PART VI AUTOMOBILE INSURANCE
Application of insurance money, 3rd party claims, etc.
258 (1) Any person who has a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, even if such person is not a party to the contract, may, upon recovering a judgment therefor in any province or territory of Canada against the insured, have the insurance money payable under the contract applied in or towards satisfaction of the person’s judgment and of any other judgments or claims against the insured covered by the contract and may, on the person’s own behalf and on behalf of all persons having such judgments or claims, maintain an action against the insurer to have the insurance money so applied.  R.S.O. 1990, c. I.8, s. 258 (1). (2) Repealed:  2002, c. 24, Sched. B, s. 39 (2). Other creditors excluded (3) A creditor of the insured is not entitled to share in the insurance money payable under any contract unless the creditor’s claim is one for which indemnity is provided for by that contract.  R.S.O. 1990, c. I.8, s. 258 (3). Insurer absolutely liable (4) The right of a person who is entitled under subsection (1) to have insurance money applied upon the person’s judgment or claim is not prejudiced by, (a)  an assignment, waiver, surrender, cancellation or discharge of the contract, or of any interest therein or of the proceeds thereof, made by the insured after the happening of the event giving rise to a claim under the contract; (b)  any act or default of the insured before or after that event in contravention of this Part or of the terms of the contract; or (c)  any contravention of the Criminal Code (Canada) or a statute of any province or territory of Canada or of any state or the District of Columbia of the United States of America by the owner or driver of the automobile, and nothing mentioned in clause (a), (b) or (c) is available to the insurer as a defence in an action brought under subsection (1).  R.S.O. 1990, c. I.8, s. 258 (4). Section applicable to purported policy (5) It is not a defence to an action under this section that an instrument issued as a motor vehicle liability policy by a person engaged in the business of an insurer and alleged by a party to the action to be such a policy is not a motor vehicle liability policy, and this section applies with necessary modifications to the instrument.  R.S.O. 1990, c. I.8, s. 258 (5). Contribution among insurers (6) The insurer may require any other insurers liable to indemnify the insured in whole or in part in respect of judgments or claims to which reference is made in subsection (1) to be made parties to the action and contribute according to their respective liabilities, whether the contribution is rateably or by way of first loss or excess insurance, as the case may be, and the insured shall on demand furnish the insurer with particulars of all other insurance covering the subject-matter of the contract.  R.S.O. 1990, c. I.8, s. 258 (6). Payment into court (7) Where any person has recovered a judgment against the insured and is entitled to bring action under subsection (1), and the insurer admits liability to pay the insurance money under the contract and the insurer considers that, (a)  there are or may be other claimants; or (b)  there is no person capable of giving and authorized to give a valid discharge for payment who is willing to do so, the insurer may apply to the court without notice for an order for payment of the money into court, and the court may, upon such notice, if any, as it thinks necessary, make an order accordingly.  R.S.O. 1990, c. I.8, s. 258 (7). Effect of order (8) The receipt of the proper officer of the court is sufficient discharge to the insurer for the insurance money paid into court under subsection (7), and the insurance money shall be dealt with as the court may order upon application of any person interested therein.  R.S.O. 1990, c. I.8, s. 258 (8). Defence to excess limits claim relating to s. 250 coverage (9) Despite anything contained therein to the contrary, every contract evidenced by a motor vehicle liability policy shall, for the purposes of this section, be deemed to provide all the types of coverage mentioned in section 250, but the insurer is not liable to a claimant with respect to such coverage in excess of the limits mentioned in section 251.  R.S.O. 1990, c. I.8, s. 258 (9). Defence where coverage under s. 247 or 248 (10) Where one or more contracts provide for coverage of a type mentioned in section 247 or 248, except as provided in subsection (12), the insurer may, (a)  with respect to that type of coverage; and (b)  as against a claimant, avail itself of any defence that it is entitled to set up against the insured, despite subsection (4).  R.S.O. 1990, c. I.8, s. 258 (10). Defence where excess limits (11) Where one or more contracts provide for coverage in excess of the limits mentioned in section 251, except as provided in subsection (12), the insurer may, (a)  with respect to the coverage in excess of those limits; and (b)  as against a claimant, avail itself of any defence that it is entitled to set up against the insured, despite subsection (4).  R.S.O. 1990, c. I.8, s. 258 (11). Defence where vehicle used in business of carrying passengers (12) Where a contract provides coverage of the type mentioned in clause 216 (a) of The Insurance Act, being chapter 224 of the Revised Statutes of Ontario, 1970, in respect of an automobile operated in the business of carrying passengers for compensation or hire and insured for that purpose, the insurer may, (a)  with respect to that type of coverage; and (b)  as against a claimant, only avail itself of a defence that it is entitled to set up against the insured in respect of that part of the coverage, if any, that exceeds, (c)  the limits mentioned in section 251; or (d)  the minimum limits required for that type of coverage by or under any other Act, whichever is the greater.  R.S.O. 1990, c. I.8, s. 258 (12). Insured’s liability to reimburse insurer (13) The insured shall reimburse the insurer upon demand in the amount that the insurer has paid by reason of this section and that it would not otherwise be liable to pay.  R.S.O. 1990, c. I.8, s. 258 (13). Insurer may be made third party (14) Where an insurer denies liability under a contract evidenced by a motor vehicle liability policy, it shall, upon application to the court, be made a third party in any action to which the insured is a party and in which a claim is made against the insured by any party to the action in which it is or might be asserted that indemnity is provided by the contract, whether or not the insured enters an appearance or defence in the action.  R.S.O. 1990, c. I.8, s. 258 (14). Rights of insurer (15) Upon being made a third party, the insurer may, (a)  contest the liability of the insured to any party claiming against the insured; (b)  contest the amount of any claim made against the insured; (c)  deliver any pleadings in respect of the claim of any party claiming against the insured; (d)  have production and discovery from any party adverse in interest; and (e)  examine and cross-examine witnesses at the trial, to the same extent as if it were a defendant in the action.  R.S.O. 1990, c. I.8, s. 258 (15). Idem (16) An insurer may avail itself of subsection (15) even if another insurer is defending in the name and on behalf of the insured an action to which its insured is a party.  R.S.O. 1990, c. I.8, s. 258 (16). Section Amendments with date in force (d/m/y) 2002, c. 24, Sched. B, s. 39 (2) - 01/01/2004