Neutral Citation: 1998 ONFSCDRS 90

FSCO A98-000053

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

PETER PRICE

Applicant

and

LIBERTY MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Issues:

The Applicant, Peter Price, was injured in a motor vehicle accident on May 27, 1997. The issues in dispute in this matter are: preliminarily, the application of the exclusion set out in subsection 30 (2)(b) of the Schedule¹; the duration of the Applicant's entitlement to income replacement benefits under section 4; and the amount of his income replacement benefit. The Applicant claims that he was both employed and self-employed during the 52 weeks before the accident. The parties do not dispute the amount of his employment income or the weekly income replacement benefit rate ($81.30 weekly) if it were calculated based solely on this income. They do however dispute the amount of the Applicant's self-employment income. Liberty Mutual Insurance Company ("Liberty Mutual") submits that the Applicant is precluded from receiving income replacement benefits under subsection 30 (2)(b) of the Schedule because, as an occupant in the car at the time of the accident, he knew or ought reasonably to have known that the driver was operating the automobile without the owner's consent. At the hearing, Liberty Mutual conceded the Applicant's entitlement to income replacement benefits from the date of the accident until October 7, 1998 in the event that I determine that the exclusion does not apply. The parties were unable to resolve their dispute through mediation, and the Applicant applied for arbitration at the Financial Services Commission of Ontario² under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act").

Preliminary Procedural Matters:

The quantum issue and interim benefits order

The hearing dates were originally scheduled to determine all issues in dispute. Liberty Mutual submitted that it received documents from the Applicant pertaining to the disability issue just days before the hearing. It therefore requested the opportunity to respond to this evidence. To permit Liberty Mutual an adequate opportunity to meet Mr. Price's case on the disability issue, I scheduled a resumption of the hearing on August 25, 26 and 27, 1999 to hear this issue.

The parties agreed that I hear evidence on the exclusion and quantum issues during this sitting and that I render a decision on the exclusion matter before the return date. The parties disagreed on whether the quantum issue should be closed at the first sitting and a decision rendered on this issue before I hear the evidence on the disability issue. The Applicant submitted that, because he has not received weekly benefits from Liberty Mutual since the accident a year-and-a-half ago, he has suffered serious financial difficulties. He testified that he is in arrears on his bills and that his parents have had to financially support him.

The Applicant alleges that he experiences memory problems as a result of a head injury he sustained in the accident. Liberty Mutual disputes this claim and submitted that credibility problems underlie the Applicant's problems with recall. Liberty Mutual also argued that, because Mr. Price alleges that memory problems have affected his recall of some of the facts pertaining to his pre-accident employment and earnings, this issue should not be closed until after the medical evidence has been heard. The Applicant argued that I can determine quantum without hearing the medical evidence since, without the Applicant's evidence, other evidence called amply supports the Applicant's case on this issue. He further argued, and Liberty Mutual submitted as an alternative argument, that without calling medical witnesses at this time the parties might file medical documentation for my consideration in determining this issue.

After considering the parties' submissions, I concluded that I would not hear arguments on the quantum issue until I have heard the medical evidence. In coming to this conclusion, I took into account the fact that the head injury issue is in dispute and I believe I would be better served in assessing the Applicant's memory problems on this issue by a full hearing of the medical evidence. Complicating the memory issue is the fact that the Applicant maintained no records or documents of his pre-accident self-employment work. He has largely had to rely on his limited memory of that work and the testimonies, letters and photographs from pre-accident clients, which were largely prepared after the fact for the hearing. I also took these factors into account in coming to my decision on this matter.

I indicated that I would make an interim order in consideration of the Applicant's financial circumstances, the parties' agreement on quantum as based on his employment income and Liberty Mutual's concession on the disability issue. Liberty Mutual conceded disability from the date of the accident until October 7, 1998 in the event that the exclusion does not apply. The Applicant has succeeded on the exclusion issue and the agreed weekly benefit rate (as based on employment income) is $81.30. I therefore order Liberty Mutual to pay the Applicant income replacement benefits under section 4 of the Schedule at $81.30 per week for the period from the date of the accident until October 7, 1998, with interest, to be applied after final determination in accordance with my order as set out below.

Protection from self-incrimination

During his testimony, Kevin Trotter sought the protection against self-incrimination afforded by the Evidence Act (Ontario), section 9³, the Canada Evidence Act,⁴ section 5 and the Canadian Charter of Rights and Freedoms, section 13. He asserted his right to not have used or received in evidence against him, in his upcoming criminal proceeding, any answers to questions posed to him in the instant proceeding that may tend to incriminate him. The Statutory Powers Procedure Act⁵ provides an automatic right to this protection for witnesses testifying at proceedings governed by this legislation. Section 14 provides in part that "a witness shall be deemed to have objected to answer any question...on the ground that the answer may tend to criminate him or her...", and further provides that no answer given shall be used or receivable against the witness in any subsequent trial or proceeding.

Issue:

The preliminary issue in this hearing is:

1. Does the exclusion set out in subsection 30 (2)(b) of the Schedule apply to the facts of this case? Did Mr. Price know, or ought he to have reasonably known at the time of the accident, that the driver was operating the automobile without the owner's consent?

Result:

1. The exclusion set out in subsection 30 (2)(b) of the Schedule does not apply to the facts of this case. The Applicant is not disqualified from receiving income replacement benefits.

2. Liberty Mutual shall pay the Applicant forthwith income replacement benefits under section 4 of the Schedule, from June 3, 1997 to October 7, 1998 at the rate of $81.30 weekly, with interest pursuant to section 46 of the Schedule, to be applied after final determination in accordance with my order as set out below.

Hearing:

The hearing was held at the offices of the Financial Services Commission of Ontario in North York, Ontario, on October 19, 20, 21 and 22, 1998, before Arbitrator Beth Allen. Marcie Williams of Rosenberger & Weir, Official Examiner, recorded the proceedings. The persons present at the hearing and the exhibits filed are listed on the Schedule to the decision. The matter has been scheduled to resume on August 25, 26 and 27, 1999 at the Offices of the Financial Services Commission of Ontario in North York, Ontario.

The Law:

Liberty Mutual argued that the Applicant is excluded form receiving income replacement benefits because at the time of the accident, he was a passenger in a car where he knew or ought reasonably to have known the driver did not have the consent of the owner to drive the car. It relies on the exclusion set out in Part IX, subsection 30 (2)(b) of the Schedule which states as follows:

30. (2) The insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under section 20, 21 or 22,

(b) in respect of an occupant of an automobile at the time of the accident who knew or ought reasonably to have known that the driver was operating the automobile without the owner's consent.

It is trite law that the party seeking to rely on an exclusion has the burden to prove that it applies. Liberty Mutual therefore has the burden to prove, on a balance of probabilities, each element of the exclusion in order to establish that the Applicant is not qualified for income replacement benefits. There are issues in this case as to who the driver was at the time of the accident, who the owner (or owners) of the car was (or were) and whether the owner(s) consented to the driver's use of the automobile. Once the insurer proves these facts, it must go on to establish that the Applicant knew or should reasonably have known that the driver was driving the car without the consent of the owner. What the occupant knew or ought to have known are questions of fact to be proven in all the circumstances of the case.

Evidence and Findings:

The accident

There are significant discrepancies in the evidence of the circumstances surrounding the accident. However, the following facts are largely non-contentious: The accident occurred on May 27, 1997 at 1:00 a.m. The car involved in the accident was a 1981 Chevy Camaro Z28, registered in the name of Douglas Trotter. The Applicant went over to the Trotter home on the afternoon of May 26, 1997 and met Kevin Trotter working on a car in the garage. Kevin was living at his parents' home at the time and had done so on and off over the years. Kevin's mother, Shirley Trotter, was at home that day, but Douglas Trotter, Kevin's father, was away on a trip. That day at about 5:00 p.m., the Applicant took the Camaro and drove the Applicant to a nearby auto supplier to pick up auto supplies. While the Applicant and Kevin were gone, Kevin's then girlfriend, Sharon Keyworth, and her friend Amanda McGill, arrived at the Trotter house and waited there for the Applicant and Kevin. When the Applicant and Kevin returned to the Trotter house they did not leave the car keys to the Camaro with Mrs. Trotter or in the house. Mrs. Trotter left the house to play Bingo at about 9:30 p.m. that evening.

Kevin, the Applicant, Sharon and Amanda remained at the house until late that evening. They drank beer and ate pizza until they decided to leave for the Trotter trailer about 30 kilometers away.⁶ Sharon and Amanda drank one or two beers each and Kevin and the Applicant finished the balance of a case of 24. On the way to the parents' trailer, they stopped at a friend's trailer where they remained until almost 1:00 a.m. drinking beer and talking. About five minutes after the Applicant, Kevin, Sharon and Amanda left the friend's trailer in the Camaro, they were involved in a single-car accident. The car ran a stop sign, hit a gravel surface and rolled over onto its roof. Shortly afterward, the police and ambulance arrived at the scene and the Applicant, Kevin, Sharon and Amanda were transported to hospital. The Applicant claims that he has no memory of the accident.

Who was the driver of the car?

The weight of the evidence tends to show that Kevin Trotter was driving the Camaro at the time of the accident. However, Kevin Trotter contended that a person named "John" was driving. At the hearing, he did not recall John's last name. In prior statements to an insurance adjuster with Liberty Mutual (dated June 27, 1997) and to the Ontario Provincial Police ("OPP") (dated May 27, 1997), Kevin indicated that John's surname was "Macedoni" and "Mascadoni". Kevin testified that John came over to his parents' house on the evening of May 26 and drove himself and the three others in the Camaro to the friend's trailer and was also driving at the time of the accident. According to Kevin, John left the scene of the accident on foot. Despite his alleged efforts to contact John since the accident, Kevin has not succeeded and consequently has never seen John again.

Sharon and Amanda testified that Kevin was driving at the time of the accident and that they did not see a person named John that evening. However, in prior statements to the OPP (on May 27 and 31, 1997 respectively), Sharon and Amanda stated that a person named John was driving at the time of the accident. Sharon and Amanda admitted at the hearing that they were lying when they gave their statements to the OPP. They both explained that at Kevin's insistence they went along with his story about John driving. They testified at the hearing that Kevin told them he would go to jail as a result of this accident if he were found to have been driving. Sharon testified that even at the accident scene, Kevin told Amanda and her to tell the authorities that a person named John was driving. Kevin denied this. Further, both Sharon and Amanda revealed that Kevin set up a three-way telephone call while Sharon was still in the hospital so they could collaborate on the story they would tell the authorities. Kevin said he did not remember this call.

Sharon testified that Kevin assaulted her on a number of occasions during arguments about the accident and she and Amanda decided, about seven months after the accident, to tell the truth to the OPP and Liberty Mutual — that is, that Kevin was driving. As a consequence of the recantation, Kevin faces criminal charges for dangerous driving causing bodily harm, impaired driving and driving while licence suspended. Both Sharon and Amanda testified that the recanted version they gave to the OPP and Liberty Mutual is true and accords with the evidence they gave at the hearing. Kevin, on the other hand, maintained that Sharon and her friend changed their stories because Sharon was upset that Kevin had broken up with her.

I find in Kevin's own admissions support for my view that Kevin was most likely the driver. He admitted that, for about the past ten years, his driver's licence has been suspended as a result of numerous traffic offences. Kevin also admitted that he has six or seven previous convictions for driving while his licence was suspended. Two of these convictions involved the Camaro. I gather from the admissions of his past offences, and the evidence of the charges facing Kevin at his criminal trial, that he has an obvious interest in not being found to be the driver at the time of the accident. It reasonably follows that it would be in Kevin's self-interest to deny being the driver of the car.

Although Sharon's and Amanda's credibility has been somewhat sullied by the fact that they had previously fabricated the story they gave to the OPP and Liberty Mutual, I accept their evidence over Kevin's. While I recognize that there is a possibility that Sharon and Amanda might have changed their stories out of vindictiveness over Sharon's and Kevin's break up, I find it more likely, and I accept their evidence that they recanted in the interest of telling the truth. Furthermore, I find Kevin's evidence about "John" highly suspect, particularly Kevin's claim that John left the scene of a relatively serious accident on foot at 1:00 a.m. in a rather remote area. As well, Kevin seemed to know very little about John and was uncertain of John's surname or his whereabouts. Adding to the suspicion is that other witnesses denied any knowledge of a person named "John" being connected to the accident and in fact Sharon contended that Kevin actually fabricated this person. Kevin admitted he has not been in touch with John since the accident. On balance, therefore, I find that Kevin was driving the car when the accident occurred.

Who was the owner of the Camaro?

It is arguable that either or all of Douglas, Shirley or Kevin Trotter were the owners of the Camaro. Obviously, if I find that Kevin Trotter was the owner of the car, I need not go on to determine the consent issue. But if either or both of his parents were the owner(s), I must decide whether the Applicant knew or ought reasonably to have known that Kevin did not have the consent of his parent(s) to operate the car.

The term "owner" as it pertains to motor vehicles is not defined in the Act or Schedule. However, the courts have looked at the meaning of the term in personal injury liability cases. It is not in dispute that Douglas Trotter was the registered owner of the Camaro. He purchased the car for $1,200 in the Spring of 1996, about one year before the accident. Douglas also insured the car in his name with Liberty Mutual. However, court and arbitration cases have established that paper ownership of a vehicle is not the sole indicator of the ownership of that vehicle. Other factors such as who has possession, control and dominion over a vehicle have been considered in determining ownership.

Court cases have looked at the term "owner" as used in personal injury cases involving highway traffic legislation. Although the policy considerations underlying the interpretation of "owner" in a tort liability case differs from those in a no-fault case, tort cases provide some useful insights and guidance. In the tort context, courts have considered factors other than registration in identifying the owners of motor vehicles. In one such case the court held that registration should be treated as prima facie proof of ownership unless the contrary is shown.⁷ Another case determined that, irrespective of the meaning intended under highway traffic legislation, a person can be found to be an owner at common law⁸. The Court in both cases considered such factors as registration, possession, dominion and control over the vehicle as well as the person in whose name the vehicle is insured. A more recent case of the Ontario Court General Division held that "the test of dominion and control continues to be good law and current law in Canada."⁹

An arbitration decision also applied the control and possession tests in determining the ownership of the car the applicant was driving when the accident occurred. Although the car was registered in another person's name, the arbitrator held that the applicant at all material times had control and possession of the car.¹⁰

Liberty Mutual mainly relied on Kevin's and his parents' evidence to demonstrate that Kevin was not the owner of the Camaro. The Applicant argued that either or all of Shirley, Douglas and Kevin Trotter could be seen as the owner(s) of the car. However, when I apply the control, possession and dominion tests to the facts before me, I conclude on balance that Douglas Trotter was the owner of the Camaro. However, I must state that the evidence as to the handling of and arrangements for the Camaro was far from consistent. Nevertheless, I find I can draw certain non-contentious facts from a body of very inconsistent evidence.

For the duration of the Camaro being with the Trotter family, it was parked and maintained at Kevin's parents' home. Douglas Trotter often travelled out of town and Shirley would be at home more frequently during the period when the Camaro was in the family, although she went daily to play Bingo. Kevin was not employed outside his parents' home. He worked from a garage on his parent's property repairing and maintaining cars, including his family's cars. Although there is conflicting evidence on the extent and nature of Kevin's involvement with the Camaro, generally the witnesses testified that Kevin took care of the Camaro. Douglas purchased supplies and parts used to maintain the Camaro. Occasionally, Douglas and Shirley allowed a number of theirs and Kevin's friends to drive the Camaro for errands, with Kevin often accompanying them. George Kennett, who testified for Liberty Mutual, is a neighbour and friend of the Trotters who regularly drove the Camaro from the purchase date throughout 1996 for his own use and to run errands for Kevin.

The evidence which suggests that Kevin might be considered an (or the) owner of the Camaro is in significant conflict with the evidence that points to his father being the owner.

According to Sharon Keyworth, Kevin told her and other friends that he was the owner of the Camaro. The Applicant also testified that Kevin told him the Camaro was his. However, Kevin and his parents testified that this is consistent with his (Kevin's) character since he has always referred to his parents' property, such as the house, the trailer and the cars as "his or ours".

Sharon testified that Kevin had his own set of keys to the Camaro on his key ring with his other keys. She stated that she visited Kevin at his parents' house about three or four times weekly before the accident and that Kevin drove her in the Camaro using his own keys under circumstances where she had the impression that he owned the Camaro. Kevin and his parents, on the other hand, insisted that there was only one key to the Camaro which was kept either in one of the parents' possessions or on a hook in the kitchen of their house. Shirley Trotter stressed that she and her husband exercised strict control over the keys to the Camaro. She maintained that when Kevin's friends would drive the Camaro, she or her husband would routinely pass the keys to the friend and ensure that the friend was behind the wheel when the car drove away. George Kennett testified that Kevin took care of all the family cars and did not treat the Camaro as his own.

The discrepancies in the evidence as to Kevin's use or non-use of the Camaro are also troubling. Kevin's parents testified that before the accident, Kevin did not to their knowledge drive the Camaro. Kevin basically testified that with the exception of those occasions when he was convicted of driving the Camaro without a licence, when he drove the car to change its position in the driveway at home or to test its brakes on the road in front of the house, he did not drive the Camaro. Kevin and his parents testified that if Kevin needed to go on errands or to go out, his parents would drive him or allow friends or Kevin's customers to drive him. Sharon, on the other hand, testified that Kevin had driven her in the Camaro about two or three times before the accident. In fact she indicated that she had not seen anyone but Kevin drive the Camaro.

As further evidence of Kevin being the owner of the Camaro, the Applicant pointed to the fact that Kevin "suped up" the car making it more sporty and hence incompatible with his parents' ages and lifestyle. The Applicant, despite memory problems in other areas of his testimony, appeared to have a fairly keen memory of the changes to the car's motor and transmission that rendered it such that a driver needed special skill or knowledge to drive it. The suggestion here is that the car was so highly powered as to make it unlikely or impossible for the parents, particularly the mother, to drive it. The background to this evidence is that Kevin had a hobby of buying older cars for their spare parts and using these parts to "supe up" or repair other cars. At the time of the accident, he owned three "junkers", none of which were road-worthy or plated.

However, on behalf of Liberty Mutual, Kevin and his parents presented evidence that, Kevin's hobby aside, his father owned the Camaro. They denied that Kevin fundamentally modified the Camaro and that Kevin made the Camaro any more powerful than it was at the time of purchase. They insisted that the car was suitable for the parents to drive and that they did in fact drive it. George Kennett also testified that during 1996 when he drove the Camaro he was unaware of any modifications to the car.

In deciding the ownership issue, I had concerns about the underlying interests of various witnesses and how this would affect the reliability of their evidence. It seems that no one was an entirely disinterested witness. The Applicant's interest in the outcome of the arbitration is obvious. Regarding Douglas Trotter's interest, the parties concurred that the standard automobile policy provides that, were Douglas Trotter to permit Kevin to drive the Camaro knowing he was unauthorized to drive, coverage for the car could be denied in the event of a claim. The parties however have divergent views on the effect of the coverage issue on Douglas' credibility. According to Liberty Mutual, Douglas Trotter would not have and did not permit Kevin to drive the Camaro while unauthorized because to do so would be unreasonable and clearly not in his interest for insurance purposes.

The Applicant, on the other hand, argued that Douglas and Shirley Trotter were lax and perhaps even permissive with Kevin in respect to the Camaro. However, according to the Applicant, now that the accident has occurred, and it appears that insurance coverage might be affected by a finding that they consented to Kevin driving while unauthorized, the Trotters are denying their permissiveness. Accordingly, the Applicant's view is that Kevin's and his parents' credibility has been tainted by this self-interest.

I have already addressed the effect of Kevin's upcoming criminal trial on his credibility, as well as my concerns with Sharon Keyworth's evidence as a result of her acrimonious relationship with Kevin. As well, I do not consider George Kennett to be a disinterested witness, as Liberty Mutual has urged, since he is a friend and neighbour of the Trotters who have frequently allowed him to borrow their cars.

Weighing the evidence on the ownership issue was challenging due to the many reliability problems. But having done so, I find there is more reliable evidence that Douglas Trotter was the owner of the Camaro than Kevin or his mother. I find that during Douglas' absences from home, as the owner of the Camaro, he delegated his authority over and responsibility for the car to his wife. But I do not find this is a sufficient basis to conclude that she is an owner of the car. Apart from her custodial responsibilities in her husband's absence, I am not persuaded that she had any other substantial connection to the car.

I believe that Kevin had more access to driving the car than his parents were prepared to admit. I think they intended to restrict his use but did not always accomplish this. After all, Kevin was convicted at least twice of driving the Camaro while unlicenced and it is reasonable to suspect that Kevin likely drove the Camaro at other times without being caught by the police. This accords with Sharon's evidence that Kevin drove her in the Camaro about two or three times in the year before the accident. I accept Sharon's evidence on this point as she does not seem to have exaggerated the number of times she drove with Kevin. However, I heard no persuasive evidence that Kevin routinely drove the car or exercised possession, control or dominion over the car such as would have conferred ownership. I believe that he might have bragged to his friends, particularly his girlfriend, that the Camaro was "his". I also accept that Kevin worked on cars as a hobby and maintained his parents' cars. He might have even made some changes to the Camaro; however, the evidence in this area is so inconsistent that I am unable to determine the extent or effect of the changes, if any. In sum, I cannot conclude from the evidence that Kevin was an owner of the Camaro as contemplated by the accident benefits scheme.

Kevin's father's relationship with the Camaro, on the other hand, had more of the hallmarks of ownership. He had paper or formal ownership as well as control, dominion and possession of the Camaro. Douglas purchased the car; registered the car in his name; insured it in his name; paid for supplies, parts and repairs for the car; kept the car on his property; and loaned the car to others. He also held the key to the car, although there is conflicting evidence as to whether this was the sole key to the Camaro. There is some evidence, as presented by Sharon, that Kevin had his own key. However, the bulk of the evidence suggests that there was only one key controlled by Douglas and his wife, and I am prepared to accept that this was the case, although it might have gotten into Kevin's hands more often than he or his parents admitted in testimony. How often, if at all, Douglas drove the car is also in question. I am persuaded by the evidence that he drove the Camaro, but he likely drove his other cars more often. In any event, I find that an owner need not drive a car on a regular basis to establish his ownership of it. I am less inclined to believe on the evidence that Shirley Trotter drove the Camaro. The evidence suggests that she was more likely to have driven her other cars.

I therefore find on the totality of the evidence that Liberty Mutual established on the balance of probabilities that Douglas Trotter was the sole owner of the Camaro at the time of the accident.

Consent

I first have to consider whether Kevin had the consent of his father, either directly or through his mother, to drive the Camaro. On the evening before the accident, Douglas Trotter was out of town and Shirley Trotter was at home until 9:30 pm. There is no evidence that Kevin communicated with his father that night about the use of the Camaro. Therefore any consent that might have been given would have had to be extended by Shirley. The question is whether his mother consented to his driving the car.

Earlier I found that Kevin did not drive the Camaro on a routine basis and that generally his parents drove him or allowed his friends to take him in the Camaro. The evidence is that on the afternoon of May 26, 1997 Shirley gave the key to the Camaro to the Applicant to drive Kevin to get car supplies and he never returned the key to her before she left for Bingo at 9:30 p.m. Neither the Applicant's, Sharon's or Kevin's memories were clear as to whether Kevin or the Applicant asked Shirley for permission to use the Camaro later that evening. Shirley, however, testified that after ensuring that the Applicant was still holding the keys, she gave the Applicant and Kevin permission to take the car out that evening, assuming that the Applicant would be driving. Given Shirley's and her husband's underlying interest in establishing lack of consent, I am not so certain that she actually confirmed the whereabouts of the keys as demonstratively as she described in testimony. However, I am prepared to accept that she did not expressly or impliedly consent to Kevin driving the car that evening. Kevin and Amanda testified that the Applicant was driving the Camaro that evening when they left for the Trotters' trailer and then some time later Kevin took over. I find it is reasonable to conclude from these facts that when the accident occurred Kevin did not have the direct consent of his father, or his indirect consent through his mother, to drive the Camaro .

To determine whether the exclusion applies, I have to decide if the Applicant, as an occupant in the Camaro at the time of the accident, knew or ought to have known that Kevin did not have the consent of his father to drive the Camaro. The test of the occupant's knowledge is both subject, that is, what he actually knew; and objective, what a person in his place would reasonably have known in the circumstances. A finding that the exclusion applies will result in Liberty Mutual not being obligated to pay the Applicant income replacement benefits.

I heard no evidence that the Applicant actually knew Kevin did not have his mother's or father's consent to drive the Camaro. The Applicant claimed to have no memory of the accident and little or no memory of the events immediately leading up to the accident. None of the other witnesses indicated that they were aware of whether the Applicant knew whether Kevin had either of his parents' consent to drive the car that night. I therefore find that the Applicant did not know that Kevin lacked his mother's or father's consent to drive the car.

Applying the objective test to the evidence is less straightforward. I considered the background of the Applicant's relationship with Kevin and his parents in determining what would be reasonable for the Applicant to have known at the time of the accident.

The Applicant did not know Kevin and his family for a lengthy period before the accident. He estimated that he had known Kevin just over a month. Kevin and the Applicant saw each other about six times, mainly in connection with Kevin repairing cars. The Applicant also testified that he believed Kevin held a driver's licence, although he had never seen Kevin drive the Camaro. Shirley did not recall ever lending the Camaro to the Applicant before the accident. According to the Applicant, he drove the Camaro only once before the accident but Kevin expressed uncertainty whether the Applicant had driven it before. Unfortunately, I received no evidence of the Applicant's understanding of why he was driving the Camaro on both occasions on May 26, 1997 instead of Kevin, since the Applicant indicated that he believed Kevin was licenced. But even with this apparent shortcoming in the evidence, I find on balance that it is reasonable to conclude from the Applicant's relatively brief relationship with the Trotter family, and his belief that the Camaro was Kevin's, that the Applicant was more than likely unfamiliar with the Trotters' arrangements for the Camaro. I heard no direct evidence that persuaded me that the Trotters' policy with the Camaro was ever communicated to the Applicant. It follows that the Applicant was probably unaware of whether Kevin needed the permission of his parents to drive it that night, and hence would not have been aware that he lacked consent.

One arbitration case¹¹ stated, in relation to a similar exclusion provision under a previous accident benefits scheme, that an insurer has a heavy burden to establish the application of this exclusion. I agree. I conclude that Liberty Mutual failed to meet this burden by establishing its case on a balance of probabilities. In the result, I find that the Applicant did not know nor would a person in the Applicant's place reasonably have known that Kevin was driving his father's car without his father's consent either directly or through his mother. The Applicant is therefore not excluded by subsection 30 (2)(b) of the Schedule from qualifying for income replacement benefits under section 4 of the Schedule.

Order:

1. The Applicant is not excluded by subsection 30 (2)(b) of the Schedule from receiving weekly income benefits.

2. I order Liberty Mutual to pay Mr. Price income replacement benefits forthwith under section 4 of the Schedule in the amount of $81.30 per week, with interest calculated pursuant to section 46 of the Schedule, from June 3, 1997 until October 7, 1998. In the event that I find Mr. Price earned self-employment income and/or is entitled to income replacement benefits beyond October 7, 1998, the amounts paid under this order shall be applied against income replacement benefits ordered upon the final disposition of the matter.

November 27, 1998

Beth Allen Arbitrator

Date

SCHEDULE

Present at the Hearing:

Applicant:

Peter Price

Mr. Price's Representative:

Daniel J. Balena Barrister and Solicitor Wendy Martin Law Clerk

Observer:

Wendy Price

Liberty Mutual's Representative:

Peter Kazdan Barrister and Solicitor

Liberty Mutual's Officer:

Tina Maasland Senior Claims Specialist

Observers:

Sandy Smith Barrister and Solicitor Walter Aronovitch Barrister and Solicitor

Witnesses:

For the Applicant:

Peter Price Karen Baker Janette Laffin Blaine Lukawesky Fred Fenton Reginald Davison Stanley Price

For the Insurer:

Sharon Keyworth Douglas Trotter Shirley Trotter George Kennett Amanda McGill Kevin Trotter Keith Bragg

Exhibits:

Exhibit 1

Arbitration Brief of Liberty Mutual Insurance, Volume I

Exhibit 2

Arbitration Brief of Liberty Mutual Insurance, Volume II

Exhibit 3

Applicant's Arbitration Brief

Exhibit 4

Applicant's 1996 T4 Slip from Interim Personnel

Exhibit 5

Reports by J.P. Flanagan & Associates and Kenneth R. Craven, Accountants, dated October 16, 1998

Exhibit 6

Photographs of Janette Laffin's home

Exhibit 7

Photographs of Janette Laffin's home

Exhibit 8

Janette Laffin's CIBC loan documents dated November 24, 1997

Exhibit 9

Photographs of Blaine Lukawesky home

Exhibit 10

Photographs of Reginald Davison's home

Exhibit 11

Photographs of Fred Fenton's house

Exhibit 12

Photographs of Peter Johnston's house

Exhibit 13

Photograph's of Daniel Tully's home

Exhibit 14

Photographs of Keith Bragg's home

Exhibit 15

Peter Price's Loan Application with Oshawa Credit Union Ltd

Legal Authorities and Legislation:

1. The Insurer's Brief of Authorities, binder with seven tabs, with front pocket containing a package of eight documents

2. Applicant's package of nine cases documents

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.
3. 3R.S.O. 1990, c. E.23 as amended.
4. 4R.S.C. 1985, c. C-5 as amended.
5. 5R.S.O. 1990, c. S-22 as amended.
6. 6The evidence establishes that the Applicant, Kevin, Sharon and Amanda left the Trotter house for the trailer. Only Kevin testified that a person named "John" came to the Trotter house that night and was driving the Camaro when the accident occurred. I will deal with this matter when I make findings on who the driver was at the time of the accident.
7. 7Hayduk v. Pidoborozny, 1972 CanLII 136 (SCC), [1972] S.C.R. 879 (S.C.C). See also an earlier case, Haberl v. Richardson and Richardson, 1951 CanLII 115 (ON CA), [1951] O.R. 302 (Ont. C.A.) where registration was found to be only prima facie evidence of ownership.
8. 8Honan v. Doman Estate, [1975] S.C.R. 866 (S.C.C).
9. 9Stoica v. Ontario (Superintendent ofInsurance),[1990] O.J. No 2569 DRS 93-00437(Ont. Ct. Gen. Div.)
10. 10Opatowski v. General Accident Assurance Company of Canada, (OIC A 95-013992, November 20, 1995).
11. 11Jacobs v. Economical Mutual Insurance Co., (OIC A-004394, June 16, 1994).