Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2002 ONFSCDRS 122

Appeal P01-00030

OFFICE OF THE DIRECTOR OF ARBITRATIONS

YURY ELENSKY

Appellant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Respondent

Before:

Nancy Makepeace, Director's Delegate

Counsel:

Henry Goldentuler (for Mr. Elensky)

Philippa G. Samworth (for Royal & SunAlliance)

APPEAL ORDER

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

The appeal is dismissed and the arbitration decision, dated May 31, 2001, is confirmed.
Royal and SunAlliance shall pay Mr. Elensky's appeal expenses.

August 9, 2002

Nancy Makepeace Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Elensky appeals from the Arbitrator's decision, dated May 31, 2001, that the incident in which he was injured was not an "accident," as defined in s. 2(1) of the SABS-1996.¹ On June 17, 1999, Mr. Elensky, a truck driver, stopped to ask for directions in Miami, Florida. While returning to his truck, he was ambushed, beaten and shot. For the following reasons, I agree with the Arbitrator that use or operation of an automobile did not directly cause Mr. Elensky's injuries.

II. THE ARBITRATION DECISION

There is no dispute about the facts. After getting directions, Mr. Elensky returned to the truck:

As he approached the vehicle he was confronted by two men who appeared from each side of the truck. Both men attacked him and tried to drag him into the bushes near where the truck was parked. He tried to grab onto the bumper of the truck, to avoid being dragged into the bushes. A struggle ensued in front of and beside the truck, culminating in him being struck on the head with the butt of a rifle and losing consciousness.

Mr. Elensky recalled regaining consciousness a short while afterwards and running towards the driver's side of the truck. He testified that he grabbed the driver's door handle and attempted to get into the cab, when he heard a gunshot, felt a pain in his chest, and realized that he had been shot by one of the assailants.

He managed to enter the driver's cabin and put the engine in gear. He explained that he was bleeding and felt pain, but was able to drive a few blocks to a gas station. He pulled into the station, and asked the manager to call the police. He was then taken to hospital and treated for a gunshot wound to his upper chest.

The assailants took Mr. Elensky's watch, a gold chain he had been wearing around his neck, and his eyeglasses. They also stole a small videocamera, a camera, some cash and a small refrigerator from the driver's cabin of the truck. Mr. Elensky stated that he believed that the assailants had intended to steal the truck, but admitted that there was no evidence to support this assertion other than his own belief. He testified that the two men had said various things during the course of the assault, but that he was not able to understand them.²

The parties disagreed about whether this incident was an "accident" as defined in s. 2 of the SABS-1996. It states:

"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. [emphasis added]

As the Arbitrator observed, this definition mirrors those in the SABS-1990 and SABS-1994, except that "[w]hereas the prior definition included incidents that were 'directly or indirectly' caused by the use or operation of an automobile, the current definition requires that the use or operation of an automobile be the direct cause of the impairment."³ [italics in original]

The Arbitrator applied the two-part causation test set out by the Supreme Court of Canada in Amos v. ICBC⁴ which summarized and reformulated the two established approaches:

The purpose test: Did the accident result from the ordinary and well-known activities to which automobiles are put?
The chain of causation test: Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant's injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

The Arbitrator described her approach in applying the Amos test to the case before her:

In Petrosoniak,⁵ the first decision to address the current, narrower definition of "accident" found in the 1996 Schedule, I stated that the words that appear in the provision raise two questions - whether the use or operation of an automobile was involved in the incident, and if so, whether such use was the direct cause of the applicant’s injuries. In my view, these two questions must be considered together: it is not enough to show that a vehicle was being used or operated and then argue that a sufficient causal link exists. Rather, the Application must show that the use of the vehicle, or its operation, directly caused the injuries complained of.

In Petrosoniak, Arbitrator Novick had adopted the definition of "direct cause" in Black's Law Dictionary (revised fourth edition):

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.

She applied the same definition in Mr. Elensky’s case. She noted that there was no commercial relationship between Mr. Elensky and his attackers, unlike in Karshe and Kumar, which concerned attacks on taxi drivers by passengers. Despite this, coverage under the SABS-1996 was denied in those cases.⁶ The assailants were "more removed from the use or operation of the vehicle" in Mr. Elensky's case.⁷

The Arbitrator also found there was "no connection between the assailants and [Mr. Elensky's] truck." The evidence did not support Mr. Elensky's contention that his attackers intended to steal the truck:

. . . their motive was to steal cash and any items of value they could access. The evidence indicates that the assailants were able to enter the driver’s cab and that the engine was left running when Mr. Elensky exited from the truck. Despite this and the fact that he lost consciousness for a period of time, the assailants did not attempt to drive away with the truck. I note Mr. Elensky’s statement that he believed that the attackers intended to steal the truck, but in the absence of any supporting evidence, and in light of the facts noted above, I am not persuaded that this was their intention.⁸

Mr. Elensky relied on Arbitrator Blackman’s statement, in Assaf, that any action taken to avoid an insured peril will not be regarded as an intervening cause.⁹ Arbitrator Novick found that Assaf did not apply because it was decided under the broader "accident" definition in the SABS-1994:

Further, the assault in that case followed an incident in which Mr. Assaf and another driver engaged in aggressive driving manoeuvres designed to intimidate each other. Both drivers then pulled over to the side of the road, got out of their cars and a skirmish ensured, during which Mr. Assaf fractured his leg. Arbitrator Blackman found that the operation of the vehicles triggered the sequence of events that led to the injuries suffered. In this case, the assailants had no contact with Mr. Elensky while he was driving the truck, and the assault, unlike the one involving Mr. Assaf, was completely unrelated to his operation of the vehicle.

The Applicant also argued that the fact that he was shot as he was attempting to enter the truck to flee the scene of the assault brings him within the definition. I disagree. The fact that Mr. Elensky was in physical contact with the truck or was attempting to enter the vehicle as he was shot does not satisfiy the requirement that the operation of the vehicle directly caused his injuries. As Director’s Delegate Naylor stated in upholding Arbitrator Draper’s decision in Ekunah and Simcoe & Erie General Insurance Company:¹⁰

The language of the Schedule requires a causal connection between the injury and the use or operation of the vehicle. . . However, it is not enough to show that an automobile was merely the location of the injury, that the victim or perpetrator were occupying it at the time of the injury, or that an automobile was involved in some peripheral or incidental way. The use or operation of the vehicle must have caused the injury. . . .¹¹

For these reasons, the Arbitrator was "not persuaded that either the initial assault, or the gunshot wound sustained as Mr. Elensky was attempting to flee the scene, were directly caused by his use or operation of the vehicle."¹²

III. ANALYSIS AND CONCLUSION

Mr. Elensky's case raises, once again, the difficult question whether the "accident" definition in the SABS extends to an assault. The Commission has considered this question in a number of cases under the three versions of the SABS, and the courts have considered the limits of motor vehicle insurance coverage in a long line of decisions. I reviewed the authorities in Kumar and Coachman, released concurrently with this decision. As the same general principles apply to Mr. Elensky's case, I summarize my analysis here.

The leading case in Canada is the decision of the Supreme Court of Canada in Amos v. ICBC. While stopped at a light, Mr. Amos' van was surrounded and attacked by a group of men. Mr. Amos was shot, but managed to lock the doors, and eventually to drive away and escape. He claimed benefits under the British Columbia statutory accident benefits regulation, which provided coverage for "injury caused by an accident that arises out of the ownership, use or operation of a vehicle." The B.C. Supreme Court and Court of Appeal denied coverage, finding that there must be "more than a 'but for', 'fortuitous', or 'incidental' relationship . . . between the ownership, use or operation of a vehicle and the accident resulting in injury," and therefore "it is not sufficient that the accident happens while the injured party is using or operating the vehicle."

This decision was reversed on appeal to the Supreme Court of Canada. Major J., writing for a unanimous court, adopted the two-part test applied by Arbitrator Novick in the case below. The Court concluded that Mr. Amos satisfied the first part of the test because he was driving his van down a street, which is an "ordinary and well-known" activity to which automobiles are put. The focus of the judgement was on the chain of causation test. The Court accepted that "a direct or proximate causal connection is not required between the injuries suffered and the ownership, use or operation of a vehicle." Rather, it must be established that the vehicle made some contribution to the claimant’s injuries. The vehicle need not be the instrument of injury, and " [n]egligence or fault in the use or operation of a motor vehicle does not need to be the cause of the injury." The Court concluded that Mr. Amos could recover under the regulation:

Was the attack in this case merely a random shooting, or did it arise out of the ownership, use or operation of the appellant’s vehicle? While the appellant’s van may have been singled out by his assailants on a random basis, the shooting appears to have been the direct result of the assailants failed attempt to gain entry to the appellant’s van. It is not important whether the shooting was accidental or deliberate while entry to the vehicle was being attempted. It is important that the shooting was not random but a shooting that arose out of the appellant’s ownership, use and operation of his vehicle.

The "arises out of" language considered in Amos is similar to the language used in the "right to sue" provisions of the [Insurance Act],¹³ but differs from the "causes" and "caused by" language of the SABS. The Supreme Court of Canada reaffirmed in Amos that, "[t]he phrase, "arising out of" is broader than "caused by." Reconciling the language of the Act and the SABS has, therefore, been an important issue in many of the Commission's "accident" cases. A number of early decisions held that the "accident" definition of the SABS must be read together with the right to sue provisions of the Act, or that the broader language of the Act prevails where the SABS would otherwise restrict access to benefits. The Ontario Court of Appeal rejected this view in Alchimowicz v. Continental Insurance Co. of Canada,¹⁴ and that ruling was applied in subsequent Commission decisions, leading to a relatively narrow reading of the "accident" definition in the SABS-1990 and SABS-1994.

Although a substantial minority of decisions go the other way,¹⁵ Commission adjudicators have generally found that assaults do not fall within the "directly or indirectly" definitions of "accident" in the SABS-1990 or SABS-1994. The Commission's appeal decisions have been consistent on point, apart from one early decision.¹⁶ The cases consistently state that while the notion of indirect causation broadens coverage beyond proximate cause, it is not sufficient that the attack occurred in or near the vehicle; the vehicle must be more than merely the situs (location) of the attack. The prevailing view is that the assailant's criminal act breaks the chain of causation between use or operation of the vehicle and the injuries suffered by the insured person. Commission adjudicators have rejected the submission that the requisite connection is established where the commercial use of the vehicle provided the motivation or opportunity for the attack. The fact situations fall into three main categories: robbery-motivated attacks, road rage, and apparently random attacks unrelated to use or operation of the vehicle. The weight of the case-law suggests that these incidents fall outside the definition of "accident" in the SABS-1990 and SABS-1994.

In June 1999, in Vijeyekumar v. State Farm, the Ontario Court of Appeal stated that the coverage language considered in Amos and the wording of the "accident" definition in the SABS-1994 are "enough alike that the Amos test may be applied."¹⁷ The Court reaffirmed this principle in Saharkhiz v. Lloyd's, which concerned an assault on a cab driver arising out of the assailants' refusal to pay the fare.¹⁸ The motions judge (Lederman J.) held that the incident was an " accident" as defined in the SABS-1994. It met the purpose test because the taxi was being driven as a taxi, the driver left his door open and engine running when he left the cab to discuss the matter with his assailants, and because the dispute arose out of the commercial relationship between the passenger and driver. The latter factor was critical to the judge’s causation analysis. He concluded that the cab was not merely the situs of the attack. Rather, "'[t]he role of the taxi-cab throughout the sequence of events is crucial," and there was "an unbroken line of causation . . . beginning with the ride in the taxi-cab and ending with the assault." In brief reasons affirming the decision, the Court of Appeal agreed that the "the assault was the end product of the commercial relationship that had been created when the ride in the taxi-cab had started" and that the driver's injuries "were caused, at least indirectly, by the use and operation of the taxi-cab."

In my view, the recent decisions of the Court of Appeal in Vijeyekumar and Saharkhiz suggest a broader analysis than that adopted in the Commission’s leading cases. However, the significant amendment of the "accident" definition in the SABS-1996 requires a different analysis.

Although the Commission decisions considering the narrower definition of "accident" in the SABS-1996 have continued to apply the two-part test set out in Amos, the cases are consistent in holding that deletion of the words, "or indirectly," makes the broad "some connection" test adopted in that case inapplicable. Arbitrator Novick, in the decision below, adopted the definition of "direct cause" she accepted in Petrosoniak. That definition has received broad acceptance in subsequent decisions. For our purposes, the most pertinent are Karshe, Sarkisian and Chisolm.¹⁹

Mr. Karshe, a cab driver, was assaulted by two passengers after leaving the vehicle. They had proffered a $100 bill in payment for the fare. He refused it, fearing it might be counterfeit, and pursued them into a building, where they assaulted him. One of the passengers robbed the cab while Mr. Karshe remained outside. There was no evidence whether the cab was still running or the door remained open. Arbitrator Blackman found that Mr. Karshe satisfied the "purpose test." However, he stated that the Amos causation test, which requires only some relationship between the injury and the vehicle, did not apply to the amended "accident" definition:

It can be said that the use or operation of Mr. Karshe's taxi-cab provided the opportunity, the motive, the atmosphere of hostility and/or the emotional impetus for a train of events culminating in an injury being sustained and was, therefore, a predisposing, secondary or indirect cause of Mr.Karshe’s impairment. However, with the legislative narrowing of the scope of coverage, that is not sufficient. I find that Mr. Karshe’s injuries were only sustained upon the intervention of a force starting and working actively from a new and independent source other than an automobile, namely brass knuckles being applied by passenger #1 against the left side of Mr. Karshe’s face. In the reality of Mr. Karshe’s case, the use or operation of his taxi-cab was not the efficient, predominate or direct cause of his impairment.²⁰

To the same effect is Sarkisian and Co-operators General Insurance Company, in which Arbitrator Sampliner found that the insured, who was shot while performing maintenance on his vehicle, was not killed in an "accident" within the definition:

. . . the car did not play a direct instrumental role in the chain of events leading to Mr. Sarkisian's death. Mr. Sarkisian's replacement of windshield fluid put him at the site of his car, but his vehicle played no role in his death or in any force giving rise to his death. Even if I were to accept that theft was the motive here, the direct and intervening instrument or cause of Mr. Sarkisian's death was the gunshot.²¹

Arbitrator Novick's statement of the causation test in Petrosoniak was also adopted by Justice Chapnik in Chisolm v. Liberty Mutual Group, a case that involved a drive-by shooting.²²She stated that "use or operation of the vehicle must directly cause the impairment."²³Rejecting the plaintiff's submission that it was only because he was trapped in his car that he was shot, she stated, "[n]evertheless, in this case, there was not an unbroken chain of events."

The only appellate decision to consider the definition of "accident" in the SABS-1996 is Correia and TTC Insurance Company Limited. Although there was no question Ms. Correia was injured in an "accident," she claimed benefits in relation to separate injuries she sustained in the course of treatment. Director's Delegate Naylor's discussion of "proximate cause" is helpful:

In the context of private insurance policies, direct cause language signals proximate cause. Indeed, there is plenty of authority for the proposition that "direct cause" and "proximate cause" are interchangeable. If the insured peril is the originating factor, the test of proximity is whether the loss was a direct result of that peril. The test for directness is whether there has been a new intervening cause. Used in this sense, direct cause speaks to the quality of the relationship between the use or operation of the automobile and the injury, not simply to their closeness in time.

Arbitrators addressing whether an accident has occurred have adopted the definition of "direct cause" in Black's Law Dictionary:

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.

While the test applied involves a "moving" cause type of analysis, it has not been equated with "liability focused" proximate cause in which the interposition of a new act of negligence necessarily breaks the "chain of causation" between the automobile’s involvement and the injury. In other words, if someone is hurt in a car crash attributable to substandard highway maintenance, their injuries nonetheless are considered to be directly caused by the vehicle’s use or operation.

Under the principles of proximate cause, absent explicit language in a policy, if injury or death results from treatment necessitated by an accident, providing there is no intervening cause, the accident remains the direct or proximate cause. Direct cause does not mean the only cause or the most immediate cause.²⁴

Ultimately, Delegate Naylor accepted that Ms. Correia’s treatment did not give rise to an intervening cause such as to break the chain of causation.

Mr. Elensky’s submissions do not persuade me to depart from the consensus approach. I adopt the definition of "direct cause" accepted in Petrosoniak, Karshe, Chisolm, Waters, Kumar and Correia. As I stated in Kumar, the deletion of the words "or indirectly" from the "accident" definition is an important consideration in my analysis. Legislative evolution can provide strong evidence of legislative intent, although it must be used cautiously because some amendments are intended to confirm the law, not to change it. In this case, it would be difficult to argue that the legislature intended only a formal change because of the many decisions that relied on the presence of the words "or indirectly" in the SABS-1990 and SABS-1994 definitions to extend coverage beyond proximate cause. I think the assault cases were very likely the primary focus of this amendment.

Mr. Elensky submits that the required causal connection is satisfied for four reasons: (i) he left the engine running when he left the truck, therefore it was still in use or operation at the time of the assault; (ii) he left the truck to ask for directions to his destination, consistent with his job duties and with commercial use of the truck; (iii) his assailants intended to steal the truck or its contents; and (iv) he was beaten and shot while attempting to get back in the truck and flee the attack.

With regard to the first and second grounds, Royal accepts, and I agree, that Mr. Elensky was using the truck for its intended and ordinary commercial use when he stopped to ask for directions to complete his journey. He was doing his job, and indeed it can be argued that his injuries arose in the course of his employment. This is not enough, however. I agree with the Arbitrator that the purpose test and the chain of causation test must be considered together. Mr. Elensky must show that use or operation of an automobile directly caused an impairment.

The Arbitrator was not persuaded that Mr. Elensky’s assailants intended to steal the truck. Appeals are restricted to questions of law,²⁵ and Mr. Elensky has provided no reason to second-guess the Arbitrator’s factual finding. I agree with the Arbitrator that the items stolen suggest an opportunistic attack not specifically targeted at Mr. Elensky or the truck. In any event, even if the assailants motivation provides the requisite causal connection under the "directly or indirectly" definition, the narrower SABS-1996 definition precludes that approach. In Kumar, I approved of the principle, stated in Petrosoniak and Correia, that "[d]irect cause does not mean the only cause or the most immediate cause." However, I found both cases distinguishable in that it was use or operation of an automobile that set in motion the chain of events resulting in injury. As counsel for the insurer stated in that case: these cases asked when the ball stops rolling; the issue in this case is whether it starts.

In Chisolm, the drive-by shooting case, Justice Chapnik accepted that the SABS-1996 does not apply to victims of criminal assaults:

Even given the factual circumstances as taken that the plaintiff's motor vehicle was stopped and the bullets were shot at the automobile itself, in my view, the shooting constituted an intervening act, independent of the vehicle's use or operation which clearly broke the chain of causation. Moreover, it appears to me that a criminal assault which does not take place within the context of the vehicle's ordinary and well-known use is not a risk that is sought to be protected by a motor vehicle liability policy. The overall objective of the legislation is to compensate insured people injured in motor vehicle accidents. This result is not an absurdity as alleged by counsel for the plaintiff. It reflects the intention of the legislature evidenced by the legislative amendments.²⁶

Mr. Elensky's truck brought him to the location, provided a target for robbery, and ultimately allowed him to flee. It played some role in the series of events, but that is not sufficient to bring the incident within the bounds of "accident" as defined. Indeed, the incident lacked some of the features of other assault cases: Mr. Elensky had no commercial relationship with his attackers (unlike the cab driver cases), the incident did not arise out of a driving dispute (as in the road rage cases), and the attack occurred outside the truck. Even if these features were present, they would not be sufficient to attract coverage. Considering the matter from a common sense point of view, I find that use or operation of the truck was not an "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." I find no error in the Arbitrator's finding that the attack on Mr. Elensky was not an "accident" as defined.

IV. EXPENSES

Although the Arbitrator's decision was consistent with the weight of the Commission authority, there is contrary authority, and the recent Court of Appeal decisions in Vijeyekumar and Saharkhiz raise questions about some of the Commission's earlier decisions. Petrosoniak and Correia provided some support for Mr. Elensky's position, and this decision, along with Kumar, released concurrently, are the first appellate decisions to consider the application of the SABS-1996 definition of "accident" to an assault on a driver. I find that Mr. Elensky raised legitimate issues and conducted his appeal expeditiously. Accordingly, I find this an appropriate case for an exercise of my discretion to award him his appeal expenses.