As discussed in our previous post,the fluctuating cost of automobile insurance and the extent to which insured persons can rely on insurance protection is partly dependant on how broadly the legislature defines or court interprets the risks of driving (i.e. the more risk an insurer is deemed to cover, the higher the cost to the insured).
Yet, when people experience tragedy, macroeconomic concerns understandably fall to the wayside. The court is routinely asked to stretch the limits of insurance coverage to protect or compensate a single claimant, potentially creating future uncertainty for both insurers and insured persons.
In Hunt v. Peel Mutual Insurance Company, 2019 ONCA 656, the Court of Appeal for Ontario helpfully clarified when a vehicle occupant is entitled to protection against liability arising from the use or operation of a motor vehicle.
Mr. Hunt and his daughter, Amealia Lewis, were passengers in a 2003 Pontiac Grand AM, which was owned and operated by Mr. Hunt's girlfriend, Ms. Dingman. Ms. Dingman was insured by Peel Mutual Insurance Company (Peel Mutual).
Ms. Dingman is alleged to have been impaired by alcohol when she crossed into oncoming traffic and collided with another vehicle driving. Mr. Hunt, Ms. Dingamn, and Ms. Lewis sustained serious injuries.
Ms. Lewis (by her litigation guardian) commenced an action for damages against Ms. Dingman, Intact Insurance Company, and her father, Mr. Hunt. With respect to the latter, Ms. Lewis alleged that her father failed to fulfill his parental duty by permitting her to occupy a vehicle operated by an impaired driver.
Ontario Superior Court of Justice
After receiving Ms. Lewis' claim, Mr. Hunt commenced his own action against Peel Mutual and moved for a declaration that Peel Mutual was obliged to defend and indemnify him against his daughter's allegations pursuant to section 239 of the Insurance Act:
239 (1) Subject to section 240, every contract evidenced by an owner's policy insures the person named therein, and every other person who with the named person's consent drives, or is an occupant of, an automobile owned by the insured named in the contract and within the description or definition thereof in the contract, against liability imposed by law upon the insured named in the contract or that other person for loss or damage,
- arising from the ownership or directly or indirectly from the use or operation of any such automobile; and
- resulting from bodily injury to or the death of any person and damage to property. R.S.O. 1990, c. I.8, s. 239 (1) [emphasis added].1
The issue before the Ontario Superior Court on this motion was whether Mr. Hunt's acts or omissions as a vehicle occupant caused Ms. Lewis' injuries. This issue engaged two well-established tests:
- did Ms. Lewis' loss or damage occur in the course of an automobile's ordinary and well-known activities (Purpose Test)?
- is there an unbroken causal chain that links Mr. Hunt's acts or omissions as a vehicle occupant to Ms. Lewis' loss or damage (Modified Causation Test)?
The Purpose Test was easily satisfied—Ms. Lewis' injuries occurred in the course of an automobile's ordinary and well-known activities (i.e. transporting individuals).
However, Mr. Hunt's alleged negligence had no connection with the use or operation of a motor vehicle. The allegations against Mr. Hunt amounted to negligent parenting—permitting his daughter to occupy a vehicle operated by an impaired driver. These allegations would remain unchanged whether or not Mr. Hunt was an occupant of the vehicle. The Superior Court held that Mr. Hunt's acts or omissions as a vehicle occupant were not causally connected to Ms. Lewis' injuries. Therefore, Peel Mutual was not required to defend these acts or omissions.
Court of Appeal for Ontario
The Court of Appeal unanimously affirmed the Superior Court's decision:
Even though Amealia's injuries arose from the use of a vehicle, Mr. Hunt's liability for her loss or damage does not. His liability is alleged to arise from negligent parenting, not from anything he did or did not do as an occupant connected to the use or operation of the automobile. When the motion judge spoke of the absence of a causal connection this is what he was alluding to – the statutory requirement that the occupant's liability must be caused by or connected to the use or operation of the automobile. 2
In addition, the Court of Appeal stated that "the plain language of section 239 [cannot] be overcome by the fact that the Insurance Act is consumer protection legislation, or that policies should be construed in favour of coverage."
The Court of Appeal strongly affirms the Modified Causation Test as the scale by which to balance the insurer's interest in fiscal certainty and the insured's interest in peace of mind.
Coverage is not triggered simply because a plaintiff is injured in the course of an automobile's ordinary and well-known activities. The outer bounds of motor vehicle liability policies are delineated by liability (wrongful acts or omissions causing loss or damage), which is caused by or connected to the use or operation of the automobile.
1 Insurance Act, RSO 1990, c I.8, s 239.
2 Hunt v Peel Mutual Insurance Company, 2019 ONCA 656 at para 6.
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