Ontario Court of Appeal says insurer has a duty to defend young male driver and his mother in unusual drink and drive case

The Court of Appeal for Ontario says an insurer has a duty to indemnify a young man, Nagraj Singh Tut, who celebrated his 20th birthday party, slept for six to nine hours, woke up, and then was involved in a motor vehicle accident the next morning while driving his friends home with a blood alcohol concentration of 1.5 times the legal limit.
The court also found the insurer had a duty to defend the young man’s mother, Gurmeet Kaur Tut, who questioned her son about the party at their residence that night and confirmed that her son had slept after the party. She had previously instructed her son not to drink and drive.
Nagraj asked his mother the morning after the party if he could use her car to drive his friends home. The accident occurred at 8:51 a.m. on June 23, 2007, when Nagraj drove his mother’s car off the road while attempting to pass another car using the gravel shoulder. No charges were laid as a result of the accident.
The passengers in the car sued Nagraj and Gurmeet in two actions for injuries they had sustained in the accident.
RBC General Insurance Company denied coverage to Nagraj because the auto insurance policy was subject to a statutory condition that states: “The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.”
At the time of the incident, RBC told the court, Nagraj was not authorized by law to drive. Nagraj held a G2 driver’s license, meaning he is not allowed to operate a vehicle with a blood alcohol concentration of more than zero.
RBC also denied coverage to Germeet because, in permitting her son to drive, she knew or ought to have known that his blood alcohol level was too high and thus he was not authorized by law to drive.
An application judge held that the statutory condition in the insurance policy applied if Nagraj contravened s. 6(1) of the Highway Traffic Act, which creates a strict liability offence and hence carries with it a “due diligence” defence. Strict liability imposes liability on a party without a finding of fault.
Since driving with a blood alcohol limit above zero is a strict liability offence, the applications judge held, Nagraj would not have contravened s. 6(1) if he and his mother had taken all reasonable care in the circumstances not to breach the law.
RBC took the position that the applications judge should have applied an absolute liability test, not a strict liability test, when determining whether or not Nagraj breached s. 6(1). This would have meant a due diligence offence was not available to either Nagraj or Germeet.
But the offence is a strict liability offence, the Appeal Court confirmed. Thus, Nagraj had a due diligence defence available to him because he had a reasonable and honest belief that after six to nine hours of sleep, his blood alcohol level was zero.
And his mother also exercised due diligence when she questioned Nagraj and saw nothing in either her house or in her son’s manner that caused her to question the amount of alcohol he had consumed the night before, the Appeal Court ruled.