Neutral Citation: 1999 ONFSCDRS 118

FSCO A98-000424

BETWEEN:

RICHARD TURNER, JR.

Applicant

and

CAA INSURANCE COMPANY (ONTARIO)

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

K. Julaine Palmer

Heard:

May 3, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Mark R. Frayne for Mr. Turner

Lee Samis for CAA Insurance Company (Ontario)

The principal issue in this case is whether Mr. Turner was injured as a result of an "accident," as defined in the Schedule¹ Even if Mr. Turner was injured in an "accident," CAA claims exemption from paying him benefits under the Schedule's provisions dealing with workers compensation benefits. Mr. Turner says those provisions do not apply to his situation; he also says that he was hurt in an "accident."

Mr. Turner was injured as a result of an accident, as defined in subsection 2(1) of the Schedule.
CAA is not exempted from paying benefits to Mr. Turner by the provisions of section 59 of the Schedule dealing with entitlement to receive benefits under any workers' compensation law or plan.

Background:

Mr. Turner was injured on May 27, 1997 and applied for benefits from CAA, his wife's car insurer.² CAA denied Mr. Turner's injuries were caused by an "accident," as defined by the Schedule. After the parties were unable to resolve their disputes through mediation, Mr. Turner applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act").

The Law:

To be entitled to benefits under the Schedule, Mr. Turner must have sustained an impairment as a result of an accident. An 'accident' is defined as:

"an incident in which the use or operation of an automobile directly causes an impairment . . . '

CAA does not dispute that Mr. Turner has suffered an impairment. It says his impairment was not caused by the use or operation of an automobile.

The Facts of This Case:

The evidence establishes that at the time of the incident Mr. Turner was in the course of his duties as a labourer for a corporation known as the Scarboro [sic] Golf and Country Club. He was driving a three-wheeled motor vehicle — a Cushman Turf-Truckster. Put simply, the question of whether Mr. Turner was in an accident hinges on whether a turf-truckster is an 'automobile' under the Schedule.

Definition of 'Automobile'

(i) The 'Ordinary Parlance Test

The word 'automobile' is not defined in the Schedule. It is defined in the Act, in section 1 and in subsection 224(1). However, if in ordinary parlance, a turf-truckster would be an 'automobile,' then, following the reasoning of Messrs. Justice Finlayson and Catzman in Regele v. Slusarczyk³and Morton v. Rabito,⁴ respectively, one need not turn to "some enlarged definition of that term" found in the Act.

The turf-truckster Mr. Turner drove was of a size comparable to that of a small car. It had a padded bench seat, could seat two people and was often used to transport labourers around the golf course property.⁵ The turf-truckster had many features in common with a roofless or open-to-the-air automobile, for instance, a steering wheel, gear selector, clutch, brake and accelerator pedals, a parking brake pedal and release. It had a fuel gauge, a tachometer and a speedometer, pneumatic tires, headlights and brake lights. The turf-truckster was powered by a gasoline or diesel engine. It was designed to transport people as well as loads and operated at speeds of up to 30 km/hr, travelling in one of its three forward gears, or in reverse.

In ordinary parlance I find a turf-truckster is an "automobile," just as a pickup truck or a motorcycle can be referred to as an automobile.⁶

For these reasons I find that Mr. Turner was injured in an "accident" within the meaning of the Schedule, because the turf-truckster is an 'automobile' in ordinary parlance, and accordingly under the Act. Mr. Turner's impairment was caused directly by the use or operation of an automobile.

(ii) Motor Vehicle Test

Although it is sufficient to find Mr. Turner eligible for benefits under the ordinary parlance test, I find he is also eligible under the statutory definition of automobile — that I will call the "motor vehicle" test. As already stated, 'automobile' is not defined in the Schedule itself, but in subsection 224(1) of the Act — in Part VI, dealing with "Automobile Insurance"—'automobile' is defined as including:

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

Two questions thus emerge. Is the turf-truckster a motor vehicle? And is it required under any Act to be insured under a motor vehicle liability policy?

The Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25("CAIA") requires all motor vehicles to be insured under a contract of automobile insurance in order to operate them on a highway.⁷ In the CAIA a motor vehicle is defined by reference to the Highway Traffic Act, R.S.O. 1990, c.H.8, as amended, ("HTA"), as follows:

"motor vehicle" has the same meaning as in the Highway Traffic Act and includes trailers and accessories and equipment of a motor vehicle;

The HTA defines a motor vehicle as including:

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 vehicle running only upon rails, or a motorized snow vehicle, traction engine, farm tractor, self-propelled implement of husbandry or road-building machine within the meaning of this Act.

It is not disputed that the turf-truckster was a self-propelled vehicle, or a "vehicle propelled or driven otherwise than by muscular power." It was powered by a gasoline or diesel engine and transported people as well as loads, at speeds up to 30 km/hr.⁸ I find that the turf-truckster falls within the language "any other vehicle propelled or driven otherwise than by muscular power."

Two recent cases of the Court of Appeal dealing with insurance aspects of accidents involving unlicensed vehicles were cited at this arbitration. I have already referred to them, above, in the previous section. In Regele the court dealt with a farm tractor, and in Morton a backhoe, both of which are specifically excluded as "motor vehicles" under the definition in the Highway Traffic Act set out above.⁹ A turf-truckster is not excluded from the definition of motor vehicle, so a different result obtains in this case. Thus, I find that a turf-truckster passes the first portion of the test of whether it is an 'automobile' under the Schedule, because the HTA definition of motor vehicle expressly includes "any other vehicle propelled or driven otherwise than by muscular power."

Was the turf-truckster required to be insured under a motor vehicle liability policy? At the time of the accident, Mr. Turner was operating the turf-truckster on the private property of a golf club. However, the evidence at the hearing clearly established that, from time to time, the club's turf-trucksters were operated on a highway. Both Mr. Warren, the manager of the club, and Mr. Turner testified that turf-trucksters were driven across Scarborough Golf Club Road, a public road, to get from one side of the golf course to the other, because the road bisected the golf course property. Mr. Turner testified that he could drive the turf-trucksters through a tunnel under the road when loads allowed, but at various times he would drive the vehicles across Scarborough Golf Club Road, out a gate on the east side of the road and through a gate on the west side, or vice versa. The witnesses testified that the club owned about four turf-trucksters which were used interchangeably. I find it is much more probable than not that the turf-truckster used by Mr. Turner on May 27, 1997 had been operated on a highway many times, when it crossed Scarborough Golf Club Road.

If a motor vehicle is operated on a public highway, as noted above, the CAIA requires that it be insured under a contract of automobile insurance.¹⁰ It is not disputed that the turf-truckster was not so insured at the time of this incident. It was also not licenced or registered. Certain exceptions to the insurance requirement in the Off-Road Vehicles Act, R.S.O. 1990, c.O.4, for off-road vehicles crossing or operating on a highway do not apply to this case.¹¹ The fact that, at the very moment this incident occurred, Mr. Turner was operating the turf-truckster on private property does not mean that the turf-truckster was not required to be insured under a contract of automobile insurance. Only if the turf-truckster met the definition of "off-road vehicle," travelled exclusively on land occupied by the owner of the vehicle, and fulfilled all the conditions of subsections 3(3) and 15(9) of the Off-Road Vehicles Act would a motor vehicle liability policy not be required.

For this second reason I find that Mr. Turner was injured in an "accident" within the meaning of the Schedule, because the turf-truckster was a motor vehicle required to be insured under a motor vehicle liability policy in accordance with the Insurance Act.

Worker's Compensation Law or Plan:

Even if Mr. Turner was injured in an 'accident' under the Schedule, CAA claims section 59 of the Schedule exempts it from paying benefits to him. Section 59 provides that where an insured person "is entitled to receive benefits under any workers compensation law or plan" as a result of an accident, an insurer is not required to pay benefits under the Schedule. For the following reasons, I find that this exemption does not apply in Mr. Turner's case and CAA must pay benefits under the Schedule.

In 1996, the Board of Directors of the Scarboro Golf Club decided to withdraw from the Ontario workers' compensation system. Membership in the workers' compensation system is not obligatory for all employers in Ontario.¹² In lieu of workers' compensation, the club arranged for a private insurance plan to provide disability benefits for its employees who suffered an accident while at work. In so doing, the club saved a "substantial" amount.¹³

In considering whether the private insurance obtained by the club is included in the phrase "any workers' compensation law or plan, CAA submits that any provincial or federal workers' compensation scheme is contemplated and that the term encompasses both private or public plans. CAA submits the golf club's insurance is clearly intended for workers, not members of the club — because the persons eligible for insurance are described in two classes: "white collar staff of the Insured under age 70 whose names are on file with the Insurer" and "blue collar staff of the Insured under age 70 whose names are on file with the Insurer. CAA submits that it is a "plan, containing time limits and criteria, rather than relying on the generosity of the employer. CAA submits that the level of benefit provided by the private insurance plan is irrelevant: only the nature of the plan is important.

On the other hand, the Applicant submits that the level of benefits and type of plan is critical. Section 59 should be interpreted to bar from recovery under their automobile policies only injured persons who enjoy what could be viewed as "alternative coverage" of a nature and type comparable to the benefits afforded by the Schedule. The Applicant submitted a chart as part of his submissions comparing the benefits available to an injured worker under the Workers' Compensation Act ("WCA"), to the benefits provided by the "group policy." I find that the quantum and range of benefits are clearly superior under the WCA, most particularly in the area of health care benefits, vocational rehabilitation benefits and spousal and dependent benefits, in Mr. Turner's particular circumstances.

The Applicant also submits that on examining section 59 of the Schedule, it is apparent that most of the section, save the initial reference to "any workers' compensation law or plan" deals specifically with Ontario law: the Workers' Compensation Act. In a workers compensation scheme as exists in Ontario, workers give up the right to sue their employers for damages in return for statutory entitlement to benefits under a comprehensive plan, regardless of fault. This principle is similar to the "exchange principle" commented on by the Court of Appeal in Meyer v. Bright¹⁴ in its analysis of the new scheme of statutory accident benefits enacted in 1990, with a concomitant withdrawal of the right to sue in most cases. In contrast to workers compensation situations, Mr. Turner may derive some benefits from the insurance plan put into place by the club, but he is not barred from bringing an action against his employer. Giving up the right of action against an employer is a hallmark of a workers' compensation plan. The policy set out in Exhibit 3 at the arbitration is more of the nature of a plan of accident and sickness insurance, governed by Part VII of the Insurance Act. The policy language, itself, never refers to workers or compensation; it speaks of staff, hazards, indemnity and accidental injury.

Section 59 falls within Part XIII of the Schedule, entitled "Interaction with Other Systems." The other sections in the same part deal with accidents outside Ontario, social assistance payments, and other collateral benefits. In my view, the meaning of the words "any workers' compensation law or plan" in section 59 is unclear. In the context in which this provision occurs, however, I believe it would be incorrect to interpret these words to include a private insurance policy like that of the club where Mr. Turner worked. It is my sense in reading section 59 that a statutory scheme is contemplated. That scheme may not be the Ontario workers compensation scheme, but could include a workers compensation plan in another province or jurisdiction in the United States of America, because the Schedule provides benefits when "accidents" occur outside Ontario.

Subsection 59(1) should not be interpreted to deprive an injured person of benefits otherwise available under the Schedule, without regard to the level of benefits provided by private accident insurance. The workers' compensation plans that the Lieutenant-Governor-in-Council contemplated at the time the Schedule was enacted, grant a significant level and diversity of benefits, in exchange for the worker giving up his right of action against his employer.¹⁵

In subsection 59(2), it is recognized that some workers have the right to bring an action, rather than accept workers' compensation benefits. In that case, even for a worker covered by a workers' compensation law or plan, the automobile insurer must pay the injured person benefits, "so long as the election is not made primarily for the purpose of claiming benefits under this Regulation."¹⁶ Here, Mr. Turner has no such option, but some benefits he receives under the golf club's private accident insurance policy may reduce the amounts CAA has to pay as income replacement benefits, if they fall within the criteria of paragraph 7(1)1. of the Schedule. In my opinion, it would not make sense of the entire compensatory scheme under the Schedule to interpret subsection 59(1) in such a way that a person injured in an "accident" at work would be in a worse position than a worker covered by workers' compensation benefits who elects to sue, when Mr. Turner has no election he can make.

I find that the private accident insurance policy that the golf club purchased is an "insurance plan" referred to in section 60, the following section, with features of an "income continuation benefit plan" mentioned in subsection 7(1)1.i and ii. In section 60, where collateral benefits are discussed, subsection 60(2) uses the following words to declare that medical and rehabilitation benefits "for which payment is reasonably available to the insured person under any insurance plan or law or under any other plan or law" are not required to be paid by an automobile insurer under the Schedule. [emphasis added] This language has been interpreted to support the legislative intent that the automobile insurer is the "last payor" and only after other avenues are exhausted, including private plans of insurance, should the automobile insurer be responsible.

Subparagraph 59(5)(b) declares that in a case where there are disputes about whether subsection 59(1) applies to a person, in the interim an insurer shall pay the person full benefits under the Schedule, pending the resolution of the dispute if "the administrator or board responsible for the administration of the workers' compensation law or plan approves the assignment." The use of the words "administrator or board responsible" to me implies a statutory or quasi-governmental authority. They are not the words that would be chosen to indicate representatives of a private insurer. This subsection also reinforces the theme that a certain substantial level of compensation and rehabilitation is contemplated by section 59 and an injured worker should not be left without benefits while a coverage dispute is ongoing.

For these reasons, I find that the exemption under section 59 does not apply in this case and CAA must pay Mr. Turner benefits under the Schedule.

EXPENSES:

Mr. Turner has been successful in this arbitration. I exercise my discretion to award him his expenses incurred in this preliminary issue hearing.

June 24, 1999

K. Julaine Palmer Arbitrator

Date