Neutral Citation: 1993 ONICDRG 9

File No. A-001840

ONTARIO INSURANCE COMMISSION

BETWEEN:

RICHARD ROY

Applicant

and

ROYAL INSURANCE COMPANY OF CANADA

Insurer

DECISION

Issues:

The Applicant, Richard Roy, was injured in a motor vehicle accident on January 20, 1991. He applied for weekly income benefits from the Insurer payable under Regulation 672 (R.R.O. 1990, the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8. Every motor vehicle policy provides these no-fault accident benefits.

The Insurer refused to pay weekly income benefits to the Applicant on the basis that he knew or ought reasonably to have known that he was operating the automobile at the time of the accident without the owner's consent. The Applicant applied for mediation of this dispute with the Insurer, but mediation was unsuccessful in resolving the matter. The Applicant then applied for arbitration under the Insurance Act.

The issues to be resolved by this hearing were:

1. Is the Applicant disentitled to weekly income benefits because he knew or ought reasonably to have known he was operating the automobile at the time of the accident without the owner's consent?

2. If the Applicant is entitled to weekly income benefits, what is the amount to which he is entitled and for what period of time?

The Applicant also claims interest on any outstanding amounts owing, and his expenses incurred in the hearing.

Result:

1. The Applicant is not entitled to weekly income benefits because he knew or ought reasonably to have known that he was operating the automobile at the time of the accident without the owner's consent.

2. If the Applicant were entitled to weekly income benefits, he would have been entitled to $325.31 per week for the period January 27 to March 16, 1991.

Hearing:

The hearing was held at North York, Ontario, on February 4, 1993, before me, K. Julaine Palmer, arbitrator.

Present at the Hearing:

Applicant:

Richard Roy

Applicant's

Representative:

Paulette Roy

Insurer's

Helen Silveira

Representative:

Barrister & Solicitor

Witnesses:

The following testified under oath at the hearing:

Richard Roy

Normand Roy

Robert Saxberg

Rod James

Thomas Sheehan

Exhibits:

The parties filed an arbitration brief and 9 other exhibits at the hearing.

Evidence and Findings:

The Applicant began working at Scenic Productions in late August, 1990 as a production assistant. Scenic Productions makes scenery for motion pictures, commercials and live shows. The Applicant's duties included driving a van and cube truck, picking up and delivering sets, cleanup of the shop and running errands. He had a set of keys to the shop and usually was the first to arrive on the job at 7:00 or 7:30 a.m.

The Applicant testified that he had his own set of keys to the van and had permission to use it for his own personal use, as long as he paid for his own gas and parking tickets. The Applicant testified that his boss, Tom Sheehan, knew he had the van; he was never questioned about his use of it nor told not to use it.

The accident occurred on Sunday, January 20, 1991 at 4:40 a.m. The Applicant testified he lost consciousness in the accident and woke up in the hospital. The Applicant testified that he had been out the previous evening, with his brother, and had driven to a friend's house where they played cards and drank beer.

The Applicant's brother, Normand Roy, testified. He also worked for Scenic Productions. He stated that the work atmosphere there was very relaxed. He testified that the keys were always in the van and that it was mainly used for running to pick up wood, cement, flats, tools, and carpenters' boxes. He testified that Tom Sheehan did not oppose the employees' personal use of the van as long as they told him about it. Normand Roy testified that he had taken the van himself a few times and Tom Sheehan had asked him if he put gas in the van.

Robert Saxberg, a part-time driver/labourer at Scenic Productions and friend of Normand and Richard Roy, testified. He stated that the van was used "strictly for work purposes" to get sets to locations and to pick up and deliver items that were necessary for the business. He stated that the keys were kept in the office on the wall. Robert Saxberg testified that he and the Applicant had a discussion in December 1990 or January 1991 before the accident about the Applicant using the van to drive home, without permission. Robert Saxberg testified that on that occasion, he talked the Applicant out of using the van, reasoning with him that he only lived three blocks away.

Robert Saxberg testified that during the 9 or 10 week period he worked with the Applicant at Scenic Productions, he did not know of any occasion when an employee had taken the van for personal reasons. He stated that Tom Sheehan was very rigid about everything concerning Scenic Productions. On one occasion, he testified, he had asked Tom Sheehan for permission to use the cube truck after hours to move, and permission was granted. A subsequent request, after this accident, was denied. Robert Saxberg still works approximately one week per month for Scenic Productions.

Rod James testified. He was the Production Manager at Scenic Productions from September 1988 to August 1992. He is a good friend of Normand Roy, the Applicant's brother. Rod James testified that he came to the hearing because he felt it was important that this issue be put to rest. The production manager testified that there was no after-hours use of the van, although the work day often involved late night runs. He stated that he never specifically told Richard Roy that he could not use the van for his own personal use. The production manager stated that he felt this was understood--just as if you worked for Consumer's Gas or Bell Telephone, you would not expect to take a work vehicle home.

Rod James testified that the keys to the van hung on the wall under the clock in the office. He stated that if the Applicant had his own set of keys to the van, he did not know about it. He testified that there was only a single set of keys to the van, because he had himself dropped the second set of keys down the sewer in front of the shop about a month after he started work for Scenic Productions.

Rod James testified that he had hired the Applicant as a general labourer. The Applicant had shown responsibility and worked hard, so was given extra responsibilities and gradually worked himself into a position as "head driver". However, the production manager testified that this did not give the Applicant special privileges with the van. Rod James testified it is incorrect if any witness testified it was common knowledge that the van could be used for personal reasons.

Thomas Sheehan, President of Scenic Productions, testified that he owned the van in question and that he did not know the Applicant took it home on a regular basis. He said, if he had known, he would have fired the Applicant. He denied there was any arrangement by which employees could take his van after work hours, in exchange for paying the gas and any parking tickets.

Thomas Sheehan testified that there were supposed to be two sets of keys to the van and they were hung on the wall in the office. He denied knowing that the Applicant kept a set of keys to the van. Thomas Sheehan stated that the Applicant had never asked him to borrow his van for personal reasons and he had no knowledge that the Applicant used it for recreational purposes. This was not common practice at Scenic Productions. Thomas Sheehan recalled only one occasion when Robert Saxberg or Richard Roy had asked to use the cube truck for personal moving purposes. He denied any conversation with the Applicant about parking tickets he had received in the course of his personal use of the van.

The Applicant argued that until the time of the accident no clear policy existed at Scenic Productions with respect to personal use of the van. There was no rationale by which Richard Roy knew or ought to have known that he was not to use the van--the work environment was very relaxed. On the contrary, Thomas Sheehan knew or ought to have known that employees were using his van.

The Insurer argued that the credibility of the witnesses was the key in this arbitration. Normand Roy, the Applicant's brother, was not an independent witness and his testimony should be viewed accordingly. The two independent witnesses, Robert Saxberg and Rod James, gave compelling testimony. All the witnesses agreed the work atmosphere was somewhat relaxed, but they disagreed about the use of the van. The Applicant had the perfect opportunity to take the van without anyone knowing, since he was the first at work in the morning and the last to lock up at night.

Section 17(1)(f) of the No-Fault Benefits Schedule provides as follows:

17.— (1) The insurer is not required to pay benefits under subsection 12(1) or 13(1) in respect of a driver of an automobile at the time of the accident.[... ]

(f) if the driver knew or ought reasonably to have known that he or she was operating the automobile without the owner's consent.

I find that the Applicant knew or ought to have known that he was operating Thomas Sheehan's van at the time of the accident without the owner's consent. In the short time that he worked for Scenic Productions, the Applicant gained the trust of the management of the small firm by hard work and by assuming responsibility. He was the first to arrive at the shop in the morning, since he was charged with letting other employees into the building, and the last to lock up at the end of the work day. I find that the Applicant took advantage of this situation and abused his position of trust by appropriating the van for his own personal use during off hours. Where the evidence of the Applicant or his brother on the issue of consent conflicts with the evidence of Robert Saxberg, Rod James or Thomas Sheehan, I prefer the evidence of the latter three witnesses. I find their testimony to be more credible on the issue of consent than the evidence of the Applicant and his brother.

If I had found the Applicant did not fall within the exception of section 17(1)(f), I would have found him entitled to weekly income benefits from January 27, 1991 to March 17, 1991. The Applicant admitted at the hearing that he could have returned to work on March 17, 1991. I find this date coincides with Dr. Hirsz's opinion in Exhibit 1.4 and the fact that the arch bars were removed during surgery on March 5, 1991.

I find that, in the four weeks preceding the accident, the Applicant earned $1,626.56, for an average gross weekly income of $406.64. The Applicant would have been entitled to 80 per cent of the last figure or $325.31 in weekly income benefits.

Expenses:

The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:

The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664 (R.R.O. 1990), Dispute Resolution Expenses.

In the Ralph McCormick v. Economical Mutual Insurance Company case (O.I.C. File No. A-000139, dated October 2, 1991), arbitrator Susan Naylor made the following comments about expenses, with which I agree:

The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act, as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.

Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.

The Director of Arbitrations approved this statement of the principles guiding an award of expenses in the appeal decision in Vito Luigi Calogero v. The Co-Operators General Insurance Company (O.I.C. File No. P-000251, issued February 13, 1992).

The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code. In the event the parties cannot agree as to the total amount of expenses, I remain seized of this matter and either party may apply for assessment of the expenses before me.

Order:

1. The Applicant is not entitled to weekly income benefits because he knew or ought reasonably to have known he was operating the automobile at the time of the accident without the owner's consent.

2. The Applicant is entitled to his expenses incurred in respect to the arbitration.

March 8, 1993

K. Julaine Palmer

Arbitrator

Date