ICBC Law

While ICBC does provide coverage for most tort claims following BC motor vehicle accidents there are certain exclusions to their coverage.  Last week the BC Court of Appeal released useful reasons for judgement addressing the scope of ICBC’s “Attached Equipment” exclusion.

In last week’s case (Wormell v. ICBC) the Plaintiff was injured in a 2003 incident when he was helping a friend transport some goods.  Their vehicle stopped at a weigh scale.  The Plaintiff stood on top of the cargo.  At the same time, the Defendant was operating a crane attached to the vehicle intending to lift the cargo.  The cargo shifted while the Plaintiff was still standing on it and in the “agony of the moment” the Plaintiff jumped off the truck to the ground which was some 12 feet below.  In jumping on the ground the Plaintiff suffered various injuries including a “crush fracture to the left ankle and a tear to the anterior cruciate ligament of his right knee“.

The Plaintiff sued for damages and following trial the Defendant was ordered to pay just over $570,000 in damages.  The Defendant was insured by ICBC.  The Plaintiff applied, pursuant to section 76(2) of the Insurance (Vehicle) Act for ICBC to pay the judgement.  ICBC refused to pay arguing that this claim fell outside of the scope of coverage because of section 72(2) of the Insurance (Vehicle) Regulation which states that:

“The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising, directly or indirectly, out of the operation of attached equipment at a site where the attached equipment is being operated…“

The Plaintiff sued ICBC and succeeded.  ICBC appealed arguing that the claim fell within this exclusion.  The BC Court of Appeal disagreed and dismissed ICBC’s appeal.  In doing so the Court provided the following reasons limiting the scope of ICBC’s ‘attached equipment’ exclusion:

[21] To repeat, the language of this exclusion is as follows:

(2)        The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising directly or indirectly, out of the operation of attached equipment at a site where the attached equipment is being operated, unless the attached equipment …

[22] ICBC’s position is that anywhere the crane is being used to load or unload cargo from the truck, or to move other loads, is “a site where the attached equipment is being operated”.

[23] This proposition is at odds with the presumption against tautology.  All words in a provision are to be taken to have meaning.  To interpret this clause as ICBC would, that whenever the crane is being operated it is at a site, effectively strikes out or renders superfluous the words “at a site where the attached equipment is being operated”.

[24] A plain reading of s. 72(2) leads to the conclusion that some losses from the operation of the attached equipment would be covered by ICBC.  Otherwise, the clause “at a site where the attached equipment is being operated” is meaningless.  The appellant argues in effect “everywhere” and “every time” the crane is operated it is at a site.

[25] If that were the case, then s. 72(2) would simply have read as follows:

(2)        The corporation shall not indemnify an insured for liability imposed by law for injury, death, loss or damage arising, directly or indirectly, out of the operation of attached equipment …

[26] To give meaning to the words “at a site where the attached equipment is being operated” requires that “site” refer to something more, such as work sites or the site of the owner’s business operations.  The appellant has not raised an alternative meaning or function that would not render the words “at a site” meaningless or superfluous.

[27] In accordance with the principles of interpretation for statutes and insurance policies, the clause means that the automobile insurance policy covers accidents caused by the attached equipment unless it was being used for business operations at a work site.  That was no doubt the intent of the drafters, namely to exclude losses arising from business operations.

[28] On the appellant’s interpretation the only time the vehicle would not be at a site, and the exclusion would not apply, would be when the truck and crane were in transit from place to place.

[29] Such an interpretation is not consistent with the reasonable expectations of the parties and if it had been intended, could have been achieved by much simpler and concise language directed to that end.

[30] I agree with the learned trial judge that the plain meaning of the words used in s. 72 is that the words “at a site where the attached equipment is being operated” mean, a site such as a construction site, a building site, or some other “work site”.

Reasons for judgement were released this week by the BC Supreme Court confirming that strict adherence to the requirements of Rule 37B are necessary for a pre-trial settlement offer to trigger costs consequences. In this week’s case (Wormell v. Hagen) the Third Party to the lawsuit made a pre trial offer stating “the Third Party offers to settle the Defendant’s claim(s) for any contribution or relief from the Third Party in this proceeding on the following terms: Dismissal of the Third Party Notice; and costs in accordance with Rule 37(22) and (37)”

After trial the Defendant’s claims against the third party were dismissed.  The Third Party brought an application for double costs under Rule 37B as they beat their pre-trial settlement offer.  Mr. Justice Goepel refused to order double costs holding that the pre-trial settlement offer did not comply with the strict requirements of Rule 37B thereby giving the Court no authority under the Rule.

Mr. Justice Goepel reasoned as follows:

[5] Rule 37 was repealed by B.C. Reg. 130/2008, effective July 1, 2008.  At that time Rule 37 was replaced by Rule 37(b) which provides that:

37B(1) In this rule, “offer to settle” means

(a)      an offer to settle made and delivered before July 2, 2008 under Rule 37, as that rule read on the date of the offer to settle, and in relation to which no order was made under that rule,

(b)      an offer of settlement made and delivered before July 2, 2008 under Rule 37A, as that rule read on the date of the offer of settlement, and in relation to which no order was made under that rule, or

(c)      an offer to settle, made after July 1, 2008, that

(i)         is made in writing by a party to a proceeding,

(ii)        has been delivered to all parties of record, and

(iii)       contains that following sentence: “The … [name of the party making the offer]… reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgment on all other issues in this proceeding.” [B.C. Reg. 130/2008, s. 1]

[6] The offer served by Mr. Moses on the defendant does not contain the wording required in Rule 37B(1)(c)(iii)…

[7] In Lau v. Rai, 2009 BCSC 696, Powers J. considered the effect of a non-compliant offer and held that a non-compliant offer did not constitute an “offer to settle” as defined under Rule 37B.

[8] I agree with Powers J.’s conclusion.  “Offer to settle” is a defined term.  A proposal concerning costs made subsequent to July 1, 2008 that does not comply with the provisions of Rule 37B(1)(c) is not an “offer to settle” as defined in the Rules and does not trigger the cost options set out in Rule 37B(5).

[9] In the result, therefore, the third party’s application for double costs is dismissed.  I confirm the cost order set out in para. 144 of my initial reasons.  The defendant is entitled to the cost of this application to be set off against the costs otherwise awarded to the third parties.  As the third parties were both represented by the same counsel at trial and took the same positions with respect to defending the third party claim the third parties are collectively only entitled to one set of costs:  Malik v. State Petroleum Corp., 2009 BCSC 115.