NS court rules against insured injured at carjacking in coverage dispute

Claim arose after uninsured man stole her vehicle

NS court rules against insured injured at carjacking in coverage dispute

A Nova Scotia court recently said that a vehicle owned by and registered to the insured plaintiff but driven by the uninsured defendant was an “uninsured automobile” as defined by Nova Scotia’s Insurance Act, 1989 and by the Section D insurance coverage.

The plaintiff alleged that she suffered bodily injury when the defendant assaulted her while stealing her motor vehicle. At the time of this “carjacking” incident, Aviva Insurance Company of Canada insured the plaintiff under a Nova Scotia (Standard) Automobile Policy Form No. 1.

The defendant had no available insurance. The Facility Association of Nova Scotia came to the defendant’s defence in line with the Insurance Act.

The plaintiff brought a claim against her insurer under her Section D coverage on the basis that the defendant was an uninsured driver when he stole her vehicle. The Section D coverage aimed to protect insured individuals from loss arising from injuries sustained in an accident involving an uninsured or an unidentified automobile.

Aviva moved for summary judgment. It argued that the wording of the definition of “uninsured automobile” – which stated that it did “not include an automobile owned by or registered in the name of the insured or the insured’s spouse or common-law partner” – excluded Section D coverage in the circumstances of this case.

In response, the plaintiff and the Facility Association contended that summary judgment was unavailable here since the definition’s wording never meant to exclude Section D coverage in these circumstances, namely when there was a carjacking of an insured’s vehicle.

Vehicle deemed “uninsured automobile”

In Ryan v. Wamboldt, 2022 NSSC 339, the Supreme Court of Nova Scotia granted Aviva’s summary judgment motion.

Ontario’s recent case law clarified that, if the plaintiff was a named insured, they would be excluded from coverage on the basis that the uninsured automobile excluded them from coverage, the court said. The court deemed Skunk v. Ketash, 2018 ONCA 450 persuasive and directly on point.

In Skunk, the plaintiff was a passenger in a vehicle owned by his wife and driven by the uninsured defendant without the plaintiff’s or his wife’s consent. When he sustained injuries during an accident, the plaintiff sued under his insurance policy’s “uninsured automobile coverage” provisions and under Ontario’s Insurance Act, 1990.

The insurer in Skunk argued that the uninsured coverage excluded the plaintiff since the vehicle was owned by the plaintiff’s spouse and was thus not an “uninsured automobile.” The Ontario Court of Appeal agreed and denied coverage to the vehicle owner’s spouse. It held that the vehicle was not an “uninsured automobile” under s. 265 of Ontario’s Insurance Act.

The Ontario Court of Appeal said that this result, though potentially “harsh,” flowed from the unambiguous wording of the policy and of Ontario’s Insurance Act. The appellate court noted that the plaintiff still had a recourse since he could bring a claim against the Facility Association.

In the present case, the plaintiff and the Facility Association contended that the Nova Scotia Supreme Court should not follow Ontario’s jurisprudence.

Nova Scotia’s Supreme Court found that the result was not absurd and was not detrimental or harsh in terms of monetary impact since the limits of both the Facility Association’s coverage and Section D coverage was the same, specifically $500,000.

The wording of Nova Scotia’s Insurance Act and of the policy was clear and unambiguous, the court added.

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