coverage, but states that it is subject to the terms, conditions,
provisions, exclusions and limits as are prescribed by the regulations. Regulation 676, s. 10, dictates that the terms of the
policy apply to the coverage provided under s. 265(1). Since the
relevant term of the policy is that there is “no coverage”
where the vehicle is operated without the owner’s consent, the
obvious conclusion is that uninsured automobile coverage is
 The situation is not so clear, however, in the case at bar.
 I will deal first with statutory condition 4(1), which is
reproduced above. There is no question that this condition was
breached, because the vehicle was knowingly operated by a disqualified driver. The question, though, is whether the statutory
conditions apply to uninsured automobile coverage.
 Section 234(3) of the Act is reproduced above, and clearly
states that statutory conditions do not apply to the uninsured
automobile coverage that is provided for in s. 265, “except as
otherwise provided in the contract”. It makes no provision for
statutory conditions to be incorporated into this class of coverage
by way of regulation.
 Section 10 of Reg. 676 purports to make statutory conditions apply to the uninsured automobile coverage provided by
s. 265. In so doing, it is in direct conflict with s. 234(3).
 Mr. Schwarzman, for CAA, concedes that there is a conflict between s. 234(3) and s. 10. He further agrees that it is an
established principle of statutory interpretation that regulations
are subordinate legislation, and where there is a conflict
between a regulation and a statute, the statute prevails. If any
authority is required for that proposition, see Ruth Sullivan,
Sullivan on the Construction of Statutes, 5th ed. (Markham,
Ont.: LexisNexis, 2008), at p. 341; and Friends of Oldman River
Society v. Canada (Minister of Transport),  1 S.C.R. 3,
 S.C.J. No. 1.
 I am satisfied that an irreconcilable conflict exists
between s. 234(3) of the Act and s. 10 of the regulation such that
the provisions of the Act must prevail. That means that the
statutory conditions, including s. 4(1), do not apply to uninsured
automobile coverage, “except as otherwise provided in the contract”. I have carefully reviewed the contract, and can find no
provision that states that the statutory conditions do apply to
this class of coverage, nor have I been directed to any such provision during the course of argument.
 Indeed, the relevant terms of the contract point to the
opposite conclusion. The coverage mandated by s. 265(1) is
contained in s. 5 of the policy, entitled “Uninsured Automobile