Schrader v. United States Fidelity and Guaranty Co. et al., (1987) 23 O.A.C. 154 (DC)

• Judge: Steele, J., Holland and White, JJ.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: June 10, 1987
• Jurisdiction: Ontario
• Citations: (1987), 23 O.A.C. 154 (DC)

Schrader v. US Fidelity and Guaranty (1987), 23 O.A.C. 154 (DC)

MLB headnote and full text

Kim Schrader (plaintiff) v. United States Fidelity and Guaranty Company, The U.S.F. & G. Companies (Baltimore, Maryland), Commercial Union Assurance Companies, Commercial Union Insurance Company, Commercial Union Assurance Company of Canada - La Compagnie d'Assurance Union Commerciale du Canada, Commercial Union Assurance Company Limited and Margaret Dragone (respondents/defendants) and the Superintendent of Insurance (appellant/defendant)

(No. 1176/85)

Indexed As: Schrader v. United States Fidelity and Guaranty Co. et al.

Ontario Divisional Court

Steele, J., Holland and White, JJ.

March 24 and June 10, 1987.

Summary:

The plaintiff Schrader was injured in Ontario by an unidentified motorist. Schrader was insured under a motor vehicle liability policy issued in New York State by Commercial. Commercial had filed a power of attorney and undertaking with the Ontario Superintendent of Insurance. Schrader sued Commercial and the Superintendent of Insurance, among others. Commercial's defence was that its policy did not insure against damage caused by an unidentified motorist.

The trial judge allowed Schrader's action against the Superintendent of Insurance. The judge dismissed the action against Commercial. The trial judge felt that because of the operation of s. 25(1) of the Insurance Act, Commercial could not raise such a defence, but felt bound by the decision in McDonald v. Proctor (1977), 19 O.R.(2d) 745, affd. (1979), 86 D.L.R.(3d) 455, to hold otherwise. The Superintendent of Insurance appealed.

The Ontario Divisional Court allowed the appeal and held that Commercial could not set up the defence offered in an action in Ontario by the insured. The Divisional Court held that s. 25 of the Insurance Act appeared to be inapplicable. See paragraph 27.

Insurance - Topic 4552

Automobile insurance - Actions by insured against insurer - Defences - Circumstances where insurer is precluded from raising a defence - Foreign insurers - S. 25(1) of the Insurance Act provided that licensed insurers in Ontario may not set up any defence to a claim under an insurance contract made outside Ontario, that might not be set up if the contract were evidenced by a motor vehicle liability policy issued in Ontario - Schrader, insured under a liability policy issued in New York by Commercial, was injured in Ontario by an unidentified motorist - Commercial had filed a power of attorney and undertaking with the Ontario Superintendent of Insurance - The Ontario Divisional Court held that although s. 25 was inapplicable, Commercial was precluded from raising as a defence to Schrader's action against it, the fact that its policy did not insure against damage caused by an unidentified motorist.

Insurance - Topic 4552

Automobile insurance - Actions by insured against insurer - Defences - Circumstances where insurer is precluded from raising a defence - Foreign insurers - S. 25(1) of the Insurance Act provided that licensed insurers in Ontario may not set up any defence to a claim under a contract of insurance made outside Ontario, that might not be set up if the contract were evidenced by a motor vehicle liability policy issued in Ontario - The Ontario Divisional Court stated that the intent of s. 25(1) was to require insurers who carry on automobile insurance in Ontario to extend to their United States policyholders and to Ontario residents the same benefits as if the insurer had written the policy in Ontario - The court stated that the same would apply respecting any extraprovincial motor vehicle liability policy where the issuing insurer is licensed to do business in Ontario - See paragraph 10.

Statutes - Topic 1450

Interpretation - Construction where meaning is not plain - Aids or methods to determine meaning - Legislative history - Reference to prior versions or amendments - The Ontario Divisional Court considered the legislative history of s. 25(1) of the Ontario Insurance Act and its predecessors - See paragraphs 11 to 14.

Cases Noticed:

McDonald v. Proctor (1977), 19 O.R.(2d) 745, affd. (1979), 86 D.L.R.(3d) 455, consd. [para. 7].

Boarelli v. Flannigan, [1973] 3 O.R. 69; 36 D.L.R.(3d) 4, refd to. [para. 18].

Cunningham et al. v. Manitoba Public Insurance Corporation (1979), 100 D.L.R.(3d) 424, refd to. [para. 21].

Pannenbecker v. Dominion of Canada General Insurance Co. et al. (1978), 13 A.R. 487; 93 D.L.R.(3d) 450 (C.A.), refd to. [para. 21].

Kolmatychi v. Walker et al. (1981), 28 A.R. 40; 123 D.L.R.(3d) 311 (C.A.), refd to. [para. 21].

Dodd v. McFadden et al. (1981), 128 D.L.R.(3d) 338 (B.C.S.C.), refd to. [para. 21].

Administrator, Motor Vehicle Accident Claims Act v. Saskatchewan Government Insurance Office (1981), 29 A.R. 582; 123 D.L.R.(3d) 331 (C.A.), refd to. [para. 21].

Shea et al. v. Manitoba Public Insurance Corporation et al., [1985] I.L.R. 1-1894, affd. [1985] I.L.R. 1-989, refd to. [para. 21].

Corbett et al. v. Co-operative Fire and Casualty Company (1984), 56 A.R. 60; 14 D.L.R.(4th) 531 (Q.B.), refd to. [para. 21].

Statutes Noticed:

Insurance Act, R.S.O. 1980, c. 218, sect. 25(1) [paras. 1-2, 4-11, 14, 16-17, 19-21, 24, 27].

Authors and Works Noticed:

Legislative Debates (Ont.) (1973), vol. 5 [para. 15].

Counsel:

R. Allan O'Donnell, Q.C., and R. McNutt, for the appellant;

J. Dallal, for the respondent, Commercial Union.

This appeal was heard before Steele, J. Holland and White, JJ., of the Ontario Divisional Court in March, 1987. The decision of the Divisional Court was delivered by J. Holland, J., and released on March 24, 1987.

On June 10, 1987, J. Holland, J., released an Addendum to the reasons for judgment.