Canada: "Dependent Relative" In An SEF 44 Policy Requires Proof Of Financial Dependence

Last Updated: March 11 2016
Article by Field LLP

Bilg v. Unifund Assurance Company, 2015 ABQB 779, per Pentelechuk, J.


The plaintiffs Gurchet Singh Bilg ("Gurchet"), Harkamal Singh Rasode ("Harkamal") and Sukhsimrit Singh ("Suksimrit") were injured in a motor vehicle accident and commenced an action against the drivers/owners of the other vehicle. In the tort action the plaintiff Mandeep Bilg ("Mandeep"), who was Gurchet's wife, sued for loss of consortium. Harkamal was Gurchet and Mandeep's brother-in-law. Suksimrit was Harkamal's brother.

The plaintiffs also commenced an action against State Farm, which had issued a policy to Harkamal for the vehicle involved in the accident. The policy contained an SEF 44 Endorsement with limits of $1,000,000.00. That action was ultimately dismissed when it was determined that the Endorsement was not triggered, as the policy limit of the tortfeasor's policy was also $1,000,000.00. 

The plaintiffs then brought an action claiming indemnification from Unifund pursuant to an Ontario OPCF 44R Family Protection Endorsement, which was similar to the State Farm SEF 44. The Unifund policy had been issued to the plaintiff Mandeep for a different vehicle, with limits of $2,000,000.00. 

Mandeep was residing in Ontario at the time of the accident. She and Gurchet had sold their home and she was in the process of moving to Alberta to join him. Gurchet was living in rented residence with Harkamal, Harkamal's wife, their daughter, Harkamal's parents and Suksimrit. No financial assistance was being provided by Mandeep or Gurchet to Harkamal and his family or Suksimrit before the accident. After the accident, Mandeep came to Alberta and she, Gurchet and their son moved into their own home.

The Unifund OPCF44R Endorsement provided coverage for "Eligible Claimants", defined as follows in s. 1.3:

a) the insured person who sustains bodily injury; and

b) any other person who, in the jurisdiction in which as accident occurs, is entitled to maintain an action against the inadequately insured motorist for damages because of bodily injury to or death of an insured person.

"Insured Person" was defined in the following terms in s. 1.6(a):

a) the named insured and his or her spouse and any dependent relative of the name [sic] insured and his or her spouse, while

i. an occupant of the described automobile, a newly acquired automobile or a temporary substitute automobile as defined in the Policy;

ii. an occupant of any other automobile except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile unless family protection coverage is in force in respect of the other automobile; or

ii. not an occupant of an automobile who is struck by an automobile.

[Emphasis added by the Court.]

The plaintiffs Harkamal and Suksimrit were not the named insured or the named insured's spouse.

Unifund applied for summary dismissal of the claims of Harkamal and Suksimrit arguing that the Endorsement did not extend coverage to the two plaintiffs on the basis that they were not "Dependent Relatives" within the meaning of the Endorsement. The term "Dependent Relative" was defined in s. 1.2 of the Endorsement as:

(a) a person who is principally dependent for financial support upon the named insured or his or her spouse, and who is:

(i) under the age of 18 years;

(ii) 18 years or over and is mentally or physically incapacitated;

(iii) 18 years or over and in full time attendance at a school, college or university;

(b) a relative of the named insured or of his or her spouse, who is principally dependent on the named insured or his or her spouse for financial support

(c) a relative of the named insured or of his or her spouse who resides in the same dwelling premises as the named insured; and

(d) a relative of the named insured or of his or her spouse, while an occupant of the described automobile, a newly acquired automobile, or a temporary automobile, as defined in the policy.

BUT 1.3(c) and 1.3(d) apply only where the person injured or killed is not an insured person as defined in the family protection coverage of any other policy of insurance or does not own or lease for more than 30 days, an automobile which is licensed in any jurisdiction of Canada where family protection coverage is available.

Unifund argued that Harkamal and Suksimrit were not "principally dependent" on the named insured Mandeep or her spouse for financial support, nor were they residing in the same premises.

II. HELD: Application for summary dismissal granted; respondent plaintiffs not dependent relatives

1. The plaintiffs Harkamal and Suksimrit were held to be relatives of the insured, as they are connected by virtue of marriage. The term "relative" was not defined in the Endorsement. It was held that common law has dictated a broad and liberal approach to the definition, beyond just marriage, blood or adoption.

2. However, they were held not to be Dependent Relatives as per the Endorsement. The Court recognized four distinct scenarios involving Dependent Relatives outlined in the Endorsement, however only two that could possibly apply in this case.

(a) The first scenario is where the relative of the named insured or his/her spouse resides in the same dwelling premises as the insured. Section 1.3(c) refers to "a relative of the named insured or of his or her spouse who resides in the same dwelling premises as the named insured."

(i) Policy goes on to say that this only applies where the relative is not an insured person of any other policy of insurance or does not own an automobile licensed in any jurisdiction in Canada where family protection coverage available

(ii) The Court held that this subsection does not require an inquiry into financial dependence

(iii) In this case, one of the Respondent Plaintiffs would not fall under the category, as he was insured under the State Farm SEF 44

(iv) The named insured under the Unifund policy was living in Ontario at the time of the Accident, and was in the process of moving to Edmonton. The Court held that the words "residing with the named insured" suggested physically living in the same residence. There was no evidence to suggest the named insured Mandeep was even in the process of actually moving to the home the respondent plaintiffs were living in at the time of the accident, as evidenced by her leaving her 3 year old son in Ontario when she flew to Edmonton to attend to her injured husband. Therefore neither of the plaintiffs fell under this section.

(b) The second scenario is whether the claimants are principally dependent on the named insured or her spouse, per s. 1.3(b).

(i) The evidence showed that neither the named insured nor the spouse provided any financial assistance to the Respondent Plaintiffs, let alone them being principally dependent on them financially.

(ii) The Court rejected the respondents' argument that "dependency" should be interpreted broadly so as to include social or culture dependency in circumstances where they lived as a family unit supporting each other culturally, financially and emotionally.

(iii) The Court held that the term "principally dependent for financial support" has been interpreted to mean more dependent on the named insured than any other source.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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