The plaintiff insured was involved in an accident while riding a newly-acquired motorcycle. He sued his insurers for failing to provide coverage for his injuries, and his insurance brokers for advising him that the motorcycle was covered under his insurance policy. The insurers, but not the brokers, brought a motion under Rule 20 for summary judgment. The Judge found that he could not make the necessary findings of fact to fairly adjudicate the issues, particularly in light of the fact that the insurance brokers had not provided evidence on the application. The motion was dismissed.

[2015] O.J. No. 4988

2015 ONSC 5856

Ontario Superior Court of Justice

Firestone J.

September 28, 2015

The action arose from a collision between the plaintiff insured and an unidentified motorist. The insured sought coverage for his injuries under the unidentified-underinsured provisions of his automobile policy (the “Policy”). The Policy insured the plaintiff’s 2004 Land Rover, and not the newly-acquired motorcycle that was involved in the accident (the “Motorcycle”). The defendant insurers, Perth Insurance Company and Economical Insurance Group, took the position that the Policy did not extend to the Motorcycle or the accident. They denied coverage. The plaintiffs sued on the basis that the plaintiff insured qualified as an “insured person” under the Policy, and that the Policy extended to newly-acquired vehicles such as the Motorcycle.

The insurers brought a motion under Rule 20 of the Rules of Civil Procedure, for an order dismissing the action against them. The insured’s insurance brokers, who were also named defendants in the action, took no position on the motion and did not provide evidence. Mr. Justice Firestone was asked to consider, inter alia, whether the case was appropriate for summary judgment and if so, whether the insured was entitled to recover under the Policy. Both the insured and the insurer also made submissions on the issue of forfeiture.

At the time of the accident, the insured owned three vehicles. The first was the aforementioned Land Rover, which was duly licensed and insured. The second was an unplated 2004 Lexus, which was not insured (the “Lexus”). The third was the Motorcycle. The Motorcycle had been purchased less than 14 days before the accident.

The insured argued that the Policy provided an automatic extension of coverage to any newly acquired vehicle for 14 days after the purchase. The insurers took the position that this was irrelevant, as the insured was automatically excluded from coverage for failing to insure the Lexus, pursuant to the terms of the Policy. The insurers further argued that the insured’s failure to insure the Lexus constituted a contravention of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C-25, which in turn barred the insured from recovering for any loss or damage arising from the use of an automobile, pursuant to the Insurance Act, R.S.O. 1990, c. I.8.

In order to interpret the Policy, Mr. Justice Firestone noted that he would need to consider whether the Lexus was “operable” at the time of the accident. The insured argued that the Lexus was an inoperable “salvage vehicle”, that was unfit to drive. He pointed to the fact that the Lexus had no permit or license plates, and that the Lexus’s VIN revealed that it was classified as “unfit”, “salvage” and “inactive.” The insurers argued that the insured’s evidence was insufficient to establish that the Lexus was inoperable. The insurers also pointed out that the insured’s arguments did not address the insurer’s position that the claim was statute barred under the Insurance Act, R.S.O. 1990, c. I.8.

Mr. Justice Firestone also noted that a central part of the insured’s case was his allegation that his insurance broker had told him that the Motorcycle was insured. The insurers took issue with this assertion, as they do not offer coverage for motorcycles. Mr. Justice Firestone noted that this issue was particularly problematic for resolution via summary judgment, as there was no direct evidence from the insurance broker defendants on this point.

Not surprisingly, Mr. Justice Firestone concluded that this matter was not appropriate for resolution by summary trial. He cited the Supreme Court of Canada in Hryniak v. Maudlin, 2012 SCC 7, for the following proposition:

“the standard for fairness is not whether the process is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute”.

In Mr. Justice Firestone’s view, he could not find the necessary facts to resolve the matter. He concluded it was not in the interest of justice that he attempt to do so. He further considered whether a “mini trial” under Rule 20.04 could be used to avoid the use of a full trial. With respect to this issue he found (at paragraph 34):

“When considering the factual matrix of this case and the issues to be determined as a whole, in my view a mini trial would not be appropriate in the circumstances and would be against the interests of justice. The broker defendants continue to be named in this lawsuit and will be giving evidence at trial in any event. It is not in the interests of justice to have these defendants give evidence twice in a piecemeal fashion. Based on the record as it stands now, I am not confident that the dispute can be fairly resolved by way of a mini trial. The record does not provide me with the necessary evidence to adjudicate the dispute between the parties in a timely, affordable and proportionate procedure. For the reasons above, a mini trial is not advisable when considering the issues in the litigation as a whole.”

Mr. Justice Firestone also clarified that he had not made any findings of facts in the case, beyond his decision that there was a genuine issue for trial. He concluded that the parties could not proceed summarily in this instance and dismissed the insurers’ motion.