Canada: Case Summary: Middleton v Pankhurst

Last Updated: December 18 2017
Article by Field LLP


A.  In Ontario the Statutory Condition in an auto policy requiring that the driver be "authorized by law" to drive refers to the licensing regime such that breaching driving conditions in a probation order does not render the driver to be unauthorized to by law and does not impact insurance recovery. This is not the case in Alberta.

Middleton v Pankhurst, 2017 ONCA 835, per Hourigan and Roberts, JJ.A. and Nordheimer, J.A. concurring [4249]


Pankhurst and Middleton went ice fishing on January 24, 2009. Pankhurst travelled by snowmobile to meet Middleton at a remote location on the lake.

Pankhurst had a valid class G driver's licence, not subject to any restrictions. He was subject to a probation order arising from a guilty plea for careless driving. The order prohibited Pankhurst from driving at night and with alcohol in his system.

Pankhurst and Middleton consumed alcohol. Middleton left on foot and became lost. He called Pankhurst, who feared for Mr. Middleton's safety because of the freezing weather. Pankhurst picked him up and proceeded onto a road. He lost control and hit a telephone pole, causing Middleton to sustain severe injuries.

Middleton and his mother brought a claim against Pankhurst which settled for $900,000. Mr. Pankhurst was insured by Aviva and Middleton's mother had insurance for under or uninsured claims through her insurer Unifund Assurance.

At issue was whether Mr. Pankhurst was "authorized by law" to drive pursuant to Statutory Condition 4(1) of O. Reg. 777/93 and thus covered by Aviva.

Settlement funds were ordered to be fully paid to the Middletons: half by each insurer. The unsuccessful insurer would repay the successful insurer after the coverage issue was determined.

At trial, the judge found Pankhurst was authorized by law to drive and therefore fell within Aviva's coverage. Aviva appealed.

II. HELD:  Appeal dismissed: Pankhurst authorized by law to drive requiring the defendant's third party insurer to pay the settlement funds.

  1. The trial judge was held not to have erred, having conducted a thorough and careful analysis. The Court agreed with her analysis and conclusion.
  2. As the case involved the interpretation of a standard form contract, the standard of review was held to be correctness: Ledcor Construction Ltd v Northbridge Indemnity Insurance Co, 2016 SCC 37. 
  3. The Court held that legal authority to drive depends upon the existence of a valid licence and the Ministry of Transport regulations and it did not matter that the insured had a probation order related to driving. 
  1. Contrary to the appellant's assertion, the case was not distinguishable from Kereluik v Jevco Insurance Company, 2012 ONCA 338, which found that the term "authorized by law" does not to apply to breaches of the law not directly connected with the violations of driver's licence conditions:

20   First, it does not matter that the undertaking in Kereluik was broader in scope than the probation order in the present case. The focus of the analysis is the same for both the undertaking and the probation order, being whether they disqualify a driver under Statutory Condition 4. That was what this court considered in Kereluik. The fact that the undertaking in that case had broader application is of no import.

21   Second, in Kereluik at para. 13, after reviewing a number of authorities on the point, Cronk J.A. concluded, "[t]hese authorities suggest that the legal authority to drive, at any given time, depends on the existence of a valid licence issued by the responsible regulatory authority and compliance with the conditions attaching to the licence." In other words, the determination of whether an insured is authorized to operate a motor vehicle is restricted to a consideration of any restrictions imposed by the MTO. That finding was necessary for her analysis in that case, and is binding on this court

22   Finally, if Kereluik is effectively overturned, insurers could potentially deny coverage in any number of situations where there has been a criminal law violation. In considering this result, regard should be had to the historical evolution of Statutory Condition 4. Earlier versions of the Insurance Act prohibited insured individuals from operating an automobile while impaired. This wording was later amended so an innocent third party would not be precluded from receiving compensation for the losses caused by an impaired driver: see Comairco Equipment Ltd. v. Breault (1985), 52 O.R. (2d) 695 (Ont. Dist. Ct.), at paras. 27-28.

23   In my view, such a technical interpretation of Statutory Condition 4 would be contrary to the apparent intention of the legislature in making the amendment, such that any breach of a court order would result in the loss of insurance coverage. As Cronk J.A. stated in Kereluik, at para. 17, "[s]uch a sweeping interpretive result should not be countenanced absent a clear expression of such intention by the legislature."

  1. The Court relied on s. 118 of the Ontario Insurance Act [analogous to s. 533(2) of the Alberta Insurance Act, R.S.A. 2000, c. I-8] to support its conclusion.

    1. Section 118 of the Ontario Insurance Act specifically states that a contravention of criminal or any other law does not by that fact alone render indemnity unenforceable. 
    2. The Court rejected Aviva's argument that Pankhurst's breach of the probation order was not a "contravention of criminal or any other law" within the meaning of s. 118:

25   In the case at bar, the appellant submits that s. 118 is not applicable because Mr. Pankhurst violated a court order and not a statute or any other law. It submits that it is not arguing that there is no coverage by the "fact alone" of a criminal offence. Rather, that as a result of the violation, the insured is not a person authorized by law to operate a motor vehicle pursuant to Statutory Condition 4(1).

26   I would not give effect to these arguments for the following reasons.

27   There is, in my view, no meaningful distinction between a court order and "any criminal or other law in force in Ontario" in this context. Both can operate to restrict the operation of a motor vehicle.

28   More importantly, however, the appellant's interpretation of s. 118 is inconsistent with the policy objective to provide insurance protection for negligent tortfeasors who do not intend to cause harm, and to their victims. As Cronk J.A. stated in Kereluik, at para. 21:

By enacting s.118 of the Act, by repealing former statutory conditions under the Act that expressly precluded the operation or use of an automobile while under the influence of alcohol (i.e., former Statutory Condition 2(1)(a), above-cited), and by not incorporating a coverage exclusion in the current standard form automobile insurance policy pertaining to drunk drivers, the legislature must be taken as having elected to protect the potential of tort compensation for innocent victims of drinking and driving [ . . . ]

29   If the appellant's submission were accepted, the policy underlying s.118 would be negated. It would mark a return to a fault based analysis of insurance coverage. A tortfeasor who has not broken the law has coverage, whereas a tortfeasor who has broken the law has no coverage. The problem with this fault based analysis is that it ignores the policy imperative underlying the enactment of s. 118 of ensuring that there is coverage available for the claims of innocent tort victims.

  1. The Court held that to allow recovery would not amount to disrespect of a court order. There are other legal consequences for breaching a court order:

32   There is nothing in the trial judge's reasons to suggest that court orders should not be respected nor is that the consequence of her decision. What is in issue on this appeal is whether the breach of such an order should operate to restrict the availability of insurance coverage. That analysis does not impact the effectiveness of court orders, as there is no conflict between the proper interpretation of Statutory Condition 4 and the proper operation of court orders.


This would not be the result in Alberta. Whereas Ontario Statutory Condition 4(1) requires that the driver be "authorized by law" to drive, Alberta Statutory Condition 2(1) is much broader. Alberta S.C. 2(1)(b) provides that the driver must be "authorized by law" to drive and his/her driver's licence must not be suspended or subject to a driving prohibition order "of any court". Thus, Pankhurst would not have succeeded if this case had been governed by Alberta law.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions