Alberta’s Standard Automobile Policy (S.P.F. No. 1) has a section stating that it does not apply to people occupying an automobile that is being used without the consent of its owner. However, as we see in many legal situations, there are nuances in the facts of many situations that make determining a seemingly simple issue more complex.
The accident and summary judgment
The respondent was seriously injured while riding as a passenger in an automobile being driven without the consent of the owner, his mother. After the injury, she commenced an action against the insurer, claiming indemnity for her injuries. While the insurer admitted the respondent was an insured person, coverage was denied on the ground that her claim was excluded because she was a passenger in a vehicle being operated without the owner’s consent. The respondent argued the policy should not apply because she did not know the vehicle was being driven without her mother’s consent.
The policy states, “No person shall be entitled to indemnity or payment under this Policy who is an occupant of any automobile which is being used without the consent of the owner thereof.”
The insurer applied for a summary judgment, and the Master sided with the insurer, denying the action. On appeal, the chambers judge noted that there is no binding authority on the interpretation of the exclusionary section of the policy. The chambers judge looked at authorities from Ontario, which as a similar policy, except it has been amended to provide language that there is no coverage where the occupant knows, or ought to reasonable know, the vehicle is being driven without consent.
In Alberta, there is no language to clearly exclude those who ought to have known, but didn’t know the vehicle was being driven without consent. On this basis, the appeal was allowed, and ordered a trial. The insurer appealed this decision, arguing the chambers judge erred by applying Ontario law, and implying a requirement for knowledge in the exclusion in the Alberta policy.
The court’s analysis
The court determined that the language in the policy is clear, containing no ambiguity or references to the relevance of knowledge about the use of the car. In approving the appeal, the court wrote,
“An ambiguity cannot be created by external means such as reading in an element not present on a plain reading of the provision. As there is no ambiguity, there is no need to resort to interpretation rules such as the reasonable expectations of the parties or contra proferentem to construe the insuring agreements. It is normal for insurance policies to contain exclusions and the fact that some claims are thereby removed from coverage does not, in itself, give rise to unfairness. If claims by persons without knowledge are to be covered, the remedy lies with the legislature, not with the courts. As knowledge is not an element of the exclusion on the plain reading of its terms, there is no need for a trial to determine the extent of the respondent’s knowledge.”
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