Neutral Citation: 1996 ONICDRG 88

File No: A-008589

ONTARIO INSURANCE COMMISSION

BETWEEN:

Ronald MacPhail

Applicant

and

AXA Insurance (Canada)

Insurer

DECISION

Issues:

The Applicant, Ronald MacPhail, was injured on May 29, 1993 while operating a motor vehicle commonly known as a "stock car." The incident occurred during a stock car race at Mosport International Speedway, Ontario. At the time of the incident, Mr. MacPhail was a named insured under a motor vehicle liability insurance, issued by AXA Insurance (Canada), ("AXA"). Mr. MacPhail applied for statutory accident benefits from AXA, payable under Ontario Regulation 672.¹ AXA refused to pay benefits. It took the position that Mr. MacPhail was not injured in an "accident" because the stock car he was operating is not an "automobile" for the purposes of the definition of "accident" in the Schedule.

The parties were unable to resolve their disputes through mediation and Mr. MacPhail applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended. The sole issue which the parties wished to be decided in this arbitration is:

Is the "stock car," which Mr. MacPhail was operating at the time of the incident, an automobile for the purposes of the definition of "accident" in section 2 of the Schedule?

Result:

1. Mr. Macphail's "stock car" is an automobile for the purposes of the Schedule. Mr. MacPhail was injured in an accident.

2. AXA shall pay Mr. Macphail's expenses incurred in respect of this arbitration.

Hearing:

The hearing was held at the Offices of the Ontario Commission, in North York, Ontario, on October 19, 1995, before me, Asfaw Seife, Arbitrator.

Present at the Hearing:

Applicant's Representative: Christine H. Mauro Barrister and Solicitor

Insurer's Representative: Geoffrey D.E. Adair Barrister and Solicitor

List of Exhibits:

1. An Agreed Statement of Facts

2. Specifications for "Late Model Sportsman"

3. Photographs of a "stock car"

4. Certificate of Insurance

Reasons for Decision:

Background:

The material facts in this case are not in dispute. They are summarized as follows:

The incident of May 29, 1993, occurred when the stock car Mr. MacPhail was operating collided with another vehicle, while engaged in a race. As a result of the collision, Mr. MacPhail sustained serious injuries, including a closed-head injury, fractured cervical vertebrae and a fractured ankle. Mr. MacPhail was 46 years old at the time of the incident.

The motor vehicle operated by Mr. MacPhail was what is known colloquially as a stock car of the "Late Model Sportsman" class. The detailed specifications, taken from the Official Rule Book of Mosport International Speedway, are contained in Exhibit 2. Certain photographs of the vehicle are shown in Exhibit 3.

The stock car was equipped with a front mounted V-8 engine. Many of its mechanical components, including the suspension, steering and braking systems, differed from those used on the average automobile driven on the highway. The vehicle was equipped with a single seating position for the driver. Driver controls included accelerator, brake and clutch pedals, steering wheel, engine tachometer, an odometer, and various gauges. The vehicle had body panels, wind shield, rear windows and rear side windows. The driver's side window was open and equipped with a net to provide driver restraint. There were no opening doors or trunk lid, and the front and rear bumpers were made of rigid welded steel tubes that had been covered by body panels.

The vehicle was intended for off-road racing. It is of a racing class that is required to have body panels of a shape generally similar to a North American-built car of the last ten years, in this case, a 1988 Buick. Neither the body panels, nor the frame (a custom-welded structure of tubes) was manufactured by Buick; its designation as a Buick was solely by virtue of its body shape, rather than the source of manufacture.

The vehicle was assembled from components and not intended for retail sale. It did not have lighting of any kind nor visible reflectors; it had no horn, no wind shield wiper system, no emergency braking system. The tires were designed "not for highway use" and had no tread. There was no outboard rear-view mirror.

A stock car is not required under any Act to be insured under a motor vehicle liability policy. It would not have been insured by any insurer licensed in the Province of Ontario because it was to be used and operated for racing in vehicle races. This particular vehicle was not insured under any motor vehicle liability insurance policy and AXA had no knowledge of the existence of this vehicle.

At all material times, including on the date of the said accident, Ronald MacPhail was the named insured under a standard motor vehicle liability policy issued by AXA, under Policy Number RAAM0366591. This policy insured four cars owned by Mr. MacPhail and his wife as set out in the Certificate of Insurance - Exhibit 4.

The Dispute:

The word "accident" is defined in Section 2 of the Schedule as follows:

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

(emphasis added)

The word "automobile" is not defined anywhere in the Schedule or in the standard Ontario Automobile Policy-O.P.F.l, ("the Policy").² However, it is defined in two places in the Act.

Section I of the Act states:

In this Act, except where inconsistent with the definition sections of any Part,

"automobile, includes a trolley bus and a self-propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway, railway stock that runs on rails, watercraft or aircraft, (emphasis added)

"Automobile" is defined again in Part VI of the Act, dealing specifically with automobile insurance. Section 224(1) states:

In this Part,

"automobile" includes a motor vehicle required under any Act to be insured under a motor vehicle liability policy.

The Applicant's Position:

On behalf of the Applicant, Ms. Mauro submitted that in the absence of any definition of the word "automobile" in the Schedule or in the Act, the issue should be resolved by referring to the definition provided in section 1 of the Act. Ms. Mauro argued that this definition is applicable to the Schedule as well as to the Policy. She submitted it is a clear and unambiguous definition signifying the intention of the Legislature. She contended that Mr. MacPhail's stock car, as a self-propelled vehicle, and one that is not of the type specifically excluded in the definition, satisfies the definition of "automobile" in section 1 of the Act. Hence, Mr. Macphail was injured in an accident, as his injuries were the result of use or operation of an automobile.

In her submissions, Ms. Mauro argued that the fact that the Legislature chose to employ the word "includes" instead of "means" in defining automobile in the Act, shows that the Legislature intended that this particular definition is not meant to be restrictive. She argued that, given the description of the vehicle in the agreed statement of facts, the stock car is clearly an automobile, in the ordinary and popular sense of the word. She maintained that the fact that the vehicle was not intended for travel on the highway is irrelevant as far as the definition in section 1 is concerned.

Ms. Mauro stated that the definition of "automobile" in section 224(1) of the Act does nothing more than say that any vehicle required to be insured under a motor vehicle liability policy is necessarily an automobile. She argued that the section does not exclude Mr. MacPhail's stock car from its definition.

Ms. Mauro relied on Pintus³ and Heath⁴, two cases which interpreted the definition of automobile in section 1 of the Act. In Pintus, Arbitrator David Evans found that a "backhoe" is an automobile, and in Heath, the Ontario Court, (General Division) interpreted the definition to include "a farm tractor."

The Insurer's Position:

Mr. Adair submitted that the Legislature did not intend for motor vehicle insurance to apply to vehicles that were not intended to be driven on the highway. He was not prepared to concede that the "stock car" falls under the definition of automobile in section 1 of the Act. He submitted that the definition "makes it clear that all self-propelled vehicles are not included, otherwise there would be no reason to specifically include a "trolley bus." Mr. Adair felt that this definition is vague. He submitted that the more significant definition lies in section 224(1) of the Act which he suggested "indicates that the word automobile is intended to include vehicles only of the type required to have insurance as per the Compulsory Automobile Insurance Act." (emphasis added)

As an indication of the Legislature's intention, Mr. Adair referred to the Family Protection Endorsement (O.E.F.44) of the Policy where the word "automobile" is defined to mean "a vehicle for which a motor vehicle liability insurance would be required if it were subject to the laws of Ontario." Accordingly, Mr. Adair submitted that Mr. MacPhail's stock car, being a type of vehicle not required to be insured under a motor vehicle liability policy, is not an automobile for the purposes of statutory accident benefits.

In his submissions, Mr. Adair further stated that since the word "automobile" is not defined in the Policy itself, and in the absence of any other applicable comprehensive and unambiguous definition, the specific word is subject to the usual rules of insurance policy interpretation.

In interpreting the Policy, Mr. Adair urged me to follow a three-step process:

1. construe the meaning of the word primarily by its ordinary and popular sense and not as a technical expression,

2. give effect to the intention of the parties from the words they have used in the contract, and,

3. avoid a result that creates an absurdi ty or an inappropriate commercial result.

Mr. Adair argued that dictionary definitions of the word "automobile" indicate that in its ordinary and popular sense, it connotes a passenger car meant for travelling on roads and streets, and not one specially designed for racing. In terms of the expectation of the parties, Mr. Adair argued that a reasonable insured would not have an expectation that any coverage under his own automobile policy would be available to him or to injuries incurred in motor vehicle racing. If this was the case, Mr. Adair argued that insurers would be exposed to "horrendous risks without any knowledge whatsoever as to the risks they were assuming."

In support of his position, Mr. Adair cited the definition of automobile in Webster's New World Dictionary⁵, and several court cases.⁶

Analysis and Conclusion:

Part VI of the Act creates a scheme of insurance to protect individuals from the consequences of automobile accidents. The scheme is triggered by an accident and is intended to cover incidents in which the use or operation of an automobile gives rise to an injury.

Section 268(1) of the Act provides that every contract evidenced by a motor vehicle liability insurance policy shall provide for the statutory accident benefits as set out in the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

The Policy is a standard form containing insuring agreements and provisions approved by the Commissioner under section 227(5) of the Act. It is published as a regulation, for use by insurers in general. Section 227(5) of the Act stipulates that the contents of the standard form must be in conformity with Part VI (Automobile Insurance) of the Act. No insurer is allowed to use a form of policy, endorsement, or renewal, a claim form or a continuation certificate in respect of automobile insurance other than a form approved by the Commissioner of Insurance (section 227(1)). It is clear therefore that any terms, conditions, provisions, exclusions, and limits set out in the standard policy with regard to statutory accident benefits must be consistent with those set out in the Act and in the Schedule.⁷

I do not agree with Mr. Adair that the issue in this case must be determined by interpreting the Policy as if it is a contractual agreement between two private parties. The wording of the policy is not the wording of the insurer or the insured. It is the wording of a regulation, mandated by the Act. Thus, while any analysis must start with the words contained in the Policy, in interpreting the Policy, it is the intention of the Legislature, and not that of the parties, that must be ascertained.

As stated earlier, the word "automobile" is not defined in the Schedule or in the Policy. However, it is defined in two places in the Act. On the other hand, the Act does not define "accident," but both the Schedule and the Policy do, identically, using the word automobile. How then should the word "automobile" in the Schedule be understood?

The Schedule is subordinate legislation. The intent of the statute transcends and governs the intent of the regulation. Therefore, in order to understand the intent of the Schedule, it is necessary to read its words in the whole context of the authorizing statute, i.e., the Act.

As stated in Driedger :

Where the provision to be interpreted appears in a regulation, it is read in the context of both the regulation and the enabling Act as a whole. Where the provision to be interpreted appears in the enabling Act, the regulations are often ignored. Because regulations are subordinate form of legislation, usually made after the enabling Act has been passed, they have limited value in interpreting provisions of the Act. In appropriate circumstances, however, where the Act and the regulations are closely meshed so as to form an integrated scheme, provisions from both are interpreted in the light of that overall scheme.⁸

The various approaches of statutory interpretation are discussed in detail in the appeal decision in Salmon.⁹ The modern approach, as enunciated in the decision of the Director's Delegate in Salmon, and adopted in many arbitration decisions, states that "words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament." This is the approach I have taken in addressing the issue in this case.

The words in the Act express the intention of the Legislature. Express declaration of legislative intent is often found in the definition section, where the Legislature has assigned to the word the meaning it is to bear in the Act. In this case, the Act has defined automobile in two places: in section 1 (general application), and section 224(1) (specific application to automobile insurance). In my view, both definitions are clear and unambiguous, when read in their entire context, their grammatical and ordinary sense, harmoniously with the scheme of the Act.

Both the general and specific definitions employ the word "includes" rather than the word "mean."

In Heath, the Court stated:

Sometimes, it is provided that a word shall "mean" what the definition section says it shall mean; in this case, the word is restricted to the scope indicated in the definition section. Sometimes, however, the word "include" is used in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. In other words, the word in respect of which "includes" is used bears both its extended statutory meaning and "its ordinary, popular, and natural sense whenever that would be properly applicable. "¹⁰

I agree with Mr. Adair that the definition in section 1 of the Act does not include all self-propelled vehicles. This is evident from the wording used in the definition. It is expressly provided that railway rolling stock that run on rails, watercraft or air craft, are not included in this definition, despite being self-propelled vehicles. However, I do not accept Mr. Adair's argument that by specifically including "a trolley bus" and excluding certain self-propelled vehicles, the Legislature meant to restrict the definition of automobile to motor vehicles designed to be driven on the highway, roads and streets. In my view, no such intention can be understood or inferred from either the wording of the definition or from the general scheme of the legislation.

In my view, the specific inclusion of "a trolley bus," and the express exclusion of certain self-propelled vehicles is indicative of the Legislature's intention to employ the word automobile in the manner it has deemed necessary to achieve the object and purposes of the Act. It is worth repeating that if the Legislature intended to exclude a stock car from coverage, or to restrict the meaning to motor vehicles designed for travel on the highway, as suggested by Mr. Adair, it would have said so expressly. I therefore find that the stock car qualifies as an automobile under the definition in section I of the Act.

By employing the expansive word "includes" rather that the restrictive "means" in the specific-purpose definition under section 114(1), the Legislature has once again expressed its intention to expand the definition of "automobile" to include all motor vehicles¹¹required under any Act to be insured under a motor vehicle liability policy. As Ms. Mauro correctly pointed out in her submission, every definition in Part VI of the Act, with the exception of the definition of automobile, uses the restrictive word "means." Once again, in this definition, had the Legislature meant to exclude stock car or other off-road motor vehicles from coverage, it would have done so by using specific language or using the restrictive word "means in the definition,

I find nothing inconsistent or contradictory between the intention expressed in the two definitions and the rest of the Act or in the Schedule. I agree with Arbitrator Evans who stated in Pintus that the term "an 'automobile' in the definition of 'accident' is not so restricted and can refer to any vehicle that is an automobile within the meaning of the Insurance Act, Other arbitrators have found a TTC streetcar,¹² a TTC bus,¹³ and a snowmobile¹⁴ qualify as an automobile under this definition.

I did not find the cases cited by Mr. Adair relevant in the circumstances of this case. None of the cases dealt with statutory accident benefits or with issues of the relationship between the provisions of the Act and those of the Schedule and the Policy. With regard to the dictionary definition cited by Mr. Adair, I am not persuaded that the stock car, as a motor car, is excluded from the definition.

The result therefore is that the stock car operated by Mr. MacPhail qualifies as an automobile within the provisions of the Schedule and the Policy. Accordingly, I find that Mr. MacPhail was injured in an accident as a result of the use or operation of an automobile.

Expenses:

Mr. MacPhail has succeeded in his application. I exercise my discretion under section 282(11) of the Act to award him his expenses incurred in respect of this arbitration.

Order:

1. Mr. MacPhail's "stock car" is an automobile for the purposes of the Schedule. Mr. MacPhail was injured in an accident.

2. AXA shall pay Mr. MacPhail's expenses incurred in respect of this arbitration.

May 29, 1996

Asfaw Seife Arbitrator

Date

APPENDIX A

List of Exhibits

1. An Agreed Statement of Facts

2. Specifications for "Late Model Sportsman"

3. Photographs of a "stock car"

4. Certificate of Insurance

APPENDIX B

List of Authorities

1. Applicant's "Statement of Law"

2. Insurer's Statute and Case Book

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. 2Section 5.1 of the Policy (Part E, General provisions, Definitions and Exclusions) defines the words "the automobile" as used in the Policy, but it does not define the generic word "automobile."
3. 3Pintus and State Farm and Elmara Construction Company, June 19, 1995 (appeal pending), OIC File No. A-012264.
4. 4Heath v. Co-operators General Insurance Company, [1994] O.J. No. 2157.
5. 5This dictionary defines "automobile" as " a passenger car, usually four wheeled, propelled by an engine or motor, sep. An internal combustion engine, that is part of it, meant for travelling on streets or roads; motor car."
6. 6Tomlinson v. Prudential Insurance Company 1954 CanLII 123 (ON CA), [1954] O.R. 508; Ocean Construction Supplies Limited v. Continental Insurance (1978), 1978 CanLII 2614 (BC SC), 5W.W.R. 681; Consolidated Bathurst Export Limited v. Mutual Boiler and Machinery Insurance Company [1980], S.C.R. 888; Wigle v. Allstate Insurance Company (1984), 1984 CanLII 45 (ON CA), 49 O.R. (2d) 101.
7. 7Section 227(2) provides that, in special cases, the Commissioner may approve a form of policy that departs from the provisions of Part VI of the Act. In this case, the policy in question is the standard policy, not a special policy approved under section 227(2).
8. 8Driedger on the Construction of Statutes (3rd edition, 1994), p. 246.
9. 9Salmon and Toronto Transit Commission, June 29, 1992 (affirmed on appeal), OIC File No. A-000235.
10. 10Cited above, at page 3.
11. 11In its ordinary sense, the word motor vehicle is broader than automobile.
12. 12Thai Tru Luong and Toronto Transit Commission (September 19, 1991), OIC File No. A-000017
13. 13Hunt and Royal Insurance Company ( October 15, 1991), (February 14, 1993, interim appeal), OIC File No, A-000370
14. 14Knott and Dominion of Canada General Insurance Company (May 8, 1996), OIC File No. A-951779