Implied Exclusion Maxim & Insurance Policies
In CUMIS General Insurance Co. v. 1319273 Ontario Ltd. (c.o.b. Done Right Roofing), [2008] O.J. No. 1268, a motorcyclist was struck by a ladder when it flew off a Done Right truck, causing injuries. The motorcyclist sued, claiming that Done Right’s employees had negligently stored the ladder on the truck. Done Right sought coverage under a CGL policy with CUMIS. However, CUMIS denied a duty to defend on the basis of two exclusions: (1) bodily injury arising out of the ownership, use or operation by Done Right of any automobile; (2) bodily injury with respect to which any motor vehicle liability policy is required by law to be in effect. The application judge agreed with CUMIS and held that exclusion #2 applied.
Before the Court of Appeal, Done Right conceded that the case law under s. 239 of the Ontario Insurance Act had established that the the loading and storage of a ladder on a truck comes within the scope of the “use or operation” of a truck. Instead, it sought to avoid exclusion #2 by arguing that it defeated its reasonable expectations. The Court disagreed. Done Right sought to avoid the application of exclusion #1 by arguing that it did not expressly exclude the loading of an automobile. It pointed to watercraft and aircraft exclusions in the policy which did expressly exclude “loading or unloading”. Done Right’s argument was based on the implied exclusion maxim, which states that the express mention of one thing means the exclusion of others not expressly mentioned. It was an interesting argument given that this maxim is typically applied in cases of statutory interpretation. The application judge found the argument to be “attractive” (though moot given the application of exclusion #2), and rejected CUMIS’s argument that the maxim could not be applied to exclusion clauses in an insurance policy. However, the Court of Appeal did not agree that the maxim was of any assistance to Done Right. It held that it was unnecessary for exclusion #1 to expressly exclude loading or unloading since the case law was clear that this waswithin the scope of the “use or operation” of a truck anyway. This could not be said for boats or airplanes. However, it appears that the Court of Appeal accepted that the implied exclusion maxim could, in general, be used to interpret exclusion clauses contained in insurance policies.