The Court of Appeal of Alberta upholds a policy’s territorial limitation provision to deny coverage, thus reversing the decisions from the master in chambers and the Court of Queen’s Bench. The Court held that the chambers judge either failed to correctly apply the interpretive principles governing the insurance policies or failed to correctly interpret the language of the policy.
Facts
Leize Wage (Mrs. Wage) was visiting the Philippines and, as a pedestrian, was struck and killed by a motorcycle. Mrs. Wage’s spouse and her estate brought the action against the insurer, Canadian Direct Insurance (Direct Insurance). They claimed for entitlement to coverage under both Section B of the policy as well as pursuant to their SFF 44 Endorsement.
Direct Insurance denied coverage and applied for summary dismissal on the basis that the motor vehicle that killed Ms. Wage not “in Canada, the United States of America or upon a vessel plying between ports of those countries” as per the wordings of the insurance policy’s territorial limitation provision. The vehicle that was insured was parked in Edmonton and at all material times, Direct Insurance was the only motor vehicle insurer of the Wage’s.
Master in Chamber’s dismissed the Direct Insurance’s summary dismissal application on the basis that the territory of the provision did not apply to negate coverage under Section B of the policy. This was appealed to the Court of Queen’s Bench, where the appeal was dismissed, leading to this appeal decision.
Court of Appeal Analysis
The Court of Appeal of Alberta (the “Court”) notes that the “sole question on appeal is whether the territorial limitation provision contained within the Alberta standard form SPF No 1 motor vehicle insurance (policy), applies to deny coverage under Section B of the policy and under the SEF No 44 Family Protection Endorsement (SEF 44 Endorsement)”.[1]
Firstly, the Court looks at the interpretive principles applicable to the policy and the SEF 44 Endorsement.The Court looks at the decision of Cardinal v Alberta Motor Association Insurance Company, 2018 ABCA 69, in which the Court found that the SEF 44 Endorsement was neither a stand-alone policy nor ambiguous. The Court therefore held that the case at hand was similar and the policy was not ambiguous, and applied the same reasoning in this decision.
The Court also looks at the language of the policy and the SEF 44 Endorsement and more specifically at the territorial limitation provision. The Court determines that the policy’s territorial limitation applies to the whole policy, as the SEF 44 Endorsement contains its own definition of automobile, and the policy indicates that “except as otherwise provided in this endorsement, all (…) provisions (…) of the policy shall have full force and effect”.[2] The Court also notes that the commercial reality also aligns with this understanding, as the suggestion that SEF 44 Endorsement provides greater territorial coverage than the underlying policy would not be consistent with commercial reality. The Court adds that the SEF 44 Endorsement is not travellers’ insurance.
Additionally, the Court finds that even though the territorial limitation provision is not found within Section B, it is contained within the general provisions which apply to the policy and Section B forms part of the policy. Therefore, the Court allows the appeal and dismisses the respondents’ action.
[1] Wage v Canadian Direct Insurance Incorporated, 2020 ABCA 49 at para 1.
[2] Ibid at para 20.
