Neutral Citation: 1998 ONFSCDRS 67

FSCO A98-000198

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JOHN PETROSONIAK

Applicant

and

SECURITY NATIONAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Issue:

The Applicant, John Petrosoniak, was injured on June 14, 1997 when he fell off of his bicycle upon driving over a wet patch of pavement. He applied for statutory accident benefits from Security National Insurance Company ("Security") to cover the cost of his cycling outfit, as well as physiotherapy and massage therapy treatments he required as a result of his injuries. Security denied his claim and takes the position that he was not involved in an "accident," as that term is defined in the Schedule.¹ The parties were unable to resolve their dispute through mediation, and Mr. Petrosoniak applied for arbitration at the Financial Services Commission of Ontario² under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issue in this hearing is:

1. Was Mr. Petrosoniak injured as a result of an "accident" as defined in section 2 of the Schedule?

Mr. Petrosoniak also claims interest on any amounts found to be owing as well as his expenses incurred in the hearing.

Result:

1. Mr. Petrosoniak was injured as a result of an "accident" as defined in section 2.

2. Mr. Petrosoniak is entitled to interest on the amounts claimed as well as the expenses he has incurred as a result of the hearing.

Hearing:

The hearing was held at the offices of the Financial Services Commission of Ontario in North York, Ontario, on August 6, 1998, before me, Shari L. Novick, Arbitrator.

Present at the Hearing:

Applicant:

John Petrosoniak

Security's

Richard F.L. Rose

Representative:

Barrister and Solicitor

Security's Officer:

Theresa Sanguigni

Witnesses:

John Petrosoniak

Exhibits:

The Insurer's brief containing all of the relevant documents was filed and marked as Exhibit 1.

Evidence and Findings:

John Petrosoniak is an avid, competitive cyclist who logs approximately 2,500 kilometres per year on his bicycle. On June 14, 1997, he was returning home from a training ride when he slid on wet pavement and fell off his bicycle as he approached the intersection of Warden Avenue and 14th Avenue in Markham. He testified that he had noticed that the pavement was wet as he approached the intersection travelling southbound on Warden and that he had attempted to steer over to a dry section closer to the curb. He stated that immediately upon coming into contact with the wet pavement his bicycle slid, causing him to fall to the ground.

Mr. Petrosoniak testified that the wet patch of pavement was quite large and shaped like an upside-down "L." He estimated that it extended from approximately 200 feet north of the intersection to the corner of Warden and 14th Avenue, and then for another 200 feet west of the intersection along 14th Avenue, which at that point is called Alden Avenue, until it gradually faded away. He recalled that there were three southbound lanes on Warden Avenue at the intersection, and that the wet area, which spanned the width of one lane, straddled the curb and middle lanes.

Mr. Petrosoniak estimated that he was travelling slower than 15 kilometres per hour when his bicycle reached the wet part of the pavement. He stated that while he had initially assumed that the wet patch was water, once he fell to the ground he realized that it was some sort of oily substance or fluid. He stated that the patch of fluid was deep enough to saturate his clothing, and estimated that it was 1 to 3 millimetres deep. The Applicant also recalled that the adjacent curb and sidewalk area were dry.

The Applicant stated that while he did not actually see a vehicle spewing or dumping any liquid on this stretch of the road, he concluded, based on the dimensions of the wet patch and the fact that the liquid smelled like a petroleum product, that it was likely hydraulic fluid that had poured out of the back of a truck. He added that he had noticed many dump trucks travelling down Warden Avenue from an area just north of the intersection in question where highway 407 was being built.

The Applicant reported the incident to the York Regional Police upon arriving home. He stated that he drove past the intersection later that day, and noticed that some type of drying agent had been applied to the area.

The Insurer did not call any evidence.

I was advised by the parties that the amount being claimed by the Applicant was not in dispute, nor was the fact that the expenses being claimed resulted from the incident. The narrow issue to be determined is therefore whether the incident described falls within the definition of "accident" in the Schedule. Section 2 states:

(1) In this Regulation,

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

This definition, in turn, raises two questions— whether the use or operation of an automobile was involved in the incident, and if so, whether that directly caused the Applicant's injuries.

On the basis of the evidence before me, I find that the fluid that caused the Applicant's bicycle to slide and him to fall to the ground originated from a motor vehicle. While there is no direct evidence of where that fluid came from, in my view it is reasonable to conclude that it was emitted from a motor vehicle that drove southbound on Warden Avenue in the curb lane and then proceeded westward at the intersection. In arriving at this conclusion I have considered the fact that the substance in question lay exclusively on the roadway and not on the curb, that it was approximately the width of one lane and that it continued in a westward direction for some 200 feet beyond the intersection before fading away. Although it would have been preferable to have more conclusive evidence on this point, I am persuaded by the factors set out above that, on a balance of probabilities, the liquid in question did emanate from a truck.

The issue then becomes whether the injuries suffered by Mr. Petrosoniak were directly caused by the use or operation of an automobile. Prior to November 1, 1996, an applicant had only to prove that any injuries sustained were "indirectly or directly" caused by the use or operation of an automobile. The parties referred to various cases decided by both the courts, and arbitrators under the Insurance Act, involving a consideration of whether injuries suffered in a variety of circumstances can be said to have resulted from an "accident." The court decisions I was referred to, as well as others I have reviewed, address the issue of causation from the standpoint of determining whether coverage should be extended under the plaintiff's insurance policy for injuries sustained in an accident. The standard phrases in these policies limit coverage to injuries either "arising from" or "arising out of" an accident.

While the Supreme Court of Canada stated in Amos v. Insurance Corp. Of British Columbia (1995) 1995 CanLII 66 (SCC), 127 D.L.R. (4th) 618 that the principles enunciated in these cases can be imported into the no-fault context, it also confirmed that the phrase "arising out of is broader than the term "caused by." I think it is fair to infer that when "caused by" is modified by the word "directly," the circumstances that fit within the definition of "accident" in the Schedule become narrower still. Given the significant difference in language, the cases referred to which address the phrases "arising from" or "arising out of" are of limited assistance in dealing with this matter.

What then of the decisions on this issue by arbitrators and Director's Delegates decided under the previous Schedule where the definition of "accident" permitted a direct or indirect cause? In attempting to interpret that definition, arbitrators generally referred to the "purpose test" set out by the Supreme Court of Canada in Stevenson v. Reliance Petroleum Ltd. 1956 CanLII 27 (SCC), [1956] S.C.R. 936 and the "chain of causation" test outlined in Law, Union & Rock Insurance Company Ltd. v. Moore's Taxi Ltd. 1959 CanLII 81 (SCC), [1960] S.C.R. 80, and after the court's decision in Amos, its restatement of these tests. In Amos, however, the court stated that while some nexus or causal relationship must exist between the applicant's injuries and the ownership, use or operation of a vehicle, it need not be a direct or proximate causal relationship. As the present definition of "accident" clearly requires a direct causal relationship, these decisions, including the court's decision in Amos, in my view, also provide limited, if any, assistance.

A reading of the decision in Portch and Royal Insurance Company of Canada/ Markel Insurance Company of Canada (OIC A-007701, March 20, 1995) illustrates this point. The Applicant truck driver in that case sustained injuries while he was in the process of connecting his truck trailer to the loading dock at a retail store in order to effect delivery of a shipment that he had transported. The arbitrator grappled with the meaning of the phrase "causes, directly or indirectly" in the definition of "accident" in the Schedule, and cited Arbitrator Palmer's comments inMander and Wellington Insurance Company (OIC A-002057, September 24, 1993) that,

the traditional chain of causation may be broken by the words "...or indirectly" which appear in the regulation. Although a causal relationship between the use of the automobile and the injuries is required, the present wording does not require the injuries to be the result of the direct or proximate use of the vehicle.

The arbitrator found that the incident described fell within the definition of "accident" in the Schedule. On appeal, Director's Delegate Susan Naylor referred to the fact that recovery was not limited to injuries caused directly by the use or operation of an automobile, and that injuries that were indirectly caused were also included. She confirmed that the use of the word "indirectly" broadens the scope of recovery and allows for a more remote causal connection.

This is the first case in which an arbitrator has been asked to interpret the amended definition of "accident" under the current Schedule. My analysis must therefore begin with a consideration of the words used in the definition, which must be interpreted in accordance with their plain meaning, keeping the purpose of the legislation in mind. Consideration must also be given to the evolution of the definition of the word "accident" in the Schedule.

Counsel for the Insurer referred to various dictionary definitions of the word "direct." One of the definitions provided by the Shorter Oxford English Dictionary (volume 1) is "without intervening agency; immediate." Black's Law Dictionary defines "direct" as being "immediate; proximate; operating by an immediate connection or relation, instead of operating through a medium." The definition I find the most useful, however, is the definition of "direct cause" found in Black's Law Dictionary. It is defined as "the active, efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source" (emphasis mine).

As I understand that definition, a series of events can be the direct cause of an incident, as long as there is no intervening agency or act. Consequently, if an unbroken chain of events involving the use or operation of an automobile leads to an injury, the injury can be said to have been directly "caused by" the incident. In the instant case, the Applicant was injured as a direct result of coming into contact with a wet patch of pavement. I have found that the fluid on the pavement was released by a motor vehicle. While the fact that the fluid fell onto the roadway, as opposed to falling directly onto Mr. Petrosoniak, may constitute an intermediate step in the process which ultimately led to his injuries, it does not, in my view, constitute an intervening act or a force "working actively from a new and independent source" as referred to in the definition cited above.

The Insurer conceded that the amended definition does not go as far as to require an applicant to come into direct contact with a vehicle. Counsel submitted, however, that the deletion of the word "indirectly" from the definition requires that there be a direct link between the circumstance that causes the injury and the incident. I agree with that statement. As the sole cause of the Applicant's injuries in this case was the existence of the oily substance on the pavement, in my view, the direct causal requirement or link has been met and the incident described therefore falls within the definition of "accident" set out in section 2.

There was some discussion at the hearing about whether the definition of "automobile" in the Insurance Act included road building machines or vehicles that were not insured to drive on the road. I do not find it necessary to address this issue, as I have no evidence before me to support the Insurer's theory that the liquid in question came from a vehicle that was not insured under a motor vehicle liability policy.

Expenses:

As the Applicant has been successful in this hearing, he is entitled to recover his expenses. In the event that the quantum of expenses cannot be agreed upon, they may be assessed in accordance with Rule 77 of the Dispute Resolution Code.

ORDER:

1. The Applicant was injured in an "accident" as defined in section 2 of the Schedule and is therefore entitled to the benefits claimed.

2. Security shall pay the Applicant interest on the amounts owing pursuant to Section 46 of the Schedule, as well as his expenses of the hearing.

November 2, 1998

Shari L. Novick

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96 and 551/96.
2. 2Effective July 1, 1998, the Ontario Insurance Commission was changed to the Financial Services Commission of Ontario, pursuant to the Financial Services Commission of Ontario Act, S.O. 1997, c.28.