Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1996 ONICDRG 168

Appeal P96-000035

OFFICE OF THE DIRECTOR OF ARBITRATIONS

DAVID HYRSKI

Appellant

and

ZURICH INSURANCE COMPANY

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Paul Barrafato (for David Hyrski)

A. Jarvis Scott (for Zurich Insurance Company)

APPEAL ORDER

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

1. The appeal is dismissed and the arbitration order, dated February 16, 1996, is confirmed.

2. Mr. Hyrski is not entitled to his appeal expenses.

October 2, 1996

David R. Draper

Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by David Hyrski from an arbitration decision, dated February 16, 1996, that he is excluded from receiving weekly benefits because he was "not authorized by law to drive" a motorcycle at the time of his accident.

II. BACKGROUND

The facts before the arbitrator were not in dispute. She summarized the situation as follows:

1. Mr. Hyrski was aged 20 at the time of the accident.

2. He held a valid licence to drive a car: a class G licence.

3. He did not hold a licence to drive a motorcycle: a class M licence.

4. At the time of the accident, Mr. Hyrski was operating a 1989 Yamaha motorcycle owned by Daniel B. Jan. The single vehicle accident occurred on Palmer Road, a highway within the meaning of the Highway Traffic Act.

5. A motorcycle is an automobile and a motor vehicle as defined in the Insurance Act and the Highway Traffic Act.

6. Mr. Hyrski was familiar with the safe operation of motorcycles and was competent to drive the motorcycle.

7. At the time of the accident, Mr. Hyrski was considering buying a motorcycle. He was taking the motorcycle for a test run, with a view to possible purchase.

The parties agreed on Mr. Hyrski's accident benefits, with one exception. The unresolved issue was whether paragraph 17(1)(d) of Ontario Regulation 672, Statutory Accident Benefits Schedule - Benefits Before January 1, 1994 ("the Schedule")¹ relieved Zurich from paying him weekly benefits. The provision reads 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,

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

Mr. Hyrski argued that "authorized by law" should be interpreted liberally to encompass a driver who is capable of driving the vehicle even if he or she is not licenced to do so. The arbitrator rejected this approach. She found that both court and arbitration decisions have equated the phrase, "authorized by law to drive," with having the necessary licence to drive the vehicle.

In Vanderwal v. State Farm Automobile Insurance Co. (1994), 1994 CanLII 10575 (ON CA), 20 O.R. (3d) 401, the Divisional Court held that the insured could not recover weekly benefits because his learner's permit prohibited him from driving his motorcycle on the highway where the accident occurred. The Court concluded that "at the time of the accident, having regard to the circumstances which then existed, he was not authorized by law to drive his motorcycle" (p.403). The arbitrator found the reasoning of the Divisional Court compelling, and was not persuaded there was any basis for distinguishing it. She concluded as follows:

An ordinary and grammatical reading of the phrase "authorised by law to drive" indicates that the applicant must have legal authority to drive at the relevant time. Although Mr. Hyrski had a Class G driver's licence to operate a car, the statute requires that at the time of the accident Mr. Hyrski was authorised by law to drive the automobile. Unfortunately, at the relevant time, Mr. Hyrski had no legal authority to operate the motorcycle he was driving, because he did not have a valid motorcycle licence. Therefore, the exclusion applies. [p.6]

As a result, the arbitrator ordered that Zurich was not required to pay weekly benefits to Mr. Hyrski.

III. THE APPEAL

In his Notice of Appeal, Mr. Hyrski simply asserts that the arbitrator erred in finding that he was not authorized by law to drive the automobile. He did not file written submissions in support of his appeal, but relied on his arbitration submissions. Therefore, I considered the same arguments as the arbitrator.

I find no basis for interfering with the arbitration order. The arbitrator dealt with Mr. Hyrski's submissions and reached conclusions with which I agree.

The main problem with Mr. Hyrski's argument is that it was rejected by the Divisional Court in Vanderwal. The insured in Vanderwal had a licence that allowed him to operate a motorcycle, but not on highways with a speed limit of more than 80 kilometers per hour (with two exceptions). When the accident occurred, he was driving his motorcycle on a highway with a speed limit of 100 kilometers per hour. The Divisional Court concluded that section 17(1)(d) of the Schedule relieves the insurer from paying weekly benefits to someone who is injured while driving beyond the scope of his licence:

On the facts of this case, any lawful authority which the respondent had to drive a motorcycle on a highway in this province was entirely dependent upon the licence which the Minister of Transportation had seen fit to issue to him.

...while it is true that the respondent's class R licence authorized him to drive a motorcycle, ...s. 17(1)(d) focuses in on the time of the accident and requires a determination as to whether, at that specific time, the driver was or was not authorized by law to drive the motor vehicle. In our view, the words "at the time of the accident" are clear and unambiguous. They refer to the moment in time when the accident occurred.

Regrettably for the respondent, at the time of the accident, having regard to the circumstances which then existed, he was not authorized by law to drive his motorcycle. Instead, he was specifically prohibited by law from doing so by virtue of condition (3) of his licence, which condition appeared on the face of the licence. [pp. 402-403]

Mr. Hyrski submits that the decision in Vanderwal is wrong and should not be followed. He contends that administrative decision-makers are not bound by precedent and should interpret the legislation to achieve its public policy purpose.

While adjudicators under the Insurance Act may have greater flexibility than the courts, I do not accept that we are free to disregard a decision of the Divisional Court that sets out the proper interpretation of the legislation, unless the case is somehow distinguishable. The role of the Divisional Court in determining matters of interpretation is underscored by section 285 of the Insurance Act, which allows the Director to state a case to the Divisional Court on any question of law.

The arbitrator considered whether this case was distinguishable from Vanderwal, but concluded that it was not. I agree. If anything, the licencing restriction here is more obvious than in Vanderwal. Mr. Hyrski was driving a motorcycle without a motorcycle licence. The insured in Vanderwal was licenced to drive a motorcycle, but not on the highway where the accident occurred.

For these reasons, the appeal is dismissed.

IV. EXPENSES

Mr. Hyrski did nothing more than file a Notice of Appeal. Considering this and his lack of success, I conclude that this is not an appropriate case in which to award expenses.

October 2, 1996

David R. Draper

Director's Delegate

Date

Footnotes

1. 1Clause 2.40(d) of the standard automobile insurance policy.