Skunk v Ketash et al 2016 ONSC 2019

This was a motion for a summary judgment by the Defendant Jevco, to dismiss a claim by the Plaintiff, it insured. The claim arose when Jevco denied coverage to the insured, after the Plaintiff was involved in a single-vehicle accident.  The Plaintiff, Mr. Skunk, was a passenger in his wife’s car when he was injured in a single-vehicle accident. The accident was caused when the driver, Mrs. Ketash, lost control if the vehicle. Mrs. Ketash lacked consent to drive the vehicle and was charged with theft.

Jevco refused coverage to the Plaintiff, claiming that they do not provide coverage in the case of theft and that the vehicle fell outside the definition of an Uninsured Automobile under section 265(2) of the Insurance Act. S. 265(2) defines an “uninsured automobile” as one where neither the owner nor driver has liability insurance, but it “does not include an automobile owned by or registered in the name of the insured or his or her spouse.”

There issue before the court was whether the phrase “but does not include an automobile owned by or registered in the name of the insured or his or her spouse” should be interpreted narrowly and thus preclude coverage based simply on ownership (as the defendant argued) or whether it should be interpreted broadly and only deny coverage in cases where the owner or spouse has explicitly chosen not to insure the vehicle (as the plaintiff argued).  

The judge agreed with the plaintiff’s interpretation of the provision. He stated that to deny coverage to an otherwise insured vehicle in the case of theft went against the principles of both statutory and contractual interpretation. In doing so, Newton J differentiated Skunk from Fosker v Thorpe, a case relied on heavily by the defendant. In Fosker, Quinn J found that s 265(2) should be interpreted narrowly and exclude coverage in the case of theft.

Newton J differentiated Skunk from Fosker on the basis that Quinn J did not address the question of contractual interpretation in Fosker. Newton J based his decision on the Plaintiff’s optional insurance policy, the OPCF 44R Endorsement. This standard endorsement protects the insured against “inadequately insured motorists.” According to Somersall v Friedman, the purpose of this endorsement is to allow the insured to protect him or herself from the risk of being injured by someone who lacks adequate insurance coverage. Newton argued that since the coverage in this endorsement is ambiguous, it should be resolved against the insurer who drafted the document. As such, Newton J defined Ms. Ketash as an “inadequately insured motorist” under the OPCF 44R Endorsement. He thus dismissed the motion for a summary judgment.

What the insurer should Know

A passeger can sue under the OPCF policy endorsement even if the vehicle in which they are traveling was taken without consent and it is insured by their spouse.

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Mitch Kitagawa

jennifer Cox, Articling Student