Court File and Parties

COURT FILE NO.: CV-16-00000017-0000

DATE: 20240524

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Linda J. Brown, Jason Edward Brown, and Angela Victoria Gaynor

Plaintiffs

– and –

Vanessa Lynn Paudash, The Estate of Kevin W. Paudash, by its Litigation Administrator, Frank K. Gomberg, and The Commonwell Mutual Insurance Group

Defendants

No one appearing

Vanessa Lynn Paudash has been noted in default

Joseph Lin, for the Defendant Estate

J.-C. Rioux and Henna Kapoor, for the Defendant, Commonwell

HEARD: May 23, 2024

REASONS ON MOTION

Christie j.

Overview

[1] This action is for personal injury damages arising from a September 1, 2015 truck versus motorcycle collision. Vanessa Paudash was driving her father’s Mazda CX-5, which was insured by Intact, when she allegedly caused the Mazda to strike Linda Brown as she was driving her motorcycle.

[2] The issue in dispute on this motion is whether the co-defendant, Vanessa Paudash, who has been noted in default in this proceeding, is entitled to coverage under an Intact motor vehicle liability policy of insurance of her father, Kevin Paudash, which is said to contain an Excluded Driver Endorsement (OPCF 28A) in relation to Vanessa Paudash specifically.

[3] The Estate argues that Vanessa Paudash is not entitled to coverage under this policy. The Plaintiffs agree with this position.

[4] The Commonwell Mutual Insurance Group, the Plaintiff’s own insurer, argues that this Excluded Driver Endorsement is not valid, and that Vanessa Paudash is entitled to coverage under the Intact policy. There is no dispute that the Plaintiff, Linda Brown, is insured with Commonwell and that she purchased a family protection endorsement with liability limits of $1,000,000.

[5] If Intact does have a valid Excluded Driver Endorsement, then Linda Brown can recover from her own insurer, Commonwell, for any amounts she is legally entitled to recover from Vanessa Paudash. If Intact does not have a valid Excluded Driver Endorsement, then Linda Brown can recover from Intact. It is understood that the policy limits available to Linda Brown will be the same in either case.

[6] The Estate has brought this issue forward in the context of a summary judgment motion, arguing that there is no genuine issue requiring a trial in relation to this question. While the determination of this issue will not finalize the litigation, it will provide the litigants with some needed clarity and focus. All parties agree that summarily deciding this issue at this time will assist in resolving a major issue in this action.

Facts

The Intact Policy

[7] The parents of Vanessa Paudash, Kevin and Valerie Paudash, have had motor vehicle liability insurance provided to them through their broker, Monkman, Gracie & Johnston Insurance ("Monkman") since 2008. The policy listed only the two of them as drivers of their vehicles.

[8] In 2013, Kelly Whetung, a broker at Monkman, reviewed Kevin and Valerie's insurance and discovered that their adult daughter, Vanessa, had moved back into their house. Ms. Whetung determined that Vanessa Paudash did not meet Intact's underwriting criteria based on her driving history and, therefore, could not be added as a driver under her parents’ policy. Ms. Whetung sent Kevin and Valerie Paudash an Excluded Driver Endorsement to be signed by both of them and Vanessa in September 2013. The Excluded Driver Endorsement form states in part:

WARNING – BY SIGNING THIS FORM YOU AGREE THAT IF THE EXCLUDED DRIVER DRIVES ANY AUTOMOBILE DESCRIBED BELOW:

• THIS POLICY WILL NOT PROVIDE THE INSURANCE REQUIRED BY LAW

• THIS POLICY WILL NOT PROVIDE COVERAGE FOR DAMAGE OR INJURIES CAUSED BY THE EXCLUDED DRIVER; AND

• BOTH THE AUTOMOBILE OWNER AND THE EXCLUDED DRIVER MAY BE PERSONALLY RESPONSIBLE FOR DAMAGE OR INJURIES CAUSED BY THE EXCLUDED DRIVER.

As for which vehicles the Excluded Driver Endorsement applied to, the form stated, “All vehicles”. The form purports to be signed by Kevin Paudash, Valerie Paudash, and Vanessa Paudash. It is to be noted that the Defendant Commonwell does not dispute the validity of the signatures of Kevin and Valerie Paudash, rather only Vanessa Paudash.

[9] On May 13, 2015, Kevin Paudash told his broker that he had purchased a new 2016 Mazda CX-5 and wanted it added to his policy. The vehicle was owned by Kevin Paudash only. Ms. Whetung sent out another Excluded Driver Endorsement to be signed by Kevin, Valerie and Vanessa Paudash. In the cover letter, Ms. Whetung stated:

Attached please find an OPCF28 Excluded driver document.

We have used these on your policy before, and unfortunately, we must again. I apologize that I cannot have Vanessa added to your policy. In order to maintain the policy you currently have with Intact, Vanessa must be excluded from driving any vehicle insured on the policy via signature from all three of you. I was unaware that Vanessa was back home.

Due to the dates of the convictions on the MVR I can only conclude that she was driving your vehicles when the tickets were obtained.

There will be no coverage should she drive.

I await receipt of the document in due course, with thanks.

[10] On June 2, 2015, Valerie Paudash called Kelly Whetung to tell her that everyone had signed the Excluded Driver Endorsement except Kevin Paudash, and that he would sign it on that day and she would send the form into Monkman. The signed endorsement was received by Monkman on or about June 8, 2015 with all three signatures. Again, it is to be noted that the Defendant Commonwell does not dispute the validity of the signatures of Kevin and Valerie Paudash, rather only Vanessa Paudash. The Excluded Driver Endorsement was in the same form as that in 2013, with the same cautions, and stated that it applied to “All listed vehicles”.

[11] A Certificate of Insurance was issued to Kevin and Valerie Paudash following the addition of the 2016 Mazda CX-5 listing three vehicles (Ford, Polaris, Mazda). The Excluded Driver Endorsement in relation to Vanessa Paudash is noted on the Certificate. It is conceded that the Certificate of Insurance was sent to Monkman and Kevin and Valerie Paudash by Intact.

Motor Vehicle Collision

[12] On the morning of September 1, 2015, Vanessa Paudash is said to have taken the Mazda CX-5 and was involved in a motor vehicle collision with the Plaintiff, Linda Brown, in Peterborough, Ontario.

[13] Only a few days later, on September 10, 2015, Kevin and Valerie Paudash’s son, John Wayne Paudash, died suddenly at the age of forty-one. Kevin and Valerie Paudash did not return any calls from the broker or from Intact Insurance for weeks following the September 1 collision.

[14] On November 11, 2015, at around 11:00 a.m., Kevin and Valerie Paudash phoned Intact Insurance and spoke with Sandra Li, adjuster on the collision. On this call, Kevin and Valerie Paudash are said to have confirmed that neither of them gave consent to Vanessa to take their vehicle and that both of them were aware that Vanessa was not allowed to use their vehicle. The note from the call states in part: “Keys were left on the counter (as always) and daughter just took them”.

[15] On December 2, 2015, Intact denied coverage to Vanessa Paudash on the assertion that it had a valid Excluded Driver Endorsement (OPCF-28A).

This Action

[16] A Statement of Claim in this action was issued on February 10, 2016, seeking damages from the Paudash Defendants and from the Plaintiff’s own insurer, Commonwell, in the event that the Paudash Defendants were uninsured or underinsured.

[17] A Statement of Defence and Crossclaim was delivered by the Defendant Commonwell on May 31, 2016.

[18] An Amended Statement of Claim was issued on March 24, 2017.

[19] On April 11, 2018, the Defendants, Vanessa Lynn Paudash and Kevin W. Paudash, who failed to deliver a Statement of Defence, were noted in default.

[20] Kevin Paudash died suddenly on August 10, 2019, at the age of sixty-five.

[21] In November 2022, the Plaintiffs sought and obtained an Order to continue the proceeding against the Estate of Kevin Paudash, to appoint Frank K. Gomberg as Litigation Administrator for the Estate, and to amend the Statement of Claim and Title of Proceedings accordingly.

[22] Valerie Paudash has not been participating in these proceedings. Vanessa Paudash has still not been located.

[23] Intact takes the position that it does not owe Vanessa Paudash a defence nor is it required to indemnify the Plaintiff.

Analysis

[24] Rule 20.04(2) of the Rules of Civil Procedure requires the court to grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[25] As the Supreme Court of Canada made clear in Hryniak v. Mauldin, 2014 SCC 7, the first step is to determine if there is a genuine issue requiring a trial based only on the evidence presented by the parties without using the fact-finding powers in r. 20.04(2.1) and (2.2). The expectation is that in making or responding to the motion, the parties have each put their best foot forward. There will be no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits. Such a determination is possible when the court can make the necessary findings of fact, apply the law to the facts, and where the result is a proportionate, more expeditious and less expensive means to achieve a just result.

[26] If, however, the judge cannot determine whether there is a genuine issue for trial based only on the evidence before them, the judge may resort to fact finding powers in rule 20.04(2.1), including: (a) weighing of evidence; (b) evaluating the credibility of a deponent; and (c) drawing any reasonable inference from the evidence: Hryniak, at para. 66.

[27] The question presented to this court on this summary judgment motion is as follows:

Is Intact Insurance's 28A Excluded Driver Endorsement valid and binding such as to exclude coverage for any losses resulting from Vanessa's operation of a vehicle listed under Kevin and Valerie's policy?

[28] Section 249 of the Insurance Act, R.S.O. 1990, c. I.8 enables an insurer to “stipulate by endorsement to a contract evidenced by a motor vehicle liability policy that any person named in the endorsement is an excluded driver under the contract." The operation of an Excluded Driver Endorsement is governed by section 240 of the Act which reads as follows:

240. If a contract evidenced by a motor vehicle liability policy names an excluded driver, the insurer is not liable to any person under the contract or under this Act or the regulations for any loss or damage that occurs while the excluded driver is driving an automobile insured under the contract, except as provided in the Statutory Accident Benefits Schedule.

[29] Further, clause 1.8.2 of the Ontario Automobile Policy states:

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...

An Excluded Driver is defined in clause 1.3 as follows:

An excluded driver is someone specifically not covered by this policy when driving the described, temporary substitute or newly acquired automobile(s). The only exception is coverage for those Accident Benefits the law requires to be paid to anyone injured in an automobile accident in Ontario.

[30] In Jevco Insurance Company v. Wawanesa Insurance Company, 1998 14712 (ON SC), [1999] 42 O.R. (3d) 276 (Ont. Gen. Div.), Spiegel J. discussed the rationale behind an insurer's ability to exclude certain drivers from coverage. In that case, the court was considering whether an insurer is liable for loss transfer indemnity pursuant to the Insurance Act while its insured's automobile is being driven by a person without the consent of the insured owner, and in a companion appeal, whether an insurer is liable for loss transfer indemnity pursuant to the Act while its insured's automobile is being driven by an excluded driver. This was the first time these issues were considered by the court. The court stated in part as follows:

[46] Prior to 1990, if an insurer was asked to provide automobile coverage to a person in circumstances where it appeared that the automobile would be available to another person whom the insurer regarded as a substandard driver, the insurer had only two options, it could charge a premium which reflected the perceived risk involved in the other person driving, or it could decline the request for insurance. Even if the person seeking coverage undertook that the other person would not drive the automobile, there was nothing in the Act which would relieve the insurer from liability to third parties if this undertaking was breached. The result was that the person would have to pay the higher premium or go without coverage which was not an acceptable option in view of the compulsory automobile insurance legislation. The excluded driver scheme was designed to remedy this unsatisfactory situation. The scheme was implemented by Bill 68, S.O. 1990 c2. which permitting the naming of persons as excluded drivers in contracts of automobile insurance and which amended a number of Acts to grant protection from liability to the insurers issuing such contracts if the automobile was driven by the excluded driver.

[49] These amendments indicate that the legislature intended to extend to the insurer a very broad scope of protection from liability when the excluded driver is driving. I find it difficult to believe that the legislature would have intended to protect the insurer of the automobile being driven by the excluded driver from liability at the expense of the Fund and not have intended s. 240 to protect such an insurer from liability for loss transfer indemnity under s. 275 of the Act. It seems to me that the interests of the publicly financed Fund are at least as worthy of protection as the interests of the first party insurer claiming loss transfer indemnity.

See also Levesque v. Levesque, [2002] O.J. No. 3751, para. 17.

[31] The court has held that signatures, while prudent, are not necessary on Excluded Driver Endorsements. In fact, the court also held that notice to the excluded driver is not required at all. In Gore Mutual Insurance Co v. 1443249 Ontario Ltd., (2004) 2004 27736 (ON SC), 70 O.R. (3d) 404, the Court considered a case in which a company carrying on business as Enroute Towing was sued after the brother of Enroute’s directing mind was involved in an accident while driving a company vehicle. Enroute was ensured with Gore. Gore offered evidence that the brother was an excluded driver in the form of an unsigned excluded driver endorsement which misnamed the brother. The brother and the company brought a counter-application for a declaration that the insurer had a duty to defend them and that the Endorsement was invalid because it was not signed by the directing mind of the company or the brother, and neither of them had notice of the Endorsement nor agreed to it. It was conceded that no steps were taken to inform the brother about the Endorsement. The counter-application of the company and the brother was ultimately granted. Karakatsanis J. wrote on behalf of the Court:

[13] The courts have recognized that an insurer's ability to exclude certain drivers from coverage is beneficial as it allows a good risk to maintain coverage while protecting the insurer from liability for a poor risk driver or owner. See Jevco Insurance Co. v. Wawanesa Insurance Co. (1998), 1998 14712 (ON SC), 42 O.R. (3d) 276, 43 M.V.R. (3d) 63 (Gen. Div.), at p. 292 O.R.; Levesque v. Levesque, [2002] O.J. No. 3751 (QL), 42 C.C.L.I. (3d) 95 (S.C.J.), at pp. 3-4 QL.

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

[18] The form of the endorsement does not itself create a legal requirement that it be signed in order to be valid. On its face it provides that the signatures are an "acknowledgement". The exclusion is based upon an amendment to the contract of insurance. In the absence of the signatures on the form, the insurer has the onus of satisfying the court that the parties otherwise agreed to amend the contract.

[20] For the above reasons, I am satisfied that the form itself does not create the legal obligation that it be signed by the insured or the excluded driver in order to be valid.

[21] The Insurance Act does not require that the OPCF 28A be signed by both the insured and the excluded driver in order to be valid. Section 249 of the Insurance Act provides that "[the] named insured may stipulate by endorsement to a contract evidenced by a motor vehicle liability policy that any person named in the endorsement is an excluded driver under the contract." This section obviously contemplates a written endorsement in the form approved by the Superintendent of Insurance. The fact that it is the named insured who may stipulate suggests that the insured will sign the endorsement. The section is, however, permissive. In the absence of a signed Endorsement, the insurer has the onus of producing evidence that the insured otherwise agreed to modify the terms of the insurance contract.

[22] The respondents submit that s. 232(4) of the Insurance Act requires that the insurer advise the insured in writing of any changes to its policy that differ from the application. While s. 232(4) may create the obligation upon the insurer to notify the insured in writing, it does not require that the changes are agreed to in writing. Indeed, while ss. 124(1) and (2) of the legislation requires that the insurer and the insured must agree upon any changes to an insurance contract in writing, s. 124(7) specifically excludes automobile insurance policies from such a requirement. In this case, the insurer submits that it did advise the insured in writing by mailing its Excluded Driver Endorsement and new Certificates of Insurance to Enroute. Whether it did so, and whether the change was agreed to by the insured is a question of fact.

[23] There is therefore no requirement in the Insurance Act that the Endorsement be signed or that an amendment to the contract be in writing.

[24] There is no provision in the Insurance Act that requires notice or the agreement of the excluded driver. Given my finding that the form approved by the Superintendent does not create the legal requirement for a signature, it cannot create the requirement that the excluded driver be given notice. While it is good policy that an excluded driver understands that there is no insurance coverage, the excluded driver is not a party to the insurance contract. There is therefore no requirement that the excluded driver agree to amend the terms of the contract, in writing or otherwise. Failure to provide notice to the excluded driver does not itself invalidate the Excluded Driver Endorsement.

[32] I have already found that the Endorsement need not necessarily be signed by the insured to amend the policy to exclude a driver. However, the presence or lack of a signature is of evidentiary value. In this case, the lack of a signature requires that the insurer establish that the insured clearly understood the effect of the endorsement and intended to agree to the amendment of the contract.

In the end, Karakatsanis J. found that it was not clear that the directing mind of the company, the insured, fully understood and agreed to the exclusion, as the Endorsement was not signed, there was no covering letter explaining the effect of the Endorsement, the directing mind of the company provided evidence that he believed his brother was added as a driver, the notation on the Certificate of Automobile Insurance did not clearly set out the exclusion and contained some inconsistencies, and the name of the excluded driver was not stated properly. The Court held that these circumstances did not operate to relieve the insurer of its obligation to provide coverage.

[32] This decision was upheld on appeal referring specifically to the comments of Karakatsanis J. at para 17: Gore Mutual Insurance Co. v. 1443249 Ontario Ltd., 2004 43772 (ON CA), [2004] O.J. No. 4822. The court stated in part:

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

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

The Court then referred specifically to the reasons of Karakatsanis J. at para 17. The Court also noted as follows:

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

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

The appeal was dismissed.

[33] In Tompros v. Ravitharan, 2015 ONSC 3998, decided well after Gore, Justice Edwards considered a case in which Mr. Thiyagarajah Ravitharan purportedly signed an excluded driver endorsement which excluded him as a driver of vehicles insured under a policy issued by Desjardins. The principle driver referenced on the Certificate of Insurance was Pathmaneela Ravitharan. The Court noted that the form did not specify which automobiles were subject to the provisions of the form. The Court also noted that Dominion, the insurer for the vehicle driven by the Plaintiff, had already tendered to the Plaintiff $200,000 plus costs as its contribution toward damages based upon what it viewed to be its maximum potential liability. Western Assurance, the Plaintiff’s own vehicle insurer, would have to pay the balance, up to $800,000 plus costs, if its one-million-dollar family protection endorsement was available. In the event the Excluded Driver Endorsement was not enforceable, Desjardins would become the primary source of coverage for the claim. There was no real dispute that the injuries suffered by Tompros (incomplete quadriplegia) would result in damages that would exceed the $1 million. Desjardins, who was not a party to the main action, sought a declaration that their Excluded Driver Endorsement was valid.

[34] Mr. Ravitharan was noted in default as no statement of defence was filed. The Court noted that there was no affidavit evidence from the various individuals referenced in the underwriting notes who actually participated in the telephone discussions with Ravitharan with respect to the form. There was also no evidence from Mr. Ravitharan.

[35] Justice Edwards expressed concern in relation to obvious differences between the approved by FSCO exclusion form and the one used in this case, including the fact that the form used in this case did not contain a section for excluded vehicles. He stated in part as follows:

[26] Counsel for the plaintiff argues, in my view correctly, that Desjardins bears the onus of establishing the enforceability of the form signed by Ravitharan. In that regard, in reliance on the decision of Sharpe J.A. in GMAC Leaseco Corp.v. Lombard Insurance 2007 O.J. No. 3652, it is argued that where an insurer seeks the protection of the 28A Excluded Driver Endorsement the insurer must “take appropriate steps to ensure that it is brought to the insured’s attention”.

[27] While on its face the form appears to be signed by someone purportedly bearing the name Thiyagarajah Ravitharan, the signature is not witnessed and there is no evidence proffered by Desjardins to confirm that the signature on the form is in fact that of Ravitharan who is named as a defendant in this action.

[28] The diary notes of The Personal were entered into evidence as an exhibit to the affidavit of Mr. Moretto, filed as part of the evidence on behalf of Desjardins. These diary notes, on their face, would suggest that there were discussions between the claims person at The Personal and someone who appears to identify themself as Ravitharan. Absent the evidence of Ravitharan to the contrary and absent the evidence of the individual preparing the diary notes, the diary notes are at this point in time the best evidence with respect to what transpired in February and March of 2007 as it relates to the necessity for the execution of a OPCF 28A as a precondition for Ravitharan becoming an insured.

[29] While Desjardins does bear the onus on this motion, my decision is not ultimately governed by the absence of any direct evidence as to whether or not the signature on the form is that of Ravitharan. It goes without saying, however, that the best evidence in that regard certainly would be made fundamentally more probative if the OPCF 28A required a space for a witness to sign witnessing the signature of the person seeking excluded driver status.

[36] While there was reference to the decision of Karakatsanis J. in Gore, it appears to have been on a different point – the type of form utilized, which was different than the FSCO approved endorsement, in that it did not list the vehicles to which the Endorsement would apply. The Court also noted that this was “telling” given that there were additions and deletions of vehicles on the policy after the signing of the form. The Court also pointed out that there was no evidence confirming that Desjardins had sent to Ravitharan both a certificate in an approved form and a copy of the Excluded Driver Endorsement. The Court found that:

[37] I agree with the position taken by the plaintiff and Western Assurance that Desjardins bears the onus of establishing in every respect the validity of the endorsement relied upon to exclude coverage for Ravitharan. I do not, however, need to decide this case on the basis of the failure of Desjardins to establish that the signature on the form is that of Ravitharan. There is enough evidence in the diary notes to at least raise a genuine issue, or at least the necessity of a mini-trial, as it relates to this question. That said, as I have already noted above, while even the approved OPCF 28A does not provide for the signature of a witness to that of the signature of the excluded driver it would be a relatively simple task to require such a witness and thereby improve the ability of the insurer relying on the Excluded Driver Endorsement to establish that the signature on the endorsement is that, in fact, of the excluded driver.

[39] … In my view, if an insurer seeks to rely on a form to exclude coverage, there has to be strict compliance with the provisions of section 227(1) of the Insurance Act…

[40] ….It would have been a simple task for Desjardins to have attached to the affidavit of Mr. Moretto, documentary evidence from the Superintendent confirming that the type of form signed by Ravitharan had in fact been approved by the Superintendent. In the absence of that approval there has been non-compliance by Desjardins with section 227.

[41] It is particularly noteworthy that the form relied upon in this case does not have any provision for the vehicles that would be caught by the Excluded Driver Endorsement. The approved form on the other hand, does make specific provision for the vehicles that are caught by the Excluded Driver Endorsement. This makes imminent sense so that anyone signing the excluded driver form would know that if the excluded driver drives any vehicle described in the endorsement there would be no coverage for that individual.

[42] Even if the failure by Desjardins to put before this court evidence confirming that the form had been approved by the Superintendent was not the determining factor in this case, there still remains the failure by Desjardins to put evidence before the court that when the policy of insurance was renewed, not only did Ravitharan receive a copy of the certificate but also a copy of the Excluded Driver Endorsement form…..

[45] The form signed by Ravitharan makes no provision for which, if any vehicles, are caught by the Excluded Driver Endorsement signed by Ravitharan. This becomes particularly important where there have been additions and deletions made to the policy, as is evident from the evidence in this case. Not only was there non-compliance with section 232(3) of the Insurance Act, there was absolutely no way anyone reading the certificate of insurance and the OPCF 28A signed by Ravitharan would know which vehicles were caught by the Excluded Driver Endorsement.

[46] While there is no obligation, as confirmed by the comments of MacKinnon J. in Hunter, to bring to the attention of an insured the continuing applicability of an Excluded Driver Endorsement upon a renewal of a policy of insurance, there is a requirement to ensure that the Excluded Driver Endorsement fully complies with the obligations imposed on an insurer to draw to the attention of an insured the applicability of the endorsement itself. The endorsement must be approved by the Superintendent of insurance. The approved form of endorsement provides for a list of automobiles caught by the endorsement. The failure on the part of Desjardins, or in this case The Personal, to have made provision for which vehicles were caught by the endorsement, in my view is fatal to the applicability of the Form in this case.

Justice Edwards concluded that Desjardins could not rely on the form and had an obligation to defend Ravitharan and respond to any judgment that might be rendered.

[37] Since the Tompros decision, as to the form of the Excluded Driver Endorsement, in Royal & Sun Alliance Insurance Co. of Canada v. Intact Insurance Co., (2017) 2017 ONCA 381, 138 O.R. (3d) 539, para 13, the Court of Appeal rejected the notion that the Excluded Driver Endorsement had to strictly comply with section 227(1) of the Insurance Act. In fact, the Court held that “See Certificate of Automobile Insurance" in the Excluded Driver Endorsement was sufficient to exclude vehicles and alter the insurance contract between the insurer and the insured. It is worth noting, however, that the Court again focused on what the insured knew, finding that Ms. Wilson, the insured but excluded driver, executed the unambiguous Endorsement, was given a pink slip certificate that identified the vehicle, and that she understood that she was excluded. The Court in Royal was satisfied that the insured knew about the exclusion. These circumstances are quite different from those presented to Edwards J. in Tompros which caused him concern about what the insured actually understood. See also: Aviva v. Intact, 2018 ONSC 6527; Trudeau v. Cavanagh, 2019 ONSC 2485. It must be noted that the Defendant Commonwell does not take any issue with the form utilized in this case.

[38] The Defendant Commonwell makes two arguments on this motion:

a. The suggestion that Vanessa Paudash was driving the vehicle without consent has not been proven by the Estate which holds the burden; and

b. Vanessa Paudash, as the excluded driver, is entitled to notice of being so excluded, especially in the context of consent or implied consent, and this has not been demonstrated.

[39] This court agrees with the Defendant Commonwell that, in the present case, it has not been established that Vanessa Paudash had the vehicle without the owner’s consent. While that is alleged, that fact is not clear. The burden of proof for an allegation that a driver had possession of a vehicle without the owner’s consent is on the party alleging lack of consent. This court is prepared to decide this issue on the assumption that Vanessa Paudash did have the owner’s consent. As a person who may have had the vehicle with the owner’s consent, she would be covered under the policy unless the Endorsement is proven valid.

[40] As for the knowledge of Vanessa Paudash that she was an excluded driver, Commonwell argues that the evidence in this case falls short, as the execution of a document must be proved through a witness with some knowledge of the circumstances under which the document was executed and of the handwriting of the parties. They concede that if Valerie Paudash, Vanessa Paudash, or a broker with some personal knowledge of the handwriting of the persons who signed the Endorsement, provided some evidence to authenticate the purported Endorsement, then Intact could rely on that evidence to support their position. In this case, Commonwell points out that the evidence on the disputed issue is that of an affidavit of insurance broker Kelly Whetung and an affidavit of insurance adjuster Sandra Li. Some salient points of the evidence are as follows:

a. Kelly Whetung does not think she ever met Vanessa Paudash. Ms. Whetung cannot say what Vanessa Paudash did or did not know about Intact’s intention to exclude her as a driver. Ms. Whetung has never seen Vanessa Paudash sign a document and she cannot say whether the signature on the excluded driver form is the actual signature of Vanessa Paudash.

b. Sandra Li has never met or spoken to Vanessa Paudash. Ms. Li cannot authenticate the signature purporting to be Vanessa Paudash. Ms. Li does not know what Vanessa Paudash knew or did not know about Intact’s intention to exclude her as a driver. According to Ms. Li, Kevin Paudash told her that the keys to the vehicle were always on the counter. Ms. Li did not ask Mr. Paudash on how many prior occasions his daughter had taken the truck.

[41] As a general proposition, it is not always only parties to a contract who are entitled to notice of a change in the contract. See: London Drugs v. Kuehne & Nagel, 1992 41 (SCC), [1992] 3 S.C.R. 299, at paras 240-244, 268. However, no authority has been provided to this court to establish that any excluded driver must have notice in order for the exclusion to be valid. The focus in the case law provided is on the knowledge of the insured, rather than the excluded driver. While cases have suggested this might be good practice, it is not a legal requirement. The entirety of the circumstances must be considered.

[42] Having considered the entirety of the circumstances, it is the view of this court that the Excluded Driver Endorsement is clearly valid. There is no genuine issue requiring a trial on this point. This is so for the following reasons:

a. There does not seem to be any dispute about the fact that Vanessa Paudash was driving the Mazda at the time of the collision.

b. The documentation and viva voce evidence clearly demonstrates Intact’s intention to specifically exclude Vanessa Paudash from her parents’ policy for all vehicles.

c. The intention of the legislation is to extend to the insurer a very broad scope of protection from liability when the excluded driver is driving.

d. It is essential that the insured is aware of the limitations of their policy, including the Excluded Driver Endorsement. There seems to be no dispute about the fact that the insured, Kevin and Valerie Paudash, understood and agreed to the exclusion. In this case, there is clear evidence that the insured agreed to the limitations on the insurance contract.

e. While proof that the excluded driver signed the Endorsement, or is at least aware of the Endorsement, may be beneficial to establish the validity of the Endorsement in some cases, it is not a legal requirement.

f. Even if Vanessa Paudash did not receive notice of the exclusion, there is no requirement that she be provided such notice. If notice were a requirement for validity, it should be clearly stipulated in the Insurance Act so as to make the obligations of insurers clear. Gore clearly states that it is not a requirement, and the Court of Appeal took no issue with this conclusion. While the Court of Appeal referred only specifically to para 17 in relation to the issue of signatures, it would seem obvious, as held by Justice Karakatsanis, that if no signatures are required, then no notice is required.

g. The uncontroverted evidence is that Vanessa Paudash and her parents signed the Endorsement. It is not uncommon for insurers to never meet the insured parties or certainly any excluded parties. To require more proof than what has been provided in this case would change the entire landscape upon which insurance contracts are made. In a note prepared by Kelly Whetung, it states:

Sent OPCF28 for signature

2015-05-13 16 42 We have to get Vanessa excluded due to MVR

2015-05-26 20 33 left vmail reminder

2015 06-02 14 21 I spoke with Val today. She said Kevin is the only one left to sign, she’ll have him do that for me today and send it in.

2015-06-095:27 recd

The signed OPCF 28A was stamped received by the broker on June 8, 2015 and purports to have the signatures of Kevin Paudash, Valerie Paudash and Vanessa Paudash. It is to be noted that the Defendant Commonwell does not dispute the validity of the signatures of Kevin and Valerie Paudash, rather only Vanessa Paudash.

h. In this court’s view, it does not need to decide the issue of consent to use the vehicle. However, even if explicit consent was provided by Kevin or Valerie Paudash, why should this make the insurer responsible where they had explicitly excluded this driver from coverage? There does not seem to be any dispute about the fact that Kevin and Valerie Paudash understood the exclusion. It would be absurd for an insurer to be held responsible to provide notice to the excluded driver, simply because an insured person, with full knowledge of the exclusion, grants consent to an explicitly excluded driver. The Defendant Commonwell argued that this was the way to reconcile Gore and Tompros, however, this would seem to create some very uncertain obligations on the part of the insurer. It is the view of this court that Gore and Tompros can be easily reconciled as turning on the specific facts of those cases.

i. There is no hint of any suspicious activity in this case that would cause this court to question whether those signatures are anything other than what they purport to be.

j. The Defendant Commonwell does not dispute the type of form utilized by Intact for the exclusion.

k. The uncontroverted evidence is that the Certificate of Insurance was mailed to Kevin and Valerie Paudash, which included the Excluded Driver Endorsement.

Conclusion

[43] For all of the foregoing reasons, the Order of this court is as follows:

a. The Excluded Driver Endorsement of Intact is valid;

b. Intact is not required to defend or indemnify Vanessa Paudash for any losses associated with her use of a vehicle listed on Intact's policy;

c. Intact is not required to provide coverage to any other persons on the basis of a right of subrogation for any losses associated with Vanessa Paudash's operation of a vehicle listed on Intact's policy.

[44] As for costs of this motion, the court strongly encourages the parties to consult with each other and attempt to reach a reasonable agreement. If the parties are unable to agree as to costs, the court will accept written submissions on costs, which shall be no more than two pages in length, excluding supporting documentation. All costs submissions are to be filed through the civil JSO portal as well as directly with my assistant by email to Bev.Taylor@ontario.ca and which shall be provided no later than 4:30 p.m. on May 31, 2024.

Justice V. Christie

Released: May 24, 2024