In Sovereign, Justice Laskin of the Ontario Court of Appeal, writing for the majority, ruled that a third party with sufficient proximity to an insurance claim may give notice of that claim to trigger liability coverage.
Mrs. Walker slipped in a parking lot and sustained serious injuries. She sued both Emshih, the owner of the mall, and Sun Shelters, the maintenance company that was hired to remove the ice and snow from the parking lot, for damages. Emshih and Walker settled but Sun Shelters went bankrupt and did not defend the claim or notify Sovereign, its insurance company, of the claim. Counsel for Emshih, carrying out a cross-claim, forwarded all the pleadings to Sovereign upon hearing that Sun Shelters was insured. The Walkers received a judgment against Sun Shelters, upon which they then brought an action against Sovereign under s. 132(1) of the Insurance Act, which allows a third party to recover against an insurer where its insured has failed to satisfy a judgment for damages. Sovereign argued it was not obligated to indemnify Sun Shelters’ claim as it could only receive notice of the claim through its insured and Sun Shelters failed to notify them.
Justice Laskin noted that s. 3(a) of the insurance policy stated that notice can be given “by or for the insured”, which on plain reading allowed for notice from others than the insured. At a minimum, the meaning was ambiguous and according to the rules of statutory interpretation, it should be interpreted against Sovereign. Rejecting Sovereign’s “rigid” interpretation, Justice Laskin also found that the purpose of the provision was to make the insurer aware of the claim so that it had a timely opportunity to deal with it. Therefore, notice could clearly be given by a person with sufficient proximity to the claim.
September 19, 2011
Link to Decision
Leo Elias & Sam Golder
*
No comments:
Post a Comment