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The Causation Test In Detail

Law, Union & Rock Insurance Co. v. Moore's Taxi Ltd
., [1960] S.C.R. 80, 1959 CanLII 81 (SCC)

In May of 1955, a taxi company – Moore’s – was contracted to take mentally handicapped children from their school to their homes.  The cab drivers had been specifically instructed to ensure the children exited the vehicle on the same side of the road as their home.  Unfortunately, the cab driver on that day allowed his charge, a young boy, to exit the vehicle across the street from his home resulting in the youngster being seriously injured by a truck.
 
The parents of the boy were successful in winning a judgment against the cab company.  The taxi cab company followed by bringing suit against their insurer, Law, Union & Rock Insurance Co. (“Law”) under the comprehensive insurance policy Moore’s had with Law.  Moore’s argued that causation should be defined as "originating from, incident to or having connection with the use of the vehicle.” Law; however, suggested that the vehicle was not the cause of the accident, the cab driver’s failure to follow the instructions to deliver the lad safely were.  Chief Justice Williams agreed: 

In my opinion the liability of the plaintiff arose from the neglect of the driver of the taxi to escort the child to his home. That there was a duty to do so is not disputed. This was a duty separate and distinct from the "use and operation" of the motor vehicle. The car had ceased to operate and was not in use. To incur liability in the use and operation of the motor vehicle implies some negligence in such use or operation. That was not what gave rise to the liability in this case.  

To summarize, the insured, Moore’s Taxi Ltd., breached their duty to safely deliver the child.  This breach occurred after the automobile was stopped.  It was this breach that led to the harm of the child.
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