Canada: Case Summary: Cardinal v Alberta Motor Association Insurance Company

Last Updated: February 28 2018
Article by Field LLP


C. The SEF 44 Endorsement is not a standalone policy and exclusions in the underlying policy apply to it such that a claimant passenger of a stolen vehicle is entitled to benefits if he/she did not know nor ought to have known that the vehicle was stolen.

Cardinal v Alberta Motor Association Insurance Company, 2018 ABCA 69; rev'g 2017 ABQB 487 [4269]


The plaintiff Cardinal was injured in a single vehicle motor vehicle accident. She was the passenger in a stolen vehicle. There was no evidence as to whether or not she knew that the driver did not have the owner's consent to possess or operate the vehicle.

Cardinal sought coverage under her mother's SEF 44 Endorsement, but the insurer denied coverage as the vehicle was stolen.

The mother's SPF No. 1 policy contained the following exclusion:

No person shall be entitled to indemnity or payment under this Policy who is an occupant of any automobile which is being used without the consent of the owner thereof [emphasis added by the Court].

However, Art. 2 of the SEF44 Endorsement provided as follows:


... that the Insurer shall indemnify each eligible claimant for the amount that such eligible claimant is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury or death sustained by an insured person by accident arising out of the use or operation of an automobile [emphasis added by the Court].

Also, Art. 11 of the Endorsement provided as follows:

This endorsement is attached to and forms part of the policy and shall be effective from the local time and effective date of the policy or renewal thereof, or if added to the policy during the policy period, from the local time and effective date of the endorsement specifying the addition of this coverage.

Except as otherwise provided in this endorsement, all limits, terms, conditions, provisions, definitions and exclusions of the policy shall have full force and effect.

The Master summarily dismissed Cardinal's case against the insurer. On the appeal in the Court of Queen's Bench, the Court held that there was a genuine issue to be tried and allowed the appeal, relying on an Ontario amendment to that province's Insurance Act, to the effect that the Endorsement was ambiguous. A possible interpretation of the policy and Endorsement is that a vehicle occupant who does not know, nor ought to have known, that the vehicle was stolen may be covered. The insurer appealed to the Court of Appeal.

II. HELD: For the respondent insurer; appeal allowed and summary dismissal restored.

1. The Court held that the standard of review on appeal from the Master is correctness.

2. The Court summarized the principles of insurance policy interpretation:

[11] If the language of an insurance policy, when read as a whole, is unambiguous, effect should be given to the clear language. If the language is ambiguous, the ambiguity should be resolved through the application of the general rules of construction. If ambiguity remains after application of the general rules, then the policy can be construed against the insurer pursuant to the principle of contra proferentem. Coverage provisions should be construed broadly but exclusions should be construed narrowly: Ledcor v Northbridge, paras 49-51. Automobile insurance policies, including endorsements, are approved by the legislature so there is an element of statutory construction involved in their interpretation. This requires a court to determine the meaning of the policy in its entire context, in its grammatical and ordinary sense harmoniously with the scheme of the legislation, the object of the legislation, and the intention of the legislature: see Sullivan, Sullivan on the Construction of Statutes, 6th ed (Markham, Ont: LexisNexis Canada, 2014) at p. 7; Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42 (CanLII) at para. 26, [2002] 2 SCR 559. An ambiguity requiring the use of rules of construction must be real. That is, the words of the provision must be reasonably capable of more than one meaning having regard to the entire context of the provision: Bell ExpressVu at para. 29.

3. The Court held that the SEF 44 Endorsement is not a stand-alone policy and is subject to the exclusions set out in the underlying policy. Furthermore, the exclusion regarding vehicles being operated without the owner's consent was not vague. Ontario authority on point had so held before the Ontario statue was amended to require that the occupant must know, or ought to have known, that there was no owner's consent. The Chambers judge was held to have erred in relying on the Ontario legislation to determine the intent of the Alberta Legislature, and that a legislative amendment in Alberta would be necessary to support the contrary conclusion:

[15] The Ontario courts that considered the interpretation of the Ontario exclusion prior to the amendment concluded that the exclusion was clear, unambiguous and did not import a knowledge requirement. That conclusion was reached in the context of both under-insured coverage and coverage similar that provided by the SEF 44. See McCauley (Litigation Guardian of) v Blagdon (2006), 2006 CanLII 51178 (ON SC), 84 OR (3d) 792, 47 CCLI (4th) 204 (Sup Ct), citing Simison (Litigation Guardian of) v Catlyn (2004), 2004 CanLII 22313 (ON CA), 73 OR (3d) 266 (CA) and Coombs v Flavell (1988), 1988 CanLII 4796 (ON CA), 64 OR (2d) 737 (CA); also see Marsden v Dominion of Canada General Insurance Co (1987), 27 CCLI 289 (Ont Dist Ct). 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. Nor can the enactment of an amendment in Ontario give rise to an ambiguity in the unamended Alberta exclusion. The Alberta legislature can make its own assessment as to whether a similar amendment is appropriate in Alberta. In the meantime, the insuring agreements in issue should be interpreted according to the principles discussed above.

[19] The respondent's arguments cannot succeed. The SEF 44 is not a stand-alone policy. It attaches to and forms part of the underlying policy. It specifically incorporates the exclusions found in that policy. There is no ambiguity in the incorporating provisions of the endorsement. Nor is there any real ambiguity in the exclusion itself. There is nothing in the language of the exclusion that suggests knowledge may be relevant. Where the legislature intended to incorporate a knowledge requirement into a provision of the endorsement, it did so specifically. For example, s 6.(c) of SEF 44 provides in part:

6.(c) Every action or proceeding against the Insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant... knew or ought to have known that the quantum of the claims... exceeded the minimum limits...

[20] An ambiguity cannot be created by external means such as reading in an element not present on a plain reading of the provision. As there is no ambiguity, there is no need to resort to interpretation rules such as the reasonable expectations of the parties or contra proferentem to construe the insuring agreements. It is normal for insurance policies to contain exclusions and the fact that some claims are thereby removed from coverage does not, in itself, give rise to unfairness. If claims by persons without knowledge are to be covered, the remedy lies with the legislature, not with the courts. As knowledge is not an element of the exclusion on the plain reading of its terms, there is no need for a trial to determine the extent of the respondent's knowledge.

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.

Events from this Firm
22 Jan 2019, Webinar, Calgary, Canada

Learn about the most important professional regulatory Court cases of the past year. What are the key legal trends?

23 Jan 2019, Seminar, Calgary, Canada

Field Law and IISA are excited to present an in-depth workshop on how the legalization of recreational cannabis is impacting and will impact the insurance industry.

6 Feb 2019, Other, Calgary, Canada

Join Field Law for a review of the most important legal cases from 2018.

In association with
Related Topics
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