The application by an insured (“Cochrane”) under a homeowner’s policy seeking a declaration that the insurer (“ING”) had a duty to defend the underlying action was dismissed where the court found that the allegations against Cochrane fell within an exclusion clause in the policy for claims “arising from the ownership, use or operation of a motorized vehicle”

Cochrane v. ING Halifax Insurance Co., [2004] N.B.J. No. 45, New Brunswick Court of Queen’s Bench

The underlying action arose from an incident in which an unoccupied motor vehicle owned by Cochrane exited his property and collided with a vehicle owned and operated by Booker. Booker commenced a lawsuit against Cochrane for damages arising out of the collision. Cochrane was insured under a homeowner’s broad form policy from Guardian Insurance (now ING) which provided certain liability coverage. Cochrane sought a defence under the policy to the underlying action. ING denied coverage on the basis of an exclusion in the policy for claims arising from the “ownership, use or operation” of any motorized vehicle. Cochrane brought a motion for a declaration that ING was obligated to defend the underlying action.

The court noted that there had been numerous cases dealing with the wording of this exclusion clause. Specifically, the court noted that in automobile policies, the words “ownership, use or operation” describe what is covered, whereas in general liability policies, these words describe what is excluded. Coverages under these respective policies are designed to complement each other, so that what is covered by one is excluded from the other and vice versa.

In this case, the court looked at the two-stage test outlined in Amos v. Insurance Corporation of British Columbia, [1995] 3 S.C.R. 405. The first stage of this test, the “purpose test”, was satisfied as the court found that the vehicle must have been improperly parked and that parking was a responsibility which arose out of the “ownership” of the vehicle. With respect to the second prong of the test, the “chain of causation” test, the court held that there was no doubt that the injuries in question were suffered directly as a result of Cochrane’s unoccupied vehicle colliding with the vehicle of Booker.

In the result, the court found that the exclusion clause in the ING policy applied and that ING was not required to defend the action.

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