In West York Sales and Leasing Inc. v The Dominion of Canada General Insurance Company (Travelers Canada), 2026 ONCA 553, the Ontario Court of Appeal allowed an insurer’s appeal and set aside a declaration that it had to defend and indemnify a lessor under an automobile fleet policy. The Court held that where a vehicle was already owned or leased when the policy took effect but was left off the schedule of automobiles, there is no coverage until a request for coverage is filed with the insurer, and there is no retroactive coverage back to the start of the policy term. Because the first communication about this vehicle came more than a month after the accident, there was no coverage and no duty to defend.
Kathleen Lefebvre and I were counsel for the successful appellant. Hudson Chalmers was involved in the matter at first instance.
Background
West York Sales and Leasing Inc. owned a 2017 Honda Civic and leased it, along with other vehicles, to a car and truck rental operator from February 2017 to January 2021. The rental operator held a monthly reporting basis fleet policy issued by Dominion for the term September 15, 2019 to September 15, 2020, and the lease required that West York be added as an additional insured.
The Civic was not on the schedule of automobiles filed when the policy term began. West York’s explanation was that the vehicle had suffered engine failure and had been taken out of service.
The vehicle was in an accident on August 25, 2020. The rental operator did not report the accident to either Dominion or West York. On September 29, 2020, fourteen days after the September 15 deadline, the operator filed its August 2020 monthly fleet report. That report listed the Civic for the first time and gave its date of entry into the fleet as August 15, 2020. Nothing in the report disclosed that the vehicle had in fact been owned and leased well before the policy term began. Dominion did not object to the late report and did not return the $7,540 premium paid for that month, calculated on 26 vehicles at $290 each.
West York first learned of the accident on July 10, 2023, almost three years later, when it and the rental operator were named as defendants in a claim for damages. West York promptly notified Dominion and sought coverage. Dominion denied the claim on October 17, 2023 on the basis that the vehicle had not been added to the policy until after the loss. The rental operator accepted the denial. West York did not, and brought an application for coverage.
The OPCF 21A Framework
The Ontario Policy Change Form Monthly Reporting Basis Fleet endorsement, OPCF 21A, exists so that vehicles can move in and out of a fleet without a new certificate of insurance being issued each time. Premiums track the number of vehicles in the fleet in a given month, and it is the insured lessor’s responsibility to verify the accuracy of the monthly reports.
As the Court set out, a vehicle can come to be insured under OPCF 21A in one of three ways:
- Vehicles owned or leased for more than 30 days at the beginning of the policy term, provided they appear on the schedule of automobiles filed with the insurer at inception;
- Vehicles added to the fleet after the policy term begins, captured through the monthly report filed by the fifteenth of the following month; and
- Vehicles owned or leased before the policy term that the insured did not include on the schedule. These are not insured until a request for coverage is made.
The third category is governed by the second sentence of OPCF 21A (c), which is set out in capital letters and provides that no coverage is provided on any automobile owned or leased by the insured before the effective date of the policy which is not included on the schedule filed with the insurer “until a request for coverage has been filed with the insurer”.
Notably, the Court found no published regulatory history explaining why clause (c) was included. Neither the former Financial Services Commission of Ontario nor its successor, the Financial Services Regulatory Authority of Ontario, has published explanatory notes on its drafting. Based on comparable wording in other Canadian and foreign fleet policies, the Court observed that clause (c) appears to originate in standard commercial fleet underwriting rather than in any particular legislative amendment.
The Decision Below
The application judge (2025 ONSC 3845) held that all of West York’s vehicles were automatically part of the schedule of automobiles regardless of when they were leased, and that the limiting words in OPCF 21A (c) were “not relevant”. She granted relief from forfeiture, a remedy West York had not sought, on the basis that filing the monthly report two weeks late amounted to imperfect compliance with no significant impact. She declined to address Dominion’s abuse of process argument on the footing that it had not been pleaded.
The Court of Appeal’s Analysis
Because the policy is a standard form contract, the standard of review was correctness: Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23. Clear policy wording is given effect in the context of the policy as a whole; where there is ambiguity, coverage terms are read broadly and exclusions narrowly. Contra proferentem did not assist West York, because OAP1 and OPCF 21A are regulated standard forms and were not drafted by the insurer.
A request for coverage was required
The Court rejected the submission, and the application judge’s conclusion, that the limiting words in clause (c) had no meaning. Paragraph (a) provides coverage for vehicles owned or leased for more than 30 days, but the capitalized second sentence of paragraph (c) restricts that coverage for one defined group of vehicles. Wording deliberately highlighted in capital letters must be given some meaning.
The Court explained why the distinction is coherent. An insurer has the right to assess risk when it agrees to provide coverage. The schedule filed at inception is what establishes the underwriting profile, and the insurer accepts future acquisitions because it has already accepted that profile. Here, the profile did not include the Civic, because the insured already had it and did not disclose it.
Was a request made on September 29, 2020?
This is the part of the reasons most worth reading closely. The Court was sceptical that filing a monthly report qualifies as a request for coverage. The purpose of the monthly report under OPCF 21A (f) is to calculate the premium payable on vehicles already covered, not to determine coverage, and this report contained no express request and did not disclose that the Civic had been left off the schedule.
The Court did not resolve the point. Because “request for coverage” is undefined and coverage language is read broadly, it assumed in West York’s favour that the September 29 filing was capable of constituting a request, and moved on to the question that actually decided the appeal.
When would coverage begin?
OPCF 21A makes no provision for retroactive coverage. Retroactive reporting under paragraph (f) addresses the premium consequences of coverage, not which vehicles are covered. The word “until” is clear, and the Court held it is synonymous with the word “before”: there is no coverage until a request is made.
The earliest communication to the insurer about this vehicle was September 29, 2020. The accident was August 25, 2020. On any reading, coverage could not have started before the request, so there was no coverage for the accident and no duty to defend. To hold otherwise would drain the capitalized limitation in clause (c) of force and effect.
Relief From Forfeiture and the Undisclosed Settlement
Having found no coverage, the Court did not need to decide the remaining issues, but addressed both. Insurers and policyholders should read these passages as obiter, and note that neither one favours the insurer.
On relief from forfeiture, the Court confirmed the settled distinction: section 129 of the Insurance Act is available where coverage has been triggered and the insured then fails to comply with a term of the policy. Where coverage was never triggered in the first place, relief from forfeiture is not available: Kestenberg Siegal Lipkus v Royal Sun Alliance Insurance Company of Canada, 2024 ONCA 607, 500 D.L.R. (4th) 548; Kozel v The Personal Insurance Company, 2014 ONCA 130, 119 O.R. (3d) 55. That is precisely why the appeal succeeded on coverage rather than on the late filing. Had coverage existed, however, the Court said it would have granted relief from forfeiture for the two week delay. There was no bad faith and no prejudice, and West York, unlike the rental operator, notified Dominion as soon as it learned of the accident.
On the undisclosed partial settlement between West York and its broker, the Court accepted that an agreement which converts an adversarial relationship into a co-operative one changes the litigation landscape and must be disclosed under rule 49.14(7). It found no such change here. The broker’s evidence on the operative question was inconsistent with West York’s coverage position and supportive of Dominion’s, West York was not a party to the underlying action, and there was no unfairness or prejudice to Dominion. This would not have disentitled West York to coverage.
The appeal was allowed with costs of $35,000 all inclusive to Dominion, on the agreement of the parties: $15,000 for the appeal and $20,000 in respect of the decision below.
Takeaways
Coverage and breach of condition are different arguments. Dominion accepted the late report, kept the premium, and never raised late filing in its denial letter. None of that mattered, because the case was not about an insured breaching a reporting obligation. It was about coverage that had never attached. Framing a fleet dispute correctly at the outset determines whether relief from forfeiture is even on the table.
The monthly report is a premium mechanism, not a coverage mechanism. For vehicles in the first two OPCF 21A categories the distinction rarely bites. For a pre term vehicle left off the schedule, it is decisive.
The holding is narrower than it may first appear. The Court did not define “request for coverage”, and expressly left open whether a monthly report can amount to one. What it decided is that coverage runs forward from the request and not backward to inception. Counsel should expect the definitional question to return in a case where the timing of the request does not dispose of the claim.
For lessors and fleet operators, the schedule is the document that matters. A vehicle temporarily out of service is still owned or leased. Leaving it off the schedule at inception moves it into the third category, and the consequence is not a premium adjustment but the absence of coverage. Lessors relying on a lessee to add them as an additional insured should verify the schedule directly rather than assume that monthly reporting will pick up anything that was missed.
A structural warning for additional insureds. West York was diligent once it knew of the accident. It lost anyway, on a disclosure failure made three years earlier by the party that controlled the policy. Where a lessee arranges the insurance and files the reports, the lessor carries the consequences of the lessee’s paperwork.
How We Can Help
Our insurance law group acts for insurers and policyholders in coverage disputes, duty to defend applications, and policy interpretation questions of the kind this appeal raised. We have written before on how policy obligations can defeat an otherwise viable claim, including a subrogated claim defeated by a breach of builder’s risk obligations. Our appellate advocacy practice takes coverage and civil litigation matters to the Court of Appeal for Ontario and appears as counsel for other firms on appeal.
If you are dealing with a fleet coverage question, a denied claim, or a decision you are considering appealing, contact Davidson Cahill Morrison LLP.
Davidson Cahill Morrison LLP is a civil litigation and appellate advocacy boutique with offices in Toronto, Huntsville, and Bowmanville. The firm’s practice areas include insurance law, medical malpractice, personal injury, municipal litigation, and appellate advocacy.
