Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1997 ONICDRG 31

Appeal P-012264

OFFICE OF THE DIRECTOR OF ARBITRATIONS

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Appellant

and

CATERINA PINTUS

Respondent

and

ELMARA CONSTRUCTION COMPANY

Intervenor

Before:

Susan Naylor, Director’s Delegate

Counsel:

Lee Samis (for State Farm)

Mark Katzman (for Ms. Pintus)

Barry Sullivan (for Elmara Construction)

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 arbitrator’s order, dated June 19, 1995, is confirmed.

2. Caterina Pintus is entitled to her appeal expenses.

February 10, 1997

Susan Naylor Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Caterina Pintus suffered injuries when she was struck by a backhoe on Niagara Street in the City of Windsor, on May 17, 1991. Ms. Pintus lived on Niagara Street. The claim is that the backhoe was reversing when it struck Ms. Pintus, a pedestrian. The area of the street was under construction and was closed to vehicular traffic, with both ends blocked off. The backhoe, which was owned by Elmara Construction Co. Ltd (Elmara) and operated by one of its employees, was engaged in construction work for the City of Windsor. The manual provided described it as a 1982 Case 580E Loader Backhoe.

The backhoe was insured under a Composite Mercantile Policy. It was not insured under an automobile insurance policy, nor was it required to be. Ms. Pintus held a standard automobile insurance policy on a personal vehicle with State Farm Mutual Automobile Insurance Company (State Farm). She claimed that her policy covered her for accident benefits in respect of injuries caused by the backhoe.

State Farm paid accident benefits of around $53,000, but then took the position that the policy did not cover Ms. Pintus’ injuries. It sought an order requiring her to repay these benefits. Ms. Pintus has commenced an action in tort against Elmara, the driver, the Windsor Utilities Commission and the City of Windsor.

State Farm’s liability depends on whether the backhoe is an “automobile” under its policy. The arbitrator received written submissions from the parties on this preliminary issue, and held that it was. State Farm appeals the resulting order that it must pay accident benefits. Elmara participated at the arbitration and was added as an intervenor on the appeal on consent of the parties. It filed written appeal submissions but did not appear on the date set for oral submissions.

II. ANALYSIS

Accident benefits are a mandatory part of the protection contained in every motor vehicle liability policy. The Insurance Act, R.S.O. 1990 c. I.8 (“Act”) establishes the framework for such policies and specifically requires every policy to provide accident benefits. However, the details of what benefits are to be provided is left to regulations: specifically, the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, (“Schedule”) R.R.O. 1990, Reg. 672, a regulation authorised under section 268(1) and 121(1) of the Act.

Ms. Pintus is claiming accident benefits under a particular motor vehicle liability policy - one issued by State Farm in respect of her personal vehicle. As required by the Act, this provided for the accident benefits set out in the Schedule. According to section 2 of the Schedule, she qualifies if she is an “insured person” under the policy and her injuries were caused by “the use or operation of an automobile”.

Section 2(e) of the Schedule defines insured person to include:

(e) the named insured, his or her spouse and any dependant of either of them who is not the occupant of an automobile or of rolling stock that runs on rails who is involved in an accident.

“Accident” is defined in the same section to mean:

“an incident in which the use or operation of an automobile causes,..... injury .....”.

(Emphasis added)

“Insured automobile” is defined in the Schedule, but “automobile” is not. Both the Schedule and the standard form owner’s policy (OPF No. 1) define the types of vehicles that are specifically insured by that policy but the arbitrator held that this definition did not apply to “automobile”.

State Farm’s written appeal submissions made reference to the policy definition but the argument was not pursued in oral submissions. The arbitrator’s decision is consistent with my recent decision in Portch and Royal Insurance Company of Canada and Markel Insurance Company of Canada, (December 17, 1996, OIC P-008360 & P-007701).

On appeal, State Farm argued that since there was no definition of “automobile” in the Schedule or policy that applied, it should be given its ordinary meaning in the context in which it appeared. In State Farm’s view, a backhoe engaged in construction work does not qualify. State Farm argued that the definitions of automobile contained in the Act itself do not apply to the Schedule, because the Schedule is a self-contained set of rules dealing with accident benefits.

There are two definitions of automobile in the Act itself, one in the general definition section that applies to the whole Act and one in the definition section that applies only to automobile insurance in Part VI.

Section 1 states:

1. 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 rolling stock that runs on rails, watercraft or aircraft.

(Emphasis added)

Part VI of the Insurance Act, which deals specifically with automobile insurance, has its own definition of automobile. 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.

(Emphasis added)

The Schedule is the controlling set of rules for accident benefits and to the extent that it contains its own definitions and provisions, they prevails.¹ However, in the absence of a definition of “automobile” in the Schedule, it is difficult to see how the definitions in the Insurance Act can be ignored. Both Part VI of the Act and the Schedule use the same term throughout, and there is strong presumption in statutory interpretation that terms playing a key role in a legislative scheme have a consistent meaning, unless the context dictates otherwise.²

The definition of “automobile” in section 1 has been in the Act since 1922, and in its present form since 1966. The definition in section 224(1) is a more recent addition, coming in as part of the package of reforms which included enhanced no-fault benefits and restrictions on personal injury actions enacted under the Insurance Statute Law Amendment Act, 1990, S.O. 1990, c. 2. The changes protected automobile owners and drivers and certain others from law suits for damages for personal injury arising from the use or operation of “an automobile” except where the injured person had died or sustained a serious injury. In exchange, more generous no-fault benefits were made available to accident victims, provided that their injuries were caused by “the use or operation of an automobile”. In Meyer v. Bright, (1993) 15 O.R. (3d) 128 at 134, the Court of Appeal described the changes in the following terms:

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. The legislation appears designed to control the cost of automobile insurance premiums to the consumer by eliminating some tort claims. At the same time, the legislation provides for enhanced benefits for income loss and medical and rehabilitation expenses to be paid to the accident victim regardless of fault.

The costs of providing compensation to automobile accident victims is spread among the totality of owners and drivers purchasing insurance, as required by law. Most motor vehicles that operate on a highway are required to be insured. The obligation to do so is set out in the Compulsory Automobile Insurance Act, R.S.O. 1990 c. 25, and is closely linked to the Highway Traffic Act, R.S.O. 1990 , H.8. Section 2 of the Compulsory Automobile Insurance Act prohibits a motor vehicle from being operated on a highway unless it is insured under a contract of automobile insurance.

Section 1(1) of the Highway Traffic Act, which requires motor vehicles to be registered, defines “motor vehicle” to include:

an automobile, motorcycle, motor assisted bicycle unless otherwise indicated in this Act, and any other vehicle propelled or driven otherwise than by muscular power, but does not include a street car, or other motor vehicles running only upon rails, or a motorised snow vehicle, traction engine, farm tractor, self-propelled implement of husbandry or road building machine within the meaning of this Act.

“Road building machine” means:

a self-propelled vehicle of a design commonly used in the construction or maintenance of highways, including but not limited to...

(b)...backhoes

The backhoe therefore was not required to be registered under the Highway Traffic Act, and so is not required to be insured under the Compulsory Automobile Insurance Act. Snowmobiles³ and certain off-road vehicles⁴ must also be insured under a motor vehicle liability policy whether operated on or off a highway. However, road building machines are specifically exempted by regulations under the Off-Road Vehicles Act.⁵

Although the requirement for motor vehicle insurance is set out in the above legislative regime, the content of automobile insurance is dealt with in Part VI of the Insurance Act. The backhoe was insured under a composite mercantile policy but that contract of insurance is not subject to the requirements of Part VI. Section 226(2) provides an exemption for vehicles that are not required to be registered. It says:

This Part does not apply to a contract providing insurance in respect of an automobile not required to be registered under the Highway Traffic Act unless it is insured under a contract evidenced by a form of policy approved under this Part.

This means that the backhoe’s insurance company is not liable to pay accident benefits to anyone, including Ms. Pintus. It also means that if benefits are paid out under another motor vehicle liability policy, that insurer cannot obtain indemnification from the backhoe insurer under the terms of section 275 of the Act.⁶

The issue here, however, is not whether Ms. Pintus can recover accident benefits from the backhoe insurer - she clearly cannot - but whether she can recover accident benefits under the standard owner’s policy that she holds on her own vehicle, even though her injuries were caused solely by the operation of the backhoe.

The definition of “automobile” in section 1 and similarly-worded provisions have been construed broadly. Motorcycles,⁷ farm tractors⁸ and four-wheel, all-terrain vehicles⁹ have all been held to be included. The Supreme Court of Canada commented on road-building equipment in obiter in Co-operative Fire & Casualty Company v. TWA, (1974) 1973 CanLII 181 (SCC), 39 D.L.R. (3d) 723. Although the case involved whether a motorcycle fell within the passenger hazard exclusion restricting liability to private passenger vehicles, the court remarked:

I can envisage a great many self-propelled vehicles such as tractors and other farm equipment and vehicles used for road building and construction which are automobiles within the meaning of [the definition section].

The arbitrator in this case relied squarely on the section 1 definition, holding that the backhoe was a self-propelled vehicle and therefore an automobile. He decided that section 224(1) did not limit the broad definition of automobile in section 1, but it ensured that all motor vehicles that were required to be insured were “automobiles”. He rejected the definitions of motor vehicle under the Highway Traffic Act and Compulsory Automobile Insurance Act as inapplicable.

State Farm argues that, even applying the broadest definition of automobile as a self-propelled vehicle, the backhoe does not qualify as a “vehicle” because its primary purpose is not the transportation of people or goods. The backhoe, it argues, is essentially a power shovel. State Farm relies on three decisions that considered the meaning of a “vehicle”.

In Township of Moore v. Farr (1978), 1978 CanLII 29 (SCC), 19 N.R. 341, (S.C.C.), the Supreme Court of Canada found that a bylaw prohibiting the use of trailers for residential purposes did not apply to a mobile home, set on concrete pillars, because it was not a “vehicle”, i.e. a means of conveyance, used for the carriage of persons or goods.

Hovinga v. Erbsville Enterprises Ltd. (1977), 1977 CanLII 1288 (ON HCJ), 16 O.R. (2d) 617 involved the application of a Highway Traffic Act limitation period in respect of an accident involving a go-cart on a go-cart track. Justice Weatherstone doubted whether the go-cart was a vehicle or motor vehicle which he defined as a “carriage intended to convey people or things from one place to another” (at page 618).

A potato harvester designed to be towed by a tractor was held not to be a vehicle under conditional sales legislation in Bank of British Columbia v. Stampede (1979), 104 D.L.R. (3d) 478. Catliffe Co. Ct. J. used the same dictionary definition as in Township of Moore.

I do not find any of these cases sufficiently similar to be of much assistance. Not only did they involve different facts, but the legislative language and context was quite different. Even the automobile insurance cases dealing with language similar to section 1 should be viewed with caution. Except for one case under the present legislative regime, none of the cases considered a provision like section 224(1). In my view, the relationship between the definitions in sections 1 and 224(1) and their respective scope is a key question.

The parties’ submissions raise a number of questions about the relationship between the two definitions, which I would summarise as follows:

1. Does the definition of automobile in section 1 continue to have any application to Part VI, given the enactment of section 224(1)?

2. If not, what is the scope of the definition of “automobile” in section 224(1)?

3. If section 1 continues to have application, what is the respective scope of “automobile” in both sections, and how do they relate to each other?

It is argued that Part VI of the Insurance Act should be construed as an integral part of the overall scheme of compulsory insurance and that only vehicles falling within that regime are contemplated.

The difficulty, put succinctly, is that both definitions in the Act use the word “includes” rather than “means”. The meaning of “includes” in this provision was discussed in Heath v. Co-operators General Insurance Co. (1994), 1994 CanLII 19781 (ON CTPD), 24 C.C.L.I. (2d) 183, (Ont. Gen. Div.). Justice Binks cited the following statement from Maxwell on Interpretation of Statutes, 12th ed. at page 270, approved by the Supreme Court of Canada in R. v. Mansour [1979] S.C.R. 916 at 920:

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 and 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”.

In AXA Insurance (Canada) v. MacPhail, (February 7, 1997, OIC P96-00053), which involved an accident in a stock car race, I considered the use of the word “includes” in section 224(1):

Mr. MacPhail’s position is that the governing definition is section 1 of the Act: Simply put, his stock car was a self-propelled vehicle and therefore an automobile. AXA argues that the governing definition is section 224(1): the stock car was not required to be, and was not, insured under a motor vehicle liability policy; therefore it is not an automobile.

AXA argues that section 224(1) restricts the meaning of “automobile” to vehicles required to be insured. It further argues that even if the meaning of automobile is extended to, rather than restricted to, motor vehicles that require insurance, the term otherwise should be given its ordinary meaning - a passenger car - which would exclude a stock car - rather than a broad statutory definition encompassing a self-propelled vehicle. Mr. MacPhail argues that section 224(1) expands the meaning of automobile, so that it includes, but is not limited to, any motor vehicle required to be insured. Further, even if automobile means a passenger car, Mr. MacPhail’s stock car qualifies.

The over-arching principle is set out in Driedger on the Construction of Statutes at page 132:

There is only one rule in modern interpretation, namely courts are obliged to determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids. In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate.

Mr. MacPhail’s argument that vehicles that are not required to be insured under a motor vehicle liability policy are not necessarily excluded from being “automobiles” by virtue of section 224(1) has considerable merit. The language and immediate context of the provision support his proposed interpretation. In particular:

• Both section 1 and section 224(1) use the term “includes” rather than “means”. Under principles of statutory construction, “means” usually is exhaustive. It limits the scope of the definition to the words used. “Includes” is normally used as a term of extension, to extend the defined term’s usual meaning or to give examples of its meaning, without being exhaustive.¹⁰

• There is a clear pattern of expression in section 224(1), which suggests that the defined term is not intended to be exhaustive. Every other definition in section 224(1) uses the word “means”. “Includes” is used only in the definition of automobile. See Heath v. The Co-operators General Insurance Company (1994), 1994 CanLII 19781 (ON CTPD), 24 C.C.L.I. (2d) 183 (Ont. Gen. Div.) citing R. v. Mansour, [1979] S.C.R. 916 at 920; Drafting Conventions of the Uniform Law Conference of Canada, attached as Appendix 1, s. 21(4), Driedger on the Construction of Statutes.

• “automobile” in section 224(1) has a comma immediately after it. Grammatically, the use of this punctuation suggests that the definition there is neither exhaustive nor self-contained.

• Section 226(2) suggests that the term “automobile” in Part VI must mean more than a motor vehicle required to be insured. The qualification in section 226(2) contemplates that vehicles not required to be insured are nonetheless “automobiles”. Although this section might be taken to suggest that such a vehicle will only attract coverage for occupants or pedestrians it strikes if it is insured under a motor vehicle policy, the provision only applies to the contract of insurance, if any. Here, Mr. MacPhail is claiming under his own automobile insurance policy. If the drafters, by leaving “automobile” open-ended in section 224(1) merely meant to allow scope for vehicles brought in under section 226(1) they could have achieved this less awkwardly.

• The definition in section 224(1) is not deprived of meaning when read with section 1. It redresses specific gaps in coverage e.g. the exclusion of TTC street cars under section 1, identified in Punja v. Toronto Transit Commission, [1979] I.L.R. 1-1103 (Ont. Div. Ct.).¹¹

• The result is consistent with the decision of Justice Binks in Heath v. Co-operators General Insurance Company (1994) 1994 CanLII 19781 (ON CTPD), 24 C.C.L.I. (2d) 183, (Gen. Div.).¹²

Even if I assume that the definition of automobile in section 224(1) ousts the definition in section 1, it still uses the word “includes”. In my view, “automobile” is capable of a broad construction - many types of vehicles use the road and can be called automobiles.

State Farm raises legitimate questions about the scope of accident benefits if vehicles that are not required to be insured are included. It also raises the relationship between the definition of automobile and restrictions on the right to sue under section 266 in its written submissions:

A further consequence is that general liability insurers, who issue policies to vehicles which are not required by the Compulsory Automobile Insurance Act to be insured, would be entitled to the benefit of the threshold bar and deduction of no-fault benefits without complying with the compulsory insurance legislation. This, again, is contrary to the legislative intent and cannot be reconciled with section 226(2) of the Act which prohibits Part VI of the Act from applying to any vehicles not registered under the Highway Traffic Act and not insured under a motor vehicle liability policy approved by that part of the Act.

No doubt the application of section 266(1) to a vehicle that is not required to be insured will be the subject of judicial consideration in the context of a personal injury action.¹³ However, we are dealing here with Ms. Pintus’ claim for accident benefits under her own policy. State Farm is arguing, in part, that the 1990 legislative changes changed the rules about who is entitled to accident benefits, thereby excluding Ms. Pintus. To accept its argument, I would have to accept that the effect of introducing a statutory limitation on personal injury actions operated to restrict the access of accident victims, like Ms. Pintus, to no-fault benefits. To the extent that this was part of the “trade-off” in the balance between rights to sue and enhanced no-fault benefits, I would expect the intentions of the Legislature to be more clearly defined.

There may be inconsistencies in how the legislation works, and how it affects parties in particular situations. The legislative scheme may not be perfectly balanced: there may be no necessary correlation between the removal of rights to sue and entitlement to accident benefits in individual cases.¹⁴ It is also worth pointing out that section 226(2), which relates to contracts of insurance, is not a new provision. It may operate to immunise insurance companies issuing certain policies from Part VI, but it is not obvious to me that it follows that Ms. Pintus should be denied the benefits of her own automobile insurance.¹⁵

State Farm raised examples of accidents involving golf-carts or garden lawnmowers to demonstrate why coverage should be restricted to vehicles required to be insured. The cases it cited also involved a motor home, a potato harvester and a go-cart operating on a go-cart track. I do not find any of the examples helpful because the facts are quite different. To qualify for accident benefits, the nature of the vehicle and the use to which it was put must be scrutinised carefully. Benefits are payable only if the person’s injuries are caused by the “use or operation of an automobile”. This is essentially a question of fact, dependent on the particular circumstances of the case.

The closest case of assistance is Heath v. Co-operators General Insurance Company, a case decided under the present legislative regime. It concerned a collision between an uninsured farm tractor travelling on a highway and a motorcycle, ridden by the plaintiff. The plaintiff sought to recover from his own insurer under the uninsured automobile coverage provisions in Part D of the policy. Justice Binks held that the tractor was an “uninsured automobile” because the definitions of automobile in the Act were inclusive, not exhaustive, and there was no specific exclusion in the policy.

The backhoe which struck Ms. Pintus had motor-vehicle-like features: a driver’s seat, front and back gears that allowed it to travel up to 35 km./h, brakes, a diesel combustion multi-cylinder engine and tire-clad wheels. It was designed to drive on highways, and could legally do so. Indeed, backhoes are familiar sights on public roads. They have a dual purpose: to perform construction work on site and to transport the operator between sites. In this case, the backhoe was operating on a road, which, while closed to vehicular traffic, remained open to pedestrians like Ms. Pintus. Although the case involves slightly different facts than Heath, the risk of injury was not dissimilar. Given this, it is reasonable to ask why the fact that the backhoe in question did not require insurance should affect Ms. Pintus’ ability to recover under her own automobile policy in the event the risk materialised. Had a car or truck reversed into her, instead of the backhoe, there would be no doubt about coverage. From her perspective, the difference is entirely arbitrary.

In light of the above, I am not persuaded that the arbitrator was wrong in finding that Ms. Pintus was an insured person under the State Farm policy in respect to the injuries she sustained on May 17, 1991, and that her injuries were caused by the use or operation of an automobile under section 2 of the Schedule. The appeal is therefore denied.

Ms. Pintus is entitled to her appeal expenses.

February 10, 1997

Susan Naylor Director’s Delegate

Date

Footnotes

1. 1Alchimowicz v. Continental Insurance Company of Canada, (1996) 1996 CanLII 1313 (ON CA), 37 C.C.L.I. (2d) 284.
2. 2Ruth Sullivan, ed., Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994), p.167 and 246.
3. 3Motorized Snow Vehicles Act, R.S.O. 1990, c. M. 44.
4. 4Off-Road Vehicles Act, 1990, c. O.4.
5. 5Regulation 863, R.R.O. 1990, section 2(1)2.
6. 6See Jevco Insurance Co. v. Commercial Union Assurance (1996), 1996 CanLII 22113 (ON CTPD), 37 C.C.L.I. (2d) 144 (Gen. Div.), decided after this appeal was heard, in which the parties did not argue whether a backhoe was an automobile but disagreed about the effect of section 275.
7. 7Walker; Co-operative Fire & Casualty Company v. TWA, (1974) 1973 CanLII 181 (SCC), 39 D.L.R. (3d) 723 (SCC).
8. 8Heath v. Co-operators General Insurance Co., (1994) 1994 CanLII 19781 (ON CTPD), 24 C.C.L.I. (2d) 183; Spiers v. Vanhelvort, (1989) 1989 CanLII 10422 (ON HCJ), 39 C.C.L.I. 229 (Ont. D.C.).
9. 9Theriault v. General Accident Assurance Co. of Canada (1990), 1990 CanLII 11415 (NB CA), 110 N.B.R. (2d) 4 (C.A.); Wellington Insurance Co. v. Wawanesa Mutual Insurance Co. [1994] I.L.R. 1-3000 (N.S.C.A.).
10. 10See Heath v. The Co-operators General Insurance Company (1994), 1994 CanLII 19781 (ON CTPD), 24 C.C.L.I. (2d) 183 (Ont. Gen. Div.) citing R. v. Mansour, [1979] S.C.R. 916 at 920; Drafting Conventions of the Uniform Law Conference of Canada, attached as Appendix 1, s. 21(4), Driedger on the Construction of Statutes.
11. 11In Punja, the Divisional Court held that a TTC street car fell within the exclusion in section 1. Cf. 1(2) of the Compulsory Automobile Insurance Act, which deems a street car to be a motor vehicle.
12. 12In MacPhail, I concluded that, when the language of the legislation was construed in the light of the scheme and purpose of the legislation, an uninsurable stock car engaged in a stock car race was not an automobile under the Schedule.
13. 13After my reasons were written, the decision in Bergsma v. Canada (Attorney General) (1994) 51 A.C.W.S. (3d) 330 (Gen. Div), aff’d (1996) 65 A.C.W.S.(3d) 519 (C.A.) came to my attention. The court ruled that Department of National Defense vehicles that were owned by the federal government and not required to be registered were automobiles under section 224(1) for the purposes of section 266(1). I have not relied on the decision, but do not find anything in it inconsistent with my decision.
14. 14See Alchimovicz v. Continental Insurance.
15. 15See Craig Brown, No-Fault Automobile Insurance, (Toronto: Carswell, 1979) page 41-42, esp. note 34.