Neutral Citation: 1994 ONICDRG 22

File No. A-002514

ONTARIO INSURANCE COMMISSION

BETWEEN:

HOSSEIN BAGHERI

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION

Issue:

The Applicant, Hossein Bagheri, was involved in a motor vehicle accident while operating his vehicle on February 1, 1991, and allegedly sustained injuries in the accident. The Applicant's automobile was uninsured at the time of the accident. The other automobile involved in the accident was insured by Allstate Insurance Company of Canada. The Applicant applied for statutory accident benefits from Allstate Insurance Company of Canada. Statutory accident benefits are payable under Ontario Regulation 672.¹ The Insurer declined to pay weekly benefits under section 13 of the Schedule on the basis that Mr. Bagheri was not insured at the time of the accident and is therefore excluded from receiving weekly benefits by operation of section 17 of the Schedule. The parties were unable to resolve their dispute through mediation and the Applicant applied for arbitration under the Insurance Act.

The sole issue in this hearing is whether the Applicant is excluded from receiving weekly benefits under section 13 of the Schedule, by the operation of sections 17(1)(c) and 17(1)(d) of the Schedule, on the basis that he was not insured at the time of the accident.

The Applicant seeks a special award under section 282(10) of the Insurance Act, for the Insurer's failure to pay weekly benefits.

The Applicant also claims interest, and his expenses incurred in the hearing.

Result:

1. The Applicant is not excluded from receiving weekly benefits under section 13 of the Schedule by the operation of sections 17(1)(c) and 17(1)(d) of the Schedule.

2. I make no determination of the amount of benefits and interest to which the Applicant may be entitled under the Schedule and therefore I am unable to make an order for a special award under section 282(10) of the Insurance Act.

3. In view of the Applicant's success, I award him his expenses incurred in respect to the arbitration. I remain seized with regard to any issue about the amount of expenses payable.

Hearing:

The parties requested that the hearing be conducted by way of written submissions filed and oral submissions made by telephone. Oral submissions were made by telephone conference call on September 15, 1993, to me, Janice Mackintosh, arbitrator.

Present during the telephone conference call:

Applicant's

Alfred M. Kwinter

Representative:

Barrister and Solicitor

Insurer's

James Flaherty

Representative:

Barrister and Solicitor

The parties introduced an agreed statement of facts, dated September 2, 1993, reproduced in Appendix "A". Documents and materials, including cases and statutes referred to by the parties, are listed in Appendix "B".

Evidence and Findings:

On the basis of the oral and written submissions of the parties and their agreed statement of facts, I conclude that:

1. Mr. Bagheri had a valid driver's licence on February 1, 1991, the date of the accident.

2. Mr. Bagheri was operating his vehicle without a valid policy of insurance on the date of the accident.

3. The accident involved another automobile which was insured by Allstate Insurance Company of Canada.

4. Mr. Bagheri was charged and convicted of the offence of failing to carry and produce a valid insurance card under subsection 3(1) of the Compulsory Automobile Insurance Act, which provides as follows:

3 (1) An operator of a motor vehicle on a highway shall have in the motor vehicle at all times,

(a) an insurance card for the motor vehicle; or

(b) an insurance card evidencing that the operator is insured under a contract of automobile insurance.

5. In connection with the same accident, Mr. Bagheri was subsequently charged with operating a motor vehicle without insurance, contrary to subsection 2(1) of the Compulsory Automobile Insurance Act, which provides:

2 (1) Subject to the regulations, no owner of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated, on a highway unless the motor vehicle is insured under a contract of automobile insurance.

6. During the course of the proceeding in the Ontario Court (Provincial Division) held in connection with the charge under section 2(1) of the Compulsory Automobile Insurance Act, Mr. Bagheri's agent, in the presence of Mr. Bagheri, represented to the court that the charge of "operate motor vehicle without insurance" was "exactly the same offence, exactly the same circumstance" as the earlier conviction of failing to carry and produce a valid insurance card under section 3(1) of the Compulsory Automobile Insurance Act.

7. Mr. Bagheri's agent represented that the Applicant's earlier conviction under section 3(1) of the Compulsory Automobile Insurance Act precluded a subsequent conviction for "effectively the same offence" under section 2(1) of the Compulsory Automobile Insurance Act, by operation of the Kienapple² principle.

8. Upon hearing these submissions, the Justice of the Peace marked the proceeding with respect to the charge under section 2(1) of the Compulsory Automobile Insurance Act "stayed".

9. The decision in Kienapple v. The Queen considered the issue of multiple convictions arising out of the same incident. The majority held that, "If there is a verdict of guilty on the first count and the same or substantially the same elements make up the offence charged in a second count, the situation invites application of a rule against multiple convictions".³

10. As a result of the Kienapple decision, the practice in criminal courts, where multiple offences arise out of the same incident, is to hear the charges together. Where a conviction is entered in respect of the more serious charge, a stay of proceedings may be ordered on the less serious charge.

11. In the case of Mr. Bagheri, the court ordered a stay of proceedings in respect of the more serious offence in view of the earlier conviction on the lesser offence.

12. No conviction was entered against Mr. Bagheri in respect of the charge under section 2(1) of the Compulsory Automobile Insurance Act.

1. Is Mr. Bagheri excluded from receiving weekly benefits payable under section 13 of the Schedule by the operation of section 17(1)(c) of the Schedule?

Section 17(1)(c) of the Schedule states:

Exclusions

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, ...

(c) if, as a result of the accident, the driver is convicted of operating the automobile while it was not insured under a motor vehicle liability policy;

Mr. Kwinter submitted, on behalf of Mr. Bagheri, that section 17(1)(c) of the Schedule contemplates a "conviction" for the specific offence "of operating the automobile while it was not insured under a motor vehicle liability policy". Section 2(1) of the Compulsory Automobile Insurance Act most closely relates to this offence. Mr. Bagheri was not convicted of an offence under section 2(1) of the Compulsory Automobile Insurance Act and should therefore not be excluded from receiving weekly benefits under section 13 by the operation of section 17(1)(c) of the Schedule.

Mr. Flaherty, on behalf of Allstate Insurance, conceded that the clear and unambiguous language of section 17(1)(c) requires a "conviction". However, Mr. Flaherty pointed out that section 17(1)(c) of the Schedule does not specifically refer to any particular section of the Compulsory Automobile Insurance Act. He submitted that, in the particular circumstances of this case, the Applicant's conviction under section 3(1) of the Compulsory Automobile Insurance Act is, in effect, a conviction "of operating an automobile while it was not insured under a motor vehicle liability policy" within the meaning of section 17(1)(c) of the Schedule.

Mr. Flaherty submitted that the Applicant appeared before a Justice of the Peace in the Ontario Court (Provincial Division) in respect of the charge of operating a motor vehicle while not insured, under section 2(1) of the Compulsory Automobile Insurance Act. Through his representative, the Applicant took the position that a charge of "operate motor vehicle without insurance", under section 2(1) of the Compulsory Automobile Insurance Act, was "exactly the same offence, exactly the same circumstance" as a conviction of failing to carry and produce a valid insurance card under section 3(1) of the Compulsory Automobile Insurance Act. Mr. Flaherty submitted that the Applicant should not be permitted to deny this assertion in the present forum. At page three of his written submissions, Mr. Flaherty proposed that "the Applicant is estopped from now arguing that they [sections 2(1) and 3(1) of the Compulsory Automobile Insurance Act] are not the same".

Mr. Flaherty referred me to the argument of the Applicant's representative before the Justice of the Peace where he stated:

...where a person does not have insurance, if he is charged with the failure to have the insurance card, then it is effectively the same offence. You can't produce a valid insurance card if you haven't got insurance".⁴

Mr. Flaherty submitted that this argument is correct. He took the position that in the particular circumstances of this case, the Applicant's conviction under section 3(1) of the Compulsory Automobile Insurance Act, in effect, included the offence of operating a motor vehicle without insurance, contrary to section 2(1) of the Compulsory Automobile Insurance Act and that the Kienapple principle was properly applied.

For the reasons that follow, I am unable to agree with Mr. Flaherty's submissions.

Section 17(1)(c) explicitly requires a conviction on the offence of "operating the automobile while it was not insured", in order for the exclusion to apply. I have considered sections 2(1) and 3(1) of the Compulsory Automobile Insurance Act. I find that they create separate offences, intended to cover distinct situations, with different penalty provisions. The maximum penalty for contravening section 3(1) is a fine of not more than $200 and anticipates a situation in which a driver is validly insured but is unable to produce evidence of insurance when requested. The maximum penalty for contravening section 2(1) is a fine of not less than $500 and not more than $2,500, with the possibility of a licence suspension of not more than one year, for driving without a valid insurance. In my view, section 2(1) of the Compulsory Automobile Insurance Act more closely relates to the offence contemplated by section 17(1)(c) of the Schedule than does section 3(1) of the Compulsory Automobile Insurance Act. I find that the specific offence contemplated by section 17(1)(c) of the Schedule is section 2(1) of the Compulsory Automobile Insurance Act.

Are the offences under section 2(1) and 3(1) of the Compulsory Automobile Insurance Act interchangeable? While it could be argued that the elements of the offence of failing to carry and produce a valid insurance card under section 3(1) of the Compulsory Automobile Insurance Act are included in the more serious offence of operating an automobile while not insured, under section 2(1) of the Compulsory Automobile Insurance Act, the reverse cannot be asserted. A conviction under section 3(1) does not carry with it the elements of a conviction under section 2(1). A plain reading of the relevant sections of the legislation makes it clear that a conviction under section 3(1) of the Compulsory Automobile Insurance Act is not "exactly the same offence, exactly the same circumstance" as a conviction under section 2(1) of the Compulsory Automobile Insurance Act, regardless of the submissions of the Applicant's representative to the Justice of the Peace.

The mere assertion by the Applicant's representative as to the status and effect of legislation does not make it so. The wording of section 17(1)(c) limits the factors which I may consider when determining whether the Applicant is excluded from receiving weekly income benefits. I have found that: section 17(1)(c) of the Schedule requires a conviction of operating an automobile while not insured; that section 2(1) of the Compulsory Automobile Insurance Act relates to this conviction; and that no conviction under section 2(1) was entered against the Applicant in connection with this accident.

I am satisfied that the principles of estoppel, specifically referred to by Mr. Flaherty in his argument, do not assist me in this matter. The statements were not made by the Applicant himself, but rather by the Applicant's representative in the course of making submissions to a Justice of the Peace. The case of Henderson v. Tudhope⁵ stands for the principle that, in certain circumstances, where a party's counsel misapprehends the law, counsel's statements in court do not create an estoppel. Moreover, the representative's statements were not made to the Insurer with the intention of causing the Insurer to alter its position to its disadvantage. On the contrary, the Insurer seeks to rely on statements that were never made to it or intended for it.

Mr. Flaherty urged me to find that the requirements of section 17(1)(c) of the Schedule are satisfied where there has been a conviction under section 3(1) of the Compulsory Automobile Insurance Act and the Applicant is factually guilty of the offence of driving without proper insurance. He suggested that such a finding would be in keeping with the general wording of the exclusion, the intention of the Schedule and a general legislative policy of keeping uninsured motorists off the roads. Mr. Flaherty referred to the case of Hufsky v. The Queen⁶ as support for this general legislative policy.

I agree that the intention of section 17(1)(c) is to reduce the incidence of uninsured drivers by precluding them from receiving weekly benefits in certain circumstances. However, as previously stated, a conviction under section 3(1) of the Compulsory Automobile Insurance Act is not equivalent to a conviction of operating an automobile while it was not insured. I do not accept that the Legislature intended to exclude a validly insured motorist from receiving weekly benefits because he or she left their insurance card behind. Furthermore, the plain language of section 17(1)(c) does not permit me to consider whether the Applicant was in fact driving without proper insurance. In my view, a conviction of a specific offence is required, if the exclusion under section 17(1)(c) is to apply. I cannot substitute my view of the facts, and the law, under a civil burden of proof, in place of a conviction by the Ontario Court (Provincial Division).

2. Is Mr. Bagheri excluded from receiving weekly benefits payable under section 13 of the Schedule by the operation of section 17(1)(d) of the Schedule?

Section 17(1)(d) of the Schedule states:

Exclusions

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, ...

(d) if the driver was not authorized by law to drive the automobile;

Mr. Flaherty submitted, on behalf of the Insurer, that the Applicant's conviction under section 3(1) of the Compulsory Automobile Insurance Act, rendered him a driver who "was not authorized by law to drive the automobile" within the meaning of section 17(1)(d) of the Schedule. This view was considered by Arbitrator Makepeace in the case of James Traganis and Security National Insurance Company, Commission File No. A-001198, July 30, 1993. She concluded on page 6 of that decision as follows:

I cannot agree. Clauses 17(1)(a), (b), and (c) exclude drivers who have been convicted of certain specified offences. It would have been an easy matter for the Legislature expressly to exclude drivers who have been convicted of an offence under subsection 3(1) of that Act [Compulsory Automobile Insurance Act].

I find that the phrase "authorized by law" refers to licensing matters. Subsection 17(2) provides as follows:

Clause (1)(d) does not apply to a driver who is not authorized by law to drive an automobile only by reason of a suspension of a licence for failure to pay a fine.

In my view, the express reference to licensing in subsection 17(2) indicates that the exclusion to which it is an exception also deals with licensing matters.

(emphasis added)

I agree with the view expressed by Arbitrator Makepeace. Mr. Flaherty did not refer me to any decisions which interpret the phrase "not authorized by law to drive the automobile" in the manner he proposed.

Finally, Mr. Flaherty urged me to find that the Applicant was factually guilty, and to consider that finding within the overall context of the Schedule and the general legislative policy of keeping uninsured motorists off the roads. He urged me to conclude that the Applicant was "not authorized by law to drive the automobile" within the meaning of section 17(1)(d) of the Schedule, because no one in Ontario is authorized by law to operate an uninsured vehicle. This argument is attractive because the Applicant has admitted that he was driving his vehicle without valid insurance, contrary to the provisions of section 2(1) Compulsory Automobile Insurance Act. Nevertheless, I cannot accept this approach because to do so would render the requirement of a "conviction" in sections 17(1)(a), (b), and (c), of the Schedule meaningless.

Mr. Flaherty referred to rules of statutory interpretation which reject a literal approach to the interpretation of a section when it leads to an unreasonable result or one which the arbitrator believes the Legislature did not intend. The result in this case is to permit an Applicant who had admitted he operated an automobile while it was not insured, but was not convicted of that offence, to receive weekly benefits. I interpret the plain language of section 17 and the explicit requirement for a conviction "of operating the automobile while it was not insured" as leaving little room for the application of the rules of statutory interpretation. This section is not ambiguous. The clear statement of the Legislature limits an arbitrator appointed under the Insurance Act from substituting her view of the facts and the relevant law, in place of a conviction by the Ontario Court. I am satisfied that this is what the Legislature intended.

I conclude that the Insurer is not relieved of paying benefits under section 13 of the Schedule by operation of the exclusions contained in section 17 of the Schedule.

Special Award

The Applicant seeks a special award under the provisions of section 282(10) of the Insurance Act which states:

(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

The only issue that was placed before me for determination was whether the Applicant is excluded from receiving weekly benefits payable under section 13 of the Schedule by the operation of sections 17(1)(c) and 17(1)(d) of the Schedule. The issue of the Applicant's general entitlement to benefits under the Schedule and specifically under section 13 was not canvassed before me. I received no evidence concerning the Applicant's injury, whether the Applicant suffered a substantial inability to perform the essential tasks in which he would normally engage, and for what period. I make no determination of the amount of benefits and interest to which the Applicant may be entitled under the Schedule and therefore I am unable to award a lump sum of up to 50 per cent of that amount, within the meaning of section 282(10) of the Insurance Act. Furthermore, I am satisfied that there was sufficient uncertainty concerning the operation of section 17 of the Schedule to justify the Insurer's decision to withhold payments pending the outcome of this dispute.

Order:

1. The Applicant is not excluded from receiving weekly benefits payable under section 13 of the Schedule by the operation of sections 17(1)(c) and 17(1)(d) of the Schedule.

2. I make no determination of the amount of benefits and interest to which the Applicant may be entitled under the Schedule and therefore I am unable to make an order for a special award under section 282(10) of the Insurance Act.

3. In view of the Applicant's success, I award him his expenses incurred in respect to the arbitration. I remain seized with regard to any issue about the amount of expenses payable.

March 10, 1994

Janice Mackintosh Arbitrator

Date

APPENDIX "A"

Re: Mr. Hossein Bagheri

OIC File No.: A002514

AGREED STATEMENT OF FACTS

1. The Applicant, Mr. Bagheri, was involved in a motor vehicle accident while operating his motor vehicle on February 1, 1991. The Applicant allegedly sustained injuries in the motor vehicle accident which involved another motor vehicle. The Applicant's automobile was uninsured at the time of the motor vehicle accident. The Insurer, Allstate Insurance Company of Canada, insured the other automobile involved in the motor vehicle accident which was owned and operated by Allstate's insured, Mr. Ricardo Arruda.

2. As a result of the accident, the Applicant was charged and convicted of an offence pursuant to the Compulsory [sic] Insurance Act, Section 3(1).

3. As a result of the automobile accident aforesaid, the Applicant was subsequently charged with "operate motor vehicle without insurance" contrary to the Compulsory Automobile Insurance Act.

4. The latter charge was heard on February 21, 1992 in the Ontario Court (Provincial Division) at 2265 Keele Street, North York. The Applicant was present in court and was represented by an agent. On behalf of the Applicant, the agent represented to the court that the charge of "operate motor vehicle without insurance" was "exactly the same offence, exactly the same circumstance" and "effectively the same offence" as the previous charged under Section 3(1) of the Compulsory Automobile Insurance Act. The court stayed the proceeding.

5. The Applicant has applied for no fault benefits which have been declined by the Insurer.

6. The issue to be determined at the Arbitration hearing is whether the Applicant in the circumstances is entitled to or excluded from no fault benefits.

7. Annexed hereto is the transcript of the proceeding before the Justice of the Peace on February 21, 1992 with respect to the offence of "operate motor vehicle without insurance".

8. The relevant sections of the Compulsory [sic] Insurance Act are contained at Tab 8 of the Insurer's Brief.

September 2, 1993

APPENDIX "B"

Applicant's Authorities

1. Mewett, Introduction to the Criminal Process in Canada, (2d) 1992, pp. 92-93

2. Salhany, Canadian Criminal Procedure, (5d) 1989, pp. 236-241, pp. 328-329

3. R v. P. (D. W), 49 C.C.C. (3d), pp. 417-432

4. Peet v. Ether (1987), 26 C.C.L.I., pp. 42-50 (Sask. Q.B.)

5. Hobbs v. General Accident Assurance Company of Canada Ltd. (1987) 27 C.C.L.I. (P.I.E.S.C.) pp. 186-196

6. Wakeling v. Insurance Corporation of British Columbia (1987), 29 C.C.L.I., pp. 301-312 (B.C.S.C.)

7. Shakur v. Plot Insurance Company(1990) I.L.R., pp. 10,320 - 10,325

Insurer's Authorities

1. Keenapple v. The Queen (1974) 1974 CanLII 14 (SCC), 44 D.L.R. (3d) 351 (S.C.C.)

2. Cox and Patton v. The Queen 1963 CanLII 78 (SCC), [1963] S.C.R. 500 (S.C.C.)

3. Hufsky v. The Queen 1988 CanLII 72 (SCC), [1988] 1 S.C.R. 621 (S.C.C.)

4. Excerpt from Canadian Encyclopedic Digest (3d) pp. 70-114 inclusive

5. Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25

6. Transcript of Proceedings in Ontario Court (Provincial Division)

Documents before the Arbitrator

1. Report of Mediator, dated October 13, 1992

2. Application for Appointment of an Arbitrator, dated November 17, 1992

3. Response by Insurer, dated December 11, 1992

4. Letter confirming pre-hearing discussion, dated May 10, 1993

5. Agreed Statement of Facts, dated September 2, 1993

6. Memorandum of Fact & Law, submitted on behalf of Applicant, dated August 31, 1993

7. Applicant's Brief of Authorities, containing 7 items

8. Written submissions on behalf of Insurer

9. Insurer's Brief of Authorities, containing 8 items

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Kienapple v. The Queen (1974) 1974 CanLII 14 (SCC), 44 D.L.R. (3d) 351 (S.C.C.)
3. 3Kienapple v. The Queen (supra) at page 367
4. 4(page 4 of the transcript of the proceedings before his Worship, Justice of the Peace, B. Jeffrey, Tab 2 Insurer's brief).
5. 51930 CanLII 385 (ON SCAD), [1930] 3 D.L.R. 245 (Ont)
6. 61988 CanLII 72 (SCC), [1988] 1 S.C.R. 621 (S.C.C.)