursuant to s. 19(1)(c) of the Courts of Justice Act, R.S.O. 1990, c. C.43, from a final order made herein by Master Pope, at Windsor, denying the plaintiff leave to make contemplated amendments to his statement of claim on the basis they were untenable in law [[2012] O.J. No. 1262, 2012 ONSC 1692 (S.C.J.)].

[2] The appeal concerns the ability of a plaintiff, injured in a single-vehicle accident involving his own automobile, to claim [page517] indemnity pursuant to the OPCF 44R family protection endorsement forming part of the insurance arranged in relation to that vehicle.

[3] For the reasons which follow, I find that Master Pope arrived at the correct result (albeit not for the reasons she gave), and accordingly dismiss the appeal.

Background and Facts

[4] All concerned are agreed that the facts giving rise to this litigation are unusual.

[5] In the early morning hours of February 18, 2006, the plaintiff was involved in a single-vehicle accident involving the plaintiff's own automobile. The vehicle was insured by a standard automobile policy of insurance (with third party liability insurance limits of $1 million and an attached OPCF 44R family protection endorsement with similar limits of $1 million) that had been issued to the plaintiff by the Allstate Insurance Company of Canada ("Allstate").

[6] Shortly after the accident, the plaintiff was found alone in his vehicle's front passenger seat. He also was charged with impaired driving and operating a motor vehicle with a blood alcohol concentration in excess of the legal limit.

[7] From the outset, the plaintiff continuously maintained that someone else had been driving the vehicle prior to the accident. However, the plaintiff says that he has no recollection of what happened in the hours before the accident or immediately after the accident, because he struck his head during the collision.

[8] Consistent with his position that the accident was caused by an unidentified driver (someone other than himself), the plaintiff defended the criminal charges against him. He also commenced a civil claim against Allstate, relying on the "Uninsured Automobile Coverage" provisions of his automobile insurance policy. The litigation was commenced on August 31, 2007.

[9] Allstate consistently has maintained that the plaintiff was in fact driving his vehicle at the relevant time, and that he was responsible for the accident.

[10] On or about May 3, 2008, in advance of the plaintiff's criminal trial, another individual, named Tom Lemieux (the defendant), came forward and informed the plaintiff's lawyer that he actually had been the one driving the plaintiff's vehicle immediately prior to the accident. In particular, Lemieux provided a formal written and witnessed statement which included the following indications: [page518]

(a) Lemieux was an acquaintance of the plaintiff, whom he had known for five years.

(b) Lemieux did not own a motor vehicle at the time of the accident, and was in need of a ride from Windsor back to his home in Tilbury. He made arrangements with the plaintiff, one to two days before the accident, to obtain a ride home in the plaintiff's vehicle on the day of the accident.

(c) At approximately 12:30 a.m. on the day of the accident, Lemieux attended a social club in Windsor where he met the plaintiff.

(d) As the plaintiff was drunk but Lemieux was sober, Lemieux decided that he would drive the plaintiff's vehicle, with the plaintiff as a passenger.

(e) The plaintiff was very intoxicated, and had a reputation for being "a little bit nuts" when in that condition. While Lemieux was driving the plaintiff's vehicle, the plaintiff suddenly became very excited because of an earlier altercation (as if "a switch flipped in his head"), and grew louder and more threatening. Lemieux became very scared.

(f) Shortly before the accident occurred, Lemieux felt compelled to "bail out" of the vehicle while it was still in motion and did so, leaving the plaintiff alone inside. The vehicle was moving faster than Lemieux anticipated, and it continued on to where it collided with a tree.

(g) Lemieux immediately fled the scene.

[11] Although Lemieux did not address this in his statement, it seems that he also had no valid driver's licence at the time of the accident. His licence apparently had been suspended for some time.

[12] On July 9, 2008, in the wake of Lemieux's statement, the plaintiff amended his statement of claim to remove Allstate as a defendant and add Lemieux as a defendant.

[13] Negotiations between plaintiff counsel and counsel for Allstate continued in relation to the plaintiff's civil claim. These included a letter sent by plaintiff counsel on or about October 20, 2008 offering to settle the tort claim in exchange for payment of $200,000 (the minimum statutory limits of insurance), plus interest, costs and disbursements. The letter explained why plaintiff counsel felt the claim was worth substantially more than $200,000, having regard to the available evidence. [page519]

[14] On November 18, 2008, Allstate then obtained an order adding itself to the proceeding as a statutory third party, pursuant to s. 258(14) of the Insurance Act, R.S.O. 1990, c. I.8.

[15] In its defence, Allstate formally pleads that the plaintiff was operating his own vehicle at the time of the accident, and is therefore responsible for his injuries. However, Allstate also takes the position that, if Lemieux is found to have been operating the plaintiff's vehicle at the time of the accident, then there has been a breach of statutory condition 4(1) of the policy, as Lemieux was not authorized by law to drive or operate the automobile.

[16] Following a trial on April 27 and 28, 2009, the criminal charges against the plaintiff were dismissed. Justice Quinn felt unable to conclude that Lemieux's evidence was not true, which in turn left him with reasonable doubt as to the plaintiff's guilt.

[17] On or about December 14, 2010, the plaintiff then moved pursuant to rules 5.04(2) and 26.01 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] for leave to further amend his statement of claim. The proposed amendments seek to once again target Allstate as a defendant to the action, this time on the basis that there is a possibility of its having to provide indemnity to the plaintiff pursuant to the OPCF 44R family protection endorsement issued to the plaintiff by Allstate. In particular, the allegation in para. 4.5 of the contemplated amended pleading reads as follows:

4.5 Allstate is being sued under its contract of insurance between the Plaintiff and the Defendant. The Plaintiff states that should Mr Lemieux be found to be an inadequately insured motorist under the terms of the OPCF 44R the Plaintiff would be entitled to access the family protection coverage, as defined in OPCF 44R, from Allstate. As a result, the Plaintiff seeks recovery from Allstate for damages found as against Mr Lemieux, as an inadequately insured motorist, pursuant to the terms of the OPCF 44R.

[18] The OPCF 44R family protection endorsement in question was issued in the standard approved form, and included the following provisions:

DEFINITIONS

1.3 "eligible claimant" means

(a) the insured person who sustains bodily injury[.]

1.4

"family protection coverage" means the insurance provided by this change form and any similar indemnity provided under any contract of insurance.

1.5 "inadequately insured motorist" means

(a) the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance . . . obtained by [page520] the owner or driver is less than the limit of family protection coverage; or

(b) the driver or owner of an uninsured automobile or unidentified automobile as defined in section 5, "Uninsured Automobile Coverage" of the Policy[.]

1.6 "insured person" means

(a) the named insured . . . while . . . an occupant of the described automobile[.]

1.7

"limit of family protection coverage" means the amount set out in the Certificate of Automobile Insurance with respect to this change form, but if no amount is set out in the Certificate, the limit for liability coverage set out in the Certificate with respect to the automobile to which this change form applies is the limit of family protection coverage.

1.8

"limit of motor vehicle liability insurance" means the amount stated in the Certificate of Automobile Insurance as the limit of liability of the insurer with respect to liability claims, regardless of whether the limit is reduced by the payment of claims or otherwise;

PROVIDED THAT in the event that an insurer's liability under a policy is reduced by operation of law to the statutory minimum limits in a jurisdiction because of a breach of the Policy, the statutory minimum limits are the limits of motor vehicle liability insurance in the Policy.

1.11 "uninsured automobile means an automobile with respect to which neither the owner nor driver thereof has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation, but does not include an automobile owned by or registered in the name of the insured or his or her spouse.

INSURING AGREEMENT

3. [T]he insurer shall indemnify an eligible claimant for the amount that he or she is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury . . . of an insured person arising directly from the use or operation of an automobile.

LIMIT OF COVERAGE UNDER THIS CHANGE FORM

4. The insurer's maximum liability under this change form . . . is the amount by which the limit of family protection coverage exceeds the total of all limits of motor vehicle liability insurance . . . of the inadequately insured motorist and of any person jointly liable with that motorist.

PROCEDURES

17. Every action or proceeding against the insurer for recovery under this change form shall be commenced within 12 months of the date that the [page521] eligible claimant or his or her representative knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred, but this requirement is not a bar to an action which is commenced within two years of the date of the accident.

MISCELLANEOUS

22. Except as otherwise provided in this change form, all limits, terms, conditions, provisions, definitions and exclusions of the Policy shall have full force and effect.

[19] The plaintiff's motion material included evidence from plaintiff counsel, offering explanations as to why a claim against Allstate based on the OPCF 44R endorsement had not been advanced earlier, and why it now was being pursued by way of the contemplated amendments.

[20] Allstate opposed the plaintiff's motion for leave to amend on two grounds.

[21] First, Allstate took the position that the contemplated amendments were not tenable at law, as there was no way in which the plaintiff could establish that Lemieux was an "inadequately insured motorist" within the meaning of s. 1.5 of the endorsement.

[22] Second, Allstate argued that the applicable limitation period for advancing such a claim (set forth in s. 17 of the OPCF 44R endorsement) had expired. It relied in particular on indications by plaintiff counsel, more than two years prior to the plaintiff's motion for leave to further amend his pleading, that the quantum of the plaintiff's claim exceeded $200,000 (the minimum limits for motor vehicle liability insurance in Ontario).

Decision at First Instance

[23] The plaintiff's motion for leave to amend was heard by Master Pope, in Windsor, on October 24, 2011.

[24] In a decision that has since been reported,[^1] Master Pope dismissed the plaintiff's motion. She did so on the basis that the proposed amendments were not tenable in law, accepting the following argument put forth by Allstate [at paras. 21, 22, 31 and 34]:

Allstate submits that if it is found that Lemieux was driving the plaintiff's vehicle, and aside from the fact that his liability coverage may be reduced to $200,000 on the basis that he had a suspended licence breaching Statutory Condition 4 -- Authority to Drive of the Standard Automobile Policy -- [page522] OAP1, the plaintiff will be unable to prove that Lemieux meets the definition of "inadequately insured motorist" because the definition states that an inadequately insured motorist means ". . . the identified driver for which the total motor vehicle liability insurance . . . obtained by the owner or driver is less than the limit of family protection coverage." In other words, since the motor vehicle liability insurance obtained by the owner, here the plaintiff of $1 million, is equal to the limit of family protection coverage of $1 million, the definition of "inadequately insured motorist" as set out in s. 1.5(a) cannot be met.

Allstate submits that this may be a harsh result but the meaning of s. 1.5(a) must be ascertained based on its plain meaning and not based on rules of statutory interpretation. It further submits that there is no ambiguity in the definition of "inadequately insured motorist" such that a court ought not to proceed on an exercise of applying the principles of interpretation where the provision in question is not ambiguous, even if one of the parties is alleging that an absurd result would ensue[.]

In my view, there is no ambiguity in the definition of "inadequately insured motorist" based on its plain meaning.

It is my view that the proposed amendment is not tenable in law because, and for the above reasons, the plaintiff will not be able to establish, based on either scenario regarding who was driving the vehicle, that Lemieux was an "inadequately insured motorist" as defined in s. 1.5(a) to trigger the insuring provision of s. 3 of the OPCF 44R Endorsement.

(Emphasis in original)

[25] Master Pope then indicated that, since her ruling on the first issue raised by Allstate was sufficient to dispose of the plaintiff's motion, she [at para. 38] did "not propose to address the second issue", i.e., the question of whether the claim to be advanced by the contemplated amendments was barred by passage of the applicable limitation period.

Party Positions on Appeal

[26] The plaintiff appeals to the Divisional Court from this final order of the master. Specifically, he asks for the order to be set aside, and replaced with an order granting the plaintiff leave to make his contemplated amendments.

[27] In essence, the plaintiff argues that the master erred in law by determining possible satisfaction of the endorsement's definition of "inadequately insured motorist" by focusing unduly if not exclusively on s. 1.5 of the OPCF 44R endorsement (without proper regard to other provisions such as s. 1.8 thereof), and embracing the somewhat facile comparison, suggested by Allstate, between the $1 million limit of family protection coverage and the nominal $1 million in third party liability limits set [page523] forth in the insurance policy originally obtained by the plaintiff as owner of the vehicle involved in the accident.

[28] In doing so, the plaintiff points to the provisions of s. 1.8 of the endorsement, as well as numerous authorities interpreting the OPCF 44R family protection change form, to emphasize that the court must go beyond the nominal third party limits set forth in the original policy of insurance to determine whether, and if so to what extent, the total limits of motor vehicle liability insurance available to address the plaintiff's claims actually may have been reduced, by intervening circumstances, to a level below the effectively fixed limit of family protection coverage.

[29] The plaintiff then argues (for various reasons which I will not address, for reasons outlined below) that his contemplated claim pursuant to endorsement is not barred by the applicable limitation period.

[30] In response, Allstate essentially repeats the arguments it made at first instance.

[31] It says the provisions of s. 1.5 of the endorsement are clear and unambiguous, make reference to the "total motor vehicle liability insurance . . . obtained by the owner or driver", and in this case the plaintiff owner "obtained" third party liability insurance with limits of $1 million -- an amount therefore equal to the $1 million limit of the family protection endorsement. In Allstate's submission, this analysis alone is sufficient to show that there accordingly is and can be no "inadequately insured motorist" in the circumstances, and therefore no obligation to provide coverage pursuant to the endorsement.

[32] Allstate concedes that such a conclusion will always follow in relation to claims by an insured stemming from a single vehicle accident involving the insured's own vehicle where no other insurance is available (as the insured's nominal amount of third party liability limits will always be the same as the insured's numerical limit of family protection coverage). However, Allstate says this reality simply reflects an intention that the OPCF 44R endorsement was never meant to apply in such circumstances.

[33] As for the limitation period issue, Allstate reiterated and expanded on its arguments offered at first instance. (I similarly will not address these in detail, for the reasons outlined below.)

[34] The plaintiff and appellant both agree that the applicable standard of review is correctness, as per Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, as the master's [page524] decision and disposition of this appeal essentially turn on questions of law.[^2]

[35] The plaintiff also did not dispute the basic proposition, put forward by Allstate and accepted by the master, that amendments ought not to be permitted where the proposed claim is not tenable in law. See A. Mantella & Sons Ltd. v. Ontario Realty Corp. (2008), 2008 23953 (ON SC), 91 O.R. (3d) 449, [2008] O.J. No. 2024 (S.C.J.), at paras. 21 and 26, affd [2009] O.J. No. 457, 2009 115 (ON CA). He simply contends that the claim contemplated by the proposed amendments is tenable in law.

Analysis

[36] For the reasons that follow, I respectfully disagree with the analysis and approach suggested by Allstate and embraced by the master, and think the concerns raised in that regard by the plaintiff have merit.

[37] In their consideration of the various successive incarnations of the "family protection endorsement", our courts repeatedly have emphasized that, unlike the mandatory provisions of the standard automobile policy (which reflect legislation), the voluntary and optional family protection endorsements are contractual in nature.[^3]

[38] Moreover, as contracts in respect of which insurers effectively have input (in contrast to insureds who must accept the form of such contracts on a "take it or leave it" basis), family protection endorsements are interpreted using the contra proferentum doctrine and the doctrine of reasonable expectations, if the endorsements are found to be ambiguous in any relevant sense. In particular, where an ambiguity is found to exist in the terminology employed in an insurance contract, including a family protection endorsement, such terminology will be construed [page525]

(a) against the insurer and in a manner favourable to the insured (with coverage provisions being construed broadly, exclusion clauses being construed narrowly, and interpretations resulting in a windfall to the insurer or virtual negation of the insured's expected coverage being avoided), if the words are fairly capable of bearing that construction;[^4] and

(b) in a manner consistent with the reasonable expectations of the average insured who purchases such insurance.[^5]

[39] As for the latter, family protection endorsements are designed to give injured insureds the same financial protection they would have had if the at-fault motorist had the same limit of liability insurance as they have, i.e., to provide relief to motorists who have the misfortune to be injured by the fault of an underinsured driver. The responsible citizen insures himself for the amount he considers adequate and expects other motorists to do the same. He or she obtains the added special family protection endorsement (and pays the additional premium), with the reasonable expectation that he or she has insured himself or herself against the eventuality of an injury caused by an irresponsible motorist who has not conducted himself or herself in the same manner.[^6]

[40] In this case, I agree that, in finding that the "total motor vehicle liability insurance . . . obtained by the owner or driver" referred to in s. 1.5(a) necessarily meant a reference to the nominal third party limits set forth in the original policies of insurance obtained by either (and in this case the plaintiff owner), the [page526] master focused unduly on the wording of s. 1.5(a) in isolation, without having sufficient regard to the endorsement in its entirety, and ss. 1.7, 1.8 and 4 in particular.

[41] The term or phrase "limit of family protection coverage", used repeatedly in ss. 1.5(a) and 4 of the endorsement, is assigned a specific definition by s. 1.7 of the endorsement. In particular, by virtue of s. 1.7, the "limit of family protection coverage" effectively is given a fixed and invariable numerical meaning, i.e., the amount set out in the certificate of automobile insurance with respect to the change form or, if no amount is set in the certificate, the limit for liability coverage set out in the certificate with respect to the automobile to which the change form applies. No provision whatsoever is made for possible variation of that amount, once set by the indicated references on the certificate initially issued to the insured.

[42] In marked contrast, the term or phrase "total motor vehicle liability insurance . . . obtained by the owner or driver" is not assigned any specific definition in the endorsement. Indeed, the precise phrase, which does not include any express reference to "limit" or "limits", does not seem to be replicated anywhere else in the endorsement. (Section 1.8 defines "limit of motor vehicle liability insurance", and s. 4 makes reference to the "total of all limits of motor vehicle liability insurance".)

[43] Given the use of a different and undefined phrase in s. 1.5(a), not making reference to the concept of "limit" or "limits", and the endorsement's particular failure to expressly define the phrase by specific reference to any limit set forth in an insurance certificate (as was done by s. 1.7 in relation to family protection coverage), I think it cannot and should not easily be assumed that the phrase "total motor vehicle liability insurance . . . obtained by the owner of driver" unquestionably was an intended reference to the nominal limits of third party liability insurance set forth the certificate of insurance originally obtained by an owner or driver.

[44] To the contrary, in my view, the undefined word "obtained" has a temporal ambiguity. In particular,

(a) it could refer to the nominal limits of third party motor vehicle liability insurance originally specified in the certificate of insurance covering the owner or driver, and thereby "obtained" in the abstract, before the accident;

(b) alternatively, however, it could refer to the actual amount of third party motor vehicle liability coverage the owner or driver is able to realize and thereby "obtain" (for his or her protection and the effective protection of the injured party), [page527] after the accident, having regard to the precise circumstances which then have materialized. Such circumstances would include the impact of any breach of the owner or driver's policy which effectively may have reduced the limits of third party motor vehicle liability coverage actually available to respond to the injured party's claim.

[45] Consistent with the principles of interpretation set forth above, the latter interpretation is the one favoured by application of the contra proferentum doctrine and the doctrine of reasonable expectations.

[46] In particular, as emphasized by the Court of Appeal in Craig v. Allstate Insurance Co. of Canada, supra, at para. 40, little purpose would be served by underinsured motorist coverage if the total motor vehicle liability insurance, used to define the effective limits of coverage pursuant to the family protection endorsement, is interpreted to include

coverage to which an injured motorist can have no resort, that is, insurance which is unavailable to the injured motorist. In that event, underinsured motorist coverage would be more illusory than real, and recovery under the Endorsement could be readily defeated by a tortfeasor acquiring multiple peril excess insurance which, by its terms or operation of law (as in this case), may not respond to an injured motorist's claims.

(Emphasis in original)

[47] In my view, interpreting the s. 1.5 phrase "total motor vehicle liability insurance . . . obtained by the owner or driver" as intending reference to the original nominal limits of third party motor vehicle liability insurance obtained by an owner or driver, without consideration of whether those limits are actually available to respond to the claim of the injured motorist (having regard to the particular circumstances existing at the time of the accident), creates precisely the danger emphasized by the Court of Appeal; i.e., the underinsured coverage reasonably expected by the insured injured motorist may well be more illusory than real.

[48] Such an interpretation also ignores the endorsement's clear intention, expressed in s. 1.8 (to which Master Pope made no reference), that a determination of any "limit of motor vehicle liability insurance" must take into account certain realities and circumstances independently arising after specification of the nominal limits of third party liability coverage available to an owner or driver.

[49] In particular, s. 1.8 of the endorsement specifies that, "in the event that an insurer's liability under a policy is reduced by operation of law to the statutory minimum limits in a jurisdiction [page528] because of a breach of the Policy, the statutory minimum limits are the limits of motor vehicle liability insurance in the Policy".

[50] I find it impossible to reconcile these s. 1.8 provisions with the master's effective determination that endorsement coverage should be determined simply by reference to the nominal third party liability limits of an owner or driver's insurance policy, i.e., without any regard whatsoever to the possibility that those nominal limits effectively may be reduced by operation of law to the statutory minimum limits, because of a breach of the policy.

[51] To the contrary, I think s. 1.8 necessarily informs the meaning that should be attributed to the phrase "total motor vehicle liability insurance . . . obtained by the owner or driver" (emphasis added), used in the s. 1.5(a) definition of "inadequately insured motorist". "Obtained" should be interpreted as referring to the actual amount of liability insurance made available to the owner or driver to address the claims of the injured party after the accident, and not to the nominal amounts of third party liability coverage originally stipulated in the owner or driver's policy of insurance.

[52] This view was shared by Justice Little in Patriquin v. Gogo, [2007] O.J. No. 149, 154 A.C.W.S. (3d) 947 (S.C.J.), affd, albeit without reference to this specific point, at [2009] O.J. No. 304, 2009 78 (ON CA). In particular, at paras. 15 to 19 of his decision, Justice Little reasoned as follows:

Was Gogo an inadequately insured motorist?

OPCF44-R defines inadequately insured motorist:

1.5 "inadequately insured motorist" means:

(a) The identified owner or identified driver of an automobile for which the total motor vehicle liability insurance . . . obtained by the owner or driver is less than the limit of family protection coverage;

The limit of Family Protection Coverage was $1,000,000. Gogo was an inadequately insured motorist because his limit was $200,000 as the result of my earlier findings. His limits are therefore less than the Family Protection Coverage limit of $1,000,000.

While the word "obtained" is used, it is my view that under the circumstances, in spite of the fact that the Dominion policy itself had originally a $1,000,000 limit, the applicable amount is $200,000. I arrive at this by relying upon s. 1.8 of the Family Protection Coverage endorsement itself, which states as follows:

1.8

"limit of motor vehicle liability insurance" means the amount stated in the Certificate of Automobile Insurance as the limit of liability of the insurer with respect to liability claims, regardless of whether the limit is reduced by the payment of claims or otherwise; [page529]

PROVIDED THAT in the event that an insurer's liability under a policy is reduced by operation of law to the statutory minimum limits in a jurisdiction because of a breach of the Policy, the statutory minimum limits are the minimum limits of motor vehicle liability insurance in the Policy.

Thus, the actual amount obtained in my view was $200,000, which is less than the limit of the Family Protection Coverage, making Gogo an inadequately insured motorist.

As a result, Patriquin is entitled to recover the balance of his judgment form Dominion through this endorsement.

(Emphasis added)

[53] In my view, the approach endorsed and adopted by Master Pope to resolve the motion before her therefore was fundamentally incorrect. In particular, the reasons offered by the master for making her order do not offer a sufficient or acceptable rationale for finding that the proposed amendments are untenable in law.

[54] However, that is not determinative of the appeal, as an appeal properly lies from an order and not from the reasons of the court below. See Grand River Enterprises v. Burnham, 2005 6368 (ON CA), [2005] O.J. No. 952, 10 C.P.C. (6th) 136 (C.A.), at para. 10; and Almrei v. Canada (Attorney General), [2012] O.J. No. 5323, 2012 779 (ON CA), at para. 10.

[55] It therefore still falls to me to decide whether the order made by the master was correct, even though her stated reasons for the order may have been flawed.

[56] In the rather unique circumstances of this case, it seems to me that the determination and order made by the master was in fact correct, albeit for reasons different than those expressed by the master.

[57] In particular, the amendments should be viewed as untenable because, in my view, there simply are no circumstances in which the proposed claims on the OPCF 44R endorsement might succeed having regard to the provisions of the underlying policy, the endorsement and the applicable law.

[58] In that regard, there would seem to be only five possible alternate scenarios:

(a) The plaintiff actually was the driver at the time of the accident (rather than Lemieux), and accordingly is responsible for his own injuries.

(b) Lemieux was the driver at the time of the accident (with the plaintiff as passenger), but was operating the vehicle without the plaintiff's permission. [page530]

(c) Lemieux was the driver at the time of the accident (with the plaintiff as passenger), and operating the vehicle with the plaintiff's permission, with no breach of any statutory condition.

(d) Lemieux was the driver at the time of the accident (with the plaintiff as passenger), and operating the vehicle with the plaintiff's permission. Lemieux was doing so in breach of a statutory condition. At the time, however, the plaintiff did not know of that breach, and the circumstances were not such that the plaintiff reasonably ought to have known of the breach.

(e) Lemieux was the driver at the time of the accident (with the plaintiff as passenger), and operating the vehicle with the plaintiff's permission. Lemieux was doing so in breach of a statutory condition, in circumstances where the plaintiff knew or reasonably ought to have known of the breach.

[59] Yet, careful consideration and examination of each indicates that none of these possible alternate scenarios gives rise to a situation where the plaintiff could or would have a claim against Allstate based on the OPCF 44R endorsement (the only stated basis of the proposed claim amendments).

[60] Using the same lettering as that used above to outline the possible alternate scenarios:

(a) Plaintiff as driver

If the plaintiff really was the driver whose conduct led to the underlying single-vehicle accident (as Allstate contends), then he cannot advance a claim without targeting himself, i.e., on the basis of his own fault and failings as a suggested basis for liability in negligence at common law.

However, at common law, no person may bring an action to trial by commencing an action against himself; see Ontario (Public Trustee) v. Guaranty Trust Co. of Canada, 1980 52 (SCC), [1980] 2 S.C.R. 931, [1980] S.C.J. No. 106.

In this first alternate possible scenario, there accordingly can and therefore will not be a claim by the plaintiff giving rise to any possible requirement for indemnity pursuant to the Allstate policy and its attached OPCF 44R endorsement.

(b) Lemieux as driver -- No permission

The second scenario posits a situation in which Lemieux actually was the driver whose conduct led to the underlying [page531] single-vehicle accident, but one in which he also was operating the plaintiff's car without permission (e.g., because the plaintiff was too inebriated to give any permission).[^7]

Lemieux's operation of the plaintiff's vehicle was in fact the scenario highlighted by plaintiff counsel during the course of submissions. This was done as a means of emphasizing why, in determining the "Limit of Coverage Under This Change Form" (as per ss. 4 and 5 of the OPCF 44R endorsement), focus could and should be placed exclusively on the limits of third party liability insurance available to Lemieux as a defendant driver, i.e., without adding any possible third party liability limits available to the plaintiff as a defendant owner of the vehicle.

In that regard, I note again that s. 4 of the endorsement provides that "[t]he insurer's maximum liability under this change form, regardless of the number of claimants or insured persons injured or killed or the number of automobiles insured under the Policy, is the amount by which the limit of family protection coverage exceeds the total of all limits of motor vehicle liability insurance . . . of the inadequately insured motorist and of any person jointly liable with that motorist.

(Emphasis added)

Pursuant to what is currently s. 192(2) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the "Act"), an owner of a motor vehicle is deemed to be liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle on a highway. However, the legislation also expressly provides that this statutory vicarious liability does not exist if the motor vehicle "was without the owner's consent in the possession of some person other than the owner or the owner's chauffeur" (emphasis added), with [page532] "chauffeur" defined by s. 1(1) of the Act as meaning "a person who operates a motor vehicle and receives compensation therefor".[^8]

Plaintiff counsel therefore argued that, if Lemieux was operating the plaintiff's vehicle without consent, the plaintiff has no statutory vicarious liability for the accident pursuant to s. 192(2), is therefore not "jointly liable" with Lemieux, effectively leaving only Lemieux's available limits of third party liability insurance for consideration when determining the applicable limit of OPCF 44R coverage pursuant to s. 4 of the endorsement. (All this was a prelude to plaintiff counsel's argument that, if the third party liability limits of Lemieux alone are somehow reduced below the applicable $1 million of family protection coverage extended by the OPCF 44R endorsement, the plaintiff would be entitled to the shortfall.)

However, such arguments ignore the full implications of Lemieux operating the plaintiff's vehicle without the plaintiff's consent. In particular, the absence of such consent may negate joint liability of the plaintiff, but it also effectively negates any coverage whatsoever pursuant to the Allstate policy, and its attached family protection endorsement.

In that regard, it must be borne in mind that Lemieux has no third party liability motor vehicle insurance available to him except that which might be provided pursuant to the Allstate policy issued in relation to the plaintiff's vehicle.

That policy, like all standard Ontario automobile policies of insurance issued in the prescribed form, contains provisions making it absolutely clear that there is no third party liability coverage whatsoever extended by the policy if the otherwise insured vehicle is being used or operated without the owner's consent. In particular, s. 1.8.2 of the Ontario Automobile Policy (O.A.P. 1) -- Owner's Policy reads 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 or is driven by a person named as an excluded driver of the automobile. [page533]

Except for certain Accident Benefits coverage, there is no coverage under this policy for an occupant of an automobile used or operated by a person in possession of the automobile without the owner's consent.

(Original bold print emphasis; added emphasis in italics)

In my view, these provisions are clear and unambiguous, and are consistent with the legislative policy reflected in s. 239(1) of the Insurance Act, supra, whereby motor vehicle liability coverage is extended only to a named insured and every person operating or occupying the vehicle "with the named person's consent".

(Emphasis added)

In the circumstances, if Lemieux was driving the plaintiff's vehicle without the plaintiff's consent, then he has no third party motor vehicle liability insurance whatsoever.

However, in such circumstances, the plaintiff also has no recourse to his own automobile policy of insurance, even if he was entirely without fault in being injured by Lemieux's unauthorized operation of the plaintiff's otherwise insured automobile.

For reasons explained by Justice Quinn in Fosker v. Thorpe (2004), 2004 33358 (ON SC), 72 O.R. (3d) 753, [2004] O.J. No. 4187 (S.C.J.), that arguably unfair but logical and inevitable conclusion is dictated by other unambiguous provisions of the policy, even without regard to s. 1.8.2 of O.A.P. No. 1.

The plaintiff in that case was an entirely blameless owner of an automobile, in respect of which she had arranged both standard automobile insurance coverage and the additional coverage extended by the OPCF 44R family protection endorsement. During a visit to her daughter's residence, the plaintiff parked her insured vehicle on the street outside. When the plaintiff exited the residence, the vehicle was in the process of being stolen by a thief, who obviously was driving the plaintiff's vehicle without the plaintiff's consent. The identified thief, who had no automobile insurance whatsoever, proceeded to run the plaintiff over with the plaintiff's own vehicle.

The injured plaintiff then sought recovery pursuant to her own automobile policy of insurance, including the OPCF 44R endorsement. However, Justice Quinn held that that the unambiguous provisions of the underlying insurance documents precluded any recovery by the plaintiff, pursuant [page534] to the terms of the policy and OPCF 44R endorsement. In particular:

Section 5 of the standard automobile policy (O.A.P. 1) specifically deals with uninsured automobile coverage. Section 5.2.1 stipulates that the insurer will pay any amounts the plaintiff has "a legal right to recover as damages from the . . . driver of an insured . . . automobile for bodily injury". In s. 5.1.2, an uninsured automobile is defined as "one for which neither the owner nor driver has liability insurance to cover bodily injury . . . arising out of its . . . use or operation". Specifically excluded from this definition is "an automobile owned by or registered in the name of the insured person".

Subsection 1.11 of the OPCF 44R endorsement, which provides uninsured motorist coverage, contains a similar definition of "uninsured automobile". In particular, it says that "uninsured automobile" means an automobile "with respect to which neither the owner nor driver has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation, but it does not include an automobile owned by or registered in the name of the insured or his or spouse".

(Emphasis added)

Subsection 265(1) of the Insurance Act states that every automobile policy must provide coverage to the insured if the insured is injured by an uninsured automobile. However, s. 265(2) of the legislation then defines "uninsured automobile" in terms that are virtually identical to s. 1.11 of the OPCF 44R endorsement (including the express exclusion of any automobile owned by the insured).

Justice Quinn found that the wording of s. 265(2) of the Insurance Act, whether taken alone or in the entire context of that statute, was "clear and unambiguous", as was the wording of s. 5.1.2 of O.A.P. 1, and the wording of s. 1.11 of the OPCF 44R endorsement. [page535] As a result, because the car involved in the single-vehicle accident that injured the plaintiff was not an "uninsured automobile" (because it was owned and insured by the plaintiff, and therefore specifically excluded from the relevant definitions), the plaintiff had no uninsured automobile coverage.

Justice Quinn also found that the blameless plaintiff similarly had no recourse, in the circumstances, to the "inadequately insured" motorist provisions of the OPCF 44R endorsement. In particular, s. 1.5(a) of the endorsement did not apply because its wording expressly refers to situations where the identified owner or driver of an automobile has obtained total motor vehicle liability insurance "less than the limit of family protection coverage" (emphasis added), and those words clearly presuppose and require the existence of some other coverage for the owner or driver of the automobile that can be compared to the limits of the family protection coverage. However, s. 1.5(b) of the endorsement also did not apply because the plaintiff's vehicle was not an uninsured automobile; a conclusion that followed not because there was no insurance taken out in relation to the vehicle (as the obviously was), but because of the specific exclusions outlined above.

Justice Quinn expressly acknowledged that the absence of coverage for a blameless and otherwise in sured plaintiff injured in such circumstances might be viewed as "harsh" and "absurd", but it was impermissible for the court (as opposed to the legislature) to rewrite the legislation or the policy to fill the gap in coverage.

In this case, I agree with and embrace the above reasoning of Justice Quinn, as far as this second possible alternate scenario is concerned.

In particular, if Lemieux was indeed driving the plaintiff's vehicle without the plaintiff's consent at the time of the accident, then I see no meaningful basis on which to distinguish the conclusion reached in Fosker v. Thorpe, supra. In this scenario, Mr. Vogler has no recourse to his own [page536] automobile policy or OPCF 44R endorsement, even if he was entirely blameless for the accident in which he was injured.

If the plaintiff in this case is to have any recovery at all pursuant to his own automobile policy of insurance and its attached OPCF 44R endorsement, the facts must involve a scenario where, at a minimum, Lemieux was driving the plaintiff's vehicle with the plaintiff's consent. (These are the three remaining alternate scenarios considered below.)

(c) Lemieux driving with permission -- no breach of statutory condition

If Lemieux was driving the plaintiff's vehicle with the plaintiff's consent at the time of the accident, then pursuant to s. 239 of the Insurance Act, and provisions of the standard automobile policy itself, Lemieux will be an insured person within the meaning of the plaintiff's automobile policy with Allstate, and will have third party liability coverage pursuant to the terms, conditions and limits of that policy.

In particular, the provisions of s. 3 of O.A.P. 1, dealing with "Liability Coverage", read in part as follows:

3.1 Introduction

This Section of your policy provides coverage for amounts that the law holds you or other insured persons responsible for bodily injuries or losses others suffer in an automobile accident.

3.2 Who is Covered

You are covered when you, or anyone else in possession of a described automobile with your consent, uses or operates it. We will consider these other persons insured persons.

3.3 What We Cover

You or other insured persons may be legally responsible for the bodily injury to, or death of others, or for damage to the property of others as a result of owning, using or operating the automobile. In that case, we will make any payment on your or other insured persons' behalf that the law requires, up to the limits of the policy.

(Emphasis added)

In the absence of any violation of the insurance policy by Lemieux (e.g., by his breach of a statutory condition), the full $1 million in third party coverage limits of the Allstate policy therefore would be available to Lemieux in response to any claim against him by the plaintiff. [page537]

However, in this relatively straightforward scenario, the indemnity would flow from the provisions of the standard automobile policy, and not from any application of the OPCF 44R endorsement. The OPCF 44R endorsement per se would have no application because neither branch of its s.1.5 definition of "inadequately insured motorist" would be engaged. In particular, the total motor vehicle liability insurance obtained by the owner or driver ($1 million) would not be less than the limit of family protection coverage ($1 million), and the plaintiff's vehicle still would not satisfy the definition of an uninsured (or unidentified) automobile.

(d) Lemieux driving with permission -- breach of statutory condition reasonably unknown by plaintiff

If Lemieux is found to have been the driver, Allstate apparently will be relying on the fact that Lemieux's driver's licence was suspended at the time of the accident.[^9] This arguably would constitute a breach of statutory condition 4(1) of the Allstate policy, which deals with "Authority to Drive", and reads as follows:

4(1) The insured shall not drive or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

Barring legislative intervention, breach of a contractual condition normally permits rescission of a contract, thereby [page538] excusing the non-breaching party from having to perform any further duties or obligations pursuant to the contract.[^10]

However, pursuant to s. 258(1), (4) and (11) of the Insurance Act, an automobile insurer generally is not permitted to assert such a defence against claimants who otherwise may benefit from third party liability insurance available but for the breach, except in relation to any such coverage exceeding the minimum $200,000 "statutory limits" of insurance mandated by s. 251 of the legislation.

In this case, if Lemieux was driving the vehicle with the plaintiff's consent, but in breach of statutory condition 4(1),

he would qualify as an "insured person" under the Allstate policy;

his breach of statutory condition 4(1) would permit Allstate to treat the contract as rescinded vis-à-vis Lemieux;

as against those entitled to advance claims for indemnity pursuant to s. 258 of the Insurance Act, because of Lemieux's negligence, Allstate would be able to assert the breach of statutory condition defence but only in relation to claims in excess of $200,000; and

the limits of third party liability insurance available to Lemieux, in respect of claims brought against him, effectively would drop from the $1 million to $200,000.

Plaintiff counsel argues that, in relation to the plaintiff's claim, this would give rise to the necessary shortfall, required by s. 1.5(a) of the OPCF 44R endorsement, between the "total motor vehicle liability insurance" available and the $1 million limit of family protection coverage extended by the plaintiff's OPCF 44R endorsement. [page539]

In my view, however, this completely ignores the other remaining limits of third party liability insurance that might be unaffected by any breach of statutory condition by Lemieux, and thus available to address the action brought by the plaintiff as claimant.

In that regard, it must be remembered that the endorsement requires consideration of all motor vehicle liability insurance "obtained by the owner or driver" (s. 1.5), and "the total of all limits of motor vehicle liability insurance . . . of the inadequately insured motorist and of any person jointly liable with that motorist" (s. 4).

(Emphasis added)

In this case, if Lemieux was driving the plaintiff's vehicle with the owner's consent, then the plaintiff as owner of the vehicle has statutory vicarious liability, pursuant to s. 192(2) of the Highway Traffic Act, "for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle" by Lemieux.

(Emphasis added)

In other words, by statute (as opposed to the common law), the "plaintiff as owner" has legal liability to the "plaintiff as claimant".

As noted above, at common law no person may bring an action to trial by commencing an action against himself. However, our courts have held that this prohibition does not extend to situations where a claimant formally asserts a claim against himself based not on his independent negligence at common law but on his deemed liability created entirely by statute, and by the aforesaid provisions of the Highway Traffic Act in particular. See Dionisi v. Dionisi (1983), 1983 1863 (ON SC), 42 O.R. (2d) 597, [1983] O.J. No. 3121 (H.C.J.), followed in Abela v. Ontario, [1988] O.J. No. 246 (Div. Ct.). As Justice Campbell indicated in the course of the latter decision, "The common law, however logical, cannot defeat the statutory cause of action."

In the present case, what this means, in my view, is that the plaintiff as claimant could have sued not only Lemieux as driver of the vehicle, but also himself as the owner of the vehicle with vicarious liability for Lemieux's negligence -- [page540] and this would have been a claim falling within the "Liability Coverage" provisions of the standard automobile policy.[^11]

This in turn means that, apart from possible implications of the alleged breach of statutory condition 4(1), the "plaintiff as owner" of the vehicle has $1 million in third party liability limits available to address the formal claims of the "plaintiff as claimant".

If such limits are available to respond to the plaintiff's claim, then the total of all limits of motor vehicle liability insurance of those jointly liable is at least equal to the $1 million of family protection coverage extended by the OPCF 44R endorsement, and the endorsement accordingly has no application.

To determine whether or not that preliminary conclusion is affected by the alleged breach of statutory condition 4(1), one must bear in mind that such a breach may curtail third party liability coverage available to a negligent defendant driver (who reasonably would be expected to know if he or she was authorized by law to drive or operate a motor vehicle), without necessarily having any impact on the third party liability coverage available to a vicariously liable defendant owner (who reasonably may not have known that the driver was in fact not authorized by law to driver or operate a motor vehicle).

See, for example, Wawanesa Mutual Insurance Co. v. S.C. Construction Ltd. (2012), 2012 ONSC 353, 108 O.R. (3d) 762, [2012] O.J. No. 316 (S.C.J.), wherein Justice Belobaba reviewed and quoted from leading authorities in this area, including Co-Operative Fire & Casualty Co. v. Ritchie, 1983 155 (SCC), [1983] 2 S.C.R. 36, [1983] S.C.J. No. 61 and Tut v. RBC General Insurance (2011), 2011 644 (ON CA), 107 O.R. (3d) 481, [2011] O.J. No. 4509 (C.A.), and summarized the relevant law as follows [at para. 9]:

The applicable law, in a nutshell, is this: an insured will not be in breach of Statutory Condition 4(1) if he acts reasonably in all the circumstances. Unless the insured knew or ought to have known that the driver didn't have a valid driver's licence, or unless in the circumstances he should have asked to see the actual licence, it cannot be said that he "permitted" the driver to [driver or operate the automobile] in breach of the Statutory Condition. [page541]

See, also, the following comments from Newcombe, The Standard Automobile Policy Annotated (Toronto: Butterworths, 1986), at p. 155, which highlight the potentially different impact of a statutory condition 4 breach vis-à-vis the owner (as named insured) and an authorized but unlicenced driver or operator:

The named insured must be aware of the fact that the operator will be in breach of the conditions. No one can "permit, suffer, allow or connive" at anything without the means of knowing of it. For example, if the permission to drive is given in good faith and the operator then decides to enter in a race or speed test without the knowledge of the insured, [thereby breaching Statutory Condition 4(2)], the breach could not be applied against the [named] insured. The operator would, of course, be in breach of policy since the "Statutory Conditions" apply to a person insured by the contract, whether named or not.

With the above in mind, I return to the particular scenario now being considered in the present case: Lemieux being the driver at the time of the accident (with the plaintiff as passenger), and operating the vehicle with the plaintiff's permission, but with Lemieux doing so in breach of statutory condition 4(1), in circumstances where the plaintiff reasonably did not know of that breach.

In such circumstances, the breach of statutory condition 4(1) cannot be asserted by Allstate as against the "plaintiff as owner" and named insured, so as to deny or limit the third party liability coverage otherwise available to the "plaintiff as owner" to respond to the claim of the "plaintiff as claimant".

In this scenario, there is no shortfall between the $1 million of family protection coverage extended by the OPCF 44R endorsement and the $1 million in third party liability limits available to the "plaintiff as owner" to address the formal claims of the "plaintiff as claimant", and the endorsement accordingly has no application.

(e) Lemieux driving with permission -- breach of statutory condition which was known, or reasonably ought to have been known, by plaintiff

This leaves, for consideration, the fifth and final scenario posited above, i.e., one in which Lemieux was the driver at the time of the accident (with the plaintiff as passenger), and operating the vehicle with the plaintiff's permission, but where Lemieux also was doing so in breach of statutory condition 4(1) in circumstances where the plaintiff knew or reasonably ought to have known of the breach. [page542]

In such a scenario, both Lemieux and the "plaintiff as owner" and named insured would be in breach of the statutory condition, pursuant to the authorities outlined above.

Again, at common law, the insurer, relying on breach of the condition, therefore would be entitled to rescind the contract as against both, and be excused from any further obligations pursuant to the contract -- including the provision of indemnity pursuant to the "liability coverage" provisions of the policy, in relation to the claim advanced by the "plaintiff as claimant".

Does the claim of the "plaintiff as claimant" nevertheless fall within the ambit of s. 258 of the Insurance Act, discussed above?

If so, the chain of reasoning favoring the plaintiff's recourse to his OPCF 44R family protection endorsement, in this fifth and final scenario, would be as follows:

Pursuant to the analysis outlined above, the "plaintiff as claimant" has claims against the jointly liable Lemieux (as negligent authorized driver) and the "plaintiff as owner" (with vicarious liability pursuant to the Highway Traffic Act).

But for the operation of s. 258 of the Insurance Act, the third party liability coverage available to both parties is negated and unavailable because Lemieux and the "plaintiff as owner" are both party to a breach of statutory condition 4(1).

If s. 258 operates in relation to the claim of the "plaintiff as claimant", Allstate may only assert the effect of the statutory condition breach, as a defence, in relation to the policy's third party liability coverage in excess of the minimum $200,000 statutory limits.

The "total of all limits of motor vehicle liability insurance" available to those jointly liable for the accident would be only $200,000, thereby falling short of the fixed $1 million limit of family protection coverage. (Again, see s. 4 of the OPCF 44R endorsement.) Similarly, the total motor vehicle liability insurance obtained by the owner or driver of [page543] the automobile ($200,000) would be less than the limit of family protection coverage ($1 million), thereby satisfying the definition of an "inadequately insured motorist".

The "plaintiff as claimant" therefore should be entitled to claim against Allstate, pursuant to the OPCF 44R endorsement, for the $800,000 shortfall between the $1 million limit of the family protection coverage and the $200,000 in available third party liability limits extended by the operation of the policy and s. 258 of the Insurance Act, supra.

Is such a line of reasoning sustainable?

Not surprisingly, there appears to be no authority dealing with the very unique fact circumstances of this contemplated scenario, so the proper result would be a matter of first impression.

In my view, however, the scenario actually would not lead to any permissible claim by the plaintiff pursuant to the OPCF 44R endorsement.

To understand why that is so, one has to look carefully at the operation and limitations of s. 258 of the Insurance Act, supra.

In my opinion, the section does effectively operate to provide partial "protection" to the claim of the "plaintiff as claimant", notwithstanding the breach of statutory condition 4(1) to which the "plaintiff as owner" was party (under this scenario).

In particular, while s. 258 was one of the legislated responses to the potential "privity of contract" barriers otherwise facing intended third party beneficiaries of insurance contracts,[^12] the words of the provision enacted by the legislature are broad enough to include someone in the position of the plaintiff, i.e., someone who, in addition to being a claimant against Lemieux and himself as owner (in the manner outlined above), is also a named party to the underlying insurance contract. [page544]

In that regard, s. 258 reads, in part, as follows:

Application of insurance money, 3rd party claims, etc.

258(1) Any person who has a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, even if such person is not a party to the contract,[^13] may, upon recovering a judgment therefor in any province or territory of Canada against the insured, have the insurance money payable under the contract applied in or towards satisfaction of the person's judgment[.]

Insurer absolutely liable

(4) The right of a person who is entitled under subsection (1) to have insurance money applied upon the person's judgment is not prejudiced by,

(a) an assignment, waiver, surrender, cancellation or discharge of the contract, or of any interest therein or of the proceeds thereof, made by the insured after the happening of the event giving rise to a claim under the contract;

(b) any act or default of the insured before or after that event in contravention of this Part or of the terms of the contract; or

(c) any contravention of the Criminal Code (Canada) or a statute of any province or territory of Canada or of any state or the District of Columbia of the United States of America by the owner or driver of the automobile[.]

Defence where excess limits

(11) Where one or more contracts provide for coverage in excess of the limits mentioned in section 251, [mandating that every contract of motor vehicle liability insurance must have minimum third party liability limits of at least $200,000], except as provided in subsection 12, [dealing with situations involving vehicles used in the business of carrying passengers], the insurer may,

(a) with respect to the coverage in excess of those limits; and

(b) as against a claimant,

avail itself of any defence that it is entitled to set up against the insured, despite subsection (4).

(Emphasis added) [page545]

In my view, as the "plaintiff as claimant" has a claim against Lemieux and himself as owner in this scenario, the clear and unambiguous wording of these provisions would bring him within the scope of s. 258(1). The insurer then would not be entitled to assert breach of statutory condition 4(1) as a defence to the claim by the "plaintiff as claimant" (even though the "plaintiff as owner" was a party to that breach), except insofar as the claim exceeded the minimum statutory limits of $200,000.

One might argue that the provisions of s. 258 thereby would confer an unintended benefit on someone in the unusual position of the plaintiff under this scenario.

In particular, if the provisions of s. 258 were intended to extend a measure of protection to "innocent" third parties having no ability to control or affect the conduct of others, and particularly the conduct of others insofar as it may affect their motor vehicle insurance arrangements, then an insured who is party to breach of a statutory condition in the underlying policy hardly falls within such a description.

However, I am mindful in this context of the "plain meaning rule" of statutory interpretation, as emphasized and exemplified by the Supreme Court of Canada in R. v. McIntosh (1995), 1995 124 (SCC), 21 O.R. (3d) 797, [1995] 1 S.C.R. 686, [1995] S.C.J. No. 16, at p. 704 S.C.R.:

[W]here, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the legislature, it must be enforced however harsh or absurd or contrary to common sense the result may be . . . The fact that a provision gives rise to absurd results is not, in my opinion, sufficient to declare it ambiguous and then embark upon a broad-ranging interpretive analysis.

Moreover, I do not think the limited protection effectively extended by s. 258 to the "plaintiff as claimant", despite his being a named insured and party to breach of a statutory condition (under this scenario), would be entirely inconsistent with the overall scheme of the legislation.

To the contrary, provisions such as those contained in ss. 251 and 258 of the Insurance Act strongly suggest that the legislature generally intended motor vehicle accident victims to have access to a minimum $200,000 of third party liability coverage (and for insurers to pay such coverage) whenever an ostensibly insured vehicle is being driven by its owner or an authorized driver -- regardless of possible misconduct or failings by an insured in relation to the policy. [page546]

In any event, for the reasons set out above, I think s. 258 would operate to protect and preserve the rights of the "plaintiff as claimant" in this fifth and final scenario, insofar as Allstate would be obliged to provide appropriate third party liability coverage in relation to Lemieux and/or the "plaintiff as owner" up to the minimum statutory limits of $200,000.

That does not mean, however, that breach of the statutory condition would cease to have relevance.

In particular, s. 258 may operate to protect the plaintiff as claimant, and limit the ability of an insurer to assert breach of a statutory condition in the context of defending a claim pursuant to s. 258(1) of the legislation. However, it does not purport to restrict or affect, in any way, the rights that otherwise may exist as between an insurer and its insured in relation to a contractual claim by the latter.

In that regard, I note again the final concluding provision of the OPCF 44R endorsement, which reads as follows:

Except as otherwise provided in this change form, all limits, terms, conditions, provisions, definitions and exclusions of the Policy shall have full force and effect.

(Emphasis added)

In this fifth and final scenario, the "plaintiff as owner" and named insured is party to breach of a statutory condition. Pursuant to basic principles of contract law, noted above, this entitles the insurer to rescind its contract of insurance vis-á-vis the "plaintiff as owner" and named insured (including the attached OPCF 44R endorsement expressly made subject to the same conditions) even though the insurer may still have obligations to the "plaintiff as claimant" pursuant to s. 258 of the Insurance Act.

In the result, the OPCF 44R endorsement has no application in this scenario either.

This is not because there is no shortfall between the $200,000 in available motor vehicle liability insurance and the $1 million limit of family protection coverage. Rather, it is because the plaintiff, by his conduct in breaching the statutory condition, has disentitled himself to any rights at all pursuant to the OPCF 44R endorsement. [page547]

[61] If none of the possible alternate scenarios gives rise to a situation where the plaintiff could or would have a claim against Allstate based on the OPCF 44R endorsement (the only stated basis of the proposed claim amendments), the amendments are indeed untenable, and no purpose would be served by permitting them.

[62] The master's decision to dismiss the plaintiff's motion for leave to amend, on the basis the proposed amendments were not tenable in law, therefore was correct (albeit not for the reasons given by the master).

[63] That is a sufficient basis on which to dismiss the plaintiff's appeal.

Limitation Period

[64] As noted above, once Master Pope found that the proposed amendments were untenable in law, she declined to address the second ground of opposition to the amendments put forward by Allstate, based on alleged expiry of an applicable limitation period.

[65] This effectively left no basis for appellate review in relation to the second issue, in the event the master's ruling on Allstate's first objection was not sustained on appeal.

[66] The limitation period issue in this case is not without its own detailed and nuanced aspects, and although it was suggested in the course of argument before me that the court at first instance may have been in no better position than I to determine the issue (based on the underlying "paper record"), I think it would have been inappropriate and unwise for me to do so on appeal as a matter of first impression.

[67] Had I not agreed with the master's conclusion that the proposed amendments were untenable at law (such that her order was correct in any event), I therefore would have remitted the matter to the master for a first instance determination of the limitation period issue.

[68] For that reason, and because my determination makes an appellate ruling from me on the limitation issue unnecessary, I decline to render any obiter opinion in that regard.

Costs

[69] Because my decision was reserved, the parties were unable to make any submissions regarding costs. If the parties are unable to reach an agreement on costs in that regard,

(a) the respondent Allstate may serve and file written cost submissions, not to exceed five pages in length (not including [page548] any bill of costs), within three weeks of the release of this decision;

(b) the appellant plaintiff then may serve and file responding written cost submissions, also not to exceed five pages in length, within three weeks of service of the respondent Allstate's written cost submissions; and

(c) the respondent Allstate then may serve and file, within two week of receiving any responding cost submissions from the appellant plaintiff, reply cost submissions not exceeding two pages in length.

[70] If no written cost submissions are received within three weeks of the release of this decision, there shall be no costs awarded.

Appeal dismissed.

Notes

[^1]: Vogler v. Lemieux, [2012] O.J. No. 1262, 2012 ONSC 1692 (S.C.J. -- Master).

[^2]: There are facts still in dispute and to be determined, such as the identity of the driver at the time of the underlying accident, and whether there was a breach of statutory condition 4(1) in the circumstances. However, the question before the master and before me on this appeal is really one of law, i.e., whether the claims embodied in the proposed amendment are not tenable in law because, on a proper interpretation and application of the relevant standard policy and endorsement provisions, the proposed claims cannot possibly succeed no matter how the outstanding factual issues are decided. (If there is a possibility of their success, the amendments should be permitted, so that the claims may proceed to trial.)

[^3]: See, for example, Craig v. Allstate Insurance Co. of Canada (2002), 2002 44956 (ON CA), 59 O.R. (3d) 590, [2002] O.J. No. 2124 (C.A.), at para. 8.

[^4]: See Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888, [1979] S.C.J. No. 133, 112 D.L.R. (3d) 49; Wigle v. Allstate Insurance Co. of Canada (1984), 1984 1817 (ON SC), 44 O.R. (2d) 677, [1984] O.J. No. 2642 (H.C.J.), affd (1984), 1984 45 (ON CA), 49 O.R. (2d) 101, [1984] O.J. No. 3422, 10 C.C.L.I. 1 (C.A.), leave to appeal to S.C.C. refused [1985] 1 S.C.R. v, [1985] S.C.C.A. No. 136; Fletcher v. Manitoba Public Insurance Co., 1990 59 (SCC), [1990] 3 S.C.R. 191, [1990] S.C.J. No. 121, 74 D.L.R. (4th) 636; Brissette v. Westbury Life Insurance Co., 1992 32 (SCC), [1992] 3 S.C.R. 87, [1992] S.C.J. No. 86; Reid Crowther & Partners Ltd. v. Simcoe and Erie General Insurance Co., 1993 150 (SCC), [1993] 1 S.C.R. 252, [1993] S.C.J. No. 10; Chilton v. Co-operators General Insurance Co. (1997), 1997 765 (ON CA), 32 O.R. (3d) 161, [1997] O.J. No. 579 (C.A.); and Somersall v. Friedman, 2002 SCC 59, [2002] 3 S.C.R. 109, [2002] S.C.J. No. 60.

[^5]: See Wigle v. Allstate Insurance Co. of Canada, supra; and Chilton v. Co-operators General Insurance Co., supra.

[^6]: See Beausoleil v. Canadian General Insurance Co. (1992), 1992 8679 (ON CA), 8 O.R. (3d) 754, [1992] O.J. No. 954 (C.A.), at paras. 8 and 12; and Chilton v. Co-operators General Insurance Co., supra, at para. 10.

[^7]: The underlying motion material filed and relied upon by the plaintiff includes an affidavit by Melanie Gardin, one of the plaintiff's lawyers, saying, "The Plaintiff struck his head during the accident and does not recall what happened in the hours before the accident, or immediately following the accident." Attached to Ms. Gardin's affidavit, as an exhibit, is a statement signed by Tom Lemieux (in the presence of two witnesses). It includes the following evidence: "Around 12:30am, I met Randy at Knights of Columbus on Walker Road. Randy was drunk, but I was sober. Due to his state of intoxication, I decided that I would drive Randy's truck" (emphasis added).

[^8]: There is nothing in the material before me to suggest in any way that Lemieux was operating the plaintiff's vehicle in exchange for compensation.

[^9]: In para. 6 of her reasons, Master Pope noted Allstate's defence pleading alleging that the plaintiff himself was the driver of his vehicle at the time of the accident and that the accident was caused by his negligence. She then went on to state that, "[i]n the alternative, Allstate pled that if Lemieux was found to be the driver, it took an off-coverage position based on the fact that Lemieux's licence had been suspended for many years and, therefore, he was in breach of Statutory Condition 4 ù Authority to Drive of the standard automobile policy ù OAP1." While this certainly was consistent with the oral submissions of counsel during hearing of the appeal, and with the affidavit of the plaintiff's lawyer filed in support of the underlying motion (at paras. 10, 13, 14 and 15), I was unable to locate such a formal allegation in the defence pleadings of Allstate located at tabs 6(D) and 9 of the appeal book, i.e., the statement of defence of the statutory third party, Allstate Insurance Company, delivered on or about December 1, 2008. If such a defence is not pled or made out, such that Lemieux was driving at the time of the accident but no breach of statutory condition concerns arise, then the situation would fall within the third scenario described above. However, for present purposes, I will continue with consideration of the scenarios in which breach of a statutory condition by Lemieux may be a concern, to explain why I think the OPCF 44R endorsement has no application in those scenarios either, in any event.

[^10]: See, for example, Waddams, The Law of Contracts, 6th ed. (Toronto: Canada Law Book, 2010), at pp. 434-35; Swan and Reiter, Contracts: Cases, Notes and Materials, 2nd. ed. (Toronto: Butterworths, 1982), at p. 5-1; and Treitel, The Law of Contract, 9th ed. (London: Sweet & Maxell, 1995), at p. 703.

[^11]: As noted above, the insurer commits, in s. 3.3 of O.A.P. 1, dealing with "Liability Coverage", to make any payment on the plaintiff's behalf "that the law requires".

[^12]: Such concerns were highlighted by Vandepitte v. Preferred Accident Insurance Co. of New York, 1932 319 (UK JCPC), [1933] 1 D.L.R. 289, [1933] A.C. 70 (J.C.P.C.).

[^13]: In my view, this wording makes it clear that s. 258(1) also applies to claimants who are a party to the contract. In particular, if there had been an intention to exclude such claimants from the operation of s. 258(1), as opposed to simply confirming expressly that non-parties also were entitled to benefit from s. 258(1), the provision easily could have omitted use of the word "even", i.e., thereby making s. 258(1) applicable only in relation to claimants "if such person is not a party to the contract".

End of Document