An Insurer is entitled to recover from the driver of a motor vehicle monies paid out under a policy of insurance for the damages caused to that motor vehicle where it is determined that the driver was driving “while not authorized by law”
Certas Direct Insurance v. Strifler, [2005] O.J. No. 4293, Ontario Superior Court of Justice
In the result, CDI was granted judgment against Strifler in the amount of $23,110.50.
On July 13, 2003, the driver of a motor vehicle (“Strifler”) was involved in a single motor vehicle accident. At the time, she was operating a 2001 Nissan Pathfinder which had been leased by her father. The Pathfinder was insured at the time by Certas Direct Insurance (“CDI”). The Pathfinder was a total loss. At the time of the collision, Strifler had seven other passengers in the Pathfinder. The Pathfinder was equipped with seatbelts for only five of the eight passengers. At the time of the accident, Strifler was the holder of a G2 driver’s licence which was issued subject to a number of conditions, including a condition that the number of passengers in the motor vehicle must not exceed the number of operable seatbelt assemblies installed in the vehicle.
Strifler was an unnamed Insured under her father’s policy. This policy was the statutorily-prescribed Ontario Automobile Policy OAP No. 1 which contained the following provisions:
7.4.2 Foregoing Our Right to Recovery
If someone else is using a described automobile with your permission when an insured loss occurs, we will pay for the resulting claim. We will also forego our right to recover the money from that person.
However, we will keep the right to recover payment:
If the person using the automobile violates any condition of this policy, or operates it in circumstances referred to in 7.2.2.
Section 7.2.2 of the OAP provided that the Insurer would not pay for loss or damage caused in an incident “if you drive the automobile while not authorized by law”.
In this case, the Court held that, at the time of the accident, Strifler was clearly in breach of the conditions of her Class G2 driver’s licence in that she had more passengers than the number of operable seatbelts in the vehicle. As a result, the Court held that she was driving “while not authorized by law” within the meaning of Section 7.2.2 of the OAP. The Court did not agree with the submissions on behalf of Strifler that there must be a causal connection between the damage to the motor vehicle and the breach of the condition on the G2 driver’s licence. The Court further rejected the argument that the Insured’s right of subrogation was premised on proving negligence on the part of Strifler.
In the result, CDI was granted judgment against Strifler in the amount of $23,110.50.
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