The Court of Appeal, in the case of Dams v. TD Home and Auto Insurance Company, 2016 ONCA 4 (CanLII), has reminded us of the law with respect to unidentified automobile insurance coverage in Ontario, particularly as it pertains to an insured’s obligations with respect to same. As explained by Justice Brown:
… Section 3 of the Schedule attached to the Uninsured Automobile Coverage regulation, R.R.O. 1990, Reg. 676 (the “Schedule”) made under the Insurance Act, imposes several obligations on a person insured under a contract of insurance who claims that an unidentified automobile has caused that person bodily harm or injury. Two of those obligations are that:
(i) the person must report the accident to a police officer within 24 hours after it occurs or as soon as is practicable after that time: s. 3(2); and
(ii) the person must give the insurer a written statement within 30 days after the accident occurs or as soon as is practicable after that date setting out the details of the accident: s. 3(3).
Both obligations are set out in s. 5.3.5 of the Ontario Automobile Policy (“O.A.P. 1”).
Section 8(1) of the Schedule states that “[n]o person is entitled to bring an action to recover an amount provided for under the contract, as required by subsection 265(1) of the Act, unless the requirements of this Schedule with respect to the claim have been complied with.” Section 5.9 of O.A.P. 1 reproduces the substance of s. 8(1).
Contrary to the above, and in the case of Wolfgang Dams, Mr. Dams failed to notify his insurer of his motor vehicle accident for approximately two and a half months. His insurer, in response, and once notified of same, “treated the matter as an accident benefits case and did not conduct any investigation”. Mr. Dams then met with a lawyer, reportedly by chance, who informed him of his right to commence a tort action. Mr. Dams, as a result, reported his accident to the police and sent a statutory declaration to his insurer. He then proceeded to commence a tort action, as he now realized this was his right, having additionally requested relief from forfeiture.
To explain, Mr. Dams requested relief from forfeiture as a result of his non-compliance with the above referenced timelines, having relied on the following Acts:
s. 129 Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.
Courts of Justice Act
s. 98 A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.
Mr. Dams’ insurer, in response, argued that neither s. 129 of the Insurance Act, or s. 98 of the Courts of Justice Act were available to Mr. Dams as they could “only relieve from imperfect compliance with a policy term, not from non-compliance with conditions precedent to a claim, such as those contained in s. 3 of the Regulation”, set out above.
The trial judge agreed with Mr. Dams’ position that his failure to comply with the timelines at issue failed to qualify as a condition precedent to his claim, but was instead to be construed as imperfect compliance with the terms of his policy. Further, as Mr. Dams had provided a reasonable explanation for same (see case for particulars), and as his insurer had not suffered any prejudice as a result, relief from forfeiture was determined to be appropriate in the circumstance.
Mr. Dams’ insurer, understandably, took issue with the above, resulting in the Ontario Court of Appeal having considered this case, and having ultimately decided as follows:
… The nature of Mr. Dams’ failure to comply in the present case clearly falls within the class of cases covered by the statutory language in s. 129 – i.e. a statutory condition as to the proof of loss to be given to the insured or other matter or thing required to be done omitted by the insured with respect to the loss.
Second, to assess the effect of s. 8(1) of the Schedule[, above,] on the availability of relief under s. 129 of the Insurance Act, the Schedule must be read in its entirety. Section 8(1) applies to all the reporting requirements imposed by s. 3, the Schedule also requires a person entitled to make a claim to give notice of the claim and to provide a proof of claim: s. 6. To accept the interpretation of s. 8(1) advanced by [Mr. Dams’ insurer] would result in that section of the Schedule precluding relief from forfeiture for imperfect compliance with the obligation to provide a proof of loss, a matter for which s. 129 specifically affords relief from forfeiture. Such an interpretation of the Schedule would run counter to the very purpose of the statutory provision. In my view, such an untenable interpretation signals that s. 8(1) of the Schedule does not transform all the requirements imposed on a claimant by the Schedule into conditions precedent to a claim for which relief from forfeiture is not available. Instead, s. 8(1) must be read in the light of s. 129 of the Insurance Act and the principles set down by the Supreme Court in the Falk Bros. case. When so read, relief from forfeiture under s. 129 of the Insurance Act is available where a claimant has failed to meet the time periods for the reporting requirements set out in s. 3 of the Schedule.
The Ontario Court of Appeal, as a result, affirmed the trial judge’s decision, with Mr. Dams having been granted relief from forfeiture.
Please be reminded that the decision to grant relief from forfeiture is decided on a case-by-case basis and that this case can be distinguished from many.