June 17, 2013

Accident Benefits Update – “FAIR’S FAIR AFTER ALL …” : Court of Appeal upholds coverage decision in favour of five year old

ACCIDENTS BENEFIT UPDATE

For the week of June 17 to June 21, 2013

“FAIR’S FAIR AFTER ALL …” : Court of Appeal upholds coverage decision in favour of five year old 

Jubenville v. Jubenville, 2013 ONCA 302, Rosenberg, Gillese and Rouleau JJ.A., heard March 20, 2013

Ashley Jubenville was the 5 year old passenger in an uninsured car driven by her father Kevin, involved in a single-car crash that occurred on May 23, 1993. Ashley’s mother had two other vehicles that were insured by Wawanesa. Ashley was a named insured under Kelly’s policy. Wawanesa brought a Rule 22 motion to determine the following question of law.

Was the vehicle owned and registered to Kevin an “uninsured vehicle” as defined in the O.P.F. 1, s. 265 of theInsurance Act, and under Kelly’s insurance policy?

The motions judge found that the vehicle was an “uninsured vehicle”.

The uninsured coverage of Kelly’s policy excluded, “an automobile owned or registered in the name of the insured or his or her spouse”. A reasonable reading of this exclusion might mean that Kevin’s car was excluded from coverage.  If this were the case, then Ashley would not be entitled to claim under Kelly’s policy.

The motion turned on the interpretation of “the insured” in the relevant sections of the policy.  It was capable of two interpretations.  It could either indicate Kelly as the owner and driver or Ashley, the specific insured advancing the claim.

The motions judge accepted the second interpretation. Ashley was an insured under the policy and the exclusion did not apply to her because she did not fit the criteria (not an owner or registrant, no spouse). Therefore she was able to claim under the policy.

Justice Rouleau for the Court of Appeal upheld the motion judge’s decision.  He observed that both interpretations were reasonable.  Given this ambiguity it was open to the motions judge to ascertain the meaning of “the insured” in context to conclude that it meant only the insured advancing the claim.  The Court agreed for the following reasons.

First, this conclusion was harmonious with the purpose of the Insurance Act and parliamentary intention to interpret “the insured” in the way that does not exclude dependent relatives of policy holders from access to coverage. Second, it is a principle of both insurance contracts and legislation that ambiguities governing the extent of coverage should be interpreted in favour of the insured. Third, this conclusion accorded with the interests of fairness and public policy.  While it is fair to exclude a spouse from coverage under his spouse’s policy, excluding a five year old dependent from coverage on the basis of decisions made by her parents would be unjust.

IMPLICATIONS

This case emphasizes the principles of fairness and public policy that are part of the underpinning of the automobile insurance regime, and encourages plaintiffs’ counsel to advocate creatively on behalf of their clients rather than accepting an insurer’s interpretation of the Insurance Act.

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