Earlier this month, the Court of Appeal released its decision in Schoenhalz v. Insurance Corporation of British Columbia, 2017 BCCA 289 . In that case, the court considered the availability of uninsured motorist benefits pursuant to section 20 of the Insurance (Vehicle) Act.
In British Columbia, all motorists are required to carry at least a minimum amount of third party liability insurance. This means that when someone is injured as a result of a negligently operated motor vehicle, the injured party can almost always count on a pool of funding to be available from which they may recover an award of damages. Section 20 of the Insurance (Vehicle) Act essentially acts as a failsafe in our mandatory insurance regime – for those rare cases where the motorist is uninsured, the injured party may make a claim for Section 20 benefits to fill in the gap where recovery from the negligent motorist is not possible. However, as this case shows, Section 20 benefits have their own limitations to be aware of.
Section 91 of the Insurance (Vehicle) Act limits recovery in certain cases:
Limitation on recovery in relation to stolen vehicles
91 (1) This section applies to a person who
(a) suffered bodily injury, death or loss of or damage to property that is caused by the use or operation of a vehicle, and
(b) at the time of the accident as a result of which the bodily injury, death or loss of or damage to property was suffered, was an operator of, or a passenger in or on, a vehicle that the person knew or ought to have known was being operated without the consent of the owner, and, in the case of a leased motor vehicle, the lessee.
(2) Despite the Negligence Act and section 100 of this Act,
(b) a person referred to in subsection (1) is not entitled to any recovery from the corporation under section 20.
Essentially, an injured party is barred from making a section 20 claim if they were a passenger in a vehicle that they knew, or ought to have known was being operated without the owner’s consent. In this case, ICBC was successful in arguing that the plaintiff was not entitled to section 20 benefits. At the time of the accident, she was 17 years old, and was a passenger in a vehicle driven by a 15-year-old. At trial, the judge found that because of the plaintiff’s young age, she couldn’t have turned her mind to whether or not the vehicle was driven without consent, and therefore she was not barred from recovering pursuant to section 20.
The Court of Appeal disagreed, and found that a reasonable person in the plaintiff’s circumstances ought to have known that the vehicle was driven without consent.
This is an important case, as it clarifies the test to be followed when considering the section 91 exception. The court is to follow an objective approach, considering what a reasonable person in the plaintiff’s circumstances ought to know, as a opposed to the subjective approach employed by the trial judge.