In the recent decision Singh v. Security National Insurance Company, Justice Burt provided an important decision governing automobile policies in Alberta. The decision considers several portions of Alberta’s Standard Policy Form No. 1 - the insurance policy that most people in Alberta carry.

The Facts

Singh was the owner of a 2023 Volkswagen Jetta and was involved in a collision on October 8, 2023. They were driving at approximately 3:00 a.m. when they rear-ended another vehicle in the vicinity of 8th Street and 8th Avenue SW in Calgary, Alberta.

The speed limit was 50 km/h. The area is a high-traffic area with ongoing construction. The event data recorder (the vehicle’s “black box”) recorded the details of the accident. The data showed that Singh was travelling 98 km/h and making severe, alternating steering wheel movements in the seconds before the collision.

A Calgary Police officer attended the scene of the accident and observed that Singh had glossy eyes and an unsteady gait, and was unable to locate their registration and insurance documentation. The constable demanded that Singh provide a breath sample, but Singh refused and offered no excuse for the refusal.

Singh was charged under s. 88.1(1)(e) of the Traffic Safety Act, but the contravention was cancelled by SafeRoads Alberta.

They were interviewed by their insurance company on December 15, 2023, and denied having had anything to drink.

The Issues

There were several issues at trial, including:

1. Could the claim be denied under Exclusion 1(h)(ii) of the policy given the presence of a contravention of s. 88.1(e), despite the contravention being cancelled?

2. Could the claim be denied under Exclusion 1(h)(i) of the policy given the condition of the plaintiff at the time of the collision?

3. Could the claim be denied under s. 524 of the Insurance Act or Statutory Condition 6 as the plaintiff failed to provide a proof of loss?

4. Could the claim be denied under Statutory Condition 6 as the plaintiff failed to provide a proof of loss?

5. Could the claim be denied under s. 554 of the Insurance Act on the basis of misrepresentations by Singh?

Denial Under s. 1(h)(ii)

Exclusion 1(h)(ii) provides that the insurer shall not be liable, under any subsection of Section C for loss or damage, where the insured drives or operates the automobile while in a condition for which the insured contravenes section 88.1(1) of the Traffic Safety Act.

It was argued that Singh had contravened s. 88.1(e) of the Traffic Safety Act by refusing to provide a breath sample, despite the contravention being set aside by SafeRoads Alberta.

Justice Burt was not prepared to accept this argument, finding that the SafeRoads Alberta decision was determinative of the issue. She held that, as a result of the SafeRoads Alberta decision, the contravention was cancelled and s. 1(h)(ii) was not available to the insurer.

Denial Under s. 1(h)(i)

Exclusion 1(h)(i) provides that the insurer shall not be liable, under any subsection of Section C for loss or damage, where the insured drives or operates the automobile while under the influence of alcohol or drugs to such an extent as to be, for the time being, incapable of proper control of the automobile.

Justice Burt relied on the burden on the insurer to prove incapability of proper control of an automobile under the civil balance of probabilities standard. She concluded, relying on Union Insurance Society of Canton Ltd. v. Arsenault, [1961] SCR 766, and Hamman v. Insurance Corporation of British Columbia, 2020 BCCA 170, that she was empowered to draw inferences from the conclusions reached by the police and the circumstances of the accident.

Justice Burt considered:

1. The constable’s recorded observations of the plaintiff at the scene.

2. The black box data from the vehicle for the seconds leading up to the collision, as set out in the report of the insurer’s expert engineer.

3. The plaintiff’s admitted refusal, without reasonable or any excuse, to provide a breath sample.

4. The adverse inference drawn by the court with respect to the plaintiff’s failure to call their passenger at trial.

Given these considerations, Justice Burt concluded that the denial under Exclusion 1(h)(ii) was proper and that the evidence supported a conclusion that Singh was incapable of proper operation of the vehicle at the time of the collision.

It should be noted that, while not referenced in the decision, the Alberta cases of R&M Drywall and Jasman were both significant topics of conversation during argument. This decision, while in line with some of the commentary in those decisions, puts the appropriate context into how the court should consider the evidence as laid out in Union, and considers the appropriate burden of proof (unlike R&M Drywall and Jasman) as set forth by the Supreme Court in McDougall.

For quite some time, R&M Drywall and Jasman were very concerning cases to insurers in denying claims for incapability to operate a vehicle under Exclusion 1(h)(ii). This decision serves as a strong reminder to consider cases in the context in which they were given and to always be aware that the facts of a matter must be the driving force in assessing any claims denials.

Further, it must always be remembered that the facts are only as strong as the witnesses who can attest to or opine on them. Here, the evidence of the constable, the engineer, and the plaintiff were all critical considerations of the trial justice.

This decision is a strong reminder that the burden of proof on insurers is a balance of probabilities. There is no requirement that an insurer prove a denial beyond a balance of probabilities.

Section 524 + Statutory Condition 6 of the Insurance Act

Section 524 of the Insurance Act requires that an insured deliver a proof of loss prior to commencing a claim. Statutory Condition 6(1) makes an insurer liable under a contract only after the provision of a proof of loss, and Statutory Condition 6(2) requires an insured to comply with, among other things, Statutory Condition 4 before bringing an action.

Justice Burt held that s. 524 and Statutory Condition 6 required strict compliance and that prejudice to the insurer is not an element of the analysis.

In this matter, the insurer had delivered the proof of loss on October 16, 2023, and again on January 18, 2024, with the October 16 letter providing that no proof of loss was required unless the insured was not in agreement with the insurer’s adjustment of the loss. The plaintiff was not in agreement with the adjustment of the loss, as the claim was denied. Singh had not provided a proof of loss as of the date of trial.

Given the mandatory nature of s. 524, Justice Burt held that a failure to submit a proof of loss is a bar to the plaintiff’s action. The Alberta Court of Justice does not have the power to relieve against forfeiture, and there was no evidence of waiver.

This decision serves as an important reminder to insurance companies that compliance with their obligations to provide statutorily mandated forms is important. Everything from claims opening to claims acceptance or denial should be well-documented and well-drafted.

This decision also serves as an important reminder that insurance policies and the Insurance Act are important documents that often have strict requirements. There can sometimes be reliance (by both insurers and insureds) on the duty of good faith under insurance policies, but there are mandated processes that must be followed.

With the addition of s. 585.1 of the Insurance Act, dispute resolution processes are likely to become more significant over time, and the mandatory language in s. 585.1, while not addressed in this decision, recently received strong judicial support.

Section 554 + Misrepresentations

Section 554 of the Insurance Act provides that if the insured wilfully makes a false statement in respect of a claim under the contract, a claim by the insured is invalid and the right of the insured to recover indemnity is forfeited.

With the Alberta Court of Appeal weighing in on the law governing misrepresentations in Abbas v. Esurance Insurance Company of Canada, 2023 ABCA 36, there is little this decision adds to the jurisprudence on misrepresentations. However, it serves as an important reminder to insurers and insureds that the words spoken during the claims process carry significant weight.

While the insurer was able to prove that Singh was incapable of proper operation of the vehicle through the evidence of the attending constable, the expert engineer, and Singh’s own testimony - and while the standard of proving incapability may not be as strict as someone reading R&M Drywall and Jasman might have thought before this decision - this is not a criminal matter.

The insured must report what happened and be honest about it. While the evidence of incapability was strong, it would always have been difficult for the plaintiff to explain how a police officer smelled alcohol on their breath when they denied having anything to drink that day.

For insurance companies, this highlights the value of a Special Investigations Unit and the importance of investigating claims thoroughly so that the insurer can be confident in a claim denial or acceptance. This is particularly true where a denial may be based on Exclusion 1(h)(ii), as it is clear that where someone is not convicted under the Criminal Code, or where a contravention is overturned under s. 88.1 of the Traffic Safety Act, the insurer will need more to rely upon.

Takeaways

This decision is one that any insurance adjuster involved in auto property loss should review. Claims adjudication is a factual process. While case law may assist in knowing what to ask or how to weigh certain factors, decisions ultimately depend on the information available to the insurer regarding the underlying loss.

There are numerous sources of information - including the insured, event data recorder data, and witnesses. Gathering all relevant information early helps adjusters conduct a proper adjudication of the claim and supports insurers in defending claim denials when and if they are appropriate.

If you handle auto or property claims, review your procedures to ensure they align with the Court’s direction in Singh. For guidance on coverage disputes or strengthening your claims process, contact John Gilbert in Calgary, Christine Pratt, KC in Edmonton or any member of Field Law’s Insurance Group.

Link to decision: Singh v. Security National Insurance Company, 2025 ABCJ 174