British Columbia’s statutory automobile insurance is the primary insurance for damage to property resulting from an automobile accident. Where the damage results from the abandonment of a trailer truck’s cargo after an accident, ICBC is liable only for the costs of removing the cargo when a legal obligation is imposed upon the driver to remove the cargo from the accident site. A legal obligation to remove the cargo may arise despite the fact that an actual order to remove the cargo by a regulatory authority has not been made.

21. September 2004 0

Westside Transport Inc. v. Continental Insurance Co., [2004] B.C.J. No. 1971, British Columbia Supreme Court

Westside Transport Inc. (“Westside”) hauled eight large paper rolls, which weighed a total of 48,000 pounds, in a tractor trailer truck. The rolls were insured by the Continental Insurance Company (“Continental”). The tractor trailer was insured by the Insurance Corporation of British Columbia (“ICBC”). On September 20, 2000 the tractor trailer crashed. The rolls of paper broke loose, and some of them rolled into a lake. The policy of insurance that Westside had with Continental contained a debris removal clause, which covered expenses incurred by Westside for debris removal, including pollution or environmental clean-up, up to $10,000. The debris removal clause was subject to a further provision which made the Continental policy, an excess insurance policy if any other insurance was available.

Westside made a claim to Continental under its policy of insurance, and to ICBC under its automobile insurance, to pay for the cost of removing the paper from the lake. Both insurers refused coverage. Westside refused to pay for the removal of the paper. The paper rolls sank to the bottom of the lake and began to decompose. Once the paper began to decompose, a pollution abatement order was issued against Westside pursuant to section 31 of the Waste Management Act, R.S.B.C. 1996, c. 482, requiring Westside to “recover and remove the paper debris from the spill area on the land and in the lake”. The order noted that the regional waste manager was satisfied on reasonable and probable grounds that the paper was causing pollution and impairing the usefulness of the land and the lake.

After the pollution abatement order was issued, ICBC agreed to pay the cost of removing the paper, on the condition that it would be entitled to bring a subrogated action against Continental to recover the costs. ICBC paid a total of $29,472.35 to remove the paper. Halfyard J. was asked to determine whether the removal of the paper was covered by ICBC’s policy, and if so, whether the Continental policy was excess insurance by virtue of coverage under the ICBC policy.

Section 64 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 states:

64. Subject to section 67, the corporation shall indemnify an insured for liability imposed on the insured by law for injury or death of another or loss or damage to property of another that:

(a)    arises out of the use or operation by the insured of a vehicle described in an owner’s certificate, and

(b)    occurs in Canada or the United States of America or on a vessel travelling between Canada and the United States of America.

Halfyard J. determined that despite the fact that the order was not issued by the Ministry of the Environment until some time after the spill, Westside was liable to remove the paper as an immediate consequence of the accident. Therefore the order was issued as a result of the accident, not as a result of a delay in removing the paper from the lake. Although Halfyard J. refused to find that the paper constituted litter or pollution, he did find that the paper constituted an immediate obstruction to people using the lake for boating, fishing or swimming, and that the character of the lake and the adjacent area were changed by the deposit of several large rolls of paper. This was sufficient to constitute damage and trigger liability pursuant to section 64 of the Insurance (Motor Vehicle) Act.

The wording of Continental’s insurance policy indicated that it was the excess insurer if any other insurance covered the loss. Since section 64 Insurance (Motor Vehicle) Act covered the loss, there was other insurance available to Westside and Continental’s obligation under the debris removal clause was limited to that of an excess insurer. In the result, Westside’s claim against Continental was dismissed.

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