The Superior Court has released a new decision on whether an
insured violated a statutory condition in the standard Ontario
In O'Connell v. The Personal Insurance Company, the
applicant's girlfriend asked to borrow his vehicle, insured
with The Personal, while she was moving a cat and some other items
to a new apartment. While driving his vehicle, she was involved in
an accident. It turned out that at the time of the accident, she
was not authorized by law to drive a vehicle because she was
driving alone and on a 400-series highway with only a G1
The evidence was that the insured and his girlfriend had been
dating for roughly five months and the Applicant believed that his
girlfriend had a valid driver's licence. The basis for his
belief was that he had seen her showing it to gain entry into bars
and clubs when they would go out.
The girlfriend was examined under oath and testified that she
did not tell the Applicant at any time prior to the day of the
accident or in the immediate aftermath of it, that she only had a
G1 driver's license. Her explanation on discovery for not
telling the Applicant about her class of license was that she was
embarrassed that at age 23 she still did not have a full
After he received a Statement of Claim, the Applicant forwarded
a copy of it to The Personal. The insurer denied a defence and
indemnity on the basis that the Applicant had breached statutory
condition 4(1) and section 1.4.5 of the OAP, both of which preclude
an insured to permit someone else to drive the insured vehicle
while they are not authorized by law to drive.
The Applications judge denied held that the insured did not
violate the conditions. He found that the evidence failed to
establish that the insured "permitted" his girlfriend to
drive while she was not authorized to do so. He referred to
jurisprudence that the word "permit" connotes knowledge,
wilful blindness, or at least a failure to take reasonable steps to
inform one's self of the relevant facts. He wrote:
In this case the applicant insured
and the driver were boyfriend and girlfriend and had been for some
five months. That, in my view, is a relationship of trust. The
applicant knew Ms. Smith had a license because he had seen her use
that license as a means of official identification, and it looked
no different than his own license. He had also been in a car when
she was the driver, and had heard anecdotes involving driving. Very
significantly she never informed him at any time pre-accident,
including the day she borrowed the car, that her license had
limitations. There is no evidence he had any basis to suspect that
she would withhold that crucial information from him, and it would
be reasonable for him, in their circumstances, to assume she would
not do that.
The moral of the story is that insurers should ask their
insureds – before an accident happens – to look twice
at their significant others' drivers licences.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
The recent Preliminary Issue decision in Walsh and Echelon (FSCO A15-007448, August 31, 2016) confirms that an economic loss does not need to be demonstrated in order to be entitled to attendant care benefits.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Policyholders recently won a key victory at the Supreme Court of Canada in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. as the Supreme Court clarified the interpretation of a standard form...
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