COURT FILE NO.: CV-14-0382 DATE: 2017-07-25

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

CHRISTOHPER SKUNK Plaintiff

E. Kim, for the Plaintiff

• and -

LAUREL KETASH and JEVCO INSURANCE COMPANY Defendants

A. Demeo and D. Treilhard, for the Defendant Jevco (moving party)

HEARD: July 6, 2017, at Thunder Bay, Ontario

Mr. Justice F. B. Fitzpatrick

Judgment on Motion for Determination of a Question of Law

[1] The defendant Jevco Insurance Company (“Jevco”) brings this motion under Rule 21.01 of the Rules of Civil Procedure, for a determination of a question of law.

[2] This is a motor vehicle accident case. The Plaintiff claims to have been injured by an uninsured driver, the defendant Laurel Ketash. Ms. Ketash was driving Maureen Skunk’s automobile (the “Automobile”) at the time of the accident. The Plaintiff is Maureen Skunk’s spouse. The parties agree Ms. Ketash did not have the consent of Maureen Skunk to drive the Automobile. The parties agree Ms. Ketash did not have the consent of Mr. Skunk to drive the Automobile. Ms. Ketash was uninsured because she had taken the Automobile without the consent of the owner.

[3] Mr. Skunk claims to be entitled to uninsured automobile coverage which his wife had purchased from Jevco.

[4] Jevco claims Mr. Skunk is not entitled to coverage as the result of the language of the governing statute and the policy of automobile insurance in place with respect to the Automobile that injured him.

Background

[5] The parties have agreed to certain facts for the purposes of this motion. They were set out in paragraphs 13 through 21 of Jevco’s factum. They are as follows.

[6] On October 7, 2012, the Plaintiff was a passenger in the Automobile. Ms. Ketash was the driver of the Automobile. The Plaintiff was injured when Ms. Ketash caused the Automobile to crash. The Automobile was owned by and registered in the name of Maureen Skunk. Maureen Skunk was the Plaintiff’s spouse. Maureen Skunk was insured by Jevco pursuant to a standard Ontario Automobile Policy (“OAP”) and OPCF 44R Family Protection Endorsement (“OPCF 44R”). Ms. Ketash was driving the Automobile without the consent of the owner. Jevco has denied coverage to Ms. Ketash. Ms. Ketash has no applicable and collectible bodily injury liability insurance.

[7] This matter has also been subject to some prior judicial consideration. This procedural history was set out at paragraphs 26 to 32 of Jevco’s factum. I repeat those paragraphs now.

[8] Jevco brought a summary judgment motion seeking the dismissal of the Plaintiff’s action against it on the grounds that the Automobile could not have been an “uninsured automobile” because it was owned by the Plaintiff’s spouse, and therefore the Policy does not provide coverage for the alleged loss. Newton J. dismissed Jevco’s summary judgment motion. (*Skunk v. Ketash*, 2016 ONSC 2019). Jevco appealed to the Court of Appeal for Ontario. Jevco’s appeal was quashed for lack of jurisdiction, on the basis that Newton J. had not made any final determination of law with respect to whether the vehicle was an “uninsured automobile”. (*Skunk v. Ketash*, 2016 ONCA 841 at paras. 54-55, 63). Jevco sought leave to appeal to the Divisional Court.

[9] Leave to appeal was denied. (*Skunk v. Ketash*, 2017 ONSC 1311). Following a case conference before Pierce J. on April 12, 2017, it was agreed that Jevco would bring the present motion in order to obtain a final determination of whether the Automobile was, as a matter of law, an “uninsured automobile”.

The Issue of Law

[10] Jevco requests the Court to answer the following question:

Was the Automobile an “uninsured automobile”, given that it was owned by the Plaintiff’s spouse?

Position of the Parties

[11] Jevco argues the statutory and contractual definition applicable to the policy of insurance at issue in this matter explicitly excludes “an automobile owned by or registered in the name of the insured or his or her spouse”. Jevco cites the decision of Quinn J. in Fosker v. Thorpe 2004 CarswellOnt 4150 at paragraph 29 OSCJ, for the proposition that the meaning of “uninsured automobile” clearly and unambiguously excludes all vehicles owned by an insured or his spouse. Therefore according to Jevco, the Automobile cannot, by definition, have been an “uninsured automobile”. The Plaintiff is therefore not entitled to uninsured automobile coverage under his spouse’s policy with Jevco.

[12] Mr. Skunk submits the statutory and contractual definition of “uninsured automobile” at issue is ambiguous. The ambiguity arises from a consideration of the purpose of the applicable provisions of the Insurance Act, the intent of the legislation and the necessity to give this remedial legislation a broad and liberal interpretation. Mr. Skunk argues it could not have been the intention of the Legislature or the parties to the insurance contract to exclude coverage for a person injured by their own stolen vehicle, even when the vehicle has been properly insured.

The Law

[13] There was no dispute about the applicability of the procedure contemplated by Rule 21.01(1)(a) to determine the matter at issue.

[14] The Court of Appeal in the decision involving this very case provided a useful analysis of applicable insurance law principles and the operation of section 265(1) of the Insurance Act. This analysis was contained at paragraphs 7 through 13 and 18 through 21 of *Skunk v. Ketash*, 2016 ONCA 841. That statement of the law provides the framework for my decision. The Court of Appeal stated:

[7] Automobile insurance is compulsory in Ontario: *Compulsory Automobile Insurance Act*, R.S.O. 1990, c. C.25. The purpose of this legislation is to protect victims of automobile accidents “from having no means of seeking damages from persons who might have caused those damages without having the protection of automobile insurance”: *Matheson v. Lewis* (2014), 121 O.R. (3d) 641, [2014] O.J. No. 3304, 2014 ONCA 542, at para. 36.

[8] The owner of a motor vehicle is liable for accidents caused by its operation under s. 192 of the Highway Traffic Act, R.S.O. 1990, c. H.8, except where subsection (2) applies, which provides as follows:

192(2) The owner of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street [page184] car on a highway, unless the motor vehicle or street car was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur.

[9] The purpose of s. 192(2) was noted in *Fernandes v. Araujo* (2015), 127 O.R. (3d) 115, [2015] O.J. No. 4202, 2015 ONCA 571, at para. 20:

[T]he purpose of this provision is “to protect the public by imposing, on the owner of a motor vehicle, responsibility for the careful management of the vehicle”. The provision is an integral element of the Highway Traffic Act 's mandatory licensing and insurance scheme to ensure the public safety. The owner has the right to give possession of the vehicle to another person, but this provision “encourages owners to be careful when exercising that right by placing legal responsibility on them for loss to others caused by the negligent operation of the vehicle on a highway”.

[10] If the motor vehicle is driven by a person who has the owner’s consent and is involved in an accident, s. 3.2 of the OAP provides coverage: “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 people insured persons.”

[11] In the normal course, if a person is injured by the operation of the motor vehicle in which he or she is a passenger, the vehicle owner’s insurer must respond.

[12] But some owners fail to insure their automobile, or their insurance is voided, and so the automobile is not insured. The Insurance Act mandates a scheme to provide for limited insurance coverage where the operation of an uninsured automobile injures a person. The coverage is provided by the injured person’s own insurer, but coverage is limited to the minimum required by s. 251 of the Insurance Act, which is $200,000 for liability claims.

[13] In order to mitigate the consequences of being injured by an uninsured or underinsured motor vehicle, purchasers of automobile insurance policies in Ontario can buy, for an additional premium, added coverage in the form of the OPCF 44R Family Protection Coverage Endorsement…

[18] Section 265(1) of the Insurance Act requires that every motor vehicle liability policy provide coverage for damages where there is liability on the part of an owner or driver of an uninsured automobile. Section 265(2) defines “uninsured automobile” as follows:

“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.

[19] This definition, which excludes automobiles owned by or registered in the name of the insured or his or her spouse, is in turn incorporated in virtually identical terms in s. 5 of the policy and in the endorsement.

[20] Section 5 of the policy provides as follows:

Uninsured Automobile Coverage

5.1 Introduction

5.1.1 Uninsured Automobile Coverage Schedule

This Section of the policy describes the terms and conditions of the coverage set out in the Uninsured Automobile Schedule under the Insurance Act (Ontario). If there is a difference between the interpretation of the wording of this Section and the interpretation of the wording in the Schedule, the Schedule prevails. However, 5.3.3 in this Section is an addition to the coverage provided by the Schedule.

5.1.2 What is an Uninsured Automobile?

An uninsured automobile is one for which neither the owner nor driver has liability insurance to cover bodily injury or property damage arising out of its ownership, use or operation, or the insurance is not collectible. However, this [page186] does not include an automobile owned by or registered in the name of the insured person or their spouse.

[21] The endorsement provides as follows:

OPCF 44R

FAMILY PROTECTION COVERAGE

1.5 “inadequately insured motorist” means

(a) the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance or bonds, cash deposits or other financial guarantees as required by law in lieu of insurance, obtained by 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.

1.11 “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. In consideration of a premium of $ àà or as stated in the Certificate of Automobile Insurance to which this change form is attached, the 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 to or death of an insured person arising directly or indirectly from the use or operation of an automobile.

[15] This case also poses an interesting issue of judicial comity. Clearly Quinn J. in Fosker supra made a definitive finding that the definition of “uninsured automobile” in s. 265(2) and s. 5.1.2 of O.A.P. No. 1 and OPCF 44R were clear and unambiguous. The same contractual and statutory language is at issue in this matter. Fosker was considered too both by Newton J. and the Court of Appeal in their decisions involving this matter. Newton J. distinguished the findings in Fosker on the basis that Quinn J. was viewing the matter through the lens of statutory interpretation principles rather than contractual interpretation principles. Further, at paragraph 47 and 57 the Court of Appeal said as follows:

[47] I conclude that the issue of whether an automobile that has been taken without the consent of the owner is excluded from the definition of “uninsured automobile” by reason of the fact that it is owned by or registered in the name of the insured or his or her spouse is not res judicata, and that the motion judge’s order dismissing Jevco’s summary judgment motion is therefore not a final order…

[57] To understand the parties’ submissions on whether the motion judge had made a binding determination of law, it was necessary to delve into the substance of the appeal. Having done so, the temptation is to find jurisdiction and rule on the merits, which would avoid the need for a further attendance by the parties. The efficiencies of time and cost for the parties are obvious. However, it would take away from the force of this court’s directive in Ashak and increase the considerable uncertainty about when an appeal of the dismissal of a summary judgment motion lies to this court. That confusion results in costs and inefficiencies – to both litigants and the court system – on a wider scale. Post-Hryniak, the volume of summary judgment motions, and, anecdotally, the volume of appeals from the dismissal of summary judgment motions, have increased. Greater clarity is needed.

[16] I am also bound by this statement by the Court of Appeal. The Court of Appeal was tempted to answer the question of law before the Court on this occasion but left it for another day. That day has arrived. I am proceeding on the basis that because the Court of Appeal said the question of law was not res judicata, it is a live issue for this proceeding.

Disposition

[17] I accept the arguments of the defence in this matter. I give the following answer to the question of law posed on this motion.

[18] “No”.

[19] The Automobile driven by Laurel Ketash at the time it injured Christopher Skunk was not “an uninsured vehicle” as it was owned by Maureen Skunk. The language of the insurance policy at issue excludes for coverage for a circumstance that occurred in this case. I find Christopher Skunk is not entitled to claim against Jevco pursuant to the uninsured provisions in this policy.

[20] I make this finding for the following reasons.

[21] I do not find ambiguity in the language of the statute or the contractual policies at issue. It seems to me the language is clear and concise. I find the contractual and the statutory language mean that if a person is injured by an uninsured driver driving a car they own, or a car belonging to their spouse, they do not get the benefit of the uninsured automobile provisions. It may not be a fair result. It may be an absurd result. However, the language is not ambiguous in my view. I cannot see any other result on a plain reading of all documents at issue.

[22] I am persuaded by the decision in Fosker. It held that the statutory language had a meaning consistent with the interpretation put forward by the defence on this motion. I also am persuaded by the arguments of the defence that the same words, dealing with the same subject matter found in two documents forming part of the same contract, with one document expressly incorporating the words found in the other cannot be found to bear different meanings. I find the definition of “uninsured automobile” in OPCF 44R s. 1 1.11 is consistent with the definition of “uninsured automobile” in section 265(2) of the Insurance Act and is consistent with the definition of “uninsured automobile” in OAP s. 5.1.2. All those sections mean that if a person is injured by an uninsured driver driving a car they own, or a car belonging to their spouse, they do not get the benefit of the uninsured automobile provisions.

[23] I was directed by both parties to the decision of the Ontario Court of Appeal in *Jubenville v. Jubenville* 2013 ONCA 302. Both parties relied on this decision albeit for different reasons. The facts in that case were not exactly on all fours with this matter. The parties in Jubenville had two cars and had not covered one of the vehicles. That vehicle, a Mercury Cougar, was involved in an accident. However, the uninsured automobile provisions in the insurance contract considered in Jubenville were exactly the same as those contractual provisions contained in this matter.

[24] Even in the face of what appears to be clear and unambiguous statutory and contractual language which would favour the upholding of the exclusionary interpretation put forward by the defence, the Court of Appeal in Jubenville found three ways to support coverage for the claimant. At paragraphs 8 through 11 of Jubenville, Rouleau J.A. set out the background for the matter before the Court. He stated:

[8] The Rule 22 motion ultimately turned on the proper interpretation of “the insured” in the exclusionary phrase contained at the end of the definition of “uninsured automobile” in s. 4.2.4 of the policy. This phrase excludes “an automobile owned by or registered in the name of the insured or his or her spouse” (emphasis added) from being considered as an “uninsured automobile”.

[9] If “the insured” in this section means either the owner of the policy (Kelly) or all those who are insured under the policy (which would include Kelly), Ashley would be denied access to coverage by the exclusionary language in the definition of “uninsured automobile”. This is because at the relevant time, Kelly, the insured, was the spouse of the owner of the uninsured vehicle, Kevin.

[10] Alternatively, if “the insured” referred only to the person making the claim, in this case Ashley, then the automobile would qualify as an uninsured automobile and Ashley would be entitled to recover under the policy. This is because Ashley did not own the uninsured vehicle and, at five years old, had no spouse.

[11] The motion judge accepted the second interpretation, i.e., that “the insured” referred to the person making the claim. As a result, he held that Kevin's Mercury Cougar was an “uninsured automobile” within the meaning of Kelly's policy and s. 265 of the Insurance Act and that Ashley was therefore able to claim under the policy. [page 325]

[25] In my view, this background is sufficiently different from the case before me to allow the decision to be distinguished for the purposes of this case. Clearly Jubenville turned on a definition of “the insured” in the exclusionary clause contained at the end of the definition of “uninsured automobile” in s. 4.2.4 of the policy. The claimant at issue in this case was a person in a different position vis-a-vis the owner of the automobile than was the claimant in Jubenville. In the Jubenville case the claimant was a child, not a spouse of the owner of the vehicle. Mr. Skunk is the spouse of the owner.

[26] Significantly for me were the comments made by Rouleau J.A. in paragraphs 20 and 21:

[20] This court's decisions in Taggart and McArdle confirm that the broad definition of “insured” in s. 224(1) of the Insurance Act applies to s. 265. As a result, the reference in s. 4.2.2(c)(ii) of the policy to “the insured” includes Ashley, because she comes within the definition in s. 224.

[21] When “the insured” is used again in the definition of “uninsured automobile” in s. 4.2.4, it can have one of two meanings. It can, as the appellant submits, have the same meaning as [page327] it does in s. 4.2.2(c)(ii), that is, all persons coming within the definition of “insured” in s. 224. This would, at a minimum, include Kelly as the named insured. Alternatively, it could, as the motion judge found, mean only the insured person making the claim. Both interpretations are reasonable.

[27] Having made that finding, the Court of Appeal went on from paragraphs 23 to 25 to give three reasons why a broad and liberal approach to statutory and contractual interpretation favoured an extension of coverage to the particular claimant at issue.

[28] In Jubenville, an ambiguity arose because the claimant was a dependent and the Court found there were two reasonable interpretations about who was “an insured”. This case too is about “an insured”, Christopher Skunk. He does come within a meaning of insured set out in s. 4.2.2(c)(i). However, Jubenville was about a person who was a dependent relative. This created an ambiguity when all sections were read together. I find no such ambiguity when the matter involves the spouse of the owner of an automobile.

[29] I agree with the submission of Jevco that the principles set out in paragraphs 23 through 25 of the Court of Appeal decision in Jubenville are not applicable to the case at bar. I say this because, like Quinn J. did in Fosker, I find no ambiguity in the language of the contracts or the statute at issue given the category of person making this claim, that is, the spouse of the owner of the vehicle involved in the accident driven by an uninsured driver.

[30] As the result of my finding, the claim against Jevco is dismissed. If costs of the action cannot be agreed, the parties may make an appointment to settle the issue. If no appointment is requested within 30 days of the release of these reasons, costs will be deemed to have been settled.

[31] The parties agreed that costs on this motion would be fixed in the amount of $3,000.00 inclusive of HST and disbursements, paid by the unsuccessful party. Jevco was successful on this motion. Mr. Skunk shall pay Jevco $3,000.00 for costs forthwith.

___________ ”original signed by”_ ___ The Hon. Mr. Justice F.B. Fitzpatrick

Released: July 25, 2017