Bing Qiu Liu v. Lombard General Insurance Company of Canada, 2002 ONFSCDRS 158

Neutral Citation: 2002 ONFSCDRS 158

FSCO A01-001429

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BING QIU LIU

Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Deena Baltman

Heard:

July 4, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received on August 29 and September 4, 2002.

Appearances:

G. Jonathan Franko for Mr. Liu

Harry P. Brown for Lombard General Insurance Company of Canada

Issues:

On January 17, 2001, Mr. Liu boarded a bus headed for Casino Rama, in Orillia, where he planned to spend the evening gambling. His luck ran out very quickly; the bus was hijacked and all the passengers robbed before they even arrived at the casino. Mr. Liu sustained injuries during the incident and later applied for accident benefits from Lombard General Insurance Company of Canada ("Lombard"), payable under the Schedule.¹ Lombard denied benefits on the basis that Mr. Liu was not injured as a result of an "accident" as defined in subsection 2(1) of the Schedule. This provision limits coverage to an incident in which the use or operation of an automobile "directly" causes an impairment.

The parties were unable to resolve their dispute through mediation, and Mr. Liu applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

1. Was Mr. Liu injured as a result of an "accident" as defined in subsection 2(1) of the Schedule?

2. Is either party entitled to its expenses of the preliminary issue hearing?

Result:

1. Mr. Liu was injured as a result of an accident as defined in the Schedule.

2. Mr. Liu is entitled to his expenses of the preliminary issue hearing.

EVIDENCE AND ANALYSIS:

A. BACKGROUND

The parties agreed on the following relevant facts:

1. Mr. Liu is 29 years old, married, and employed as a chef. On January 17, 2001, he boarded a bus headed for Casino Rama in Orillia. The bus was operated by Tai Pan Bus Tours, which provides a specialty service for clients requiring transportation to and from casinos.

2. The bus driver was Mr. William Bradley, who regularly drove the round trip from Toronto to Casino Rama. The bus was owned by AZ Bus Tours which had an ongoing contract with Tai Pan Bus Tours to transport clients to and from Casino Rama.

3. Before heading to Casino Rama, the bus stopped at various pre-established pick-up points in Toronto, where passengers boarded. All the pick-ups are located at shopping malls.

4. Mr. Liu boarded the bus at Pacific Mall, a large shopping centre in Markham, at 10:00 p.m. Pacific Mall was the final pick-up point for passengers.

5. By the time Mr. Liu boarded the bus there were approximately 22 passengers. He was the last passenger to board. He took a seat and promptly fell asleep.

6. At a few minutes after 10:00 p.m. Mr. Bradley boarded the bus and sat down in the driver's seat, ready to depart for Casino Rama. The interior lights were on and the bus was running at this point.

7. Before Mr. Bradley could close the doors, three men followed him onto the bus. They were wearing balaclavas and each had a gun drawn. One of the assailants held a gun to the driver's throat and ordered him to close the doors, turn off the interior lights, and drive out of the parking lot at slow speed. For the next ten minutes he directed the driver through the main roads into a residential area.

8. A bystander in the mall observed the assailants boarding and sealing the bus, and ran to the Tai Pan office to alert them. An employee of Tai Pan then called the driver on his emergency phone, but the assailants ordered him not to answer.

9. While the first assailant was navigating the bus the other two circulated among the passengers and robbed them of their money, jewellery and credit cards. As Mr. Liu was asleep one of the assailants smashed a gun into his head and chest to awaken him, whereupon he immediately surrendered his valuables, which included $1,500 in cash.

10. The navigator then ordered the bus driver to stop the bus behind a parked vehicle on a side street within the residential area. He pistol whipped the driver into unconsciousness and the three assailants then left the bus with a bag containing the stolen goods. One of the passengers then revived the driver, who drove back onto a main street and stopped at a grocery store, whereupon the police were notified.

11. Mr. Liu was taken to a hospital with head and chest injuries. He suffered headaches and dizzy spells and was absent from work for two weeks, and then returned part-time on light duties.

12. None of the three assailants has been apprehended.

B. THE LEGISLATION

In order to be eligible for benefits Mr. Liu must establish that he was in an "accident" as defined under subsection 2(1) of the 1996 Schedule:

" 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 medial or dental device" [emphasis added]

The two previous regulations defined "accident" more broadly. The 1993 Regulation stated:

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

This was similar to the 1990 Regulation, which stated:

" accident" means an incident in which the use or operation of an automobile causes, directly or indirectly, physical, psychological or mental injury or causes damage to any prosthesis, denture, prescription eyewear, hearing aid or other medical or dental device" [emphasis added]

C. DISCUSSION

Before the 1996 Schedule was enacted, both Court and Commission decisions generally applied the test set out by the Supreme Court of Canada in Amos v. Insurance Corporation of British Columbia, 1995 CanLII 66 (SCC), [1995] 3 S.C.R. 405. While driving his vehicle, Mr. Amos was surrounded and attacked by a group of men. He was shot but managed to drive away. He claimed benefits under the British Columbia statutory accident benefits regulation, which provided coverage for injuries caused by an accident "that arises out of the ownership, use or operation of a vehicle." The Court determined that this provision should be interpreted by applying a two part test:

1. The purpose test: Did the accident result from the ordinary and well known activities to which automobiles are put? and

2. The causation test: Was there some nexus or causal relationship between the plaintiff's injuries and the ownership, use or operation of his car, or was the connection merely incidental or fortuitous?

Although the British Columbia regulation provided benefits for injuries from an accident "that arises out of" the use of an automobile, and Ontario's pre-1996 legislation applied to injuries caused "directly or indirectly" by an automobile, both the Ontario Court of Appeal and many Commission cases applied the Amos test when determining causation.

This all changed with the 1996 Schedule. It is now clear that the removal of the words "or indirectly" has significantly narrowed the coverage available. In the very recent decision of Chisholm v. Liberty Mutual Group 2002 CanLII 45020 (ON CA), [2002] O.J. No. 3135 (August 15, 2002), Justice Laskin of the Ontario Court of Appeal stated that the "stringent" causation requirement of "directly causes" in the newer definition of accident means that "the Amos test, or at least the causation part of that test, can no longer be used to interpret the definition." Similarly, Director's Delegate Makepeace, in the case of Kumar and Coachman Insurance Company,² recently wrote that "the weight of [Commission] authority is that deletion of the words, 'or indirectly,' makes the broad 'some connection' test adopted in [Amos] inapplicable."³

With the causation aspect of the Amos test no longer applicable, the majority of Court and Commission cases have instead focussed on the meaning of "directly causes." Recent cases suggest that judges and arbitrators are using similar guidelines when considering the 1996 Schedule.

In Chisholm, the plaintiff was driving a car when an unknown assailant fired gun shots at him from another vehicle, rendering him a paraplegic. Mr. Chisholm argued that his use of his car was a direct cause of his injuries because he would not have been wounded unless he had been confined in his car. Justice Laskin, in dismissing that argument, emphasized that entitlement to accident benefits requires not just that the use or operation of a car be "a cause" of the injuries, but that it be a "direct cause." He applied definitions of direct cause taken from a leading text on torts and Black's Law Dictionary which, roughly paraphrased, define the term as a train of events leading to a result without any later intervening act. Justice Laskin agreed with the motions judge that the shooting by the assailant constituted a later intervening act which broke the chain of causation:

Here an external force, the gun shots, came "into active operation later"...even accepting that the use of Chisholm's car was a cause of his impairment, a later intervening act occurred. He was shot.

Significantly, Justice Laskin noted that accidents may occur where an automobile is only one of the direct causes:

Conceivably road accidents may occur where there is more than one direct cause of a victim's injuries and one of the direct causes is the use or operation of an automobile.

He went on to state, however, that in Mr. Chisholm's case the only direct or "effective" cause of his injuries were the gun shots, and that the use or operation of his car was "at best ancillary."

In Kumar, Director's Delegate Makepeace considered an appeal by Mr. Kumar, a taxi driver, who was injured when a passenger struck him with a hard object. The passenger had intended to rob Mr. Kumar but fled when Mr. Kumar opened his car door and screamed for help. In the course of her lengthy and detailed review of the relevant caselaw, Delegate Makepeace noted that the majority of Commission adjudicators have found that assaults do not fall within the definition of "accident," even under the broader definitions in the 1990 and 1994 Schedules. The prevailing rationale was that the vehicle did not play a central enough role in causing the injury, but was merely the location or motive for the assault. By contrast, she noted that several judicial decisions post-Amos have held that automobile insurance covers injuries caused by assault. The rationale she identified in the Court cases is significant:

...these are cases where the claimant or plaintiff also suffered injuries in a motor vehicle accident, apart from the injuries suffered in the assault, or the automobile played a central and ongoing role in the commission of the assault, beyond providing the opportunity and location. [emphasis added]

Delegate Makepeace agreed with the arbitrator's conclusion that the vehicle played no direct role in Mr. Kumar's injuries. She found that while the taxicab provided the opportunity, location and motivation for the assault, "there was no evidence that Mr. Kumar's attacker attempted to seize control of the vehicle, hijack it or steal it." [my emphasis]

A similar distinction arose in the case of Elensky and Royal & SunAlliance Insurance Company of Canada,⁴ a decision released concurrently with the Kumar decision. In that case, Mr. Elensky, a truck driver, stopped to ask for directions. While returning to his truck, he was ambushed, beaten and shot. The arbitrator denied Mr. Elensky's claim for benefits, finding that "there was no connection between the assailants and [Mr. Elensky's] truck." In dismissing Mr. Elensky's appeal, Delegate Makepeace noted that although the assailants stole Mr. Elensky's jewellery and some personal belongings from inside the truck, there was no evidence that they intended to steal the truck.

Before Kumar and Elensky, the only appellate decision at the Commission to consider the definition of accident in the 1996 Schedule was Correia and TTC Insurance Company Limited.⁵There the parties agreed that Ms. Correia had been injured in a car accident; the dispute was whether the newer definition covered injuries she later sustained in the course of treatment. Director's Delegate Naylor agreed with the arbitrator's finding that if injury or death results from treatment necessitated by an accident, the accident remains the direct or proximate cause, providing there is no intervening cause. As she stated, "Direct cause does not mean the only cause or the most immediate cause."

Delegate Naylor cautioned against taking too narrow a reading of the newer Schedule:

It is well established that SABS is to be given a liberal construction... "Accident" is defined in terms of an incident or event involving an impairment. Certain consequences may result from or flow from such an event, giving rise to entitlement to benefits. I find it most plausible that the move to direct cause was intended to reinforce the involvement of the automobile in relation to an injury in the context of an original accident." [emphasis added]

When distilled, the following principles emerge from the caselaw that has considered the definition of "accident" under the 1996 Schedule:

1. For a vehicle to be a direct cause of an injury it must play a central or dominant role in the incident, not peripheral.

2. A direct cause does not mean the only cause, or the most immediate cause.

3. A direct cause is a cause which sets in motion a train of events leading to a result, without any later intervening act.

Boiled down even further, the ultimate question in each case concerns the role played by the vehicle in relation to the injuries: Was it instrumental enough to satisfy the term "direct"???

I turn then to consider the role played by the bus in this case. The facts indicate that it was involved in the following ways:

• the bus was targeted by the assailants because it was being used on a regular basis to transport passengers and their valuables to a casino;

• the assailants successfully hijacked the bus and imprisoned its passengers within the vehicle;

• while the bus was moving and under their control, the assailants robbed the passengers and pistol whipped Mr. Liu and the bus driver;

• the assailants navigated the bus along a pre-determined route that allowed them to complete their crime and escape detection.

In sum, the bus was a critical part of a methodically planned and well-executed robbery; the assailants, well disguised, strategically timed their entry onto the bus; they equipped themselves with firearms to ensure maximum control of the bus; they isolated the bus and imprisoned its passengers by sealing the doors, ordering the driver along a pre-determined route and forbidding him to respond to his phone; they robbed and beat the occupants while they were imprisoned within the moving bus; they used the bus to escape detection and deliver them to their getaway point. Under these circumstances, it cannot be said that the vehicle's involvement was in any way peripheral or merely, as in other cases, the "site, opportunity or motive." Here it effectively became a prison, a weapon and a getaway vehicle, and thus played a central role in the robbery that led to Mr. Liu's injuries.

The Insurer argued that the direct, effective cause of Mr. Liu's injuries was the pistol whipping inflicted by the assailants. But as Justice Laskin and Delegate Naylor observed in Chisholm and Correia, respectively, direct cause does not mean the only cause or the most immediate cause. Here, the gun wielded by the bandit who struck Mr. Liu was both the most immediate cause and a direct cause of his injuries, but it was not the sole direct cause. In the unique facts of this case, I find that both the bus and the gun were critical weapons with which the assailants carried out the crime that resulted in injuries to Mr. Liu. Although the term "weapon" is most commonly thought of as an actual instrument of physical harm, the Concise Oxford Dictionary also defines it as "a means employed for trying to gain the advantage in a conflict." Here the assailants' control of the bus, and their use of it as a moving prison, was an integral means by which they overcame the passengers.

The Insurer also distinguished this case from others where the vehicle in question came into direct physical contact with the victim. It noted that Mr. Liu's injuries did not result from contact with any part of the bus. But the legislation doesn't say that the vehicle must be the direct physical cause. Had the drafters so intended, they could easily have said so.

It bears noting that none of the Commission or Court cases that have rejected benefits involved a hijacking or successful theft of a vehicle. This is an important distinction - as recognized by Delegate Makepeace, an assailant's control over the vehicle gives it a much more central role in the incident. In this case the hijacking set in motion the chain of events resulting in injury to Mr. Liu.

The Insurer argued, however, that the pistol whipping inflicted by the gunman was a later intervening act that broke the chain of causation. I disagree; here, not only did the assault occur while the vehicle was being operated, but the forced extraction of valuables from the passengers was essential to the success of the entire incident. It is significant that the assailants were in complete control of the vehicle at the same time that Mr. Liu was injured; under those circumstances, the attack on Mr. Liu was not a later intervening act but an integral part of a well-calculated, premeditated plan to both overtake the bus and rob its passengers. Far from being an intervening act, the violent behaviour by the assailants was an integral part of their use of the vehicle.

A significant parallel can be drawn with the Amos case, which involved the attempted hijacking of a vehicle. Although the causation test used there is not applicable to the narrower definition under the 1996 Schedule, the Supreme Court of Canada also considered whether the assault on Mr. Amos was an intervening act that broke the chain of causation - quite independently of the degree of causation required:

The appellant’s injuries arose out of the ownership, use and operation of his van. They originated from, flowed from, or were causally connected with its ownership, use and operation. Neither can it be said that there was an intervening act, independent of the ownership, use or operation of the vehicle, which broke the chain of causation. [emphasis added]

A similar finding was made in Saharkhiz v. Lloyd's⁶ where a taxi driver was assaulted outside his cab following an argument with two customers who refused to pay their fare. The motions judge (Lederman J.) found that the incident was an "accident" under the broader definition in the 1994 Schedule. However, in addition to finding that the use of the taxi-cab was "at least indirectly" connected to the assault, he also noted that there was "an unbroken line of causation....beginning with the ride in the taxi-cab and ending with the assault." This reasoning was referred to and upheld by the Ontario Court of Appeal.

In this case, I find that the bus was the unifying factor that made the sequence of events from the initial entry by the assailants to their assault on Mr. Liu and ultimate escape "an incident" as required under the Schedule. I therefore conclude that the facts establish a direct connection between the use of the bus and Mr. Liu’s injuries.

D. EXPENSES

I exercise my discretion to award Mr. Liu his expenses incurred in this preliminary issue hearing.

October 4, 2002

Deena Baltman

Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 158

FSCO A01-001429

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BING QIU LIU

Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Liu was involved in an accident within the meaning of subsection 2(1) of the Schedule.

2. Mr. Liu is entitled to recover his expenses of the preliminary hearing.

October 4, 2002

Deena Baltman

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, 551/96, 303/98, 114/00 and 482/01.
2. 2Appeal decision (FSCO P01-00026, August 9, 2002
3. 3The first prong of the Amos test, namely the "purpose" test, was not seriously raised in this case. To the extent that it still applies, I find that Mr. Liu succeeds; he was injured while a passenger in a bus that was being driven from one location to another, which is one of the common purposes to which automobiles are put. Even if one factors in the hijacking, that activity, while not common, and certainly not desirable, is a recognized activity to which a vehicle might be put. See "Arising out of the Ownership, Use or Operation," by David Shoemaker [Vol. 76, 1997] Canadian Bar Review, 428 at p. 434 ff.
4. 4(FSCO P01-00030, August 9, 2002)
5. 5(FSCO P00-00061, July 16, 2001)
6. 6Saharkhiz v. Underwriters, Members of Lloyd's, 2000 CanLII 5719 (ON CA), [2000] O.J. No. 1760 (C.A.), cofg 1999 CanLII 15099 (ON SC), [1999] O.J. No. 3816 (Ont. S.C.J.)