Attached is a copy of Justice Lally’s reasons in Blight v. AXA and Royal & SunAlliance, decided last Friday in Belleville. The court ruled that there was no liability coverage under a tenant’s insurance policy for a fire that broke out while the tenant was conducting repairs to his wife’s automobile. Our office successfully represented Royal.
The action was a subrogated one by the homeowner’s insurer, Co-operators. Co-op had first obtained default judgment against the tenant and had then sued both the tenant’s property and auto insurers, both of whom had denied the claim, seeking payment of the claim. In Royal’s case, it had relied upon a frequently-litigated exclusion which read:
We do not insure claims arising from the ownership, use or operation of any motorized vehicle.”
The tenant had been working on his wife’s car in the garage of their rented premises. For that purpose, he had brought a table lamp into the garage. While draining the gas tank, some gasoline splashed into his eyes. While he was staggering around, unable to see, he knocked over the lamp. It appears that the filament of the light bulb ignited the gasoline.
Last week’s motion dealt only with the claim against Royal (the property insurer). The action against AXA has yet to be heard.
In his submissions, counsel for Co-operators tried to liken this case to Derksen v. 539938 Ontario Ltd. There, the Supreme Court of Canada had held that both a CGL and an auto policy had been triggered where an accident had resulted from two chains of “concurrent causation”.
In Blight, counsel for Co-operators argued that there were also two causes of the fire: the auto repairs (which he admitted were excluded by the tenant’s insurance) and the use of the table lamp (which, he submitted, was not caught by the exclusion).
Justice Lally ruled that the exclusion did apply. He applied the test in another Supreme Court of Canada case, Amos v. ICBC, and concluded that there was “a nexus or causal relationship between the fire and the tenant’s ownership and use of his vehicle and the connection between the fire which caused the damage and the ownership and use or operation of the vehicle is not merely incidental or fortuitous.”