On appeal to the B.C. Supreme Court from a Small Claims court decision, ICBC was not held liable for the costs of repairing damage to a truck engine caused by a driver’s negligence

ICBC v. Pfelger, [2006] B.C.J. No. 2027, British Columbia Supreme Court

In a Small Claims action, the Insured sued Mr. Gillespie and ICBC for damage caused to his truck. The damage occurred when Mr. Gillespie drove the truck despite a “water and fuel” warning light which came on briefly. The Small Claims judge held that the engine damage caused by this negligence fell within the claimant’s comprehensive coverage in the ICBC policy.

Section 132(1) of the Insurance (Motor Vehicle) Act Regulations excluded liability under comprehensive coverage if the damage was “consisting of” or “caused by” mechanical fracture, failure or breakdown of any part of the motor vehicle unless that loss or damage was coincidental with damage which was covered under comprehensive or collision coverage. The Insurer accepted that it had the onus to show that the exclusion clause applied. It argued that the trial judge erred in confining the inquiry to causation of the damage and failing to consider whether the engine damage “consisted of” mechanical fracture, failure or breakdown. The Court found that “consisted of” had a separate and distinct meaning from “caused by”. The Court agreed with the Insurer that “consists of” referred to the actual composition of the loss or damage, as opposed to what caused the damage. The Court agreed that the loss or damage to the motor vehicle did consist of mechanical failure or breakdown of the engine. The Court therefore held that section 132(1) excluded ICBC’s liability to indemnify Mr. Pflegr for the cost of repairing the engine damage.

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