Slijepcevic v. State Farm Fire & Casualty Co.
26 O.R. (2d) 566
103 D.L.R. (3d) 381
COURT OF APPEAL
MACKINNON, A.C.J.O., HOULDEN AND BLAIR, JJ.A.
6TH NOVEMBER 1979.
Insurance -- Statutory conditions -- Whether fire insurance conditions applicable to homeowner's theft insurance -- Insurance Act, R.S.O. 1970, c. 224, s. 122.
Section 122 of the Insurance Act, R.S.O. 1970, c. 224, in the fire insurance part of the Act (Part IV), providing that the conditions set forth therein "shall be deemed to be part of every contract in force in Ontario", applies only to contracts within Part IV of the Act, that is, fire insurance contracts. Section 117(1)(a) of the Act excludes theft insurance. Consequently, the statutory limitation period of one year does not apply to a homeowner's policy primarily covering theft.
[Chiasson v. Century Ins. Co. of Canada (1978), 86 D.L.R. (3d) 342, distd]
APPEAL from a judgment of Montgomery, J., 22 O.R. (2d) 595, 93 D.L.R. (3d) 698, in favour of the plaintiff in an action on an insurance policy.
F. W. Knight, Q.C., and D. S. Jovanovic, for appellant, defendant.
A. D. Houston, Q.C., and R. G. Colautti, for respondent, plaintiff.
The judgment of the Court was delivered by
BLAIR, J.A.:-- In this appeal the question is whether an insured claiming indemnity for theft under a "Homeowners Policy" is bound by a statutory condition applicable to fire insurance policies to institute an action within one year of the loss. Counsel stated that the question was important because of the popularity of "composite" or "homeowners" policies insuring against a variety of perils. The Insurance Act, R.S.O. 1970, c. 224, makes no special provision for such policies. Mr. Justice Montgomery held that the statutory condition did not apply and gave judgment for the respondent insured from which the appellant insurer now appeals.
The trial proceeded on an agreed statement of facts to which the insurance policy and the application were attached. The insurance was applied for on August 3, 1974, and upon acceptance, became effective on the application date. Personal property was stolen from the insured's residence on August 13th. The action was commenced on December 30, 1976, more than two years after the theft, but well within the ordinary limitation period of six years.
The insured applied for the policy on a form which was entitled "Homeowners Application". The coverage applied for was described as follows in the application:
The application contained the insured's address along with a brief description of the premises in which he resided. The insured was described as a tenant which probably accounts for no coverage being placed on the dwelling. Under the heading of "Rating" the application contained the following information: "Protection Class: 1; Is Risk Within Town Limits? Yes; Distance to Hydrant: 300 Feet; Distant to Fire Dept.: 1 Mile; Name of Servicing Fire Department: Windsor". Beyond these particulars, which obviously refer to fire, the application contained no indication of the perils covered by the policy.
The policy was issued in a standard printed form which was designed for use as either a homeowner's policy or a standard fire policy. Particulars of coverage under each type of policy were printed side by side on the first page. Only the homeowner's portion was completed by a restatement of the coverage requested in the application under the heading "Homeowners Policy".
The policy covers 16 named perils including fire and theft. In addition, it provides the liability protection listed in s. 2 of the application. The statutory conditions are set out [s. 122(2)] and include the one in question which reads as follows:
14. Every action or proceeding against the insurer for the recovery of a claim under or by virtue of this contract is absolutely barred unless commenced within one year next after the loss or damage occurs.
I agree with Montgomery, J., that whether a "Homeowners Policy" can be classified as a fire policy depends on all the circumstances including the package of coverage provided by the insurer. He was correct in holding that the decision of the New Brunswick Court of Appeal in Chiasson v. Century Ins. Co. of Canada (1978), 86 D.L.R. (3d) 342, that the "Homeowners Policy" in that case was a fire policy did not apply to all homeowners' policies. In the instant case he held it did not apply because the policy and the circumstances were different.
Obviously the printed form of the policy is designed to include a dwelling but, in this case, it covers only chattels and miscellaneous personal liabilities. The attempt to adapt a standard broad form of policy to a more restricted coverage creates confusion. If oral evidence had been presented, it is possible that the intent of the parties and the precise nature of the coverage agreed upon might have been clearer. Being confined to the agreed statement of facts, this Court is in the same position as the learned trial Judge and, like him, I consider the determining factor in this case to be the application of the relevant sections of the Insurance Act to the policy. I propose now to examine these provisions.
Part IV of the Act, which includes ss. 96 to 144, applies to fire insurance. Section 122(1) makes the statutory conditions, including stat. con. 14, applicable to fire insurance contracts. The insurance to which Part IV applies is described as follows:
117(1) This Part applies to insurance against loss of or damage to property arising from the peril of fire in any contract made in Ontario except,
(a) insurance falling within the classes of aircraft, automobile, boiler and machinery, inland transportation, marine, plate glass, sprinkler leakage and theft insurance;
. . . . .
(c) where the peril of fire is an incidental peril to the coverage provided; or
(d) where the subject-matter of the insurance is property that is insured by an insurer or group of insurers primarily as a nuclear risk ...
Fire insurance is defined in para. 22 of s. 1 as follows:
22. "fire insurance" means insurance (not being insurance incidental to some other class of insurance defined by or under this Act) against loss of or damage to property through fire, lightning or explosion due to ignition;
The statute obviously contemplates that an insurance policy may include more than one class of insurance. This is made plain by the opening words of s. 117(1) and cl. (a) as well as the references in cls. (c) and (d) to incidental perils and primary risks. I interpret s. 117(1) to mean that in any contract of insurance, which includes fire coverage, Part IV applies unless otherwise excepted.
Clause (a) of s. 117(1) excepts "insurance falling within the classes of ... theft insurance". Theft insurance is defined in para. 63 of s. 1 as follows:
63. "theft insurance" means insurance against loss or damage through theft, wrongful conversion, burglary, house-breaking, robbery or forgery;
(Emphasis added.) The basic coverage under the heading of theft in the policy is stated as follows:
Theft, meaning any act of stealing or attempt thereat, including loss of property from a known place under circumstances when a probability of theft exists.
The extended coverage provided insurance against loss from forgery or alteration of credit cards and acceptance of counterfeit money. In addition, the insured had taken optional theft coverage for property taken from an automobile.
The insurer contended that, in order to fall within the "class" of theft insurance, the policy had to cover every type of theft mentioned in the definition. I cannot accept this view. The various types of theft are listed disjunctively in the definition and a policy, embracing one or more types, can, therefore, fall within the "class" of theft insurance. The policy, in this case, meets this test because of the broad definition of theft contained in it.
In the result, it is possible to construe the policy that was sold to the respondent as being a policy "falling within the classes of ... theft insurance". If there is any doubt in this matter it must, of course, be resolved in favour of the insured. Accordingly, the statutory condition requiring commencement of an action within one year does not apply.
I would dismiss the appeal with costs.