Background
West York Sales and Leasing Inc. owned a 2017 Honda Civic that it had leased to Platinum Car and Truck Rental since 2017. Dominion insured Platinum’s changing fleet under a standard Ontario automobile policy containing the OPCF 21A monthly-reporting endorsement. Although West York was an additional insured, the Civic was not included in the vehicle schedule when the policy term began on September 15, 2019.
The Civic was involved in an accident on August 25, 2020. Platinum first included it in an August fleet report submitted on September 29, two weeks after the reporting deadline and more than a month after the accident. West York did not learn of the accident until litigation was commenced nearly three years later, after which it sought a defence and indemnity from Dominion.
The application judge held that the vehicle was covered, granted West York relief from forfeiture for the late fleet report, and required Dominion to defend and indemnify West York. Dominion appealed that judgment and the related costs order.
The Court’s Holding
The Court of Appeal allowed Dominion’s appeal. Reading the policy and OPCF 21A together, it held that a vehicle owned or leased before the policy took effect, but omitted from the initial schedule, is not covered until the insurer receives a request for coverage. The application judge erred by treating the endorsement’s express limitation as irrelevant.
The court assumed that listing the Civic in the September 29 monthly report could qualify as a request because the policy did not define that term. Even so, OPCF 21A did not make coverage retroactive: the monthly report calculated premiums for vehicles already covered and did not create prior coverage where none existed. Because the accident occurred before the first communication concerning coverage for the Civic, Dominion had neither an indemnity obligation nor a duty to defend.
Relief from forfeiture could not supply coverage that had never been triggered. The court added that, had coverage existed subject only to timely filing of the report, it would have relieved West York from the two-week delay because West York acted without bad faith and notified Dominion promptly after learning of the accident. It also concluded that West York’s undisclosed settlement with its broker would not independently have justified denying coverage.
Key Takeaways
- Under OPCF 21A, a pre-existing fleet vehicle omitted from the policy’s initial schedule is uninsured until a request for coverage reaches the insurer.
- A retrospective monthly fleet report may calculate premiums, but it does not retroactively insure an omitted vehicle for an earlier accident.
- Relief from forfeiture can excuse imperfect compliance after coverage is triggered; it cannot create coverage that never attached.
Why It Matters
The decision distinguishes the administrative function of monthly fleet reporting from the separate act required to obtain coverage for vehicles omitted at policy inception. Lessors, rental businesses, and brokers cannot assume that paying a premium through a later report will cure an initial omission retroactively.
The ruling also reinforces a fundamental limit on relief from forfeiture in Ontario insurance disputes: courts may excuse a breach of a policy obligation, but they cannot use that remedy to extend the policy to a risk that was not insured when the loss occurred.