Ashton et al. v. Tu et al., (1998) 110 O.A.C. 283 (CA)

• Judge: Osborne, Rosenberg and Goudge, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 11, 1997
• Jurisdiction: Ontario
• Citations: (1998), 110 O.A.C. 283 (CA)

Ashton v. Tu (1998), 110 O.A.C. 283 (CA)

MLB headnote and full text

Temp. Cite: [1998] O.A.C. TBEd. JL.029

Sean Ashton and Sheena Kraftchuk (plaintiffs) v. Le Phan Tu, Tu-Chong Banh, Lang Tu and Laurentian Casualty Company of Canada (defendants/respondents) and State Farm Mutual Automobile Insurance Company (third party/appellant)

(C17695)

Indexed As: Ashton et al. v. Tu et al.

Ontario Court of Appeal

Osborne, Rosenberg and Goudge, JJ.A.

May 29, 1998.

Summary:

An insurance broker for State Farm back­dated an application for automobile insur­ance and issued a binder and liability certifi­cate. The broker was unaware that the vehicle being insured had been in an acci­dent with a vehicle driven by Ashton. The accident occurred after the effective date of the policy but before the date on which the policy was actually applied for. Ashton sued his insurer, Laurentian, under the uninsured motorist coverage provisions in his policy. Laurentian paid the claim and commenced third party proceedings against State Farm for contribution and indemnity. The third party proceedings proceeded to trial.

The trial judge granted Laurentian judg­ment against State Farm. State Farm appealed.

The Ontario Court of Appeal dismissed the appeal.

Insurance - Topic 4603

Automobile insurance - Actions by third parties against insurer on public liability policy - Defence by insurer respecting extent or validity of coverage or policy - A State Farm insurance broker backdated an application for automobile insurance and issued a binder and liability certificate - The applicant misrepresented that there had been no accidents - An accident had oc­curred with a vehicle driven by Ashton after the policy's effective date but before the date of the application - State Farm denied coverage - Ashton's insurer (Laurentian) paid Ashton uninsured motor­ist coverage and sought contribution and indemnity from State Farm pursuant to ss. 226(1) (right of action for injured third party) and 226(5) (absolute liability provi­sion) of the Insurance Act - State Farm asserted that there was no insurance con­tract, or, alternatively, it did not provide indemnity for the claim, therefore s. 226(5) was not engaged - The Ontario Court of Appeal granted Laurentian judgment against State Farm.

Cases Noticed:

Ontario (Minister of Transport) v. Cana­dian General Insurance Co., [1972] S.C.R. 234, dist. [para. 28].

Walker v. Allstate Insurance Co. of Canada (1989), 67 O.R.(2d) 733 (C.A.), dist. [para. 28].

Harrison v. Ocean Accident and Guaranty Corp., [1948] O.R. 499 (C.A.), dist. [para. 28].

Dokuchia v. St. Paul Fire and Marine Insurance Co., [1949] O.R. 170 (C.A.), dist. [para. 28].

Ellis v. London-Canada Insurance Co., [1954] 1 D.L.R. 785 (S.C.C.), dist. [para. 32].

Leslie v. Pitts Insurance Co., [1970] I.L.R. 1032 (Ont. H.C.), dist. [para. 32].

Ontario (Minister of Transport) v. London & Midland General Insurance Co., [1971] 3 O.R. 147 (C.A.), dist. [para. 32].

Campanaro v. Kim (1995), 24 O.R.(3d) 274 (Gen. Div.), refd to. [para. 38].

State Farm Mutual Automobile Insurance Co. v. General Accident Assurance Co. of Canada (1995), 167 N.B.R.(2d) 48; 427 A.P.R. 48; 127 D.L.R.(4th) 648 (C.A.), refd to. [para. 40].

Dore v. General Insurance Corp. of New Brunswick, [1992] I.L.R. 1594; 115 N.B.R.(2d) 123; 291 A.P.R. 123 (T.D.), refd to. [para. 40].

Crawford et al. v. Employers Mutual Lia­bility Insurance Co. of Wisconsin (1981), 35 N.B.R.(2d) 109; 88 A.P.R. 109 (T.D.), refd to. [para. 40].

Marshall v. Law Union & Rock Insurance Co. (1958), 18 D.L.R.(2d) 442 (N.B.C.A.), refd to. [para. 40].

Murphy v. Casualty Co. of Canada, White, Singleton and Pittman (1987), 63 Nfld. & P.E.I.R. 59; 194 A.P.R. 59; 36 D.L.R.(4th) 87 (Nfld. C.A.), refd to. [para. 40].

Blair v. Royal Exchange Assurance (1968), 67 D.L.R.(2d) 420 (Man. Q.B.), refd to. [para. 40].

Comer v. Bussell, [1940] 1 D.L.R. 97 (Ont. C.A.), affd., [1940] S.C.R. 506, refd to. [para. 41].

Bourgeois et al. v. Prudential Assurance Co., [1946] 1 D.L.R. 139 (N.B.C.A.), refd to. [para. 41].

Patterson and Perry v. Gallant, [1994] 3 S.C.R. 1080; 174 N.R. 380; 125 Nfld. & P.E.I.R. 1; 389 A.P.R. 1; 120 D.L.R.(4th) 1, refd to. [para. 46].

Buske v. Potter and London and Midland General Insurance Co., [1966] 1 O.R. 517 (Co. Ct.), refd to. [para. 48].

Code v. British America Assurance Co., [1972] 3 O.R. 673 (H.C.), refd to. [para. 48].

Statutes Noticed:

Compulsory Automobile Insurance Act, R.S.O. 1990, c. C-25, sect. 6(1) [para. 51]; sect 6(2) [para. 52].

Insurance Act, R.S.O. 1980, c. 218, sect. 226(1), sect. 226(5) [para. 25].

Insurance Act, R.S.O. 1990, c. I-8, sect. 258(1) [para. 43]; sect. 258(5) [paras. 27, 49].

Authors and Works Noticed:

Couch, Cyclopedia of Insurance Law (2nd Rev. Ed. 1985), vol. 9, pp. 589, 590 [para. 31].

Counsel:

Thomas D. Galligan, for the appellant;

Lynne Lawson, for the respondent, Laurentian Casualty Company.

This appeal was heard on September 11, 1997, by Osborne, Rosenberg and Goudge, JJ.A., of the Ontario Court of Appeal. Os­borne, J.A., released the following deci­sion for the court on May 29, 1998.