S. Quesnelle

This action arose from a fatal motor vehicle accident involving a tractor and a passenger van.

The main action settled, leaving a third-party claim by the defendants (tractor operator and owner) against the Township of Cramahe for contribution and indemnity.

The defendants alleged the Township was negligent and breached its statutory duty by failing to maintain Telephone Road in a reasonable state of repair, specifically by not painting a centerline.

The court found that the absence of a centerline constituted a state of non-repair, as it was required by the Ontario Traffic Manual guidelines.

However, the court ultimately dismissed the third-party claim, finding that the defendants failed to prove, on a balance of probabilities, that 'but for' the absence of the centerline, the accident would not have occurred.

The court concluded that the driver of the van either never identified the tractor as a hazard or did not have sufficient time to react, and the centerline would have made no difference.

Two related applications addressed whether a commercial general liability insurer owed a duty to defend or indemnify its insured gas station operators for environmental contamination claims brought by a landlord.

The landlord sought a declaration requiring the insurer to indemnify the tenants, while the insurer sought a declaration that its policy provided no coverage.

The court held that the landlord, as a stranger to the insurance contract, could not pursue indemnification before obtaining judgment against the insured under s. 132 of the Insurance Act.

Interpreting the policy wording and pollution exclusion clauses, the court found the claim fell squarely within the policy’s pollution exclusions.

The insurer therefore had no duty to defend or indemnify the tenants in the underlying environmental contamination action.