Part 31 published on 01/08/10
Strata Corporation’s Liability Insurance did not apply to claim against owner for alleged negligence as “social host”
This case concerned insurance coverage for the owner of a Strata lot. The owner, Mr. Rattan, hosted a social gathering at his strata lot townhouse. One of the guests at the gathering allegedly caused a motor vehicle accident (after leaving the gathering). Three passengers of another vehicle, allegedly injured in the accident, sued Mr. Rattan. The injured passengers alleged that Mr. Rattan failed to take steps to ensure that the particular guest did not operate a motor vehicle when he left the gathering (allegedly in a state of intoxication).
Mr. Rattan had a homeowner’s insurance policy issued by Economical. Economical was defending Mr. Rattan under the liability insurance section of the policy. Economical asserted that the strata corporation’s liability insurance policy (issued by Aviva) should also provide liability coverage to Mr. Rattan.
In summary, Economical asserted that the strata corporation’s insurer should be sharing in the risk.
The Court held that the strata corporation’s liability insurance did not apply. The Court said:
“In all the circumstances, I am satisfied that the Strata Corporation has acquired a policy that does not afford Mr. Rattan coverage except in respect of any business conducted by him and in respect of any liability he may have in his capacity as a stockholder in the Strata Corporation. As neither constitutes the base from which the claims against Mr. Rattan are advanced, Aviva has no duty to defend or to participate in the defence of any of the three actions brought against him.”
The Court left open the possibility that the strata corporation’s liability insurance might not be in keeping with the requirements of the Strata Property Act (Sections 150 and 155). However, the Court said:
“If the coverage which the Strata Corporation obtained is inadequate, or not in compliance with a requirement imposed by the SPA, that is an issue between the Strata Corporation and Mr. Rattan as an owner and does not impose a duty to defend on Aviva.”