McNaughton Automotive Ltd. v. Co-operators General Insurance Co., (2001) 151 O.A.C. 252 (CA)

• Judge: Laskin, Sharpe and Simmons, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 02, 2001
• Jurisdiction: Ontario
• Citations: (2001), 151 O.A.C. 252 (CA)

McNaughton Auto. v. Co-op General (2001), 151 O.A.C. 252 (CA)

MLB headnote and full text

Temp. Cite: [2001] O.A.C. TBEd. JN.051

McNaughton Automotive Limited (applicant/appellant) v. Co-operators General Insurance Company (respondent/respondent in appeal)

(C34926)

Indexed As: McNaughton Automotive Ltd. v. Co-operators General Insurance Co.

Ontario Court of Appeal

Laskin, Sharpe and Simmons, JJ.A.

June 18, 2001.

Summary:

McNaughton Automotive Ltd. insured a fleet of its vehicles with Co-operators. When one of McNaughton's vehicles was irreparably damaged in an accident, Co-operators paid McNaughton the cash value of the vehicle minus the deductible and sold the vehicle for salvage. McNaughton claimed entitlement to the cash value of the damaged vehicle and the salvage price. McNaughton moved for judgment on its action and certification of a class action on behalf of similarly situated insureds.

The Ontario Superior Court, in a decision reported at [2000] O.T.C. 727, dismissed McNaughton's claim and accordingly, did not deal with the matter of certification of a class action. McNaughton appealed.

The Ontario Court of Appeal held that McNaughton was entitled to the cash value of the vehicle without the deduction of a deductible. The court remitted the matter of the certification of a class action to the motions court judge for determination.

Insurance - Topic 5229

Automobile insurance - Compulsory government schemes - Rights and duties of insurer - Re salvage - McNaughton Automotive Ltd. insured a fleet of its vehicles with Co-operators - When one of McNaughton's vehicles was irreparably damaged in an accident, Co-operators paid McNaughton the cash value of the vehicle minus the deductible and sold the vehicle for salvage - McNaughton claimed entitlement to the cash value of the damaged vehicle and the salvage price - The Ontario Court of Appeal held that, as the insurer elected to take title to the damaged vehicle, the terms of statutory condition 6(7) required the insurer to pay McNaughton the actual cash value without reduction for the amount of the deductible under the policy - See paragraphs 16 to 28.

Cases Noticed:

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488; 112 D.L.R.(3d) 49; [1980] I.L.R. 1-1176, refd to. [para. 16].

Curtis's and Harvey Ltd. v. North British and Mercantile Insurance Co. (1920), 55 D.L.R. 95 (P.C.), refd to. [para. 20].

Prasad v. Gan Canada Insurance Co. (1997), 100 O.A.C. 63; 33 O.R.(3d) 481 (C.A.), leave to appeal refused [1997] 3 S.C.R. viii; 225 N.R. 399; 110 O.A.C. 173, refd to. [para. 21].

Mueller v. Western Union Insurance Co., [1974] 5 W.W.R. 520 (Alta. Dist. Ct.), refd to. [para. 24].

Straus v. Allstate Inc. (1978), 378 N.E. 2d 1308 (Ill. App. 1 Dist.), refd to. [para. 25].

Langford v. Federated General Mutual Co, (1989), 543 So. 2d 675 (Ala. Sup. Ct.), refd to. [para. 25].

July v. Neal and Home Insurance Co. (1986), 17 O.A.C. 390; 57 O.R.(2d) 129 (C.A.), refd to. [para. 26].

Bywater v. Toronto Transit Commission (1998), 27 C.P.C.(4th) 172 (Ont. Gen. Div.), refd to. [para. 36].

Statutes Noticed:

Insurance Act, R.S.O. 1990, c. I-8, sect. 131(2) [para. 15]; sect. 234(2) [para. 11].

Authors and Works Noticed:

Brown, C., Insurance Law in Canada (looseleaf, 1999), vol. 1, p. 11-16 [para. 24].

Newcombe, The Standard Automobile Policy Annotated (1986), p. 164 [para. 24].

Ontario, Ministry of the Attorney General and Ministry of Financial Institutions, Inquiry into Motor Vehicle Accident Compensation in Ontario (1988), p. 138 [para. 20].

Osborne Report - see Ontario, Ministry of the Attorney General and Ministry of Financial Institutions, Inquiry into Motor Vehicle Accident Compensation in Ontario.

Counsel:

Michael McGowan, Kirk Baert and Paul Downs, for the appellant;

T.H. Rachlin, Q.C., and Michael Eizenga, for the respondent.

This appeal was heard on May 2, 2001, before Laskin, Sharpe and Simmons, JJ.A., of the Ontario Court of Appeal. On June 18, 2001, Sharpe, J.A., released the following judgment for the court.