Insurance Denied - Permitted Illegal Use (Automobile)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-04-25
CLNP Page ID:	2186
Page Categories:	Insurance
Citation:	Insurance Denied - Permitted Illegal Use (Automobile), CLNP 2186, <>, retrieved on 2024-04-25
Editor:	MKent
Last Updated:	2023/04/07

Duggan-Rowlands v. CAA Insurance Company, 2007 CanLII 8642 (ON SC)

[64] A closer reading of the policy clearly excludes the insurer’s liability on the mother’s claim (the innocent insured’s claim) if she is found to have permitted the wrongdoing. This is so as the policy before me states that “we won’t pay if: you drive the automobile while not authorized by law” and/or if “another person with your permission drives or operates the auto under any of these conditions (i.e. while not authorized by law)”. (emphasis my own) [Section 7.22 of the policy]

[65] I must thus decide if the evidence before me reveals that Ms. Duggan-Rowlands; the named insured, permitted Chris Rowlands to drive when not authorized by law.

[66] It is my view that Ms. Duggan-Rowlands did not permit Chris to use her vehicle when not authorized. While, in my view, she was at best naïve about the likelihood of alcohol consumption at this bush party on this, her son’s 17th birthday, I cannot say on a balance of probabilities that she permitted Chris to drive her vehicle knowing that he would drink. My decision would have been less difficult if she had specifically instructed him not to drink and drive or even explain that is why she left the car with him overnight. Nonetheless, I have inferred from her leaving the car with Chris for the entire night (intending to take a cab to work the following day), that she specifically did not permit him to drive when he had been drinking.

[67] I read with interest the case of Henckel v. State Farm Automobile Insurance 1997 CanLII 12129 (ON SC), 33 O.R. (3d) 253 and adopt its logic. It was Ms. Duggan-Rowlands evidence that she told Chris to be good; to have fun. In the context of having no knowledge that he had any intention of drinking, I have been satisfied that Ms. Duggan-Rowlands did take reasonable steps to ensure that her son did not drive her vehicle when he was not authorized to do so (i.e. when he had breached a term of his G2 licence). I do not accept that Chris’ breach (which I find was proven on the balance of probabilities to have occurred), would preclude his “innocent” mother from recovery of her damages.

(...)

[74] Section 7.22 covers illegal use. It states that the insured

• won’t pay for loss or damage caused in an incident:...if you are unable to maintain proper control of the automobile because you are driving or operating the automobile while under the influence of an intoxicating substance;
• if you drive the automobile while not authorized by law;
• if another person, with your permission drives or operates the automobile under any of these conditions.

Henckel v. State Farm Mutual Automobile Insurance, 1997 CanLII 12129 (ON SC)

On March 12, 1993 the insured plaintiff gave his 24-year-old son the keys to his 1988 Toyota so he could drive himself to a rink to play hockey. He asked his son not to drink and drive and also to drive carefully.

Unfortunately his son did not tell him that his driving licence had expired on January 31, 1993 because he had failed to renew it for monetary reasons. At some point he had also failed to renew it because he had cut his lip, and did not want an inappropriate picture in his driver's licence. The son agreed he got a notice to renew his licence. The evidence is that the father knew nothing about his son's failure to renew his licence, or the notice, and he asked him nothing about the state of his licence when he loaned him his truck. His son had a licence since he was 16, and drove his own car, but it was not reliable. He renewed his licence on March 15, 1993.

(...)

Counsel for the insured said the issues were:

1. Was the son authorized by law to drive? 2. Did the father "permit" the son to drive? 3. If there was a breach of the statutory condition, ought relief from forfeiture be given under s. 129 of the Insurance Act, supra?