Neutral Citation: 1995 ONICDRG 50
File No. A-010681
ONTARIO INSURANCE COMMISSION
BETWEEN:
DAVID BRANCH
Applicant
and
DOMINION OF CANADA GENERAL INSURANCE COMPANY
Insurer
DECISION
Issues:
The Applicant, David Branch, was injured in a motor vehicle accident on September 21, 1993. He applied for statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. The Insurer refused to pay him weekly income benefits on the grounds that Mr. Branch was a passenger in a motor vehicle which he knew, or ought to have known, was being driven without the consent of its owner. After an unsuccessful attempt to resolve the dispute through mediation, the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issue in this hearing is:
- Is David Branch precluded from receiving weekly income benefits pursuant to section 17(3)(b) of the Schedule because he was a passenger in a motor vehicle which he knew or ought to have known was being driven without the consent of the owner?
The Applicant also claims interest on any amounts owing, and his expenses incurred in the hearing.
Result:
- On the facts of this case, the Applicant is not precluded by section 17(3)(b) of the Schedule from receiving weekly income benefits. Mr. Branch will be paid weekly income benefits of $600, plus interest and expenses.
Hearing:
The hearing was held in Kingston, Ontario, on April 6, 1995, before me, K. Julaine Palmer, arbitrator.
Present at the Hearing:
Applicant:
David Branch
Applicant's
John F. Scheulderman
Representative:
Barrister and Solicitor
Insurer's
Pasquale Santini
Representative:
Barrister and Solicitor
Witnesses:
David Branch, Jacqueline Branch,
Frank Spindler, Gerrit Martini
The parties filed one exhibit at the hearing. Counsel referred to the case, McLeod v. Morse (1975), 1975 CanLII 752 (ON HCJ), 59 D.L.R. (3d) 39 (Ont. H.C.).
Evidence and Findings:
David Branch was injured in a motor vehicle accident on September 21, 1993. At that time, he was a passenger in a tractor being driven by Gerrit Martini. In the accident, Mr. Branch suffered injuries to his right shoulder and arm. The parties agree that since the accident, Mr. Branch has been incapable of performing his essential tasks as a driver/loader for Frank the Mover. The parties have also agreed that if Mr. Branch is entitled to weekly income benefits, he should be paid the sum of $600 per week, unless any adjustment for CPP disability payments is required.
The parties also agreed that David Branch was an insured person according to the provisions of the Schedule and the Insurance Act under a policy of insurance held by his wife, and also under a policy held by his employer, Frank the Mover. However, they remained fundamentally divided on the question of whether Mr. Branch knew or reasonably ought to have known that Gerrit Martini was operating the tractor without the consent of its owner.
At the time of the accident, Gerrit Martini and David Branch worked for Frank Spindler, who operated a business called Frank the Mover. Mr. Spindler owned two five-ton trucks with 26- foot boxes and a 14-foot cube van. At the time of the accident, he had three or four full-time employees and as many part-time employees. All the employees who were expected to operate any vehicle as part of their duties had keys to all of the company's vehicles.
In September 1993, Mr. Spindler purchased a 1985 Ford L-9000 tractor and a 40-foot trailer. There is no issue between the parties in this claim that to lawfully operate this unit required a class AZ driver's license. Of all Mr. Spindler's employees, only Daniel Wilkinson possessed such a license. Mr. Spindler and his employees, Gerrit Martini and David Branch, had discussed their wish to upgrade their driver's licenses so that they could operate the tractor trailer unit.
On the day of the accident, the tractor and trailer were being refurbished. Mr. Wilkinson brought the tractor trailer to a location in the Kingston area so that the trailer could be sandblasted. In the afternoon, he moved the trailer to a different location to prepare it for painting. The second location was at an industrial park. Several witnesses testified that the industrial park consisted of two rows of warehouse buildings separated by large internal roadways and parking lots. During the afternoon of September 21, 1993, while the trailer was being prepared for painting, first Gerrit Martini, then David Branch took the tractor unit for a test drive around the industrial park. Frank Spindler was present.
Both Mr. Martini and Mr. Branch testified that Mr. Spindler asked them their opinion about the operation of the tractor. He made no comment to them, however, suggesting their operation of the unit was restricted.
Both Mr. Martini and Mr. Branch testified that it was their understanding that in order to operate the tractor trailer unit, a driver was required to possess an AZ class driver's license. However, they both believed that they could operate the tractor unit, independently of the trailer, with only a class G license.
About a week prior to the accident, Frank Spindler had given keys to the tractor to Gerrit Martini and David Branch. The tractor was routinely kept at Daniel Wilkinson's home, because Mr. Spindler did not have a place to store this vehicle. The evidence is that each vehicle in the Spindler operation was assigned to a driver, who was primarily responsible for its fuelling and day-to-day maintenance. Three witnesses testified that the company had no formal policy with respect to the operation of company vehicles for the personal use of employees. Employees would use company vehicles to transport snowmobiles and do other errands. Mr. Martini testified, however, that if an employee wished to take one of the company vehicles to Toronto or Montreal, then, of course, he would ask the permission of the owner before embarking on such a trip.
On the day of the accident, Mr. Spindler left the industrial park late in the afternoon. Gerrit Martini and David Branch remained there to finish work on the trailer. After they finished, Gerrit Martini told David Branch that he was going to take the tractor for a test drive. Mr. Martini inquired if Mr. Branch would care to come along. The two employees climbed into the tractor, proceeded first to a fuel outlet where Mr. Spindler had a company account, and then set out driving in the rural area of Lennox and Addington county. Mr. Martini testified that he intended to drive the tractor for a few miles, then stop and let Mr. Branch drive the tractor on the return trip to the industrial park. Unfortunately, during the course of Mr. Martini's operation of the tractor, he failed to stop the vehicle in time at an intersection, and the tractor overturned in a ditch, injuring Mr. Branch.
Mr. Martini, who still works for Mr. Spindler, testified that he had made a bad error in judgement in taking the tractor on the roadway that evening. He further testified that Mr. Spindler before he left the industrial park, told him (out of earshot of Mr. Branch) "not to screw around too much". Mr. Martini reflected that he was not sure what Mr. Spindler meant by that phrase: whether he was referring to the amount of time they would spend finishing the work on the trailer, or whether he was speaking about driving the tractor.
Frank Spindler testified at the hearing that he gave no thought to the employees driving the tractor on a highway. He testified that he was aware that his employees required an AZ license in order to operate the tractor on a public roadway. He was not concerned with the manner in which his two employees operated the tractor on the industrial park lot; he had not considered the possibility that they might take the vehicle onto the roadway. He gave no consideration to their opinion or their belief as to their ability to lawfully operate the tractor, separately from the trailer, with the class of license which they had.
Section 17(3)(b) of the Schedule reads as follows:
17.--(3) The insurer is not required to pay benefits under subsection 12(1) or 13(1),
(b) in respect of an occupant of an automobile at the time of the accident who knew or ought reasonably to have known that the driver was operating the automobile without the owner's consent.
In this case, the Insurer has the burden of proving the facts which are necessary to bring the section 17(3)(b) exclusion into operation. The Insurer admitted that there was no evidence before me which would enable me to conclude that David Branch knew that the tractor was being operated without the consent of its owner. However, the Insurer urged me to accept the view that the facts proved that David Branch "reasonably ought to have known" that Mr. Martini should not have been operating the vehicle on a public roadway. I say this, because that seems to me what the Insurer was asking me to find. However, it is not the question of illegality of operation of the motor vehicle on the roadway which is at issue. The question is whether or not the owner consented to his employee's operation of this vehicle.
In June 1994, I released the decision Peter Jacobs and Economical Mutual Insurance Company, June 16, 1994, OIC File No. A-004394. That case concerned a young man, also a passenger in a motor vehicle. The insurer denied payment of weekly income benefits to Mr. Jacobs also as a result of the exclusion provision of section 17(3)(b) of the Schedule.
In the Jacobs case, I discussed what I believe this section means.
. . . the words "reasonably ought to have known" become the focus. The use of the word "reasonably" implies an objective standard. The words "ought...to have known" are distinguished from the word "knew", which presumes a purely subjective finding.
In other words, is the test what an ordinary, rational, sensible and sober person in Peter Jacobs' shoes at the time of the accident "ought reasonably to have known" or is the test what Peter Jacobs, the grossly intoxicated passenger, "ought reasonably to have known"?
I conclude that the use of the word "reasonably" in the phrase "ought reasonably to have known" of section 17(3)(b) of the Schedule means that an individualized inquiry is called for, but only to the extent of the exercise of reason by an ordinary, rational person in the situation of the Applicant. The evidence must convince the arbitrator, at least on a balance of probabilities, that an ordinary person in Peter Jacobs' situation that night should have known that Adam Toulouse was driving the Grand Am on May 29/30, 1992, without the consent of Karen Trudeau-Toulouse.
In this case, I am satisfied that Mr. Spindler had not considered the possibility of his employees, Martini and Branch, driving the tractor onto a public roadway. I find, however, that such a lack of consideration is a factor contributing to this accident. This employer had given his employees the keys to operate this motor vehicle; in my view, that gesture, without specific instructions or restrictions, implies the authority to operate the vehicle.
In addition, on the day of the accident itself, Mr. Spindler was present while his employees operated the vehicle around parking lots of the industrial park. He was aware of the intention of the two employees to upgrade their licenses to the required class, and also of their need to practise operating the vehicle, in order to become familiar with its operation.
Jacqueline Branch testified that several days after the accident, Mr. Spindler, during one of his visits to Mr. Branch in the hospital, commented about the imminent arrival of an insurance adjuster to take a statement from Mr. Branch. Mrs. Branch testified that Mr. Spindler suggested that it would be all right for her husband to tell the adjuster that at the time of the accident, he and Martini had the vehicle to practise driving, with his permission. I am satisfied that Mr. Spindler made this statement in an effort to be helpful to Mr. Branch, who really was confused as to what to tell the insurance adjuster. I am also satisfied, as I have stated above, that Mr. Spindler had not considered the possibility of his employees taking the vehicle onto the highway.
However, I conclude that by giving sets of keys to the tractor to at least three employees, and by being present during the operation of the tractor by two of these employees (including the one who was driving at the time of the accident), that Gerrit Martini, at the time of the accident, had the owner's impliedconsent to operate the motor vehicle.
In so finding, therefore, it will be apparent that I am satisfied that it was reasonable for David Branch to assume that Gerrit Martini was operating the tractor on the evening of the accident with its owner's consent.
At the outset of this hearing, there was a claim for a special award against the Insurer, which, as the testimony unfolded, was not pursued by the Applicant. I find that David Branch is not entitled to a special award, although I find that he is entitled to interest on the weekly income benefits, as set out in section 24 of the Schedule. Mr. Branch has been successful in this arbitration and I further find that he is entitled to his reasonable expenses of the proceeding.
Order:
On the facts of this case, the Applicant is not excluded by section 17(3)(b) of the Schedule from receiving weekly income benefits. The Applicant is entitled to weekly income benefits of $600 from September 28, 1993 forward, plus interest as set out in section 24 of the Schedule.
The Applicant is entitled to his expenses incurred with respect to the arbitration.
May 10, 1995
K. Julaine Palmer
Arbitrator
Date