In a recent decision, the Ontario Court of Appeal (“ONCA”) examined the provision of the standard Ontario Automobile Policy (“Policy”) pertaining to situations where a vehicle covered by the Policy is driven without permission, specifically in the context of a stolen vehicle.
Facts
The case revolves around an incident that occurred on August 25, 2014, when Mr. Burnham was a passenger in a stolen pickup truck that collided with a transport truck, resulting in severe injuries and fatalities. Mr. Burnham, claiming to have been unaware of the vehicle’s stolen status as he was asleep at the time of the collision, initiated legal actions against both the uninsured driver of the pickup truck and Co-operators, the insurer of the vehicle.
Co-operators argued that the claim for uninsured motorist coverage was excluded under section 1.8.2 of the Policy (s1.8.2), which disallowed coverage when the vehicle was driven without permission or consent. In the subsequent motion brought by Co-operators, the Court ruled in their favour. The motion judge concluded that Mr. Burnham’s claim for uninsured motorist coverage was precluded by the stolen vehicle exclusion, irrespective of his alleged lack of knowledge about the theft.
As a result, the Court dismissed Mr. Burnham’s action against Co-operators. The Minister of Public and Business Service Delivery (the “Minister”), responsible for the Motor Vehicle Accident Claims Fund, appealed this decision. Mr. Burnham did not participate in the motion and appeal.
The Policy
Section 1.8.2 of the Policy, concerning excluded drivers and driving without permission, sets forth the circumstances under which coverage is not provided. It is described below:
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 policy or a person who, at the time he or she willingly becomes an occupant of an automobile, knows or ought reasonably to know that the automobile is being used or operated by a person in possession of the automobile without the owner’s consent.
Except for certain Accident Benefits coverage, there is no coverage under this policy for a person who, at the time he or she willingly becomes an occupant of an automobile, knows or ought reasonably to know that the automobile is being used or operated by a person in possession of the automobile without the owner’s consent.
The Parties’ Positions
The Minister argued that the first paragraph of s 1.8.2 applied to Mr. Burnham’s case as an innocent passenger in a stolen and uninsured vehicle. The Minister contended that this paragraph outlined the circumstances in which coverage would be excluded for a stolen vehicle, including situations where the vehicle is used without consent, driven by an excluded driver, or occupied by someone aware or reasonably aware of the unauthorized use. The Minister emphasized that the third clause of the paragraph only excluded a passenger if they had knowledge or should reasonably have knowledge of the vehicle’s unauthorized use.
The Minister argued that the second paragraph of s 1.8.2 referred to any automobile, while the second paragraph referred to the automobile covered by the Policy.
Co-operators, in contrast, maintained that the coverage provisions of s 1.8.2 did not apply to the insured vehicle, even if it was driven without consent or stolen. They argued that occupants of the insured vehicle have no coverage once it is driven without the owner’s consent. Co-operators interpreted the first paragraph of the exclusion provision as a series of independent exclusions, each separated by the word “or,” suggesting a disjunctive reading.
Co-operators took the position that none of the paragraphs expanded coverage to an occupant of the automobile covered by the Policy.
The Decision
The ONCA overturned the motion judge’s decision and ordered a new trial to determine whether Mr. Burnham’s version of the events qualified for exemption. In its reasoning, the ONCA noted the ambiguity presented by s 1.8.2 regarding coverage for innocent occupants in stolen vehicles, particularly due to the undefined distinction between “the automobile” and “an automobile” in the Policy.
The ONCA applied key interpretive principles to address the ambiguity of s 1.8.2. It rejected Co-operators’ proposed disjunctive interpretation, which it found to be inconsistent with a contextual reading of the provision.
The ONCA emphasized that this interpretation would create separate exclusions that undermine the collective meaning of the paragraph and lead to absurd results. Furthermore, the ONCA highlighted that Co-operators’ interpretation rendered the second paragraph redundant.
Considering these factors, the ONCA favoured the interpretation advanced by the Minister, as it aligned with the text, established a coherent distinction between the paragraphs, and favored the insured.
Interestingly, the French translation of the Policy provided additional insight, as it did not support Co-operators’ theory. The translation used “l’automobile” throughout the first paragraph of the exclusion, without distinguishing between “l’automobile” and “une automobile” as the English translation does.
Co-operators argued that the French translation might be erroneous, but the ONCA did not find this view persuasive. Thus, the decision serves as a reminder of the importance of language skills, highlighting the need to be proficient in French when interpreting statutory authorities to advance desired positions.
Conclusion
This decision sheds light on the interpretation of s 1.8.2 of the Policy, specifically concerning coverage for innocent occupants in stolen vehicles. The court’s ruling favoured the Minister’s position, rejecting Co-operators’ disjunctive interpretation and emphasizing the importance of a contextual and coherent reading of the provision.
Legal professionals should take note of this decision’s impact on insurance coverage for innocent occupants in similar cases, as well as the significance of language proficiency in interpreting legal documents.
