Driving restrictions fall to MTO not parole conditions

November 13, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Middleton v Pankhurst and Unifund

COURT OF APPEAL FOR ONTARIO

DATE Of Decision: November 2,  2017
Heard Before: Hourigan, Roberts and Nordheimer JJ.A.

In appeal from the judgment of Justice Wendy M. Matheson of the Superior Court of Justice, dated May 17, 2016 reported at 2016 ONSC 3157.  Did the trial judge err in finding that Cal Pankhurst was a “person authorized by law” to operate a motor vehicle under the Insurance Act? The trial judge did not err. She conducted a very thorough and careful analysis of the issue, specifically considering and rejecting the same arguments advanced by the appellant, Aviva, on this appeal.  Accordingly, the appeal is dismissed.

Facts

On January 24, 2009 Tyler Middleton and Mr. Pankhurst agreed to go ice fishing on Lake Simcoe. Later that day, Mr. Pankhurst travelled by snowmobile to meet Mr. Middleton at a remote location on the lake where some of their friends had ice huts. Mr. Pankhurst had a valid class G driver’s licence, which was not subject to any restrictions. However, he was subject to a probation order arising from a guilty plea to careless driving in the fall of 2008. That order prohibited Mr. Pankhurst from driving at night and from driving with alcohol in his system.

Both Mr. Middleton and Mr. Pankhurst consumed alcohol that night. In the early evening, Mr. Middleton left the ice huts by foot, while Mr. Pankhurst stayed behind. Later that evening, Mr. Middleton called Mr. Pankhurst’s cell phone. He explained that he was lost and disoriented and asked Mr. Pankhurst to pick him up. Mr. Pankhurst believed that Mr. Middleton was in danger of freezing because he was not properly dressed. He drove his snowmobile on the lake, found Mr. Middleton, and they drove to shore. They then proceeded on a road along the shore.  While on that road, Mr. Pankhurst lost control of his snowmobile and both he and Mr. Middleton were ejected. Mr. Middleton hit a telephone pole and suffered significant injuries.

Mr. Middleton brought a personal injury claim against Mr. Pankhurst. The parties reached a settlement agreement pursuant to which Mr. Pankhurst would pay $900,000 to the Middletons. Mr. Pankhurst was insured by Aviva, and Ms. Middleton was insured by Unifund. Ms. Middleton’s insurance policy provided coverage for under or uninsured claims.

Statutory Condition 4 applies to all Ontario automobile insurance contracts, including Mr. Pankhurst’s policy with Aviva. Statutory Condition 4(1) reads:

4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

Aviva took the position that it was not obliged to pay any part of the settlement on the basis that Mr. Pankhurst was not authorized by law to drive at the time of the accident, because he had been drinking and driving at night, in breach of his probation order.

Justice David Brown ordered that the settlement funds be paid in full to the Middletons – 50% paid by each insurer – with provision to have the successful insurer repaid by the unsuccessful insurer after the coverage issue was determined. He further ordered a trial of an issue, namely, whether Mr. Pankhurst was entitled to insurance coverage from Aviva.

Decision of the Trial Judge

The trial judge found that Mr. Pankhurst was authorized by law to drive at the time of the accident because he had a valid driver’s licence that was not subject to any restrictions imposed by the Ministry of Transportation (“MTO”). She rejected Aviva’s argument that the phrase “authorized by law” refers to not only the provincial licensing scheme operated by the MTO, but also to violations of court orders, such as Mr. Pankhurst’s probation order.

In so ruling, the trial judge relied on this court’s decision in Kereluik v. Jevco Insurance Company, 2012 ONCA 338, 111 O.R. (3d) 395. In that case, Cronk J.A. found that the phrase “authorized by law” was not intended to apply to breaches of the law not directly connected with violations of driving licence conditions. The trial judge also held that Aviva’s position was inconsistent with s. 118 of the Insurance Act.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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