Owasco Canadian Car & Camper Rental Ltd. v. Fitzgerald et al., 2021 ONSC 7235

The plaintiff Owasco is an auto body shop. It rented a vehicle to Fitzgerald while his vehicle was under repair. Fitzgerald was operating the vehicle and was involved in a collision with a third party. All litigants agreed that the accident was the fault of the third party. Owasco, rather than submitting a claim to its own insurer for the property damage (which had a $25,000 deductible), sued Fitzgerald for the property damage in accordance with the rental agreement. Fitzgerald and his own insurer, Coachman, argued that s. 263 of the Insurance Act barred Owasco’s claim. The Small Claims Court rejected that argument and awarded Owasco damages for the rental vehicle.

On Fitzgerald’s appeal to the Divisional Court, Justice Dawe reversed the decision, holding that s. 263 was a complete bar to Owasco’s right to recover for property damage under the rental contract. He also held that Owasco could not make a claim for the damage under Fitzgerald’s Coachman policy. Owasco’s only remedy was to bear the cost of the damage itself, or make a claim to its own insurer (though the damage was less than the $25,000 deductible). Justice Dawe rejected the argument that Owasco could advance the claim through Coachman because Fitzgerald’s policy included an endorsement for damage to temporary substitute automobiles.

Coast Capital Equipment Finance Ltd. v. Old Republic, 2018 ONCA 540

This appeal dealt with whether the lessor, Coast Capital, was insured for third party liability. 62254641 Canada Inc., a trucking company, leased a tractor from a third party. Old Republic issued a Certificate of Automobile Insurance which listed that vehicle. The Certificate included a description of lessors which stated “as per OPCF 5 Forms”. An OPCF 5 endorsement expressly allows a lessor to lease a vehicle to a lessee who has completed an application and provides coverage to a lessee as if he were the named insured. If an OPCF 5 is part of the policy, both the lessor and the lessee benefit from third party liability insurance. The Court of Appeal held that Old Republic, by adding the phrase “as per OPCF 5 Forms” to the Certificate, intended to provide coverage to both the lessor and the lessee. The Court attached no significance to Old Republic’s failure to attach a physically separate copy of the OPCF 5 endorsement to the Certificate.