Taxi company’s insurer not liable for accident victim’s statutory accident benefits

Underlying claim is whether taxi company is vicariously liable when dispatched cab hits pedestrian

Taxi company’s insurer not liable for accident victim’s statutory accident benefits
Superior Court dismisses appeal of government’s Motor Vehicle Accident Claims Fund

Whether the insurer of a taxi company, which dispatches cabs it does not own, or the provincial government’s Motor Vehicle Accident Claims Fund would pay the statutory accident benefits received by the victim, was the issue in a case.

In Her Majesty the Queen in Right of Ontario (Minister of Government and Consumer Services) v Royal & Sun Alliance Insurance Company of Canada, 2021 ONSC 3922, the underlying claim pertained to whether Beck Taxi was vicariously liable for a November 2014 accident wherein one of its dispatched taxi cabs hit a pedestrian then allegedly did not remain at the scene. The taxi company gave evidence that the cab with the number reported by the victim was not close to the accident’s location during the time reported.

The taxi company’s standard non-owned automobile (SPF 6) policy issued by the respondent insurer, characterized by the insurer as business insurance rather than car insurance, covers claims against the insured for vicarious liability for the driver or car, even if the insured does not own or drive the motor vehicle. The SPF 6 policy is a standard form policy recognized under s. 227 of the Insurance Act, RSO 1990, c I.8.

The arbitrator, ruling in favour of the insurer, determined that the insurance policy did not fall within the definition of a motor vehicle liability policy under s. 1 of the Insurance Act and did not include the Statutory Accident Benefits Schedule under s. 268 (1). The arbitrator cited the ruling in ING Insurance Company v Temple Insurance (May 7, 2008), which stated that SPF 6 coverage did not cover the car, its owner or its driver, with the purpose being the protection of the insured from liability that could be imposed on it for another reason, such as in the context of taxi dispatching.

The Superior Court of Justice of Ontario dismissed the appeal filed by the government’s Motor Vehicle Accident Claims Fund, which had contended that insurers under SPF 6 policies should be held liable for the payment of statutory accident benefits to motor vehicle accident victims. The court ruled that the insurer in this case should receive the costs of the appeal.

The court found an error of law with respect to the arbitrator’s statement that Beck Taxi, as a corporation and not a natural person, should not be considered a “person” for the purposes of the definition of motor vehicle liability policy under s. 1(b) of the Insurance Act.

Justice Frederick Myers, writing for the Superior Court, said that there was “no logical basis to find that of the 1,121 times the word ‘person’ is used in the Insurance Act, in this one instance, the Legislature intended to exclude corporations.” Myers noted that s. 87 of the Legislation Act, 2006, SO 2006, c 21, Sch F defines the word “person,” as applicable to every act and regulation, to include corporations.

On the mixed factual and legal issue of whether Beck Taxis were driven on behalf of Beck, the court found no error in the arbitrator’s ruling that there was no evidence on record to suggest that Beck Taxis were driven by Beck’s employees or agents or driven on behalf of Beck. The court agreed with the rationale provided in the ING Insurance Company case, which was cited by the arbitrator.

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