The Ontario Court of Appeal held that the inclusion of the word “indirectly” in the phrase “directly or indirectly from the use or operation of an automobile” in the endorsement on the policy created a more relaxed causation requirement than the causation test enunciated by the Supreme Court of Canada in Amos v. Insurance Corp. of British Columbia

Vytlingam (Litigation guardian) v. Farmer, [2005] O.J. No. 2266, Ontario Court of Appeal

The infant Plaintiff was injured catastrophically while driving the family’s insured vehicle in the United States. He was struck with a large boulder which had been dropped from an overpass by the Defendants, Todd Farmer (“Farmer”) and Anthony Raynor (“Raynor”). While the Defendants Farmer and Raynor had used Farmer’s motor vehicle to transport the boulder to the scene, they were not in the vehicle at the time they dropped the boulder from the overpass.

The Defendant Farmer carried only the legal minimum of $25,000 US in third party liability insurance. The Plaintiffs claimed under the Family Protection Coverage endorsement in its policy with the Defendant insurer, which provided that the insurer “shall indemnify an eligible claimant for the amount that he or she is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury to or death of an insured person arising directly or indirectly from the use or operation of an automobile.”

The chambers judge, in dismissing the insurer’s motion for summary judgment, held that the Plaintiffs were entitled to recover damages from the insurer.

The Court of Appeal, in dismissing the appeal, held that the infant Plaintiff’s injuries arose “directly or indirectly from the use or operation of an automobile”. The language in the endorsement was broader than the policy language in Amos v. Insurance Corporation of British Columbia, [1995] 3 S.C.R. 405. The Court of Appeal thus held that the causation requirement in the case at bar was relaxed as compared to the causation test suggested by the Supreme Court of Canada in Amos v. Insurance Corporation of British Columbia, supra, due to the difference in the policy language.

Note:  the interpretation of the phrase “arising from the ownership or directly or indirectly from the use or operation” of an automobile, as that phrase appeared in a standard motor vehicle liability insurance policy, was also at issue in a recent unrelated case argued before the Ontario Court of Appeal. The Court’s reasons for judgment in that case, Herbison v. Lumbermens Mutual Casualty Company, [2005] O.J. No. 2262, were released concurrently with the reasons in this case.

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