Edited by Amanda Kostek
Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Welyk v. Intact Insurance Company, 2024 ABKB 663
SEF 44 Endorsement | Unidentified Vehicle | Section 545 of the Insurance Act
An unidentified driver struck the rear of a motorcyclist propelling that motorcyclist into the rear of the Plaintiff’s motorcycle during a group ride. The unidentified driver fled the scene. The Administrator defended, but policy limits were exhausted, so the Plaintiff sued her SEF 44 insurer, Intact. Intact brought a summary dismissal application on the basis that the policy defined an unidentified driver as one that made physical contact with the Plaintiff’s vehicle. Since there was no direct contact with the unidentified Driver, the SEF 44 insurer argued that no SEF 44 claim could be advanced. The SEF 44 Insurer relied heavily on the Alberta Court of Appeal decision in Funk v. Wawanesa Mutual Insurance Company, 2018 ABCA 200. However, that decision was issued based on the law as it existed before Section 545 of the Insurance Act came into force. Section 545 provides that if a condition or term of a policy is adjudged unjust or unreasonable by a Court, it is not binding on an insured:
[12] Subsequent to the facts in Funk, but prior to the decision in Funk, section 545(1) of the Insurance Act, RSA 2000, c I-3, came into force. It provides:
545(1) If a contract contains a stipulation, condition, term, proviso or warranty, other than a prescribed exclusion referred to in subsection (3)(a), that is or may be material to the risk, including, but not restricted to, a provision in respect of the use, condition, location or maintenance of the insured property, the stipulation, condition, term, proviso or warranty is not binding on the insured if it is held to be unjust or unreasonable by the Court before which a question relating to it is tried.
The Court had difficulty seeing any difference between the risk undertaken by an insurer if the collision had been direct between the unidentified driver and the Plaintiff, and the situation at hand, where the unidentified driver first hit another vehicle that caused a chain reaction collision that resulted in another vehicle colliding with the Plaintiff. As a result, the Court declined to order Summary Dismissal and instead directed that it should be left to a Trial Judge to determine if section 545 of the Insurance Act should be invoked.
As a result of the legislative changes in Section 545, the application of Funk, may be limited:
[23] This case is distinguishable from Funk on both the applicable law and the facts. There is an express legislative provision permitting Court intervention that was not available in Funk, and the mechanism of the collision is not a “collision avoidance” situation as was the case in Funk. While I do not go so far as to say that section 545(1) necessitates that all issues about its application be determined at a trial, in my view, and considering the facts and legislative framework here, I find that the addition of section 545(1) to the legal background under which liability under the SCF 44 policy will be determined makes for a sufficient difference between this case and the Funk case such that I am not able to summarily dismiss the action as requested by the insurer. Accordingly, the application for summary dismissal is dismissed.