Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1997 ONICDRG 209

Appeal P-002514

OFFICE OF THE DIRECTOR OF ARBITRATIONS

Allstate Insurance Company of Canada

Appellant

and

Hossien Bagheri

Respondent

Before:

Elisabeth Sachs

Counsel:

James. M. Flaherty (for Allstate Insurance Company of Canada)

Alfred M. Kwinter (for Hossien Bagheri)

APPEAL ORDER

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

The appeal is dismissed and the arbitration order dated March 10, 1994, is confirmed.
Mr. Bagheri is entitled to his reasonable appeal expenses.

December 17, 1997

Elisabeth Sachs Director of Arbitrations

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Allstate Insurance Company of Canada ("Allstate") appeals the arbitrator's decision that Hossein Bagheri is not precluded from receiving weekly benefits under section 13 of O. Reg. 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (the Schedule), as the exclusions in paragraphs 17(1)(c) and 17(1)(d) of the Schedule do not apply to him.

II. BACKGROUND

The arbitrator's findings of fact were not challenged and are crucial to an understanding of how the Schedule was applied. Starting at page 3 of the decision, they are as follows:

Mr. Bagheri had a valid driver's licence on February 1, 1991, the date of the accident.
Mr. Bagheri was operating his vehicle without a valid policy of insurance on the date of the accident.
The accident involved another automobile which was insured by Allstate Insurance Company of Canada.
Mr. Bagheri was charged and convicted of the offence of failing to carry and produce a valid insurance card under subsection 3(1) of the Compulsory Automobile Insurance Act, which provides as follows:

3 (1) An operator of a motor vehicle on a highway shall have in the motor vehicle at all times,

(a) an insurance card for the motor vehicle; or

(b) an insurance card evidencing that the operator is insured under a contract of automobile insurance.

In connection with the same accident, Mr. Bagheri was subsequently charged with operating a motor vehicle without insurance, contrary to subsection 2(1) of the Compulsory Automobile Insurance Act, which provides:

2 (1) Subject to the regulations, no owner of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated, on a highway unless the motor vehicle is insured under a contract of automobile insurance.

During the course of the proceeding in the Ontario Court (Provincial Division) held in connection with the charge under section 2(1) of the Compulsory Automobile Insurance Act, Mr. Bagheri's agent, in the presence of Mr. Bagheri, represented to the court that the charge of "operate motor vehicle without insurance" was "exactly the same offence, exactly the same circumstance" as the earlier conviction of failing to carry and produce a valid insurance card under section 3(1) of the Compulsory Automobile Insurance Act.
Mr. Bagheri's agent represented that the Applicant's earlier conviction under section 3(1) of the Compulsory Automobile Insurance Act precluded a subsequent conviction for "effectively the same offence" under section 2(1) of the Compulsory Automobile Insurance Act, by operation of the Kienapple¹ principle.
Upon hearing these submissions, the Justice of the Peace marked the proceeding with respect to the charge under section 2(1) of the Compulsory Automobile Insurance Act "stayed".
The decision in Kienapple v. The Queen considered the issue of multiple convictions arising out of the same incident. The majority held that, "If there

is a verdict of guilty on the first count and the same or substantially the same elements make up the offence charged in a second count, the situation invites application of a rule against multiple convictions".²

As a result of the Kienapple decision, the practice in criminal courts, where multiple offences arise out of the same incident, is to hear the charges together. Where a conviction is entered in respect of the more serious charge, a stay of proceedings may be ordered on the less serious charge.
In the case of Mr. Bagheri, the court ordered a stay of proceedings in respect of the more serious offence in view of the earlier conviction on the lesser offence.
No conviction was entered against Mr. Bagheri in respect of the charge under section 2(1) of the Compulsory Automobile Insurance Act.

The arbitrator found as a fact Mr. Bagheri was not convicted of the offence of operating a motor vehicle without insurance pursuant to paragraph 2(1)(b) of the Compulsory Automobile Insurance Act (the CAI Act)³. She held that a conviction under that provision of the CAI Act was the necessary basis for the exclusion under paragraph 17(1)(c) of the Schedule to apply.

The arbitrator further determined that the admission in the provincial court proceedings that Mr. Bagheri drove without having a valid contract of insurance on his vehicle did not create an estoppel to assist Allstate in its position that the weekly benefits claim was excluded under paragraph 17(1)(d) of the Schedule. The arbitrator held the section could not be interpreted to find Mr. Bagheri was "not authorized by law to drive..." becuase he was uninsured at the time of the accident. Accordingly, Mr. Bagheri was not excluded from receiving weekly benefits by virtue of paragraphs 17(1)(c) or 17(1)(d) of the Schedule.

III. ANALYSIS AND FINDINGS

At the time of the accident, the relevant provisions of the Schedule read:

(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,...

(c) if, as a result of the accident, the driver is convicted of operating the automobile while it was not insured under a motor vehicle liability policy;

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

Allstate advanced the same arguments as in the arbitration hearing and relied on the authorities set out in Appendix "B" of the arbitration decision. In addition, it argued on appeal that the Commission's role includes ensuring claimants without proper insurance do not recover accident benefits as a matter of policy.

A. Interpretation of Paragraph 17(1)(c) of the Schedule

Allstate submits that a reading of section 2 of the CAI Act shows more than one offence is created, namely: operating a motor vehicle without insurance [para. 2(1)(a)]; as an owner, permitting an uninsured motor vehicle to be operated on a highway [para. 2(1)(b)]; and producing an invalid insurance card [para. 2(3)(b)]. It then argues the latter provision is equivalent to section 3 of the Act. Subsection 3(1) reads:

3.-(1) An operator of a motor vehicle on a highway shall have in the motor vehicle at all times,

(a) an insurance card for the motor vehicle; or

(b) an insurance card evidencing that the operator is insured under a contract of automobile insurance,

and the operator shall surrender the insurance card for reasonable inspection upon the demand of a police officer.

This is the section under which Mr. Bagheri was convicted (requiring every owner or operator to have an insurance card available for inspection). Allstate submits the offences are similar, as without insurance a person cannot produce a card. Allstate says the drafters of the Schedule did not have a specific provision of the CAI Act in mind: it is sufficient that the automobile or operator was uninsured. A conviction of any one of those offences brings subparagraph 17(1)(c) into play.

I cannot agree with this submission. The provision in the Schedule is clear and unambiguous. The driver must be "convicted of operating the automobile while it was not insured" for the exclusion to apply. After reviewing the transcript of the court proceeding, there is no doubt this precise charge (under section 2 of the CAI Act) against Mr. Bagheri was stayed, and no conviction entered⁴. It is apparent that the Legislature meant to curtail recovery of certain monetary statutory accident benefits to persons driving without insurance, but in doing so, required a conviction for that offence. Whether the drafters of the Schedule did or did not consider various sections of the CAI Act, it is plain from the wording that a conviction on a specific offence is needed. Failure to produce an insurance card is not tantamount to driving uninsured. Mr. Bagheri was convicted only of not producing an insurance card, and accordingly the exclusion in subparagraph 17(1)(c) does not apply to him.

B. Interpretation of Paragraph 17(1)(d) of the Schedule

Allstate argued by admittedly driving without insurance, Mr. Bagheri is thereby "not authorised by law to drive", and thus the exclusion in paragraph 17(1)(d) of the Schedule applies to relieve it of paying weekly benefits to him.⁵

Allstate submits this exclusion, contrary to the Traganis decision and what the arbitrator here determined, is not confined to licensing matters, but encompasses driving without insurance. The fallacy, it submits, is to say a person is licensed, and thus authorized to drive when in fact a person can be licensed and not so authorised (i.e. driving while intoxicated, driving a different type of vehicle⁶). Allstate argues the "authority" must mean more than "licensed", and being licensed cannot be the only criteria applicable to this paragraph in the Schedule as a matter of policy and common sense. It submits the intent of the legislation is to deny weekly benefits to those driving without lawful authority, that is, without the compulsory insurance coverage mandated in the CAI Act. It points to the comments of the Supreme Court of Canada, in considering the police program of random spot checks of motorists in R. v. Hufsky, 1988 CanLII 72 (SCC), [1988] 1 S.C.R. 621 at 636-638, that:

...driving is a licensed activity subject to regulation.....there is no such intrusion where a person is required to produce a license or permit or other documentary evidence of a status or compliance with some legal requirement that is a lawful condition of the exercise of a right or privilege.

(Emphasis added)

Consequently, Allstate submits a conviction under section 3 of the CAI Act coupled with his admission before the Ontario Court (Provincial Division), is proof of Mr. Bagheri's non-compliance with the lawful condition of being authorised to drive, namely, having a valid motor vehicle liability policy evidenced by an insurance card in place. On that basis, Mr. Bagheri should be precluded from receiving weekly benefits. Further, Allstate argues the Commission, as a regulator, should not read paragraph 17(1)(d) too literally and limit its operation but must ensure that recovery of weekly benefits is only available to persons complying with the law.

Except for the gloss of the regulator's function, this argument was made to, and rejected by, the arbitrator here, in Traganis and in the cases referred to by Mr. Bagheri⁷. For the reasons expressed in those decisions, I agree that paragraph 17(1)(d), when read together with subsection 17(2) of the Schedule points toward issues relating to licensing, and cannot be extended to include operating an uninsured vehicle.⁸ While Allstate's argument is attractive, and it may be that Mr. Bagheri committed an 'offence' under the CAI Act, without more I cannot find he was not authorised to drive.

As I have found the neither of the exclusions in paragraphs 17(1)(c) or 17(1)(d) applies to Mr. Bagheri's claim for weekly benefits, the appeal is dismissed.

IV. EXPENSES

Mr. Bagheri was successful in resisting Allstate's appeal, and he is entitled to his expenses accordingly.