Fridays with Rogers Partners

February 17, 2023

At our weekly meeting, Emmanuel Couture-Tremblay discussed the recent decision of the Ontario Superior Court in Cernjul v. The Nordic Insurance Company of Canada, 2023 ONSC 559.

Overview

This application involved a claim for a declaration that the Applicant’s automobile insurer had a duty to defend him in a civil action.

Background

On October 6, 2019, an anti-abortion rally was held in Thunder Bay. The Applicant joined a counter-protest held in a parking lot next to where the anti-abortion protesters were marching.

The Applicant parked approximately 20 feet away from the anti-abortion protesters and played music from externally powered speakers that had been placed in the hatch area of his vehicle to disrupt the anti-abortion rally. The speakers were connected to the Applicant’s phone and were powered by an external gas-powered generator.

A civil action was later commenced by two of the protestors. The plaintiffs alleged they suffered permanent hearing loss, neurological and psychological impairments, and a lessened enjoyment of life. The plaintiffs claimed $300,000 in general damages, $1 million in special damages, and $1 million in punitive damages.

The Applicant requested that his insurer, Nordic Insurance, provide coverage in accordance with the duty to defend and indemnify terms of the policy. The Respondent notified the Applicant that the claim fell outside the scope of the Applicant’s coverage, and therefore that the duty to defend or indemnify was not engaged.

Issue

Does The Nordic Insurance Company of Canada have a duty to defend and indemnify the Applicant in the civil action?

Legal Framework

The duty to defend is engaged where the facts alleged in the pleadings, if proven true, would require the insurer to indemnify the insured: Monenco Ltd. v. Commonwealth Insurance, 2001 SCC 49, at para. 28.

The “mere possibility” that a claim may succeed for coverage is sufficient to trigger the duty to defend. Any uncertainty should be resolved in favour of the insured:  Nichols v. American Home Assurance Co., [1990] 1 S.C.R. 801, at pg. 327; Amos. v. I.C.B.C., 1995 CanLII 66 (SCC), [1995] S.C.J. No. 74, at pg. 414, para. 16; Morrow, at para. 16.

Section 239 of the Insurance Act mandates coverage for liability for loss or damage:

  1. arising from the ownership or direct/indirect use or operation of an automobile; and
  2. resulting from bodily injury to or the death of any person and damage to property.

The two-part test set out in Amos v. I.C.B.C. sets out a purpose part and a causation part of the test:

  1. Did the accident result from the ordinary and well-known activities to which automobiles are put? [purpose part of the test]
  2. If so, is there some nexus or causal relationship between the injuries and the ownership, use or operation of the vehicle, or is the connection merely incidental? Consideration must also be given to whether there is some intervening act that breaks the chain of causation. [causation part of the test]

In other words, the use of a vehicle must be more than simply providing an “opportunity” for the alleged damage to be inflicted. The loss must occur from a risk in using a vehicle that arises in the “ordinary course of things”.

Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46 states that coverage under the automobile insurance policy should not be stretched so as to not give effect to the reasonable expectations of both insured and insurer.

Court’s Analysis

This case is similar to Citadel General Assurance Co. v. Vytlingam. In that case Vytlingam was severely injured by a boulder that was thrown from an overpass onto the car in which he was travelling on a highway below. The perpetrators used the vehicle to put the boulders into their car to transport them, and then after striking motorists they used the vehicle to escape. Vytlingam sought to recover against his own insurance policy for damages seeing as the perpetrators were not adequately insured.

The motions judge in that case held that the perpetrators’ vehicle was central to their plan and was required to transport both them and the boulders to the scene. Seeing as the transportation of goods was an ordinary and common use of a motor vehicle, the judge held that the purpose portion of the Amos test was satisfied. The Ontario Court of Appeal upheld the decision while the Supreme Court of Canada reversed it.

In Vytlingam, Justice Binnie noted that Amos signalled that:

“…someone who uses a vehicle for a non-motoring purpose cannot expect to collect motor vehicle insurance. […] The same conclusion is compelled under s. 239(1)(a) because an injury resulting from such an off-beat use could not sensibly be said to arise “directly or indirectly from the use or operation” of the motor vehicle as a motor vehicle.”

L. Blackburn Excavating Ltd. v. Salmon Arm Machine Shop Ltd. (1977), 1977 CanLII 1738 (BC SC), 76 D.L.R. (3d) 190 (B.C.S.C.) and Cordeiro v. Lafarge Canada Inc., (1997), 49 C.C.L.I. (2d) 152 (Ont. Gen. Div.) also determined that where an insured uses a vehicle as a platform for some purpose disconnected to the purposes of the vehicle itself, there will be no coverage.

Applying the Amos test, the judge found that this case must fail on both the purpose and causation aspects of the analysis:

  1. The “true nature” of the claim is that the Applicant is alleged to have created a nuisance and caused the plaintiffs’ losses by operating externally powered speakers as part of a political protest.
  2. The purpose to which the vehicle was put was not an ordinary and well-known activity, it was simply used as a platform for the speakers. The use of the vehicle to transport the speakers before using it as a platform for the speakers during the alleged nuisance does not affect the analysis.

While parking has been recognized as an ordinary and well-known use of a vehicle, the judge stated that the alleged tort did not occur in the course of that common activity because the music was not played from speakers that are part of the vehicle itself.

The judge stated that even if she was incorrect on the purpose portion of the Amos test, this case must fall on the causation aspect of the test. In this case, the vehicle’s use and operation did not cause the plaintiffs’ injuries, the speakers did.

The plaintiffs did not allege that anything associated with transportation, or the act of parking caused their damages. Rather they argued that the playing of loud music from the speakers caused the nuisance and their losses. The tort alleged is therefore an event wholly severable from the use and operation of the Applicant’s vehicle.   

Conclusion

Application dismissed.

Takeaways

This decision provides insight in how the courts assess automobile coverage when objects extraneous to the vehicle cause the alleged loss. Key factors to consider are the purpose and causation elements of the Amos test.