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THE INSURANCE CONTRACT - Interpretation - Coverage provisions and exclusion clauses

Monday, March 12, 2018 @ 8:30 AM  

Lexis Advance® Quicklaw®
Appeal by the defendant insurer from a decision setting aside a Master’s order dismissing the respondent’s action. The respondent was seriously injured while a passenger in an automobile driven without the consent of the owner. The respondent’s mother had an SPF No 1 policy issued by the appellant which contained an SEF No 44 endorsement. The respondent commenced an action against the appellant, claiming indemnity for her injuries pursuant to the SEF No 44 Endorsement. The underlying policy excluded coverage for a person who was an occupant of any automobile which was being used without the consent of the owner. The appellant denied coverage on the ground that the respondent’s claim was excluded because the automobile in which she was a passenger was being operated without the consent of the owner. There was no evidence as to whether the respondent knew that the automobile was being driven without the consent of the owner. While the Master determined that the exclusion applied, the chambers judge concluded that the exclusion was ambiguous and, relying on Ontario amendment, held that the amendment evidenced the intention of the Ontario legislators to provide coverage to occupants who lacked knowledge that the automobile was being operated without consent. The chambers judge held that the law in Alberta was unsettled on the relevance of knowledge of consent in these circumstances, and if knowledge was relevant, then evidence would be required of the respondent’s knowledge.

HELD: Appeal allowed. The chambers judge erred in law in concluding that the insurance provisions were ambiguous. On its face, the exclusion appears to apply to the respondent’s claim for indemnity. It was an error for the chambers judge to suggest that the Ontario amendment could give an indication of legislative intent in Alberta or provide assistance in the interpretation of the unamended Alberta exclusion. The enactment of an amendment in Ontario could not give rise to an ambiguity in the unamended Alberta exclusion. There was nothing in the language of the exclusion that suggested knowledge might be relevant. Where the legislature intended to incorporate a knowledge requirement into a provision of the endorsement, it did so specifically.

Cardinal v. Alberta Motor Association Insurance Co., [2018] A.J. No. 195, Alberta Court of Appeal, P.T. Costigan, B.K. O'Ferrall and T.W. Wakeling JJ.A, February 21, 2018. Digest No. TLD-Mar122018001