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AUTOMOBILE INSURANCE - Statutory conditions - Uninsured or underinsured motorist coverage

Wednesday, June 14, 2017 @ 9:28 AM  

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Appeal by Royal & Sun Alliance Insurance Company of Canada (Royal) from the dismissal of its application for a declaration that Wilson was fully insured by Intact Insurance Company (Intact), such that Intact had a duty to defend her against a claim by Rita and Cathy MacLeod arising from a motor vehicle accident. Wilson and her husband attended their insurer, Intact, after Wilson’s license was suspended for unpaid fines. Wilson signed an Excluded Driver Endorsement (EDE) so that her husband could maintain Intact auto insurance coverage on the car. The trial judge found that when Wilson completed the EDE, she understood that even if her licence were to be reinstated, Intact would not insure her and the EDE would continue to apply. However, once Wilson’s licence was reinstated, she decided to drive the vehicle and was involved in an accident in which the MacLeods were injured. The Macleods’ uninsured motor vehicle carrier, Royal, in the context of the personal injury action against Wilson, brought a motion to obtain a declaration that Wilson was fully insured by Intact. Intact, relying on the EDE, took the position that there was no coverage and Wilson was uninsured. The application judge determined that the EDE was in full force and effect at the time of the accident, such that Intact had no duty to defend or indemnify Wilson in respect of the accident. Royal appealed. The main question in the appeal was whether an endorsement of an automobile insurance policy that excluded coverage for a named driver was valid even though its form was not that pre-approved by the Superintendent of Financial Services, as required by s. 227(1) of the Insurance Act (Act).

HELD: Appeal dismissed. The fact that Wilson did not properly execute the prescribed form for an EDE did not render the endorsement void. Section 227(1) of the Act did not render void an unapproved form. A proper interpretation of the provision, taking into account the context of the Act, its purposes and the regulatory scheme as a whole, indicated that the legislature intended a lack of compliance with s. 227(1) to be a matter for the Superintendent of Financial Services. It was not the role of the courts, while applying the law of contract, to read into s. 227 that a non-compliant form was necessarily void as a matter of law. The application judge was correct in finding that the EDE on the Intact policy insuring the vehicle was in full force and effect when Wilson was involved in the accident.

Royal & Sun Alliance Insurance Co. of Canada v. Intact Insurance Co., [2017] O.J. No. 2380, Ontario Court of Appeal, R.G. Juriansz, D.M. Brown and B. Miller JJ.A., May 10, 2017. Digest No. TLD-June122017008