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Recent Court Decisions

SUPREME COURT RULES ON MEANING OF "USE OF AUTOMOBILE"

Lumbermens Mutual Casualty Company v. Herbison

The issue in Lumbermens is succinctly stated by the Supreme Court of Canada as follows:

Can it be said that when a hunter steps away from his pick-up truck under cover of darkness, leaving the engine running, and negligently shoots at a target he cannot see 1,000 feet away, and hits a companion in the leg thinking him to be a deer, that the injury arose "directly or indirectly from the use or operation" of the insured truck within the meaning of s. 239(1) of the Insurance Act, R.S.O. 1990, c. I.8?

Coverage was sought under the hunter's standard automobile liability policy. The Court, however, found in favour of the insurer, concluding that not every "circumstance or activity associated with the use or operation of a motor vehicle will... engage s. 239(1) of the Act and the corresponding coverage condition of a motor vehicle liability insurance policy". Here, the negligent shooting "was an act independent of the ownership, use or operation of" the hunter's truck. While the Court found that the hunter was using his vehicle for transportation, which was its ordinary use, the hunter interrupted his motoring to start hunting, thereby breaking the chain of causation. The hunter's truck "merely created an opportunity in time and space for the damage to be inflicted, without any causal connection, direct or indirect, to the negligence in firing the rifle".

The Court disagreed with the lower court's decision, which had concluded that the addition of the phrase "indirectly or indirectly" to s. 239(1)(b) of the Insurance Act "effectively removed the requirement of an unbroken chain of causation". The Court further disagreed that it was sufficient if the use or operation of a motor vehicle "in some manner contributes to or adds to the injury".

Citadel General Assurance Company v. Vytlingam

In Citadel, the tort defendants used a motor vehicle to transport boulders to a highway overpass, threw a boulder down onto a car driven by the insured, and drove off. Their motor vehicle liability policy had inadequate limits to compensate the plaintiffs for their injuries. As a result, the plaintiffs brought an action under s. 3 of the Ontario Policy Change Form 44R. However, the Supreme Court of Canada sided with the insurer.

The Court determined that the claim did not arise from the ownership, use, or operation, directly or indirectly, of a motor vehicle, so the insurance policy did not apply. While the use of the tort defendant's vehicle to transport rocks fell within the scope of the ordinary activities to which automobiles are put, the word "indirectly" is not sufficient to overcome the requirement of an unbroken chain of causation linking the conduct of the tortfeasor as a motorist to the injuries. Here, the relevant tort consisted of dropping rocks from a highway overpass, not transporting rocks via automobile. The tort defendant was not at fault "as a motorist". The rock throwing was an independent act which broke the chain of causation, and an intervening event severable from the use and operation of the tortfeasor's vehicle.

By way of example, the Court stated that someone who uses a vehicle for a non-motoring purpose cannot expect to collect motor vehicle insurance. On the other hand, the Court pointed out that coverage cannot be denied simply because a motor vehicle is being used in the course of criminal activity, such as a getaway car in a bank robbery or a car driven by a drunk driver.

Supreme Court of Canada holds police can be liable for negligent investigations Hill v. Hamilton-Wentworth Regional Police Services Board

The Supreme Court of Canada held that the courts below correctly dismissed the appellant's action for negligent investigation against the police arising from a bank robbery investigation that led to his wrongful conviction. However, the court held that the tort of negligent investigation does exist in Canada, and police can be held liable to suspects for negligent investigations. In summary, the court found that the police owe a duty of care to suspects in criminal investigations and that there is no compelling policy reason to negate the duty of care. The standard of care is that of a reasonable police officer in like circumstances.

Writing for the majority, Chief Justice McLachlin stated (at paras. 3, 39, 65, 67, 73, 90 and 92):

I conclude that police are not immune from liability under the Canadian law of negligence, that the police owe a duty of care in negligence to suspects being investigated, and that their conduct during the course of an investigation should be measured against the standard of how a reasonable officer in like circumstances would have acted. The tort of negligent investigation exists in Canada, and the trial court and Court of Appeal were correct to consider the appellant's action on this basis. The law of negligence does not demand a perfect investigation. It requires only that police conducting an investigation act reasonably. When police fail to meet the standard of reasonableness, they may be accountable through negligence law for harm resulting to a suspect. [3]

... an investigating police officer and a particular suspect are close and proximate such that a prima facie duty should be recognized. Viewed from the broader societal perspective, suspects may reasonably be expected to rely on the police to conduct their investigation in a competent, non-negligent manner. [39]

... no compelling policy reason has been shown to negate the prima facie duty of care. [65]

Both the trial judge and the Court of Appeal adopted the standard of the reasonable police officer in like circumstances as the standard that is generally appropriate in cases of alleged negligent investigation. I agree that this is the correct standard. [67]

... This standard should be applied in a manner that gives due recognition to the discretion inherent in police investigation. Like other professionals, police officers are entitled to exercise their discretion as they see fit, provided that they stay within the bounds of reasonableness. ... So long as discretion is exercised within this range, the standard of care is not breached. The standard is not perfection, or even the optimum, judged from the vantage of hindsight. It is that of a reasonable officer, judged in the circumstances prevailing at the time the decision was made - circumstances that may include urgency and deficiencies of information. [73]

To establish a cause of action in negligence, the plaintiff must show that he or she suffered compensable damage. Not all damage will justify recovery in negligence. [90]

... lawful pains and penalties imposed on a guilty person do not constitute compensable loss. It is important as a matter of policy that recovery under the tort of negligent investigation should only be allowed for pains and penalties that are wrongfully imposed. The police must be allowed to investigate and apprehend suspects and should not be penalized for doing so under the tort of negligent investigation unless the treatment imposed on a suspect results from a negligent investigation and causes compensable damage that would not have occurred but for the police's negligent conduct. The claimant bears the burden of proving that the consequences for the police conduct relied upon as damages are wrongful in this sense if they are to recover. Otherwise, punishment may be no more than a criminal's just deserts - in a word, justice. [92]

In dissent, the minority held that the tort of negligent investigation should not be recognized in Canada, stating that a private duty of care owed by the police to suspects would necessarily conflict with an officer's overarching public duty to investigate crime and apprehend offenders.

For the full judgment, click here.

McIntyre v. Grigg, [2006] O.J. No. 4420
Summary by Pamela Connolly of McCague Peacock Borlack McInnis & Lloyd LLP

The Ontario Court of Appeal in McIntyre v. Grigg has confirmed the liability of commercial hosts who sell alcoholic beverages to patrons to the point of intoxication and are later involved in motor vehicle accidents. Click here to read more...

Supreme Court of Canada Dismisses Appeal in Social Host Liability Case Childs v. Desormeaux

The Supreme Court of Canada unanimously held that as a general rule, a social host does not owe a duty of care to a person injured by a guest who has consumed alcohol, and that the courts below correctly dismissed the appellants' action. Click here to read more...

Court of Appeal Overrules itself in Automobile Insurance Deductible Case

The Ontario Court of Appeal, in David Polowin Real Estate Ltd. v. The Dominion of Canada General Insurance et al., reversed itself on the question whether an automobile insurer is entitled to charge a deductible in situations in which the car is damaged beyond repair and the insurer elects to take title to the salvage. Following the release of the Court of Appeal's 2001 decision in McNaughton v. Co-operators, which decided in favour of the insured's position, over 30 class actions were commenced against different insurers in Ontario. After the Supreme Court of Canada denied Co-operators' application for leave to appeal, many insurers in the industry refunded deductibles which had been charged in total loss situations to their policyholders during the year preceding the decision.

McCague Peacock Borlack McInnis & Lloyd LLP represented Zurich Canada, which was one of only eight insurers defending the class actions to ask the Court of Appeal to reconsider its earlier ruling. Zurich Canada did not implement a refund program and instead vigorously defended the class action on all fronts. We were also successful in obtaining a ruling dismissing the action against Zurich for reasons particular to that case. The plaintiff has appealed that ruling which has not been heard, however, that appeal is now moot given the recent decision in the Court of Appeal

In interviews with the press, plaintiff's counsel has indicated his intention to seek leave to appeal the latest decision of the Court of Appeal to the Supreme Court of Canada.

Recent Publications

Van Krkachovski has authored a paper entitled Limiting the Vicarious Liability of Motor Vehicle Lessors in Ontario, which discusses the new amendments to the Insurance Act which became effective on March 1, 2006.

Van Krkachovski and John Teal have published an article entitled "Reasonable Steps: Ontario's Minimum Maintenance Standards for Municipal Highways" in the February 2006 issue of Municipal World magazine. The article contains a detailed discussion of maintenance standards in the province for such municipal concerns as patrolling, maximum snow accumulation, potholes, and road signs. Please contact Van or John to discuss the article.

Theresa Hartley and Douglas McInnis published an article on the duty to defend intentional torts. For more information, please contact Theresa Hartley or Douglas McInnis, or follow this link to the article: International Law Office Newsletters – Canada – Insurance/Reinsurance

Nicole Tellier published an article summarizing the recent trial decision in R. v. Gauthier, in which the Court of Quebec allowed an automobile’s “black box” into court as evidence of the car’s speed and braking immediately prior to an accident. For more information about using the “black box” for accident reconstruction, please contact Nicole Tellier, or follow this link to the article (on page 3 of the magazine): Canadian Litigation Counsellor, Fall 2004

Anthony Cole published an article summarizing the new Ontario Limitations Act, 2002, and its effects on litigation and limitation periods throughout the province. For more information, please contact Anthony Cole, or follow this link to the article (on page 4 of the magazine): Canadian Litigation Counsellor, Summer-Fall 2003

Past Publications

For more articles published by our Toronto law firm or our affiliated law firms in Canadian Litigation Counsel, please follow this link: Past issues of Canadian Litigation Counsellor


Our law firm was also the exclusive 2005 contributor of articles concerning Canadian insurance and reinsurance law in the International Law Office Newsletter, a publication that is distributed to insurance professionals and other lawyers across the globe. For more information, please follow this link: International Law Office Newsletters – Canada – Insurance/Reinsurance.