In the recent case of Cardinal v. Alberta Motor Association Insurance Company, 2018 ABCA 69 (CanLII), the Alberta Court of Appeal overruled the lower court, determining that an injured passenger was not covered under an SEF No. 44 Family Protection Endorsement to the SPF No. 1 Standard Automobile policy as the vehicle was being used without the consent of the owner.

In this case, the Alberta Motor Association denied coverage to Cardinal under the SPF No. 44 Endorsement on the ground of an exclusion in the Standard Automobile policy which states:

“No person shall be entitled to indemnity or payment under this Policy who is an occupant of any automobile which is being used without the consent of the owner thereof.”

In her claim against the Alberta Motor Association, Cardinal argued, among other things, that the exclusion in the SPF No. 1 requiring consent of the owner of the vehicle is ambiguous. Cardinal argued that the exclusion can be read such that:

a) coverage is denied whether or not the passenger knew the driver had the owner’s consent; or

b) coverage is denied only when the passenger knew or reasonably ought to have known the driver did not have consent.

Rejecting Cardinal’s arguments, the court held there is no real ambiguity in the exclusion. There is nothing in the language of the exclusion that suggests knowledge may be relevant. Where the legislature intended to incorporate a knowledge requirement into a provision of the endorsement, it did so specifically.

The court concluded that if claims by persons without knowledge are to be covered, the remedy lies with the legislature, not with the courts.

In light of this case, it remains to be seen whether the Government of Alberta will amend legislation such that knowledge becomes a relevant consideration in the application of the exclusion to SEF No. 44 coverage.