


COURT OF APPEAL FOR ONTARIO

CITATION: Kahlon v. ACE
    INA Insurance, 2018 ONCA 906

DATE: 20181109

DOCKET: C64997

Lauwers, Huscroft and
    Trotter JJ.A.

BETWEEN

Kulwinder Singh Kahlon

Plaintiff (Respondent/Appellant
    by way of cross-appeal)

and

ACE INA Insurance
,
Allstate Insurance Company of Canada
and Jevco Insurance Company

Defendant
    (
Respondent/Respondent by way of Cross-Appeal, Appellant
)

Sheldon A. Gilbert, Q.C., for the appellant

Joseph A. Cescon, for the respondent, Kulwinder Singh
    Kahlon

Patrick J. Monaghan, for the respondent, ACE INA
    Insurance

Heard: November 2, 2018

On appeal from the judgment of
    Justice Whitten of the Superior Court of Justice, with reasons reported at 2018
    ONSC 784, 141 O.R. (3d) 384.

By the court:

[1]

The court expressed several concerns to counsel about the appeal as
    presented and, after hearing their submissions, decided to adjourn the hearing
    of the appeal
sine die
to permit the parties to address the concerns,
    if so advised.

The Factual Context

[2]

Mr. Kahlons corporation, Kohuja Transport Inc., owned and leased a
    tractor to Bell City Transport Systems Incorporated. Mr. Kahlon operated it as
    an independent contractor for Bell City Transport under fleet insurance
    provided by ACE INA Insurance.

[3]

On May 24, 2011, Mr. Kahlon was in Florida operating the tractor with a
    trailer. He stepped out of the tractor when it was stopped in a line-up to
    determine the cause of the delay. He was struck by a Florida-based domestic
    vehicle operated by a member of the MacDonald family. Mr. Kahlon suffered
    serious injuries, including a traumatic brain injury. The insurance coverage
    available on the MacDonald vehicle was only $20,000, which was insufficient to
    cover the damages flowing from Mr. Kahlons injuries. The motion judge
    identified this as an obvious situation of underinsurance.

[4]

Mr. Kahlon had automobile insurance on his personal vehicle through
    Allstate Insurance Company of Canada. Both the Allstate policy and the ACE INA
    fleet policy had OPCF 44R Family Protection Coverage, which covers
    underinsurance.

The Decision under Appeal

[5]

The motion judge heard three motions under r. 21.01(1)(a) of the
Rules
    of Civil Procedure
. The parties effectively sought a determination as to
    whether either of Allstate or ACE INA were obliged to provide underinsurance
    coverage to Mr. Kahlon under the OPCF 44R endorsement in the respective
    policies.

[6]

The motion judge granted summary judgment to Mr. Kahlon and declared
    that Allstate was obliged to respond to his underinsured coverage claim. The
    motion judge declared that ACE INA was not obliged to respond.

[7]

Allstate appealed. Mr. Kahlon cross-appealed seeking coverage under the
    ACE INA policy.

Discussion

[8]

In a nutshell, this appeal involves the availability in Ontario of
    underinsured coverage to truck drivers like Mr. Kahlon. Allstates position is
    that a combination of the provincially prescribed language of its OPCF 44R
    endorsement and the provincially prescribed insurance policy for automobiles
    (OAP1), in particular, section 2.2.3, leads to the inescapable conclusion that truck
    drivers like Mr. Kahlon do not have underinsured coverage under their personal
    automobile policies for injuries they sustain as drivers of their trucks.

[9]

The argument advanced by Allstate could extend more broadly to drivers
    of other commercial vehicles and persons related to such drivers. There are
    likely thousands of people who would be affected by a ruling in favour of
    Allstates argument. The implications could be serious for such drivers and
    their families.

[10]

The
    parties are entitled to have their appeal decided; at the same time, however, courts
    are obliged to understand and take into account the context within which
    contractual interpretation will operate. The court has limited evidence before
    it about how Ontario-based truck drivers and other drivers of commercial
    vehicles obtain underinsured coverage, if in fact they do, and whether the
    interpretation urged by Allstate would have a surprising impact on Ontario
    insureds.

Disposition

[11]

Accordingly,
    the panel decided to give the parties the opportunity to enlarge the record, perhaps with expert evidence, in order to provide the court with the information and context necessary to reach a just outcome in this case. The appeal was adjourned sine die. If the parties prefer the court appoint amicus, they should advise the court. Otherwise the court requests the parties to develop a plan for responding to the court's concerns including timelines.

[12]

This
    panel is seized, and the progress of the case towards the next hearing date
    will be case-managed by Lauwers J.A. The first case-management conference call
    will be arranged by court staff for early December 2018.

Released: November 9, 2018

P.
    Lauwers J.A.

Grant
    Huscroft J.A.

G.T.
    Trotter J.A.

