IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101210

Docket: M106097

Registry:
New Westminster

Between:

Vasile
Moldovan

Plaintiff

And

Insurance
Corporation of British Columbia

Defendant

Before:
The Honourable Madam Justice Loo

On
appeal from: The Supreme Court of British Columbia, November 13, 2009, (Moldovan
v. Insurance Corporation of British Columbia, 2009 BCSC 1551, New Westminster
Docket M106097)

Reasons for Judgment

[1]            
The plaintiff appeals from the order of a Master made November 13,
2009 dismissing an application to add Republic Western Insurance Company
(“RWIC”) as a defendant to this action, on the basis that the plaintiff failed
to commence his claim against RWIC within two years as required by s. 103
of the Insurance (Vehicle) Regulation, B.C. Regulation 447/83, Part 7-Accident
Benefits, made pursuant to the Insurance (Vehicle) Act, R.S.B.C. 1996,
c. 231. The section reads:

Limitation

103(1) No person shall commence an action in respect of
benefits under this Part unless

(a) he has substantially complied with the provisions of
sections 97 to 100 that are applicable to him, and

(b) the action is commenced within 2 years after

(i) the date of the accident for which the benefits are
claimed,

(ii) where benefits have been paid, the date he received the
last benefit payment under this Part, or

(iii) the date on which the corporation receives a notice
under subsection (2).

(2) If an insured makes a claim for benefits under this Part
and the corporation has not made a payment in accordance with section 101, the
insured may issue written notice to the corporation within 2 years of the date
of the accident for which the benefits are claimed of the insured’s intention
to commence an action in respect of benefits under this Part.

(3) A notice referred to in subsection (2) must be

(a) in the form established by the corporation, and

(b) sent by registered mail addressed to the claim office
dealing with the insured’s claim.

[2]            
I have already informed the parties of my decision that the plaintiff’s
appeal is allowed, and these are my reasons for judgment.

[3]            
The parties agree that the Master’s decision resulted in an order
central to a final issue in the proceedings and that the appeal is therefore in
the nature of a rehearing.

[4]            
This action for Part 7 accident benefits (or “no fault benefits”) arises
out of a motor vehicle accident which occurred on June 8, 2005 in Coquitlam. The
plaintiff was a passenger in a rental motor vehicle owned by U-Haul Co.
(Canada) Ltd. (“U-Haul”), which collided with another vehicle. The motor vehicle
owned by U-Haul was insured under a contract of insurance entered into in the
State of Arizona and issued by RWIC, a company incorporated under the law of
the State of Arizona.

[5]            
RWIC refuses to pay the plaintiff any Part 7 accident benefits. RWIC argues
that it filed a Power of Attorney and Undertaking (“PAU”) and thereby stepped into
the shoes of the defendant Insurance Corporation of British Columbia (“ICBC”) and
is therefore entitled to rely on s. 103. The plaintiff did not apply to
RWIC for Part 7 accident benefits until by letter dated January 13, 2009
from his counsel which was after the expiration of the s. 103 limitation period.

BACKGROUND

[6]            
On or about May 10, 2007 Trevor Armstrong, QC (as he then was) of
the law firm Hamilton Duncan Armstrong & Stuart was retained to act for the
plaintiff. The plaintiff commenced the tort action against U-Haul on
May 24, 2007. U-Haul admitted liability in January 2008. This action
against ICBC for Part 7 accident benefits was commenced on May 28, 2007.
ICBC filed an appearance in February 2009.

[7]            
In January 2009 Mr. Armstrong contacted counsel for the U-Haul
defendants in the tort action and was advised for the first time that the
identity of the insurer behind the defence in the tort action was RWIC. The
operating insurance policy had not been produced in the tort action. At that
time Mr. Armstrong requested reimbursement for various expenses incurred
by the plaintiff.

[8]            
On April 30, 2009 counsel for ICBC wrote to Mr. Armstrong
outlining its position that it was not the responsible party for the
plaintiff’s no fault benefits. It also faxed a copy of the PAU filed by RWIC on
September 23, 1997.

[9]            
On July 7, 2009 counsel for RWIC sent to Mr. Armstrong, “…the
U-Haul rental document folder including terms of the rental agreement and
representation as to insurance coverage including accident benefits.”

[10]        
The U-Haul rental agreement (the “Agreement”) included within or as part
of the U-Haul rental document folder (which counsel for RWIC referred to as the
“Rental Contract Addendum”) reads:

This Agreement is between the
Customer signing this Agreement (“Customer”, “I”, “Me” or “My”) and the local
“U-Haul” Marketing Company in which the Agreement is entered into or an
independent U-Haul Marketing Company dealer (“Company”). These terms and
conditions, the terms and conditions of the individual rental contract signed
by the Customer, together constitute the entire Agreement (“This Agreement”)
for the rental of that equipment identified on the individual rental contract
(“EQUIPMENT”; and where necessary EQUIPMENT may be further specified as a
“Truck”, “Trailer”, “Pick Up Truck” or “Van”), including all of its parts. I,
the Customer, agree to all terms and conditions of this Agreement.

[11]        
Clause 1 of the Agreement is entitled “1. VEHICLE”, clause 2 is entitled
“2. AUTHORIZED DRIVERS”, clause 3 deals with “LIABILITY PROTECTION”, including
“DUTY TO DEFEND” and “MY DUTY TO COOPERATE”. Clause 4 reads:

4. NO FAULT BENEFITS

Unless required by applicable
law, the company does not provide no-fault benefits, supplemental no-fault
benefits, personal injury protection or other insurance, coverage or protection
that is optional or can be waived or rejected, and Customer specifically waives
and rejects all such benefits, protection, coverage and insurance. To the
extent required by applicable law, the Company provides no-fault to Authorized
Drivers and passengers, limited as follows:  The Company’s no-fault protection
does not apply until after the exhaustion of all other no-fault insurance
and/or other protection available to the Authorized Driver and/or passenger(s)
(no-fault, supplemental no-fault, personal injury protection, employer’s
insurance and/or any other protection or indemnification, whether primary,
excess or contingent), and then the Company’s protection applies to the extent
it is needed to meet, on a cumulative basis with all such other insurance
and/or protection available to the Authorized Driver and/or passenger(s), the
minimum benefits required by the applicable law. To the extent applicable law
requires that Company provide no-fault benefits other than as described above,
they will not exceed the minimum benefits required by such law.

[12]        
The remaining clauses of the Agreement deal with uninsured/underinsured
motorist protection, and other provisions or exclusions that are not relevant
on this application.

[13]        
RWIC accepts that the Agreement was entered into in British Columbia. RWIC
is not licensed to sell insurance in British Columbia and does not do so.

[14]        
The issue on this application is the effect of RWIC’s filing of the PAU.

ANALYSIS

[15]        
RWIC filed a PAU on September 23, 1997 pursuant to s. 134(9)
of the Insurance Act, which reads:

134(9) An insurer that issues a motor vehicle liability
policy outside British Columbia must file with the superintendent, in a form
prescribed by the superintendent,

(a) a power of attorney authorizing
the superintendent to accept service of notice or process for itself in any
action or proceeding against it arising out of a motor vehicle accident in
British Columbia, and

(b) an undertaking

(i) to appear in any action or
proceeding against it or its insured arising out of a motor vehicle accident in
British Columbia, and of which it has knowledge,

(ii) that on receipt from the
superintendent of any notice or process served on him or her in respect of its
insured, or in respect of its insured and another or others, and sent by the
superintendent to it as provided, it will immediately have the notice or
process personally served on its insured, and

(iii) not to set up any defence to any claim, action or
proceeding, under a motor vehicle liability policy issued by it, that might not
be set up if the policy has been issued in British Columbia in accordance with
the law of British Columbia relating to motor vehicle liability policies, and
to satisfy up to the limits of liability stated in the policy, and in any event
to an amount not less than the limits of liability set by this Part any
judgment rendered against it or its insured by a court in British Columbia in
that action or proceeding.

[16]        
Section 134(9) of the Insurance Act is now found, with some slight
changes, in s. 92.1(2) of the Financial Institutions Act, R.S.B.C.
1996, c. 141.

[17]        
The PAU reads:

CANADA NON-RESIDENT
INTER-PROVINCE
MOTOR VEHICLE LIABILITY INSURANCE CARD

POWER OF ATTORNEY AND
UNDERTAKING

(denoting compliance
with minimum coverage requirements
and facilitating acceptance of service)

REPUBLIC WESTERN INSURANCE COMPANY the head office of which
is in the City of PHOENIX in the State/Province of ARIZONA
In the Country of UNITED STATES OF AMERICA, hereby, with respect to an action
of proceeding against it or its insured, or its insured and another or others,
arising out of a motor-vehicle accident in any of the respective Provinces or
Territories, appoints severally the Superintendents of Insurance of British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia,
Prince Edward Island, Newfoundland, Quebec, and Yukon Territory and the
Northwest Territories, to do and execute all or any of the following acts,
deeds, and things, that is to say: To accept service of notice or process on
its behalf.

‘Superintendent of Insurance’ means the Superintendent of
Insurance or any other provincial or territorial official or Public Body
authorized by law or designated by his or her government to accept such service
of notice or process.

REPUBLIC WESTERN INSURANCE
COMPANY aforesaid hereby undertakes:

A.     To appear
in any action or proceeding against it or its insured in any Province or
Territory in which such action has been instituted and of which it has
knowledge;

B.     That upon
receipt from any of the officials aforesaid of such notice or process in respect
of its insured, or in respect of its insured and another or others, it will
forthwith cause the notice or process to be personally served upon the insured;

C.    Not to set up
any defence to any claim, action, or proceeding, under a motor-vehicle
liability insurance contract entered into by it, which might not be set up if
the contract had been entered into in, and in accordance with the laws relating
to motor vehicle liability insurance contracts or plan of automobile insurance
of the Province or Territory of Canada in which such action or proceeding may
be instituted, and to satisfy any final judgment rendered against it or its
insured by a court in such Province or Territory, in the claim, action or
proceeding, in respect of any kind or class of coverage provided under the
contract or plan and in respect of any kind or class of coverage required by
law to be provided under a plan or contracts of automobile insurance entered
into in such Province or Territory of Canada up to the greater of

(a)  
the amounts and limits for that kind or class of coverage or coverages
provided in the contract or plan, or

(b)  
the minimum for that kind or class of coverage or coverages required by
law to be provided under the plan or contracts of automobile insurance entered
into in such Province or Territory of Canada, exclusive of interest and costs
and subject to any priorities as to bodily injury or property damage with
respect to such minimum amount and limits as may be required by the laws of the
Province or Territory,

D.   
That it will not issue Canada Non-Resident Inter-Province Motor Vehicle
Liability Insurance Cards to persons other than those who are non-residents of
Canada and who are insured with it under a contract of motor-vehicle liability
insurance.

[18]        
The effect of filing a PAU was discussed in Diotte v. ICBC, 2000
BCSC 1779. In that case the plaintiffs were injured in a motor vehicle insured
by an Alaskan insurer, Progressive Specialty Insurance Company (“Progressive”).
The policy of insurance did not provide for the payment of no fault benefits.
Progressive filed a PAU which mirrors the PAU filed in this case by RWIC. Mr. Justice
Cohen concluded that Progressive was solely responsible for payment of Part 7 accident
benefits to the plaintiffs under the terms of the PAU. In arriving at that
conclusion Cohen J. stated:

[5]        … A PAU, discussed in greater
detail later, is a mechanism by which extraprovincial and other foreign
insurers may be required to pay insurance proceeds which are greater than those
contained within the terms of the extraprovincial or foreign contract of
insurance.

[12]      The
B.C. legislature has created a scheme whereby in certain actions in B.C.,
arising out of accidents in B.C., extraprovincial and other foreign insurers
may be prevented from relying on contractual limits which are less than those
required by the law of B.C. As a result, some extraprovincial and other foreign
insurers may be required to pay their insureds higher benefits than are
prescribed in a contract of insurance. This situation arises under B.C.
legislation because (a)it is a condition of a license issued in B.C. to carry
on business in B.C.; (b) there is reciprocity legislation; or (c), the insurer
has filed a PAU. The legislation which makes up this scheme includes the Insurance
Act, the Insurance (Motor Vehicle) Act, and the Financial
Institutions Act, R.S.B.C. 1996, c. 141.

[18]      The
law in this province regarding the legal effect of filing a PAU appears to be
well settled. Where a foreign insurer has filed a PAU with the Superintendent,
the foreign insurer is bound by the terms of the PAU from setting up a defence
to a claim, action or proceeding initiated in this province, which might not be
set up if the contract of insurance had been issued in this province. …

[28]      Thus,
once the PAU has been filed, the extraprovincial or foreign insurer is precluded
by law from setting up any defence on the basis that the contract of insurance
does not include a provision for Part 7 benefits. Because all contracts of
insurance issued in B.C. contain provisions for the payment of Part 7 benefits,
an extraprovincial or foreign insurer who has filed a PAU is obliged to pay
Part 7 benefits up to the limits prescribed in this province.

[37]      The
fact that Progressive is bound by the PAU once it is filed is indicative of the
nature of the PAU. Because a foreign insurance company cannot be bound by B.C.
legislation, it seems that the PAU, by virtue of its power to bind a foreign
insurer is more contractual in nature than statutory. A further reason that I
do not think that the PAU can be classified as statutory is that it creates
enforceable rights in favour of a certain class of people. The significance of
this is that a breach of the promise contained in the PAU could give rise to an
action by some member of that class. By filing a PAU with the Superintendent,
Progressive is doing more than simply complying with a statutory obligation:
Progressive is voluntarily opting into the scheme of compulsory universal
automobile insurance in B.C., thereby creating enforceable rights and
obligations.

[38]      This
conclusion is consistent with the description given to PAU’s in earlier cases
in which the courts have indicated that the PAU is distinct from statute. In Cunningham
et al. v. Manitoba Public Insurance Corporation (1979), 13 B.C.L.R. 199
(C.A.), Lambert J.A. recognized, at p. 203, that the requirement of
extraprovincial and foreign insurers not to set up a defence in proceedings in
B.C. that a B.C. insurer could not set up was accomplished “by requiring the
filing of an undertaking and not by attempting to impose a direct statutory
obligation.” In Shea, supra, the PAU was described in the
following terms, at pp. 97-98:

It is a promise to the world, not a promise
to the insured. … [T]he undertaking, by limiting the defences available to
[the] Manitoba Public Insurance Corporation, give to this plaintiff rights that
would not be available if the accident had happened in Manitoba.

[44]      In my
opinion, what emerges from a plain reading of the PAU, and in particular Clause
C of the PAU, is that it provides a promise by Progressive not to set up any
defence to any claim, action or proceeding which might not be set up if
the contract had been entered into in B.C., from the date of
the filing of the PAU forward. Applied generally, that means that from the date
the PAU is filed, Progressive can no longer set up a defence that could not be
set up by a B.C. insurer. On the specific facts of this case, the PAU precludes
Progressive from setting up a defence to the plaintiffs’ claim on the basis
that the Alaska contract of insurance does not provide no-fault benefits
because no B.C. insurer could raise such a defence to the plaintiff’s claim for
Part 7 benefits. This is true in respect of any claim, action or proceeding
which is brought in the future or which is ongoing, regardless of whether it
was initiated before the PAU was filed.

[19]        
In Matilda v. MacLeod, 2000 BCCA 1, the plaintiff, a resident of
the United States was insured by an Ohio insurer, Progressive Casualty
Insurance Company (“Progressive”) when he was injured in a motor vehicle
accident in Vancouver, British Columbia. Progressive had filed a PAU.
Progressive paid the plaintiff medical benefits and sought the right to recover
the amounts paid from the defendant or ICBC. The issue turned on ss. 25(1)
and (2) of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996,
c. 231. The Court of Appeal in Matilda upheld the conclusion of the
chambers judge that neither Progressive nor its insured had the right to claim
the benefits paid by Progressive to its insureds, and stated at para. 8:

[8]        The issue is whether
the provisions of the Insurance (Motor Vehicle) Act purport to modify
the terms of extra-provincial policies and thereby exceed the reach of
provincial jurisdiction. In my view, they do not. The focus of s. 25(1) and (2)
is on the tort action by Progressive’s insureds against ICBC’s insureds. The
torts are the motor vehicle accidents that occurred within British Columbia and
clearly are within provincial jurisdiction. The subsections simply provide that
accident benefits cannot be claimed in the B.C. tort actions irrespective of
where the policy paying the benefits was made. That does not purport to modify
the terms of the extra-provincial policies. It merely limits the damages
recoverable in tort whether by the insured beneficially or Progressive as
subrogated claiming in the name of its insureds. In my opinion, the subsections
address an incident of provincial jurisdiction over torts within the province
and do not attempt to legislate terms of extra-provincial contracts.

[20]        
In MacDonald v. Proctor (1977), 86 D.L.R. (3d) 455 (O.N.C.A.),
aff’d [1979] 2 S.C.R. 153, the plaintiff, a Manitoba resident, insured by the
Manitoba Public Insurance Corporation (“MPIC”), was injured in a motor vehicle
accident in Ontario. MPIC had filed a PAU which appears to be similar if not
identical to the PAU filed by RWIC, particularly the third undertaking.

[21]        
After setting out the relevant sections of the PAU, the Court of Appeal in
MacDonald stated at 457-458:

It is argued that the broad purpose of this document (in this
case) is to put an extraprovincial insurer in the same position as an Ontario
insurer. It is said as well that an Ontario insurer could not defend an action
in Ontario on the grounds that it included no Sch. E coverage and that by
reason of para. C of the undertaking of the Manitoba Public Insurance
Corporation is precluded from so doing. As a result the Manitoba policy is
drawn into Part VI of the Insurance Act and must be viewed, therefore,
as a policy that has been made in Ontario.

Mr. Justice Goodman accepted this argument and developed it
in greater detail and with more sophistication than my bare summary indicates.
With great respect, however, I find myself unable to agree with his conclusion.

Firstly, the undertaking filed
simply precludes an insurer from setting up defences which cannot be set
up by an Ontario insurer by virtue of the Insurance Act. I am unable to
read the undertaking as an agreement to incorporate into extraprovincial
policies all those items that the Ontario Insurance Act obliges
an Ontario policy to include. It is important to observe that where policy
limits are involved, the undertaking goes on to expressly subscribe to the
minimum limits in the Province of Ontario.

[Emphasis added.]

[22]        
MacDonald was cited with approval in Unifund Assurance Co. v.
Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63 at
para. 98.

[23]        
The plaintiff contends that there is nothing in either s. 92.1 of the Financial
Institutions Act or the PAU filed by RWIC that incorporates the provisions
of Part 7 of the Insurance (Vehicle) Regulation into the contract
of insurance between the plaintiff and RWIC. The PAU simply requires RWIC to:

a)    Appear in
proceedings;

b)    Not set up
defences that are not available under a policy issued in British Columbia; and

c)     Satisfy
any judgment, up to the limits of liability in the policy, but to an amount not
less than the limits required with respect to a policy issued in British
Columbia.

[24]        
The PAU is a “promise to the world” by RWIC that it will not raise
defences that are unavailable to a British Columbia automobile insurer and that
it will not rely on any limits of liability contained within its policy that
are more restrictive than the minimum limits that must be available under a
policy issued in British Columbia.

[25]        
RWIC contends that by filing the PAU, RWIC opts into a scheme of
compulsory universal automobile insurance and has all of the rights and
obligations of ICBC; it steps into the shoes of ICBC in terms of its rights and
obligations under Part 7 of the Insurance (Vehicle) Regulation,
including s. 103.

[26]        
RWIC relies on what it describes as four “key cases”: Shea v. Shea
(1985), 21 D.L.R. (4th) 716, 66 B.C.L.R. 92 (C.A.); McIlvenna (litigation
guardian of) v. Insurance Corp. of British Columbia, 2008 BCCA 289; Batchelder
v. Filewich, 2004 BCCA 50; and particularly Diotte at para. 37:

[37]      … By
filing a PAU with the Superintendent, Progressive is doing more than simply
complying with a statutory obligation: Progressive is voluntarily opting into
the scheme of compulsory universal automobile insurance in B.C., thereby
creating enforceable rights and obligations.

[27]        
RWIC relies on Shea at 721 that in British Columbia there is a
compulsory scheme of motor vehicle liability insurance, and “…there are no
policies or contracts in the traditional sense; there is a legislative scheme”.
The rights and obligations are created by statute and regulation. Therefore RWIC’s
legal rights in British Columbia include the right to rely on s. 103 of
the Insurance (Vehicle) Regulation.

[28]        
RWIC further contends that as there is no contract of insurance, the
Agreement or Rental Contract Addendum is not relevant. With respect to clause 4
of the Rental Contract Addendum, RWIC argues that “it’s just a representation”,
and not meant to be a legal document for any no fault benefits. RWIC argues
that it does not matter what U-Haul sets out in the documents because it is meant
to be a rental contract for a motor vehicle and not meant to be a policy of
insurance. RWIC further argues that the only relevant document is the PAU, and all
that is relevant is the filing of the PAU. The “actual interpretation” of the
PAU is not relevant.

[29]        
I am unable to agree with RWIC’s contention.

[30]        
In McIlvenna, Mr. Justice Tysoe for the Court of Appeal described
Part 7 of the Insurance (Vehicle) Regulation as a contract and s.
103 a contractual provision of the contract. Tysoe J.A. stated at paras. 22-24:

[22]      In interpreting section 103, it must be borne in
mind that Part 7 of the Regulation constitutes a policy of insurance between
ICBC, as insurer, and the plaintiff, as insured: see Baluk v. Swiderski (1996),
83 B.C.A.C. 1, 38 C.C.L.I. (2d) 1 at para. 2; Fredrickson v. Insurance Corp.
of British Columbia, [1985] 5 W.W.R. 342 at 352, 64 B.C.L.R. 301 (S.C.);
and Kraeker Estate v. Insurance Corp. of British Columbia (1992), 93
D.L.R. (4th) 431 at 433, 69 B.C.L.R. (2d) 145 (C.A.). Although the plaintiff
argued at the hearing of this appeal that Part 7 of the Regulation should be
interpreted as social welfare legislation, I agree with counsel for ICBC that
the contractual nature of the relationship is clearly established in the case
law and legislation.

[23]      Section 103 is a contractual provision limiting the
ability of the insured to sue the insurer. It is not a limitation provision
contained in a statute other than the Limitation Act that expressly
applies to all causes of action against a specified category of persons (for
example, section 285 of the Local Government Act, R.S.B.C. 1996, c. 323,
in relation to actions against municipalities).

[24]      Part 7 of the
Regulation is a contract pursuant to which the insured is entitled to certain
benefits from the insurer, ICBC. Section 103 is a limitation on the right of
the insured to enforce his or her contractual right to the benefits by way of
action. In my opinion, section 103 must be interpreted in the context of this
contractual arrangement, and should not be construed broadly to apply to all
causes of actions that the insured may have against ICBC as a result of their
dealings.

[31]        
Both Shea and Batchelder dealt with the “old” form of PAU,
rather than the broader wording in Part C of the “new” form of PAU that RWIC
filed. The difference between the new form and the old form is explained in Diotte
at paras. 26 to 28:

[26]      The language of the PAU signed and filed by
Progressive distinguishes this case from Shea. The PAU in the case at
bar contains terms which are identical to those used in Court, with the
exception of the following addendum:

…. in respect of any kind or class of coverage provided
under the contract or plan and in respect of any kind or class of coverage
required by law to be provided under a plan or contracts of automobile
insurance entered into in such Province or Territory of Canada…

[Emphasis added.]

[27]      By virtue of this additional clause, the
undertaking to which Progressive is a signatory is both wider in scope and more
powerful in effect than the undertaking considered in Court. The inclusion of
the words “any kind or class of coverage” is a clear reference not only to
liability, but to other kinds of coverage, including Part 7 benefits.

[28]      Thus,
once the PAU has been filed, the extraprovincial or foreign insurer is
precluded by law from setting up any defence on the basis that the contract of
insurance does not include a provision for Part 7 benefits. Because all
contracts of insurance issued in B.C. contain provisions for the payment of
Part 7 benefits, an extraprovincial or foreign insurer who has filed a PAU is
obliged to pay Part 7 benefits up to the limits prescribed in this province.

[32]        
RWIC argues that on the basis of Batchelder, Shea is still
good law.

[33]        
However Shea was concerned with s. 31(4) of the Manitoba
Public Insurance Corporation Act, 1970 (Man.), c. 102 (C.C.S.M., c. A180),
and the scope of the wording of Part C of the undertaking in the PAU. Seaton
J.A. stated at 722:

… I think that s. 31(4) only applies to liability coverage.
No-fault benefits are payable by an insurer to an injured person irrespective
of liability. Provisions for them may be tacked on liability insurance
policies, but such provisions are not with respect to liability insurance. They
are accurately termed "Accident Insurance Benefits" in Part II of the
Regulations Respecting Coverage Under  the Manitoba Public Insurance
Corporation Act, Man. Reg. 33/74.

Part C of the undertaking is
similarly qualified. It only relates to a defence to a claim "under a
motor vehicle liability insurance contract" not available in accordance
with British Columbia law "relating to motor vehicle liability insurance
contracts".

[34]        
RWIC’s argument can be summed up this way: British Columbia motor
vehicle insurance legislation, which imposes on ICBC certain rights and
obligations, including those under Part 7, is imposed on an out-of-province or
United States insurer by the filing of a PAU.

[35]        
However, in Unifund Assurance Co., the Supreme Court of Canada
recognized that to give effect to that argument would give British Columbia
legislation an impermissible extraterritorial effect. The PAU is an undertaking
and not an agreement to incorporate into RWIC’s insurance policy all those
terms that the Insurance (Vehicle) Act and Regulations, including
Part 7, of this Province requires a British Columbia or ICBC policy to include.

CONCLUSION

[36]        
The plaintiff’s appeal is allowed, the order of Master Keighley
pronounced November 13, 2009 is set aside and the following order substituted
in its place:

a)    Republic Western
Insurance Company be added as a defendant;

b)    The style of
cause be amended accordingly;

c)     The
plaintiff has leave to amend the Writ of Summons as set out in schedule  “A” to
the Notice of Motion dated September 4, 2009; and

d)   
The plaintiff is entitled to its costs of this appeal and costs of the
application before the Master, in any event of the cause.

“Loo
J.”