Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1996 ONICDRG 107

Appeal P96-000033

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ECONOMICAL MUTUAL INSURANCE COMPANY

Appellant

and

J.E.

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Noella M.R. Thompson (for Economical)

Harry P. Brown (for Economical)

Peter B. Lillico (for J.E.)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The arbitration order, dated February 15, 1996, is rescinded and the following order is substituted:

J.E. is not entitled to death benefits or funeral benefits under sections 51 and 52 of the Schedule.

J.E. is entitled to her appeal expenses.

June 25, 1996

David R. Draper

Director's Delegate

Date

REASONS FOR DECISION

I. THE ISSUE

The issue presented in this appeal is straightforward: Can the surviving spouse of an insured person who commits suicide recover death benefits and funeral expenses under Ontario Regulation 776/93, the Statutory Accident Benefits Schedule - Accidents on or after January 1, 1994 ("the Schedule - 1994")?

The facts are not contested. Mr. D.E. committed suicide. He was found in the driver's seat of his car, parked in his garage with the engine running. The car windows were open and the garage doors were closed. The coroner concluded that Mr. D.E. died of carbon monoxide poisoning due to suicide. His widow, Mrs. J.E., accepts this finding.

Mr. D.E. had an automobile insurance policy issued by a company related to the Economical Mutual Insurance Company ("Economical"). Mrs. J.E. applied under this policy for death benefits and funeral expenses. Economical denied her claim on the basis that Mr. D.E.'s death was an intentional act, not an "accident" covered by the policy.

According to sections 51 and 52 of the Schedule - 1994, death benefits and funeral expenses are payable if an insured person dies "as a result of an accident." "Accident" is defined in section 1 of the Schedule - 1994 as follows:

In this Regulation,

"accident" means an incident in which, directly or indirectly, the use or operation of an automobile causes an impairment or causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device.

Suicide was considered in two previous arbitrations, one under the Schedule - 1994 and one under its predecessor, the Statutory Accident Benefits Schedule - Accidents before January 1, 1994 ("the Schedule - 1990").¹ In each case, the arbitrator concluded that the insured person's suicide was not an "accident."

The arbitrator in this case considered these decisions, but disagreed with them, concluding that Mr. D.E. died as a result of an "accident" as defined in section 1 of the Schedule - 1994. Economical appealed the resulting order that it pay death benefits and funeral expenses, plus interest.

The parties provided thorough written and oral submissions, for which I am grateful. Simply put, Economical contends that suicide is not, and has never been, covered by automobile insurance policies. Mrs. J.E. submits that the arbitrator's analysis is correct and, therefore, her order should not be disturbed.

II. ANALYSIS

"Accident" is a common term in insurance policies and legislation. The courts have held that absent a specific definition, it is a broad, non-technical term that should be given its ordinary and popular meaning.² Although the ordinary meaning of "accident" does not include a wholly intentional event, this does not mean that the injured person must be "blameless." An injury may be accidental even if the injured person acted recklessly, as long as he or she did not voluntarily "look for" or "court" the risk of that injury.³

The cases make it clear that it is the perspective of the injured person that is critical. It is not an accident if the injured person intentionally causes his or her own injuries. However, if someone else causes the injuries, whether intentionally or unintentionally, the injured person is considered to have been injured in an accident. For example, the Supreme Court of Canada recently considered the situation of a driver who was shot by one of a group of men attempting to stop and gain access to his van.⁴ It was accepted that the driver was injured as a result of an "accident," despite the fact that the shooting was intentional. The only issue was whether the accident arose out of the ownership, use or operation of the van.

Historically, the courts have had particular concerns about suicide. Life insurance policies that provided for death benefits on the suicide of the insured person were held to be contrary to public policy.⁵ In part, this was because suicide was considered a crime. But, there is also a sense that because insurance provides protection against risk, the insurer should not be liable to pay a benefit where the insured person deliberately causes the event that was insured against.⁶

In Ontario, the legislation was amended to allow life insurance policies to cover suicide. The current provision is found in section 188 of the Insurance Act:

188.--(1) Where a contract contains an undertaking, express or implied, that insurance money will be paid if a person whose life is insured commits suicide, the undertaking is lawful and enforceable.

The arbitrator treated this section as an indication that views about suicide and insurance coverage have changed. The question in this appeal is whether the definition of "accident" in the Schedule - 1994 represents a similar extension of coverage for suicide to automobile insurance. For the following reasons, I conclude that it does not.

The common law creates a strong presumption against insurance coverage for intentional injuries, including suicide. Section 188 specifically alters the law in Ontario with respect to life insurance policies. In my view, it is extremely significant that there is no similar provision in the Insurance Act for automobile insurance.

In addition, section 188 does not require that every life insurance policy cover suicide. It simply authorizes coverage that was unenforceable at common law. The fact that it is optional coverage preserves the insurer's ability to issue policies based on some assessment of risk. Typically, life insurance policies that include coverage for suicide exclude compensation if the suicide occurs within two years of the effective date of the policy.⁷ This delay in coverage reduces some of the public policy concerns by treating suicide as a potential future risk. At the time the policy is issued, the insured person cannot purposely create a loss for which the insurer is liable.

Unlike life insurance, automobile insurance is mandatory. If Ms. J.E.'s position prevails, every motor vehicle liability policy would have to cover automobile-related suicide from the date the policy is issued. I do not believe that the legislation is sufficiently clear to signal such a dramatic change in the law.

A. The Definition of Accident

The definition of "accident" in section 1 of the Schedule - 1994 is clearly important. In Amos v. Insurance Corp. of British Columbia, the Supreme Court of Canada endorsed the following excerpt from Driedger on the Construction of Statutes (3rd ed., 1994):

When used in legislation, common law terms and concepts are presumed to retain their common law meaning, subject to any definition supplied by the legislature.

Because "accident" is defined, neither dictionary definitions nor decisions interpreting "accident" as an undefined term are directly relevant. However, they are not irrelevant. "Accident" has a common law history. The question is the extent to which the definition in section 1 alters its common law meaning.

The arbitrator examined the definition and asked whether it was "lexical" or "stipulative." In a "lexical" definition, the definition corresponds to the normal usage of the word, whereas in a "stipulative" definition, the word is given a different meaning. Based on the lack of any reference in the definition to unforseeability, unexpectedness, or an unplanned event or circumstance, the arbitrator concluded that it was a "stipulative" definition, extending the meaning of "accident" to include suicide.

In my view, this analysis ignores the fact that the definition significantly restricts the meaning of "accident." Events that might be called accidents in normal usage, are not accidents for the purposes of the Schedule - 1994 unless:

a specific "incident" is involved, rather than a series of mishaps;
the incident involves the use or operation of an automobile; and
that use or operation causes, directly or indirectly, an "impairment," or damage to certain items.

I prefer the following analysis from the arbitration decision in Cynthia P. and Non-Marine Underwriters, Members of Lloyd's, London, England, (September 29, 1995, OIC A-008806):

I find that the definition restricts or limits the meaning of the term "accident" for the purposes of the Schedule, to situations where the use or operation of an automobile, directly or indirectly, causes personal injuries, of various sorts, or causes damage to personal property such as prostheses, prescription eyewear, or other medical or dental devices. It does not broaden the meaning of the term to include all such incidents, including incidents deliberately planned and intended to cause injury or damage. It does not speak to any incident where the use of a motor vehicle has caused injury, but only to those incidents which fall into the primary (and narrower) category of accidents. (p.5)

This interpretation is strengthened when the context of the definition is considered. The Schedule - 1994 is a regulation made under the Insurance Act. Section 268 of the Insurance Act that creates the requirement every motor vehicle liability policy must include statutory accident benefits. It states that benefits must be provided "in respect of incidents involving the use or operation . . . of an automobile":

268.--(1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

(1.1) The benefits set out in the Statutory Accident Benefits Schedule shall, in respect of incidents involving the use or operation, on or after the day section 267.1 comes into force, of an automobile, include benefits of the following kinds . . .

[emphasis added]

The regulation-making authority under which the Schedule - 1994 was created allows the Lieutenant Governor in Council to make regulations establishing benefits, including "terms, conditions, provisions, exclusions and limits related to such benefits," and "procedures for determining entitlement."⁸ It does not authorize regulations expanding the events giving rise to accident benefits.

Therefore, the link between the Insurance Act and the Schedule - 1994 is the phrase "incidents involving the use or operation . . . of an automobile." If the intention was to expand the scope of events covered by accident benefits beyond the common law meaning of "accident," it is curious that the word "accident" was chosen to describe the triggering event.

In my opinion, the definition of "accident" was used to make the Schedule - 1994 easier to read, not to change the basic concept of an accident. The drafters could have repeated the phrase, "an incident involving the use or operation of an automobile," each time they wanted to refer to the triggering event. Considering the fact that the words "accident" and "pre-accident" appear more than 200 times in the 96 sections of the Schedule - 1994, that would have been extremely cumbersome.

Finally, the legislation draws no clear distinction between "accident" and "incident." Both words are used to describe the event that gives rise to liability, property damage or injuries covered by automobile insurance. The most relevant example is found in sections 266:

266.--(1) In respect of loss or damage arising directly or indirectly from the use or operation, after the 21st day of June, 1990, of an automobile and despite any other Act, none of the owner of an automobile, the occupants of an automobile or any person present at the incident are liable in an action in Ontario for loss or damage from bodily injury arising from such use or operation in Canada, the United States of America or any other jurisdiction designated in the Statutory Accident Benefits Schedule involving the automobile unless, as a result of such use or operation, the injured person has died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important bodily function caused by continuing injury which is physical in nature.

(2) Subsection (1) does not relieve any person from liability other than the owner of the automobile, occupants of the automobile and persons present at the incident.

(3) In an action for loss or damage from bodily injury arising directly or indirectly from the use or operation of an automobile, a judge shall, on motion made before or at trial, determine if the injured person has, as a result of the accident, died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important bodily function caused by continuing injury which is physical in nature.

In Young v. Donway Ford Sales Limited (1995), 1995 CanLII 7245 (ON CTGD), 26 O.R. (3d) 607, Justice Borins had to consider whether there was a difference between the references to "incident" in subsections (1) and (2), and "accident" in subsection (3). In that case, an employee of the defendant negligently failed to tighten the lug nuts on one of the wheels of the plaintiff's truck. After the plaintiff left the defendant's premises, he was injured when the wheel fell off, causing him to collide with another vehicle. The plaintiff commenced an action, but the defendant argued that it should be dismissed because the injuries were not sufficiently serious to come within the exceptions in section 266(1). The plaintiff submitted that section 266 did not apply because the defendant's employee was not "present at the incident." The defendant's employee clearly was not at the accident. The question was whether "incident" had a different meaning that could include the negligent work on the truck.

Justice Borins accepted the principle that the same word should generally be given the same meaning throughout the legislation, while different words should be given different meanings. However, after a detailed reading of the legislation, including the Schedule - 1990, he concluded that this was a rare example where different words should be given the same meaning:

In my view, the words "the incident" should be given a construction which furthers the purpose of s. 266 of the Act and effects harmony with the Statutory Accident Benefits Schedule where "accident" is used throughout, and is defined as "an incident" in which personal injuries are caused by the use or operation of an automobile. Thus, the "incident" referred to in s.266(1) is the accident giving rise to the loss or damage from the use or operation of an automobile for which the injured person seeks to recover non-pecuniary damages. In other words, "incident" means the accident in which loss or damage was caused the plaintiff by the use or operation of an automobile . . .

In my view, to achieve consistency between s-s. (1) and (3), "incident" and "accident" must be given the same meaning - the event from which loss or damage arose from the use or operation of an automobile. (p.615)

Although the issue in Young v. Donway was different from the one presented in this appeal, I accept its analysis and find it relevant. In my opinion, little importance can be given to the use of the word "incident" in the definition of "accident" because in the context of this legislation, the two terms are interchangeable.

B. Legislative History

The arbitrator also relied on legislative history in reaching her conclusion. Before the significant reforms in 1990, Ontario had an essentially third-party liability system for compensating people injured in automobile accidents. However, some first-party benefits were available through Schedule "C " to the Insurance Act. Schedule "C" specifically excluded the payment of nearly all first-party benefits if the injuries or death resulted from the insured person's suicide or attempted suicide:

Subsection 3—SPECIAL PROVISIONS, DEFINITIONS, AND EXCLUSIONS OF THIS SECTION

(2) Exclusions

(a) Except as provided in Part III of subsection (2) [Supplemental Benefits respecting Accidents occurring in Quebec], the Insurer shall not be liable under this section for bodily injury to or death of any person,

(i) resulting from the suicide of such person or attempt thereat, whether sane or insane; ...

Neither the Schedule - 1990 nor the Schedule - 1994 includes this type of exclusion provision. What is the significance of this omission? Legislative history can be used in interpretation, but sections 17 and 18 of the Interpretation Act, R.S.O. 1990, c.I.11 make it clear that legislative amendments cannot be taken as a declaration that the state of the law has changed:

The repeal or amendment of an Act shall be deemed not to be or to involve any declaration as to the previous state of the law.
The amendment of an Act shall be deemed not to be or to involve a declaration that the law under the Act was or was considered by the Legislature to have been different from the law as it had become under the Act as so amended.

Schedule "C" provided benefits for insured persons who sustained bodily injury or death as a result of an "accident arising out of the use or operation of an automobile." The exclusion provision clarified that suicide was not covered, but in its absence, the common law would have led to the same result. "Accident" was not defined in Schedule "C" and, according to the case law, suicide would not have been considered an accident.

The arbitrator rejected this approach because she felt it gave no effect to the exclusion provision, treating it as "mere surplusage." I am unable to agree. The fact that legislation confirms the common law position does not make it "mere surplusage." The words have meaning and continue to apply even if the common law position changes.

In 1990, Ontario changed the way that victims of automobile accidents were compensated. As stated by the Court of Appeal:

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.⁹ [emphasis added]

The objectives of the new scheme were expressed by the Minister of Financial Institutions, the Hon. Murray Elston:

We established four objectives that had to be met if the new insurance plan was to succeed, four fundamental principles that guided all our efforts in the development of the new system. First, affordability: Insurance rates had to be kept as low as possible, not just in 1990 but for years to come. Second, availability: We had to have a highly accessible marketplace. Third, timely delivery: Benefits had to be paid promptly to accident victims. Finally, comprehensive protection: People injured in accidents had to be properly compensated.¹⁰

There was clearly a dissatisfaction with the way that the tort system, and related insurance coverage, dealt with automobile accidents. The legislative changes were meant to create a new system for dealing with those accidents. I find no indication, however, that the new system was intended to respond to events beyond those historically regarded as accidents.

With the advantage of hindsight, it might have been better to include a specific exclusion for suicide in the Schedule - 1990 and the Schedule - 1994. However, the absence of such a provision cannot be treated as a positive indication that the law was changed to include suicide within the meaning of "accident." Coverage for automobile-related suicide may be a legitimate public policy issue, but I conclude that the current legislation does not reflect a decision to provide such coverage.

For these reasons, the appeal is allowed.

III. EXPENSES

Ms. J.E. should receive her reasonable appeal expenses. She was successful at the arbitration and did nothing to delay the appeal. If the parties cannot agree on the amount of the expenses, an assessment can be arranged through the Registrar's office.