COURT CASES on FOREIGN INSURERS

 

There exist certain situations where a resident of British Columbia will be injured in a motor vehicle accident in British Columbia, where the at-fault motorist does not live in British Columbia, and is insured elsewhere. When this situation arises, issues can arise as to which insurer is responsible for accident benefits, and as to the extent of third party liability coverage.

 

A Power of Attorney and Undertaking (PAU) is a document filed by non-British Columbia insurance companies that has the effect of providing minimum insurance requirements in the jurisdiction in which the accident occurs. For example, if a California insured vehicle with third party liability coverage of only $25,000.00 strikes and injures someone in British Columbia, where the minimum third party coverage limits are $200,000.00, then the foreign insurance company is required to provide $200,000.00 in third party liability coverage, should the circumstances of the case require it.

 

In Schuk v. York Fire & Casualty Insurance Company, the Plaintiff, a resident of British Columbia, was injured as a pedestrian when struck by a vehicle that was insured by the Manitoba Public Insurance Corporation (MPIC). There was a dispute between ICBC and MPIC as to who had to provide accident benefits coverage. The Court eventually ruled that both ICBC and MPIC had to provide coverage, yet that MPIC would be the primary insurer.

 

Another Court application was brought by the Plaintiff, who sought entitlement to the more generous MPIC accident benefits. MPIC disagreed, claiming that the extent of their responsibility was the limits of the British Columbia coverage for accident benefits. The Court agreed with counsel for MPIC, ruling that a resident of British Columbia that is injured in British Columbia by an MPIC insured vehicle is not entitled to claim the more generous MPIC accident benefits coverage.

 

[4]               Before Mr. Justice Myers, the issue turned on whether Ms. Schuk was a pedestrian.  If Ms. Schuk was a pedestrian, it was agreed that ICBC’s liability would be secondary to that of MPIC.  Mr. Justice Myers concluded that Ms. Schuk was a pedestrian and was therefore an insured for the purpose of the no-fault benefits under both MPIC and ICBC coverage, with MPIC being the primary insurer.

 

[5]               On this application, the plaintiff argues that she is entitled to the unlimited benefits provided under the Manitoba Public Insurance scheme.  The limit of benefits in B.C. is $150,000 under Part 7 of the Regulations, whereas there is no limit under the MPIC legislation.

 

[16]         The issue before me turns on the proper interpretation of the Power of Attorney and Undertaking filed by the Manitoba Public Insurance Corporation.  In this case, the relevant provisions of the undertaking provide that the Manitoba Public Insurance Corporation undertakes to:

 

A. … appear in any action … against it or its insured …

 

C. … not to set up any defence to any claim … which might not be set up if the contract had been entered into in accordance with the laws relating to motor vehicle liability insurance contracts or plan of automobile insurance in the Province … and to satisfy in a final judgment rendered against it or its insured by a court … in respect of any kind or class of coverage … up to the greater of

 

(a) the amounts and limits for that kind or class of coverage … provided in the contract or plan, or

(b) the minimum for that kind or class of coverage … required by law in such province ….

 

[17]         There is no issue that the coverage for the kind or class of insurance, being no-fault benefits is greater in Manitoba.  The question is whether its undertaking makes MPIC liable to pay that amount to Ms. Schuk.  In my view, it does not.  The undertaking provides that MPIC will satisfy any final judgment rendered against it “in respect of any kind or class of coverage provided under the contract or plan”, and “in respect of any kind or class of coverage required by law to be provided under a plan” in British Columbia.

 

[18]         In this case, there is no coverage provided under the contract or plan to Ms. Schuk for no-fault benefits under Part 2 of the Manitoba Act.  To qualify for that coverage, a person must be a Manitoba resident or injured in an accident in Manitoba (s. 74).  As MPIC argues, the Manitoba standard automobile policy does not incorporate PIPP benefits.  PIPP benefits are available based upon statutory entitlement. 

 

[19]         Here, Section B of the contract provided accident benefits “as required by law”.  The Manitoba legislation provides PIPP benefits only to those resident in or injured in Manitoba.  Those benefits are not “required by law” for one, like Ms. Schuk, who is not a resident of Manitoba and not injured in Manitoba.  The driver of a Manitoba licensed vehicle is not required to carry PIPP coverage.  The Section B endorsement carried a charge of $950 for “accident benefits coverage for those drivers not eligible for Personal Injury Protection Plan (PIPP)”.  I accept the submissions of Manitoba Public Insurance that this would be drivers who were not Manitoba residents and were not injured in Manitoba. 

 

[20]         Ms. Schuk did not have PIPP benefits coverage under either the contract or the plan.

 

[21]         The other portion of MPIC’s undertaking, that is not to set up any defence which might not be set up if the contract had been entered into in the Province of British Columbia, also does not assist the plaintiff.  ICBC could certainly have set up the defence that it does not provide benefits under the Manitoba legislation; that Ms. Schuk does not qualify for PIPP benefits.

 

In Moldovan v. Republican Western Insurance Company, the Plaintiff was injured as a passenger in a vehicle insured by an insurance company outside of British Columbia. He sued ICBC for “no fault” benefits, but when he realized he should have sued the foreign insurance company, it was beyond the two year limitation period contained in Section 103 of the Insurance (Vehicle) Act Regulations. The British Columbia Court of Appeal confirmed that Power of Attorney and Undertaking signatories can use this limitation period to their benefit, however in the facts of this case the Court permitted the addition of the foreign insurance company as a Defendant, even beyond the two year mark.

 

[17]             As will be seen below, I am of the opinion that while s. 103 would normally be available to RWIC to assert in defence of the plaintiff’s claim, s. 4(1)(d) of the Limitation Act nevertheless does permit the court to join RWIC as an additional defendant. I also conclude that RWIC should be so joined in the circumstances of this case…

 

[36]           In the circumstances of this case, it seems to me that the balance of prejudice is clearly in the plaintiff’s favour, and that it is just and convenient that RWIC was added as a defendant notwithstanding the time limitation in s. 103 of the Regulation.  I would therefore dismiss the appeal and confirm the order of the chambers judge below, although for different reasons than those she expressed.