Neutral Citation: 2002 ONFSCDRS 180

FSCO A02-000286

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ZDENEK PRAJZA

Applicant

and

AXA INSURANCE (CANADA)

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

David J. Evans

Heard:

October 3, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Jeffrey Raphael for Mr. Prajza

David Murray for AXA Insurance (Canada)

Issues:

Zdenek Prajza fractured his left hand in an incident on February 21, 2001 and applied for statutory accident benefits from AXA Insurance (Canada) ("AXA"), payable under the Schedule.¹ AXA did not pay Mr. Prajza any accident benefits because it disagreed that he had been involved in an automobile accident. The parties were unable to resolve their disputes through mediation, and Mr. Prajza 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. Prajza involved in an automobile accident as defined by subsection 2(1) of the Schedule?

2. Did any impairments suffered by Mr. Prajza arise out of the use or operation of an automobile?

Result:

1. Mr. Prajza was involved in an automobile accident as defined by subsection 2(1) of the Schedule.

2. Any impairments suffered by Mr. Prajza arose out of the use or operation of an automobile.

EVIDENCE AND ANALYSIS:

Background:

Most of the facts in this case are not disputed. Mr. Prajza had been trying to hook a trailer up to the back of his van. He was pulling the trailer by hand when he slipped. The trailer continued to roll and crushed his hand against a wall.

On February 21, 2001, Mr. Prajza had driven his van to his brother's house to pick up a trailer of garbage and take it to a dump. The trailer was on the east-facing driveway, and the north-facing van was parked just north of the driveway on the laneway behind the house. He pulled the trailer by hand off the driveway into the laneway, but he slipped on ice when he attempted to turn the trailer to the north (left) towards the van. Because of its momentum, the trailer continued across the laneway to the opposite wall, pinning and injuring his hand. AXA took issue with whether Mr. Prajza fell on public property.

Mr. Prajza takes the position that this was an "accident," which is defined in s. 2(1) of the Schedule to mean "an incident in which the use or operation of an automobile directly causes an impairment . . ." He relies on s. 2.2.4 of the Standard Ontario Automobile Policy, which states: "Any trailer used in connection with the automobile is insured for . . . Accident Benefits . . ." Therefore, he submits, the trailer was an automobile within the definition of "accident." Alternatively, he submits that the use or operation of the van directly caused his impairment.

AXA denies that he was involved in an "accident." First, it submits that the only "automobile" in the area was the van. AXA submits that the trailer was not an automobile within the meaning of the Insurance Act or the Schedule or the automobile policy. Second, it submits that the impairment did not directly arise out of the use or operation of the van. Third, in the alternative, it submits that his impairment did not directly arise out of the trailer's use or operation. AXA submits that the proximate cause of Mr. Prajza's injury was not the trailer but his slipping on the ice, so an intervening act gave rise to a break in the causal connection.

Evidence:

Mr. Prajza prepared a map of the scene of the accident, set out below.

Mr. Prajza testified that he has been self-employed for the last 20 years, mostly plastering and painting. He has owned a plated trailer for about 10 years, towing it on public highways to job sites for garbage stowage. In the past, after finishing a job, he had always successfully manually pulled and reattached the trailer to the van. A few days before the incident Mr. Prajza had left the trailer ("T" in the diagram) at his brother's house for a job. On February 21, 2001 at about 11:00 a.m. he drove to the house to tow the trailer now full of garbage to the city dump.

Mr. Prajza testified that he backed his van into the common laneway that people use to get to their garages behind the houses. He parked the van about 10 feet from the trailer, although in a statement to AXA made on October 9, 2001, he had estimated the distance was 15 feet. He did not know if he kept the van running after he left it to walk over to the trailer.

Mr. Prajza then pulled the trailer by its four-foot-long hitch straight past the garage at the end of the driveway. About two feet from the Post Office wall opposite the driveway, he tried to turn the trailer 90 degrees towards the van but slipped and fell onto his left knee. He lost control of the trailer, but kept his left hand on the hitch. The hitch of the rolling trailer then crushed his hand against the Post Office wall ("X" marks the spot). In his statement he estimated that the trailer hit the wall about 5 feet from the van.

Mr. Prajza testified that the trailer itself is about 10 feet long, so the combined length of the trailer and hitch is 14 feet. The wheels are in the middle of the box, so they are 9 feet from the front of the hitch. He estimated that the lane itself is about 10 feet wide. Since he fell about two feet from the Post Office wall, that would mean (if his estimates are correct) that the wheels of the trailer were not yet in the lane when he fell, but they were in the lane at the point of impact against the wall.

Although Mr. Prajza did not know who owned the laneway, his counsel had conducted a property search. The search appears to show that the laneway was granted to His Majesty the King in the Right of Canada by deed dated April 26, 1948.

Submissions and Findings:

I will deal with the two weakest ancillary arguments — whether the impairment arose out of the use or operation of the van and whether the slip-and-fall was an "intervening cause" — before focusing on the main issue of whether the trailer was an "automobile."

Did the use or operation of the van directly cause the impairment?

Mr. Prajza submits that, if the trailer was not an "automobile," then the act of hooking up the trailer to the van was still direct use of the van and the fact that the trailer was not attached at the time should not make a difference. He argues that hooking up the trailer was all one "incident" and that the presence of the van caused the incident.

Even if the entire sequence of events from the time Mr. Prajza left his van to the time the trailer hit his hand could be considered one "incident," which I doubt, I find that the presence of the van did not cause the incident because it was the trailer that hit Mr. Prajza and caused his impairment. His argument sounds like a "but for" test — but for getting there in the van, Mr. Prajza would not have been injured. However, that test has been rejected as the conclusive test of legal causation both by the Commission and by the courts: see the discussion by the Court of Appeal in Chisholm v. Liberty Mutual Group, 2002 CanLII 45020 (ON CA), [2002] O.J. No. 3135. In that case, a drive-by shooting, Chisholm submitted that the use or operation 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: But for being in his car he would not have been injured. The court rejected this submission:

The "but for" test of causation serves as an exclusionary test. Its purpose is to eliminate from consideration factually irrelevant causes. It screens out factors that made no difference to the outcome. If the but for test is not met then the injury would have occurred regardless of the act or omission in question. If the but for test is met then the act or omission in question is a factual cause of the injury. However, the but for test does not conclusively establish legal causation, the cause that attracts legal liability. . . . Legal entitlement to accident benefits, however, requires not just that the use or operation of a car be a cause of the injuries but that it be a direct cause.

I find that the only direct cause, the only effective cause of Mr. Prajza's injuries, was the trailer hitting his hand. The use or operation of his van was at best ancillary.

Furthermore, AXA has a compelling Supreme Court Case against Mr. Prajza's argument: Highway Victims Indemnity Fund v. Federal Insurance, 1979 CanLII 221 (SCC), [1979] 2 S.C.R. 289. In that case, a home-made trailer became detached from its owner's truck and struck the plaintiffs. Significantly, it was admitted that the trailer was not included within the definition of the word "automobile" contained in the policy (the definition of "automobile" in Mr. Prajza's Policy is discussed below). The court discussed the causation issue and the meaning to be ascribed to the policy as follows:

When the word "automobile" does not refer to a trailer, therefore, a distinction must be made between the use of the automobile and the use of the trailer as the immediate cause of the alleged damage. If in such circumstances damage is caused first and foremost by the use of the trailer, it cannot also be said that the same damage is caused by the use of the automobile: this would be to deny any practical effect to the contractual definition of the word "automobile."

Appellants argued that the use of the automobile, strictly speaking, was the cause of the damage suffered by them, since if the trailer had not been coupled to the automobile it could not have separated from it, and there would have been no accident. I am not persuaded by this reasoning, inter alia because it relieves the definition of the word "automobile" contained in the policy of all practical meaning.

Accordingly, I find that the use or operation of the van did not directly cause Mr. Prajza's impairment.

Did the use or operation of the trailer directly cause the impairment?

This argument only applies if the trailer was an "automobile" within the definition of "accident." AXA submits that it was the slip-and-fall that caused the injury, which as a later intervening act broke the chain of causation of the use and operation of the trailer.

However, the very definition of "accident" shows that this argument is incorrect. An accident is an incident in which the use or operation of an automobile directly causes an impairment. However, at the time Mr. Prajza fell, he had not yet suffered the impairment. The impairment occurred moments later, when the trailer directly hit his hand and caused the impairment. How can the slip-and-fall be a later intervening act when the impairment had not yet occurred? This is not like the Chisholm case, where some other agency such as a bullet caused the injury. Here, it was the trailer that caused the injury. Mr. Prajza still had his hand on the hitch when he hit the wall, and although he may have lost control of the trailer, this was still a use or operation of the trailer. Otherwise, an insurer could argue that someone who loses control of a car while driving it and goes off the road was not in an "accident" because the slip on the road caused the injury. I find that this argument is untenable because it leads to absurd results. Accordingly, I find that the use or operation of the trailer did directly cause the impairment.

Furthermore, the Copley case, upon which AXA relies,² sets out that trying to attach a trailer is a normal use or operation of a trailer. To paraphrase the court, connecting the trailer to the van so that the van could pull the trailer is an integral part of the use of the trailer. Indeed, it is an essential step in the process of using or operating the trailer. Connecting the trailer to the van is as much a use of the van as the starting of an automobile is a use of an automobile.

That leaves the main issue of whether or not the trailer was an automobile within the definition of accident.

Was the trailer an "automobile"as defined in the Policy?

Mr. Prajza submitted that the O.A.P. 1 — Ontario Automobile Policy (Owner'sPolicy)³ governs the relationship between Mr. Prajza and AXA. Therefore, the relevant definition of "automobile" is that set out in the Owner's Policy. Section 1.3 of the Policy distinguishes between a described automobile — any automobile specifically shown on the Certificate of Automobile Insurance — and the automobile — that is, a non-described automobile. It is agreed that the trailer was a non-described automobile. Was it "the automobile"? The Policy states: "When we refer to the automobile, we mean . . . trailers, in certain circumstances." Section 2.2 contains a chart summarizing the types of coverages that can be extended to non-described automobiles. For "Owned Trailer (and not described)," under "Accident Benefits," it indicates "Yes, if used in connection with an automobile covered by the policy." Those circumstances where the trailer is insured for accident benefits are then specifically set out in s. 2.2.4: "Trailers — Any trailer used in connection with the automobile . . ." There is no dispute that Mr. Prajza's van was an automobile covered by the policy. Mr. Prajza submits that he was using the trailer in connection with that automobile while he was trying to hook it up.

AXA submitted that one looks at the Policy last, not first, and that the governing definitions are first those in the Insurance Act and then those in the Schedule. However, that is not the law. First, the Court of Appeal in Chisholm recently confirmed that the definitions in the Schedule prevail over provisions in the Insurance Act. The appellant had argued that the Court should interpret the phrase "directly causes" in the Schedule's definition of "accident" very broadly and more in line with the definition in the Act, thereby equating it in substance to "directly or indirectly causes." The court wrote at par. 14 that

Chisholm's argument disregards s. 268(1) of the Insurance Act which makes entitlement to accident benefits "subject to the terms, conditions, provisions, exclusions and limits" in the Schedule. By this provision the Legislature intended that accident benefit coverage would be determined by regulation, and that the definitions in the Schedule would prevail over provisions in the Act.

However, the term "automobile" is not defined in the Schedule. Absent the definition in the Policy, the Copley case⁴ would likely set out the law. In that case, the plaintiff had backed up his truck to a tomato wagon in a field. He had connected the truck's electrical system and air brake lines to it but had not completed the connection when he suffered serious injuries. The court held for the purposes of s. 267.1(1) of the Insurance Act that the tomato wagon was not an "automobile." The court noted:

To determine what an automobile is for the purposes of s. 267.1(1) of the Insurance Act, one must begin with that Act, travel through the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, as amended, and proceed on to the Highway Traffic Act, R.S.O. 1990, c. H.8, as amended. Even then, the meaning is far from obvious.

However, in footnote 2 on p. 350, the Court specifically notes: "The responsibility of Mr. Copley's own automobile insurer for first-party benefits is not in issue in these proceedings." The responsibility of Mr. Prajza's own automobile insurer, AXA, for first-party benefits is the issue in these proceedings, so Copley does not set out the relevant law.⁵

I find it is not necessary to proceed through the laborious analysis in Copley because "automobile" is defined in the Policy. As recently discussed in the Griffiths appeal decision,⁶ the Superintendent can extend the scope of benefits under s. 227(3) of the Act by approving a form of motor vehicle liability policy that provides coverage beyond that provided in the Schedule. Subsection 227(3) provides that the "Superintendent may, if he or she considers it to be in the public interest, approve a form of motor vehicle liability policy or endorsement thereto that extends the insurance beyond that prescribed in" Part VI, Automobile Insurance, of the Act. In Griffiths, the Policy (OPF 1) contained an additional clause in the definition of "insured person" not found in the relevant Schedule. I find that if the Policy can extend a definition in the Schedule, then equally the Policy may provide a definition missing in the Schedule. In Griffiths, the Director noted that the additional clause was added to the OPF 1 to fill a specific gap in the definition of "insured person" in the Schedule. Similarly, the courts have noted a gap created by the confusion in the meaning of "automobile." In footnote 3 on p. 351, the court in Copley noted that a self-contained definition of automobile in the applicable parts of the Insurance Act "would substantially clarify the legislature's intent with respect to the reach of those provisions." I find that in providing a self-contained definition of "automobile" in the Policy, the Superintendent was acting in the public interest consistent with s. 227(3) to indeed clarify the reach of accident benefits. I find it would defeat the purpose of the Policy to ignore that definition.

Returning to the definition of "automobile" in the Policy, Mr. Prajza submits that he was using the trailer "in connection with" the van while he was trying to connect the two. AXA submits that for the definition to apply, the trailer had to be actually connected to the van. However, that is not what the definition says. If the Superintendent had intended to require an actual, complete physical connection between the trailer and the automobile, the definition could easily have read "Any trailer connected to the automobile."

According to the Canadian Oxford Dictionary, Webster's Ninth New Collegiate Dictionary, and Microsoft Bookshelf 98, the word "connection" means not only "the state of being connected" but also "the act of connecting." As for the phrase "in connection with," the COD defines it as "with reference to," and Bookshelf treats it as a synonym for "concerning." These definitions suggest a broader meaning for "in connection with" than simply "connected." Accordingly, I find that for the trailer to be used in connection with the van did not require a complete physical connection.

This appears to be a case of first impression. The cases cited to me are of little assistance. AXA relied on the Copley case, where even though the tomato wagon was partially hooked up, the connection was not complete. However, that finding turned on the definition of "motor vehicle" in the Compulsory Automobile Insurance Act (CAIA), which includes "trailers . . . of a motor vehicle." The court held:

I think the phrase "of a motor vehicle" is meant to draw a distinction between trailers which are under the power and control of a motor vehicle and those which are not. A trailer sitting in the field is not a trailer "of a motor vehicle." In my view, only trailers which are attached to and under the power and control of a motor vehicle can properly be described as "trailers . . . of a motor vehicle."

The court appears to have treated the phrase "trailers . . . of a motor vehicle" as equivalent to "trailer connected to a motor vehicle." I have already found that the definition in the Policy is not as strict as that and that the phrase "used in connection with" is not equivalent to "connected." Accordingly, I find that this conclusion in Copley is not binding, which is consistent with the court's note that the responsibility for first-party benefits was not at issue.

The Highway Victims case does not assist. The definition of a non-described trailer as an "automobile" in that case was "a trailer owned by the Insured, not described in this policy and used with a private motor car or station wagon . . ." The relevant phrase is "used with" and not "used in connection with." Accordingly, the definition is different from the one in this case. The court also did not consider the meaning of the definition, as it had been simply admitted that the trailer that struck the plaintiffs' automobile was not included within the definition of the word "automobile" contained in the policy. I find that these facts case are sufficiently distinguishable from those in this case.

AXA also relied on the Masih v. Allstate Insurance Co. of Canada case,⁷ which has some interesting similarities with the current case. The plaintiff stopped after his trailer blew a tire. He unhitched the trailer, drove off to get replacement tires, returned and started changing the tires on the trailer when he was hit and killed. The definition of "motor vehicle" in the relevant policy did not include trailers. The court cited and followed the Highway Victims case, finding that the change of the flat tire was first and foremost the cause of the incident and that the "use or operation of the motor vehicle had nothing to do with the incident." However, the facts in this case are again distinguishable. They are similar up to a certain point, as Mr. Prajza had also left his trailer at a certain spot, gone away and come back. However, in Masih, the deceased was not engaged in the act of connecting the trailer at the time of his death. Instead, he was working on the trailer itself. The equivalent for Mr. Prajza would be the times he was working on the job at his brother's house, putting debris into the trailer. If he had slipped and injured himself against the trailer during those operations, he would not have been using the trailer "in connection with" an automobile.

I find that once Mr. Prajza started pulling the trailer towards his van he was engaged in the act of connecting the trailer with the van. He had pulled the trailer a large way into the laneway and was in the process of trying to turn it towards his van when he fell. I find that this was an act he had performed successfully numerous times before. I therefore find that the trailer was being "used in connection with the automobile," namely the van, and accordingly the trailer was also an automobile and was insured for accident benefits by the terms of the Policy. I have already found that, as discussed above, this was a normal use or operation of the trailer. I have already found that his impairment resulted directly from the use or operation of the trailer. Accordingly, I find that Mr. Prajza was involved in an automobile accident as defined by subsection 2(1) of the Schedule and that the impairments he suffered arose out of the use or operation of an automobile.

For the sake of completeness, I will briefly address the issue of whether the trailer could otherwise be considered an "automobile" as defined in s. 224(1) of the Insurance Act.

Was the trailer an "automobile"under the Insurance Act?

This question involves the analysis set out in Copley. Briefly, "automobile" is defined in s. 1 of the Insurance Act as including "the trailers . . . of automobiles." The analysis in Copley, where it was held that "trailers . . . of a motor vehicle" required a complete connection, similarly suggests that by this definition the unconnected trailer would not be an automobile. However, s. 1 also states that the definitions in it only apply "except where inconsistent with the definition sections of any Part."

The term "automobile" is redefined in Part VI, Automobile Insurance, as including "a motor vehicle required under any Act to be insured under a motor vehicle liability policy." That is the definition from which the Copley analysis starts. If the vehicle is not an automobile within the ordinary sense, as this trailer clearly was not, then it must be determined whether it comes within this broadened definition.

Turning next to the CAIA, s. 1(1) contains the following definition: "'motor vehicle' has the same meaning as in the Highway Traffic Act and includes trailers and the accessories and equipment of a motor vehicle." The requirement for insurance under a motor vehicle liability policy is then set out in s. 2(1):

2(1) Subject to the regulations, no owner or lessee of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated, on a highway unless the motor vehicle is insured under a contract of automobile insurance.

I have already discussed the "trailers . . . of a motor vehicle" possibility above. For the reasons set out in Copley, the trailer was not a trailer "of a motor vehicle" because it was not connected to the van at the time of the incident.

That leaves the possibility of whether the trailer was a "motor vehicle" as defined in the Highway Traffic Act. This is where the analysis ends for Mr. Prajza, as "motor vehicle" is defined in subsection 1(1) of that Act as including "any other vehicle propelled or driven otherwise than by muscular power . . ." (Emphasis added.) At the time of the accident, the trailer was being propelled by Mr. Prajza's muscular power, so it was not a motor vehicle. For completeness, I note that although the definition of "vehicle" in the Highway Traffic Act includes "trailer," "trailer" in turn "means a vehicle that is at any time drawn upon a highway by a motor vehicle." Even assuming the laneway was a highway, the trailer was not being drawn by a motor vehicle, so it was not a "trailer" within the meaning of the Act.

If the trailer is not a trailer or motor vehicle as defined in the Highway Traffic Act, it is also not a motor vehicle for the purposes of the CAIA. To paraphrase Copley, the fact that the trailer was regularly taken on the highway and that Mr. Prajza intended to take it on the highway as soon as it was hooked up to his van does not extend the reach of s. 2(1) of the CAIA. At the time of the incident, it was not a motor vehicle because Mr. Prajza was pulling it with his muscular power. The prohibition speaks only to motor vehicles being operated on a highway.

EXPENSES:

I exercise my discretion to award Mr. Prajza his expenses incurred in this preliminary issue hearing. He was successful, and the hearing involved a novel point of law.

November 14, 2002

David J. Evans

Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 180

FSCO A02-000286

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ZDENEK PRAJZA

Applicant

and

AXA INSURANCE (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. Prajza was involved in an automobile accident as defined by subsection 2(1) of the Schedule.

2. Any impairments suffered by Mr. Prajza arose out of the use or operation of an automobile.

3. AXA shall pay Mr. Prajza his expenses of this arbitration hearing.

November 14, 2002

David J. Evans

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. 2Copley v. Kerr Farms Limited (2002), 2002 CanLII 44900 (ON CA), 59 O.R. (3d) 346 (C.A).
3. 3As approved by the Superintendent of Financial Services for use as the standard Owner's Policy on or after January 1, 2001.
4. 4Cited above.
5. 5In fact, the same law firm represented both Mr. Copley and Mr. Prajza. Counsel for Mr. Prajza filed documents indicating that Mr. Copley's first-party insurer provided first-party accident benefits to Mr. Copley in the circumstances of that case.
6. 6Griffiths and State Farm Mutual Automobile Insurance Company (FSCO Appeal Order P01-00018, March 25, 2002)
7. 7[2001] O.J. No. 4357 (SCJ).