Aviva v. Pizza Pizza, [2008] O.J. No. 2625 continues the recent trend in the courts of taking a firmer approach to the interpretation of the words “ownership, use, or operation” of an automobile in liability policies. Pizza Pizza was sued in relation to a car accident involving one of its delivery vehicles. Besides its alleged negligence, via its driver, arising out of the accident itself, it was also alleged that Pizza Pizza was negligent with respect to its business practice of (1) providing food free if delivered more than 30 minutes after it is ordered (this allegedly encourages its drivers to drive fast since they risk paying late fees themselves), (2) its failure to have safe driving policies in place, and (3) its failure to test or investigate the driving history of the driver who caused the collision for his propensity for speed. Pizza Pizza brought an application requiring Aviva to defend it in the personal injury action in relation to the allegations of negligent business practices. Its CGL policy with Aviva contained the usual exclusion excluding any claims arising out of the ownership, use, or operation of any automobile. Pizza Pizza succeded before the application judge and Aviva appealed to the Ontario Court of Appeal. On appeal, Aviva argued that the application judge erred in holding that the claim with respect to negligent business practices was independant of the claim arising out of the negligence of the driver. The Court of Appeal agreed and found that the exclusion clause did apply.

The Appeal court’s decision is important as it reinforces the growing judicial trend towards a more strict interpretation of such automobile exclusions. Up until recently, one could have arguably made the case (upon then existing caselaw) that such business practice claims were not caught by the automobile exclusion.

Raj K. Datt