Neutral Citation: 1995 ONICDRG 154

File No.: A-011977

ONTARIO INSURANCE COMMISSION

BETWEEN:

TIMOTHY J. HANLON

Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA

Insurer

DECISION

Issues:

The Applicant, Timothy J. Hanlon, suffered injuries on April 16, 1993 when Michael Daly deliberately struck him in the side of the head and face with a portable cellular telephone. He applied for statutory accident benefits from the Insurer, payable under Ontario Regulation 672.¹ The Insurer denies liability on the grounds that the assault was not an "accident" within the meaning of the Schedule. The parties were unable to resolve their dispute through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue in this hearing is whether Mr. Hanlon was injured as a result of an "accident" as defined in section 2 of the Schedule?

The Applicant also claims his expenses incurred in the hearing.

Result:

1. The injuries sustained as a result of the blow to the head were not the result of an "accident" within the meaning of section 2 of the Schedule.

Hearing:

The hearing was held in London, Ontario, on August 21, 1995. Further submissions were made by teleconference on October 19, 1995.

Present at the Hearing:

Applicant:

Timothy J. Hanlon

Applicant's

Douglas Bryce

Representative:

Barrister and Solicitor

Insurer's

Brian McCall

Representative:

Barrister and Solicitor

Assisted by Patricia Sheenan, articling student

Insurer's

Don Wright

Officer:

Evidence and Findings:

Around 9:00 p.m. on Friday, April 16, 1993, Timothy Hanlon was returning home from McMaster University where he had just finished writing his final examination in engineering physics. He was driving his pick-up truck on Highway 2 between Brantford and Hamilton. At the relevant location, the highway is two lanes in each direction divided by a paved median two to three feet wide.

Michael Daly was travelling in his pick-up truck in the same direction, behind Mr. Hanlon. Mr. Daly claims that Mr. Hanlon would not let him pass. Mr. Hanlon claims that he could not get out of Mr. Daly's way. After some jockeying for position and flashing of high beams, Mr. Daly attempted to pass Mr. Hanlon by driving on the median. There was a collision between the front left corner of Mr. Hanlon's truck and the right rear corner of Mr. Daly's truck. Mr. Hanlon's side mirror was damaged and his fender was dented. Mr. Daly's right rear tire exploded. Mr. Daly made two complete turns on the highway. For the purpose of this decision it is unnecessary for me to determine who bears the greater blame in this accident. I find that each driver used his vehicle to frustrate and intimidate the other.

Mr. Daly attempted to flee the scene by driving with the flat tire to the first exit at Madden Road. Mr. Hanlon pulled onto the shoulder where he stopped to examine his truck. He then followed Mr. Daly onto Madden Road.

He drove up to within 15 feet of Mr. Daly's vehicle to a point where he could see the licence number. He saw Mr. Daly inspecting his flat tire and, satisfied that Mr. Daly was not a big man, got out of his truck. The two started shouting at each other. Mr. Daly was holding a portable cellular telephone which he intended to use to call an automobile association if he could not change the tire. I accept Mr. Hanlon's testimony that Mr. Daly crossed the 15 feet between the vehicles. Mr. Daly swung at Mr. Hanlon with the telephone clenched in his fist and missed. His second swing hit Mr. Hanlon in the side of the head and face with the telephone. Mr. Hanlon caught hold of Mr. Daly's arms before he could deliver another blow and he did not release him until Mr. Daly calmed down. Mr. Hanlon did not strike Mr. Daly. I find that at no time did Mr. Hanlon want to physically fight with Mr. Daly and that he did not expect the blow to the face.

Mr. Hanlon retreated to his vehicle where Mr. Daly tapped on his window and pleaded with him not to lay charges.

The assault was investigated by OPP Officer Gregson. Officer Gregson said that Mr. Daly was so angry at the scene of the assault that he was unable to change his tire. Officer Gregson had to show Mr. Daly how to operate the jack.

Mr. Daly pleaded guilty to a charge of common assault.

Argument:

If these events constitute an "accident" within the meaning of section 2 of the Schedule, Mr. Hanlon is entitled to statutory accident benefits. I understand that the parties have agreed on the amount of those benefits.

Under the relevant portion of section 2 of the Schedule:

"accident" means an incident in which the use or operation of an automobile causes, directly or indirectly, physical, psychological or mental injury . . .

Sections 266, 267.1 and 268 of the Insurance Act and other related amendments to the Act, establish the automobile no-fault systems. These sections refer to liability "arising directly or indirectly from the use or operation" of an automobile.

Throughout this decision the words "arising from" or "arising out of" are used with reference to the risk covered. These are the words used in the cases I refer to. However, the Schedule uses the words "causes" in the definition of "accident". In Amos v. Insurance Corporation of British Columbia, September 21, 1995, the Supreme Court of Canada notes that the words "arising out of" provide broader coverage than the words "caused by" and must be interpreted in a more liberal manner. As Arbitrator Draper noted in Brian C. Portch and Markel Insurance Company of Canada and Royal Insurance Company of Canada, March 20, 1995, OIC File Nos. A-007701 and A-008360, it is not clear why the wording in the Schedule differs from that in the Act. Did the legislature intend that the risk covered in the Act be broader than the risk covered in the Schedule?

In Myer v. Bright 1993 CanLII 3389 (ON CA), 15 O.R. (3d) 129 the Ontario Court of Appeal discussed the purpose of the no-fault scheme.

The scheme of compensation provides for an exchange of rights wherein the accident victim loses the right to sue unless coming within the statutory exemptions, but receives more generous first-party benefits, regardless of fault, from his or her own insurer.

Clearly, the Act and Schedule are meant to be complimentary. Under the Act, an accident victim's right to sue for injuries which "arise from" a motor vehicle accident are restricted in exchange for the accident victim's right to claim no-fault benefits. Statutes are paramount over regulations. It is presumed that regulatory provisions are meant to work together with their own enabling legislation. Accordingly, the no-fault benefit regulation cannot be interpreted to further restrict the accident victim's rights. Such would be the case if the accident victim was required to establish that his injuries satisfy a narrower test of being "caused" by a motor vehicle accident.

It is a principle of statutory interpretation that in the case of conflict, the statutory provision prevails over the regulatory provision. In my view therefore, the words "use or operation of an automobile causes, directly or indirectly" in the definition of "accident" in the Schedule should be read as "arising directly or indirectly from the use or operation of an automobile" as used in the Act.

In some of the case law considered in this decision, the relevant words are "arising out of the use of operation of an automobile". I see no difference between "arising from" and "arising out of".

Counsel for the Applicant advanced four arguments as to why his client should succeed.

1. The primary issue is what test should be applied to determine whether a loss is an "incident in which the use or operation of an automobile causes, directly or indirectly . . . injury".

Applicability of "purpose" and "chain of causation" test:

In 1990 the Insurance Act was amended ² to bring in a more comprehensive no-fault system. The amendments included the addition of the words "directly or indirectly" in the phrase "arising directly or indirectly from the use or operation" of a vehicle in provisions dealing with third party liability coverage and in provisions dealing with the establishment of the no-fault system.

Prior to those amendments, the phrase which applied to the peril insured against in motor vehicle liability policies included the words: loss or damage arising from the ownership, use or operation of any such automobile".³ That phrase, or similar phrases, have been used in automobile policies and in exclusionary clauses to comprehensive liability policies, and in automobile insurance legislation for a number of years.

The Supreme Court of Canada considered the meaning of the phrase on three occasions.

In 1956, in Stevenson v. Reliance Petroleum Ltd., 1956 CanLII 27 (SCC), 5 D.L.R. (2d) 673 Rand J. formulated what has become known as the purpose test "to determine whether a loss arose out of the use or operation of an automobile. The test involves determining whether the accident resulted from the ordinary and well-known activities to which automobiles are put.

In 1959, in Law, Union & Rock Insurance Company Ltd. v. Moore's Tax Ltd., 1959 CanLII 81 (SCC), 22 D.L.R. (2d) 264, the Supreme Court again looked at the meaning of the phrase and formulated what has become known as the "chain of causation test". This test involves tracing a continuous chain of causation unbroken by the interposition of a new act of negligence and stretching between the negligent use and operation of a motor vehicle on the one hand and the injuries sustained by the claimant on the other.

On September 21, 1995, the Supreme Court released reasons for decision in Amos v. Insurance Corporation of British Columbia. The Court considered the meaning of the words "arises out of the ownership, use or operation of a vehicle" in section 79 of the British Columbia no-fault automobile insurance regulation. The Court confirmed that a two-part test, the "purpose test" and the "chain of causation test", still applies to the interpretation of these words.

The Amos case involved an insured who slowed down his vehicle to avoid a group of men. As he did so, he was surrounded by the men and shot as they attempted to break into his vehicle. The Court concluded that the no-fault character of the benefits does not change the interpretation of the words "arises out of the ownership, use or operation of a vehicle".

There is no indication that the legislature has provided an alternative definition for the phrase in question, or has intended to modify the judicial interpretation given to that phrase in the case law. Consequently, prior jurisprudence concerning whether an injury arises out of the ownership, use or operation of a vehicle is useful in interpreting the provisions of s. 79(1).

Similarly, there is no indication that the Ontario legislature has intended to modify the judicial interpretation given to that phrase in the case law. In my view, the addition of the words directly or indirectly" to the phrase arising from the use or operation" and to the definition of accident" does not alter the conclusion that the purpose test" and chain of causation test "still apply. In Amos the Court considers the words "direct or proximate causal connection" in the formulation of the second part of the two-part test and rejects the notion that the causal connection must be direct.

With respect to causation, it is clear that a direct or proximate causal connection is not required between the injuries suffered and the ownership, use or operation of a vehicle. The phrase arising out of" is broader than caused by", and must be interpreted in a more liberal manner.

The two-part test as set out in Amos is:

1. Did the accident result from the ordinary and well-known activities to which automobiles are put?

2. Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant's injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

The Court added that while the phrase "arises out of the ownership, use or operation of a vehicle" "must not be stretched beyond its plain and ordinary meaning, it ought not to be given a technical construction that defeats the object and insuring intent of the legislation providing coverage".

Application of the "purpose test":

Stevenson v. Reliance Petroleum Ltd. involved the negligent delivery of gasoline to a service station. The tank trunk was left unattended and gasoline was allowed to flow. As a result the gasoline overflowed and ignited and destroyed the premises. Rand J. said at page 676:

The expression "use or operation" would or should, in my opinion, convey to one reading it all accidents resulting from the ordinary and well-known activities to which automobiles are put, all accidents which the common judgment in ordinary language would attribute to the utilization of an automobile as a means of different forms of accommodation or service.

He also noted that use or operation implies a human factor.

For negligence we must have human action: the truck is not self operating" or self-using"; use" implies human direction and utilization of a means:

Some confusion in determining whether an injury arises from the use or operation of a vehicle may be attributed to decisions in which it appears that the Court does not apply the purpose test" or applies the purpose test "using the words of the chain of causation test".

For example, in Fraser Valley Taxi Cabs Ltd. v. Insurance Corporation of British Columbia, 1993 CanLII 1417 (BC CA), [1993] I.L.R. 1-2941 (B.C.C.A.) an intoxicated individual was run over and killed by a vehicle half an hour after being ejected from a taxi. The issue was whether his death arose out of the ownership, use or operation of the taxi. The Court does not consider the "purpose test" as formulated in Stevenson v. Reliance. Rather, it applies the "chain of causation test". It says:

The claim in this case does not arise out of the ownership of the taxi, the operation of the taxi, or the use of the taxi. Rather, as in Law, Union and Rock Insurance, it is "the action of the driver in ceasing to use and operate the motor vehicle" (emphasis in original) that is the source of the claim. As observed there "The car had ceased to operate and was not in use".

In my view, the Court could have used the same words to find that the "purpose test" had not been satisfied.

Similarly, in Johnstone v. Lee, (1979) 1979 CanLII 732 (BC SC), 17 B.C.L.R. 324 (S.C.B.C.) the Court applies the "chain of causation test" without considering the "purpose test". In that case the Court found that injuries from an assault following a motor vehicle accident did not arise from the use or operation of the motor vehicle. The Court said:

I do not accept plaintiff's counsel's submission in this case that Mr. Lee was acting as an automaton and that there was a continuous unbroken chain of causation. Mr. Lee performed many deliberate and thoughtful acts before turning his attention to obtaining particulars of the accident from the driver of the other motor vehicle. Mr. Lee did not make any effort to assault the plaintiff until he was confronted with the plaintiff's version of the accident - namely, that he had a witness that could say that Mr. Lee had pulled out in front of Johnstone. It is my conclusion that the blow or blows thrown by the defendant Lee at the plaintiff were a new and independent cause of the plaintiff's injuries.

In my view, the Court could have used the "purpose test" to arrive at the same result.

I also note that in Amos v. Insurance Corporation of British Columbia the Supreme Court of Canada emphasizes that the injuries occurred after the use or operation of the vehicle had ended in two decisions in which it was determined that the injuries did not arise from the use or operation of a vehicle. With reference to a Michigan Court of Appeal decision the Supreme Court said:

The altercation in Kangas from which the injuries flowed occurred after the passenger in the insured automobile alighted from the stopped vehicle, and assaulted a pedestrian. [Emphasis in original.]

With reference to Law, Union & Rock Insurance Co. v. Moore's Taxi Ltd. the Supreme Court said:

It was held that the insured's liability arose from a breach of duty that occurred after the vehicle was stopped, when the child crossed the street unescorted. This duty was a contractual duty, and had nothing to do with the use or operation of the insured's vehicle. . . [Emphasis in original.]

Applying these principles to the present case, human direction or utilization of the vehicles had ceased well before the time of the injury. Time had passed and a number of deliberate acts had taken place between the last use and operation of the vehicles and the injury. Both Mr. Daly and Mr. Hanlon got out of their trucks. Each man shouted at the other. Mr. Daly crossed the 15 feet separating the trucks and confronted Mr. Hanlon. The two continued shouting and Mr. Daly swung twice before hitting Mr. Hanlon with the telephone. The injury occurred after the use or operation of the vehicles had ceased. In my view, the accident did not result "from the ordinary and well-known activities to which automobiles are put". The first part of the two-part test is not satisfied.

It might be argued that the injury resulted from the aggressive driving on the highway and that driving on a highway satisfied the "purpose test". In my opinion, this is an argument concerning causality. It is an inquiry as to the relationship between a cause (the aggressive driving) and the effect (the injury). To deal first with whether there is some nexus or causal relationship between the driving on the highway and the assault would be to ignore the first part of the two-part test.

In my view it is preferable to apply the two tests in order and since Mr. Hanlon is unable to satisfy the first part of the two-part test, it is unnecessary for me to determine whether he satisfies the second part of the test. However, even if Mr. Hanlon did satisfy the "purpose test" he does not satisfy the "chain of causation test ". The chain of causation between the use of the vehicles and the injury was severed by new and independent acts which occurred after the vehicles had stopped. These acts included Mr. Daly and Mr. Hanlon shouting at each other and the assault.

2. The Applicant also argues that Mr. Daly's actions were those of an automaton: they started when the collision on the highway occurred and did not end until after the blow to the head. I find that Mr. Daly was not an automaton. He performed deliberate and thoughtful acts before assaulting Mr. Hanlon. He tried to flee the scene. Having found what he thought was a place of safety, he got out of his vehicle with a portable cellular telephone intending to telephone the automobile association if he could not change his tire. Mr. Hanlon arrived and got out of his vehicle. Mr. Hanlon was satisfied that there was no risk that Mr. Daly might injure him. The two shouted at each other and then Mr. Daly struck Mr. Hanlon with the telephone.

3. The Applicant also argues that the cellular phone was a part of the vehicle by virtue of being used in the vehicle, and that using it as a weapon was a use of the vehicle.

I find that use of the telephone as a weapon cannot be considered to be the use or operation of a vehicle. The telephone was not connected to the vehicle and its use inside the vehicle cannot make it part of the vehicle for the purpose of automobile coverage. Even if it were part of the vehicle, I am not satisfied that using part of a vehicle as a weapon amounts to the use or operation of the vehicle. Iaquone v. Florou, [1981] I.L.R. 1-1367 (Ont. S.C.) is authority for the proposition that an accident occurs when a motor vehicle is used to deliberately run over a victim, so long as the assault was not expected, provoked or knowingly risked by the plaintiff. The Court in that case found the motor vehicle was being used for its usual purpose of moving under its own power when the injury occurred and that the first part of the two-part test was satisfied. In this case, the telephone was not being used for its usual purpose when it was used to strike Mr. Hanlon.

4. The Applicant also argued that the decision in McIndoe v. I.C.B.C. 1990 CanLII 1801 (BC SC), [1990] I.L.R. 1-2612 (B.C.S.C) applies to his case. The issue in McIndoe was whether the plaintiff's injury arose out of the ownership, use or operation of a vehicle within the meaning of the British Columbia no-fault benefit regulation. McIndoe was a passenger in a vehicle being pursued by a policeman. When McIndoe's vehicle left the roadway and drove into a wooded area, the policeman stopped his vehicle and continued the pursuit on foot. The policeman's revolver accidentally discharged and the bullet injured McIndoe. Skipp J. said:

The discharge of Constable Kirkpatrick's revolver was the most proximate cause of the injury sustained by the plaintiff, but in my view the cause of this injury cannot be solely attributed to the accidental discharge of the revolver. The negligent use or operation of the vehicle by Pasmen was a contributing cause and I find therefore the plaintiff to be entitled to Part VII benefits.

The Applicant argues that the assault by Daly was similarly connected to and responsive to the use of the vehicles on the roadway.

In my view, the reasoning in McIndoe does not apply. In McIndoe the vehicle was being used when the injury occurred. Although not specifically stated by the Court, the first-part of the two part test was satisfied because the continuing use of the vehicle was a contributing cause of McIndoe's injury. The Court then appears to apply the second part of the test.

In the present case, the use and operation of both vehicles had ended. The first part of the test is not satisfied and there is no need to apply the second part of the test.

Order:

1. Mr. Hanlon was not injured as a result of an "accident" as defined in section 2 of the Schedule.

2. Mr. Hanlon is entitled to his expenses of the arbitration.

October 30. 1995

William J. Renahan

Arbitrator

Date

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. 2S.O. 1990, c. 2
3. 3R.S.O. 1980, c. 218, s. 209