Another C.A. Decision on “Ownership, Use or Operation”

Yesterday, the Court of Appeal dismissed the plaintiff’s appeal in Blight v. Axa and Royal & SunAlliance Insurance Company. Our firm acted for the successful respondent, Royal & SunAlliance. Royal insured a tenant and the issue was whether the policy covered the tenant for a fire that he had started while working on his car in the garage of a rented house. Blight, the owner of the house, was insured by the Co-operators, who were pursuing a subrogated claim against the tenants’ property insurer (Royal) and auto insurer (Axa), for the cost of the fire damage.

The decision is the latest of many from the Court of Appeal within the last year, in which the court has been asked to interpret the meaning of the phrase, “ownership, use or operation of any motorized vehicle” (or language similar to that). Others include Djepic v. Kuburovic, McLean v. Jorgenson, Herbison v. Lumbermens, Vytlingam v. Farmer and Lupsor v. Unum.

In the Blight case, the tenant was repairing the gas gauge in his car. Because it was raining outside, he was working in the garage of the house that he and his wife had rented from the owner, Blight.

The tenant brought a table lamp into the garage and turned it on, so that he could see while working on the gas tank of his car. As he was in the process of removing the gas tank, it suddenly came loose from its bracket and gasoline spilled into the tenant’s eyes. Temporarily blinded, he stumbled into the lamp, breaking the light bulb. The filament ignited gasoline vapours, which quickly engulfed the house in fire.

Co-operators paid its insured, Blight, and sued the tenant and his wife to recover its payment. It obtained default judgment against the tenants and then brought this action directly against Axa and Royal, presumably under ss. 132 and 258 of the Insurance Act.

Both insurers defended. Axa took the position that an exclusion in its policy, for property “rented or owned by the insured” applied. Royal defended on the basis that the loss arose out of the “ownership, use or operation of any motorized vehicle”, indemnity for which was excluded under its policy.

Royal moved for an order dismissing the action. Axa did not participate in the motion (and in fact, the Co-operators’ subrogated action against Axa is still outstanding). Mr. Justice Thomas J. Lally of the Ontario Superior Court granted the motion. and dismissed the action as against Royal.  A copy of his unreported reasons for judgment is attached.

Co-operators’ main argument had been that this was a case of “concurrent causation”, as discussed in the Supreme Court of Canada’s decision in Derksen v. 539938 Ontario Limited et al. Co-operators contended that the fire had resulted from different acts of negligence, some of which were auto-related (and therefore excluded) and others of which were not. In particular, its counsel suggested that the tenant’s placement of the lamp in the garage and his having tripped over it, constituted negligence that was unrelated to the “use” of the car (which the repairs themselves were conceded to be). If this were true, then the Derksen decision would suggest that the loss should have been covered.

On the original motion, Justice Lally rejected Co-operators’ argument. He said: “there is only one chain of causation. Mr. Tucker’s [the tenant’s] use of the table lamp to light his work area can indeed be characterized as being part of the automotive repairs he was undertaking at the time the fire broke out. The table lamp was put in the garage for the purpose of the repairs. As such, the plaintiff’s loss can be said to arise solely from the use of a motorized vehicle, with the result that it falls within the exclusion in the Royal & SunAlliance liability policy”.

On the appeal of the decision of Lally J., Co-operators again argued that this was a case of “concurrent causation”. On behalf of Royal, we relied on two earlier Court of Appeal cases (Unger v. Unger and the recent case of McLean v. Jorgenson), which had held that for something to be a concurrent cause, it has to be capable of standing alone as a basis for liability. Nothing that the tenant had done here amounted to negligence that could stand alone, divorced from the use of the automobile.

The Court of Appeal agreed with Lally J., that there was only one chain of causation in this case and that it fell within the “ownership, use or operation” exclusion. Accordingly, the appeal was dismissed.

Leave to appeal is being sought in the Herbison and Vytlingam cases, so we may not have heard the last of this troublesome phrase.

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