What happens when two insurers cover the same risk and each declare themselves excess to other available insurance? Ontario’s Court of Appeal addressed that issue in the recent case of TD General Insurance v. Intact Insurance, which involved a claim for bodily injury advanced by a passenger in a boat driven by the insured.
The TD policy covered the specific boat involved in the accident and the driver was covered as he was operating the boat with the owner’s consent. The driver was also covered under his homeowner’s policy with Intact, which provided liability coverage for claims arising out of the insured’s use or operation of any type of watercraft. Each policy declared itself excess to other available insurance.
Because the TD policy specifically covered the boat in question, the application judge held that the TD policy provided primary insurance for the watercraft in question and dismissed TD’s application that the two policies share equally in the defence and indemnity of the driver. In doing so he relied on the ‘closeness to the risk approach’ in which courts consider:
- Which policy specifically described the accident causing instrumentality?
- Which premium reflect the greater contemplated exposure?
- Is coverage of the risk primary in one policy and incidental to the other?
Unfortunately the Supreme Court of Canada expressly rejected this approach to overlapping coverage in the Family Insurance Corp. v. Lombard Canada Ltd. Case. Instead, the Supreme Court preferred to focus on “whether the insurers intended to limit their obligation to contribute, by what method, and in what circumstances vis-à-vis the insured”. Because the contest, as here was between two insurers, the court held that there was no need to look to surrounding circumstance and instead relies strictly on the policy wording. If there are no limiting intentions or limiting intentions that cannot be reconciled, the burden is shared equally between the insurers. The Court of Appeal considered the identical ‘other insurance clauses’ to be limiting intentions. Because each policy was declared excess to the other, the court concluded that they were irreconcilable. As a result, the policies had to contribute equally. The reasons of the Court of Appeal in this case are nuanced and underscore the importance of a close reading of policy wording when faced with a circumstance of overlapping coverages.
The case of O’Brien v. O’Brien, 2018 ONSC 4665, is a tort threshold motion brought by some of the defendants after a jury trial where damages was the only issue. The damages quanta were found to be closer to the defendants’ position thereupon. The motion was heard by Justice McKelvey of the Superior Court with reasons, dated July 31, 2018. Regulation 461/96 was referenced, which sets out criteria to be considered upon such a motion. In deciding the motion, it was noted the jury’s verdict was not binding upon His Honour but the findings of fact implicit thereto worthy of serious consideration. It was the plaintiff’s burden, on balance, to prove the threshold was met.
Barry O’Brien was a passenger in a pickup truck piloted by his uncle, James O’Brien, which collided head on with a transport. Among other things, he sustained an ankle fracture in the accident. In respect of other injuries sustained, he had significant pre-existing health issues. Credibility at the motion was not contested and the Judge, in fact, found the plaintiff to underestimate the impact of his injuries. The plaintiff’s orthopod was preferred due to recency of assessment and area of subspecialty. The evidence of the various health practitioners was reviewed in coming to a determination about the various alleged impairments. The left ankle was found to be permanently impaired. Ankle function was found to be ‘important’ to the plaintiff. The ‘seriousness’ criterion was found to be met despite the plaintiff making significant strides to overcome many of the effects of his impairment. Despite the Judge’s review required to consider the plaintiff’s condition ‘at the time of trial’, a likely future inability to work could be considered if a proper evidentiary foundation had been laid. The concern for the Judge on motion was that the jury awarded nothing for future income loss or vocational retraining. Despite the verdict, his Honour found the ankle impairment seriously affecting the ability to continue regular employment. In conclusion, the ankle impairment was found permanent, important and serious in relation to employment but not to his usual daily activities; as the interference with hunting was not ‘most’ of his usual activities.
Said The Prince to Portia in The Merchant of Venice, “all that glitters is not gold”. The defence motion was dismissed.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
That is of course a subjective question and one that you won’t find an explicit answer for in the case of Konopka v. Traders. However, you will read about what is not considered to be reasonable conduct in the context of an OAP 1 policy breach. In Konopka, the elderly insured fell ill while driving to her cottage and permitted her unlicensed husband to drive her vehicle to a nearby parking lot where they intended to stop and rest until she felt better. Shortly after taking the wheel, the unlicensed husband caused an accident. There was no dispute that the insured was aware that her husband was unlicensed and as a result on the face of it she was in breach of the ‘authorized by law to drive’ provision in section 4(1) of the policy. The insurer denied coverage as a result.
The court noted that a breach of this nature was subject to a strict liability standard which required that the insured to establish that she took all reasonable steps to avoid the particular event. The reasonableness standard requires a consideration of the nature of the breach, what caused it and all of the surrounding circumstances that explain the act or omission. The court ultimately determined that it was not reasonable for the insured to allow her husband to drive. It is worth noting that the court relied in large part on the discovery transcript of the husband which betrayed a level of confusion and an inability to focus. The court ultimately concluded that the husband was someone ‘who simply cannot get his bearings’ and as a result it was not reasonable to allow him to drive, regardless of the circumstances.
This case is fact driven but provides a good counterpoint to the decision of Ontario’s Court of Appeal in Kozel v. Personal. In that case, the insured was also in breach of section 4(1) for driving while she was not authorized by law to drive. However, in that case the license suspension was the result of a failure to respond to a license renewal notice which was considered to be a ‘relatively minor breach’. In contrast, allowing an elderly individual who had an ‘inability to get his bearings’ and who had not driven in more than 20 years was something quite different and ultimately, not reasonable. https://bit.ly/2KoWLxQ
In this Shakespeareanesque drama respecting three related motor vehicle tort actions, Aviva, as third party, successfully motioned under Rule 31.10, at what appears to be the outset of the trials, to discover three “non-parties”. All three plaintiffs were in the same vehicle and represented by the same lawyer but each (more likely their lawyer) elected to sue the defendant, Backs, in three different actions. Despite an earlier order to be tried together or one after the other, the actions remained separate proceedings.
The non-parties to be discovered were actually the three plaintiffs; each a technical stranger to the others’ cases. Aviva wanted testimony from the two ‘strangers’ in each case as to the effects of the accident upon each plaintiff going both to credibility and damages. The questions were refused in discoveries about two years prior as not being relevant to the action in which they were being asked.
Mr. Justice de Sa in his April 4, 2018 reasons held that use of the Rule was an exception but not meant as a means to limit access to a witness with relevant evidence. Technically, considering the order for trial together there was a right to ask the impugned questions which were clearly relevant and not collateral. The decision to sue in three actions and take a narrow view of relevance was felt to frustrate the discovery process. The plaintiffs’ positions added costs and delay to the proceedings and contravened various principles, not the least of which was their determination on the merits. Some might say that concept has suffered for some time now.
The motion was granted for discovery of each of the non-parties. Aviva was awarded $7,000.00 in costs. Rosencrantz and Guildenstern should have been so lucky. Creative use of the Rules, yes. Ultimately in the best interest of the plaintiffs, no. See Kissoon v. Aviva 2018 ONSC 2167.
Under Ontario’s threshold provision, persons injured in a car accident can sue for damages for non-pecuniary loss only if they have sustained “a permanent serious impairment of an important physical, mental or psychological function, or a permanent serious disfigurement.”
Beginning in October 2003, s. 4.3(5) of Ontario Regulation 461/96 (Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996) injured persons have also had to meet evidentiary requirements prescribed by regulation. They must lead evidence of their impairment from a qualified physician and, in addition to that evidence, they must “adduce evidence that corroborates the change in the function that is alleged to be a permanent serious impairment of an important physical, mental or psychological function.”
This appeal to the Ontario Court of Appeal raises a single question: can the injured person – the plaintiff – provide the corroborating evidence? The answer – “yes”.
The words of s. 4.3(5) do not expressly preclude the plaintiff or the injured person from being the corroborating witness. Section 4.3 requires the evidence of at least one physician and some other evidence of change in function. The physician’s evidence alone is not enough and the other evidence alone is not enough. That other evidence may come from the plaintiff, a family member, an employer or co-worker, another lay person, or even from surveillance or medical records. Section 4.3(5) does not exclude anyone or anything. Indeed, undoubtedly there are cases where a plaintiff cannot provide corroborating evidence – for example, if the plaintiff is a minor or was severely brain damaged in the accident – otherwise the plaintiff may corroborate the evidence from the doctor about the change in the function that is alleged to be a permanent serious impairment of an important physical, mental or psychological function.