Alof v. Ikeno et al., 2014 ONSC 2087

Alof v. Ikeno et al.

[Indexed as: Alof v. Ikeno]

Ontario Reports

Ontario Superior Court of Justice,

W.M. Matheson J.

April 2, 2014

119 O.R. (3d) 635 | 2014 ONSC 2087

Case Summary

Insurance — Automobile insurance — Actions — Insurer retroactively voiding insured's automobile insurance to date prior to motor vehicle accident — Motor vehicle insured at time of accident within meaning of s. 2(1) of Compulsory Automobile Insurance Act — Action for damages arising from motor vehicle accident not barred under s. 267.6 of Insurance Act — Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, s. 2(1) — Insurance Act, R.S.O. 1990, c. I.8, s. 267.6.

The plaintiff was injured in a motor vehicle accident. He brought a personal injury action against the owner and driver of the other vehicle. After the accident, the plaintiff's insurer notified him that his coverage was retroactively voided to a date prior to the accident because of his alleged failure to disclose a material change in the risk. The defendants brought a motion for summary judgment dismissing the action on the ground that it was statute-barred under s. 267.6 of the Insurance Act because the plaintiff was contravening s. 2(1) of the Compulsory Automobile Insurance Act ("CAIA") at the time of the accident.

Held, the motion should be dismissed.

s. 2(1) of the CAIA provides that no owner or lessee of a motor vehicle shall operate the vehicle on a highway unless the motor vehicle "is insured". The [page636] plaintiff's vehicle was insured at the time of the accident within the meaning of s. 2(1) of the CAIA. The action was therefore not barred under s. 267.6 of the Insurance Act.

Budd v. Paterson (2002), 2002 37032 (ON CA), 62 O.R. (3d) 715, [2002] O.J. No. 4883, 166 O.A.C. 388, 28 C.P.C. (5th) 1, 33 M.V.R. (4th) 1, 119 A.C.W.S. (3d) 1010 (C.A.); Hernandez v. 1206625 Ontario Inc. (c.o.b. Mr. Biggs Sports Bar & Eatery) (2002), 2002 45089 (ON CA), 61 O.R. (3d) 584, [2002] O.J. No. 3667, 218 D.L.R. (4th) 456, 165 O.A.C. 45, 32 M.V.R. (4th) 64, 117 A.C.W.S. (3d) 311 (C.A.), consd

Other cases referred to

Berardinelli v. Ontario Housing Corp., 1978 42 (SCC), [1979] 1 S.C.R. 275, [1978] S.C.J. No. 86, 90 D.L.R. (3d) 481, 23 N.R. 298, 8 C.P.C. 100, [1978] 3 A.C.W.S. 185; Langford v. Oleksiuk, [2003] O.J. No. 3785, [2003] O.T.C. 849, 125 A.C.W.S. (3d) 704 (S.C.J.); Neto v. Liberatore, 2005 33787 (ON SC), [2005] O.J. No. 4031, [2005] O.T.C. 817, 33 C.C.L.I. (4th) 26, [2005] I.L.R. I-4447, 142 A.C.W.S. (3d) 673 (S.C.J.)

Statutes referred to

Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, s. 2(1) [as am.]

Insurance Act, R.S.O. 1990, c. I.8, ss. 267 [as am.], 267.6

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 20

MOTION for summary judgment dismissing an action.

Sergio Grillone, for plaintiff (responding party).

Rafeena Bacchus, for defendants (moving parties).

1W.M. MATHESON J.: — This is a motion for summary judgment brought by the defendants, seeking a dismissal of this action.

2The action arises from a motor vehicle accident. The defendants seek summary judgment because they contend that the plaintiff did not have the required liability insurance at the time of the accident and the action is therefore statute-barred under s. 267.6 of the Insurance Act, R.S.O. 1990, c. I.8.

3More specifically, this motion arises because the plaintiff's insurer retroactively voided the plaintiff's insurance to a date prior to the accident.

4The plaintiff made no objection to this issue being decided on a motion for summary judgment.

Circumstances Giving Rise to Insurance Issue

Circumstances Giving Rise to Insurance Issue

5The accident in question took place on July 12, 2010 in Mississauga, Ontario. The plaintiff was driving his car on North Service Road. He collided with a car driven by the defendant Alfred Ikeno and owned by the defendant Vernon Ikeno. The defendant driver allegedly caused the accident. The plaintiff alleges that he suffered serious injuries as a result of the accident. [page637]

6The plaintiff did not have proof of insurance with him at the time of the accident. A confirmation of insurance was obtained two days later. That document, from TD Insurance, confirmed that the plaintiff's vehicle was insured under policy 53219693 for a period of time that included the date of the accident.

7The plaintiff reported the accident to TD Insurance and made a claim against the policy. The plaintiff had obtained the policy in Nova Scotia and his vehicle had been registered there. He then came to Ontario and registered his vehicle in Ontario on February 25, 2010.

8About a month after the accident, TD Insurance notified the plaintiff that his coverage was voided as of the February registration date. The letter indicated that this was due to his failure to inform TD that his vehicle had been registered in Ontario since February 2010.

9TD Insurance's voiding coverage form includes the following note from the claims department about the plaintiff's move to Ontario:

Unfortunately, insured neglected to inform us that the vehicle has been registered in Ontario since at least February 25, 2010. Underwriting notes from May 15, 2010 suggest that they had this discussion with insured and that insured wasn't sure if he would be moving permanently to Ontario. This appears to be a material change in risk which could affect coverage.

10It is therefore apparent that the plaintiff had a discussion with TD Insurance after he came to Ontario with the vehicle, well before the accident. This did not give rise to the insurer voiding the coverage at that time. Even after the accident, this report says only that it "appears to be" a material change in risk that "could" affect coverage.

Issue

Issue

11The defendants rely on the following requirement under the Insurance Act:

267.6(1) Despite any other Act, a person is not entitled in an action in Ontario to recover any loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile if, at the time of the incident, the person was contravening subsection 2(1) of the Compulsory Automobile Insurance Act in respect of that automobile.

(2) Subsection (1) applies whether or not the person was prosecuted for or convicted of an offence under the Compulsory Automobile Insurance Act.

[Emphasis added]

12The issue is therefore whether or not the plaintiff was contravening s. 2(1) of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25 ("CAIA") [page638] "at the time of the incident". That section provides as follows:

2(1) Subject to the regulations, no owner or lessee of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated,

on a highway unless the motor vehicle is insured under a contract of automobile insurance.

[Emphasis added]

13The defendants submit that, given the retroactive voiding of the insurance, there was no insurance at the time of the accident. The plaintiff submits that he did have insurance at the time of the accident, as was confirmed days later by TD Insurance.

Analysis

Analysis

14The parties have not located any authority that addresses the situation where insurance was initially in place, but voided retroactively after the incident in question, as happened here. This is not a case where the plaintiff simply had no insurance: e.g., Neto v. Liberatore, 2005 33787 (ON SC), [2005] O.J. No. 4031, [2005] I.L.R. I-4447 (S.C.J.); Hernandez v. 1206625 Ontario Inc. (c.o.b. Mr. Biggs Sports Bar & Eatery) (2002), 2002 45089 (ON CA), 61 O.R. (3d) 584, [2002] O.J. No. 3667 (C.A.). Nor is it a case where the plaintiff had cancelled his insurance well before the accident: e.g., Langford v. Oleksiuk, [2003] O.J. No. 3785, [2003] O.T.C. 849 (S.C.J.).

15The only case before me where there was any question at all about whether there was insurance at the time of the incident is Budd v. Paterson (2002), 2002 37032 (ON CA), 62 O.R. (3d) 715, [2002] O.J. No. 4883 (C.A.). In Budd, the plaintiff's wife, in the context of marital breakdown, transferred the ownership of the car in question to her husband and cancelled her insurance on the car. She said she asked her insurer to put insurance into place under her husband's name at the same time. Six days later, the plaintiff was in an accident. There was a factual dispute about what the wife had done and what the plaintiff knew. There was an arbitration hearing against the insurer at the Financial Services Commission of Ontario ("FSCO"). After hearing evidence, the arbitrator determined, among other things, that the vehicle was not insured on the date of the accident and that the plaintiff knew or ought reasonably to have known that was the case. The arbitrator was upheld on appeal to the directors delegate at FSCO.

16In Budd, there were two actions at issue: the first against the person who allegedly caused the accident, and the second [page639] against the insurance company. The defendants in both actions moved for summary judgment. In the first case, the issue was whether the plaintiff could pursue his claim given the finding in the FSCO proceedings that he had no insurance on the day of the accident. In the second case, the issue was whether the plaintiff could sue the insurer given that it would mean relitigating findings made in the FSCO proceedings.

17The Court of Appeal permitted both actions to go forward. In doing so, it did not deal with the question of whether or not the plaintiff's knowledge of the cancellation of the wife's insurance was relevant under s. 267.6 of the CAIA. It found that the grounds for the motions, specifically res judicata and abuse of process, were not established.

18The purpose of the overall legislation has been discussed in some cases, though not in the circumstances of this case. It was considered by the Court of Appeal in Hernandez. In that case, an uninsured driver wanted to sue the tavern where he had been drinking before getting into an accident. The court had to consider the scope of s. 267.6, and whether it precluded all actions by an uninsured driver. Despite the plain wording of the section, the court permitted the action against the tavern to proceed. In doing so, the court mentioned the obvious purpose of the Act in keeping uninsured drivers off the road (at para. 42) as well as the following purpose of the Act (at para. 38):

While the Act may serve several purposes, it is clear that one main purpose is to stabilize automobile insurance premiums. The respondent's interpretation of s. 267.6 is consistent with this purpose. It would limit the class which can recover from the automobile insurance pool to those who have paid premiums into that pool. Uninsured owners could not seek to recover damages that would ultimately be paid by automobile insurers, thus advancing the goal of matching claims and premiums.

19This purpose was highlighted to explain why it would not be inconsistent to permit the plaintiff to sue the tavern. Thus, it supported a narrower interpretation of the section than could arguably have been supported on its words. In doing so, the court relied upon the specific presumption against interfering with the right to bring an action (at para. 41). Such a section "attracts a strict interpretation of any ambiguity" that "should be resolved in favour of the person whose right of action is being truncated": Hernandez, at para. 41, citing Berardinelli v. Ontario Housing Corp., 1978 42 (SCC), [1979] 1 S.C.R. 275, [1978] S.C.J. No. 86, at p. 280 S.C.R.

20The above purpose has been repeated in a number of cases since Hernandez. However, apart from Budd, those cases [page640] do not give rise to issues similar to the issue on this motion. This is not a case where the plaintiff never insured the vehicle or cancelled his insurance and drove anyway.

21In my view, the starting point is the question of whether the defendants have proved that the plaintiff was contravening s. 2(1) of the CAIA "at the time of the incident", as required to invoke s. 267.6. While there need not be a prosecution or conviction, the defendants must show that all elements of that offence have been established as of that time.

22There is no question that the plaintiff was driving the car, and that he was on a highway. Section 2(1) then requires that the vehicle "is insured" when driving on a highway. The defendants submit that this is a strict liability offence and they therefore need not show that the plaintiff intended to breach the Act. If they did need to show intention, this motion would certainly fail.

23Accepting that this is a strict liability offence, the defendants must still address the temporal issue. The plain and ordinary meaning of s. 2(1) invokes a temporal limitation. It does not require insurance as a result of ownership or the potential that the vehicle might be used. It is only required if the owner actually drives the car or permits someone else to do so. It is at that point in time that insurance is required. In turn, s. 267.6 only applies if there is a breach of s. 2(1) "at the time of" the accident. Here, there was insurance at the time of the accident. TD Insurance specifically confirmed it within days afterward.

24While I do not think it is necessary to resort to the presumption against interfering with the right to bring an action, given the plain words of these sections, that presumption would lead to the same result. Even if there were ambiguity with respect to the temporal aspect of s. 2(1) or s. 267.6, it should be resolved in favour of the plaintiff in the context of a section that curtails the ability to sue.

25I therefore conclude that s. 267.6 does not bar this action. Under Rule 20 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] it is open to me to grant summary judgment against the defendants with respect to their s. 267 defence. I do so.

26If the parties are unable to agree on costs, they may provide me with brief written submissions together with a costs outline, to be delivered by April 25, 2014. Any brief written response to the opposite parties' submissions shall be delivered within 20 days after service of those submissions.