The Court, in allowing the Insured’s claim, held that the proximate cause of damage was negligence during the repair of a vehicle. The failure of the engine was a secondary cause resulting from the initial negligence in the repair process. The exclusion under s. 132 of the Regulations to the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, did not apply.

Dawson Truck Repairs Ltd. v. ICBC, [2006] B.C.J. No. 1030, British Columbia Supreme Court

A truck was in the possession of the Insured repair shop for repairs. Following the repairs, the truck was being moved from the garage for the purposes of a road test when the engine suddenly over-sped resulting in an engine type explosion. The Insurer denied coverage for the repair costs. Under s. 132 of the Regulations to the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, the Insurer was not liable for loss or damage caused by mechanical fracture, failure or breakdown of any part of a motor vehicle unless the loss or damage was coincidental with other loss or damage for which indemnity was provided.

The Court found that the Insured was negligent in the repair of the vehicle. The Court held that the proximate cause of the damage to the truck was negligence in the repair process and that the fracture, failure or breakdown of the engine was an effect, or secondary cause, resulting from the initial or primary negligence in the repair process. The exclusion under s. 132 of the Regulations did not apply. The Insured’s claim was allowed. However, damages were reduced by approximately 15% due to betterment.

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