Neutral Citation: 2003 ONFSCDRS 16

FSCO A02-001141

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ABDUL SESAY

Applicant

and

CERTAS DIRECT INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

John Wilson

Heard:

January 28, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Majid Yazdani for Mr. Sesay

Ralph D'Angelo for Certas Direct Insurance Company

Issues:

The Applicant, Abdul Sesay, was injured in a motor vehicle accident on January 30, 2002. He applied for statutory accident benefits from Certas Direct Insurance Company ("Certas"), payable under the Schedule.¹ Certas refused to pay weekly income replacement benefits. The parties were unable to resolve their disputes through mediation, and Mr. Sesay 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 issue is:

1. Is Mr. Sesay precluded from proceeding to arbitration pursuant to subsection 30(1)(b) of the Schedule because he was driving on a 400 series highway with a speed limit greater than 80 kilometres per hour, with a restricted Class G1 Licence.

Result:

1. Mr. Sesay is precluded from proceeding to arbitration.

EVIDENCE AND ANALYSIS:

At the pre-hearing in this matter, the parties agreed to the following facts:

1. The accident happened on January 30, 2002.

2. At the time of the accident, the Applicant was the holder of a G1 driver's licence.

3. At the time of the accident, the Applicant was operating an automobile on a 400 series highway, namely Highway 401, where the speed limit was greater than 80 km/hr.

In the past decade, the province has altered the long-standing practice of issuing driver's licences for passenger motor vehicles. The law now provides for a system of graduated licences, which limit the right of a new driver to drive on certain roads and after certain hours of the day, as well as restricting the carriage of passengers in a vehicle driven by a driver possessing a restricted licence.

The intent of the legislation is to permit the new driver to attain a certain skill level before being given carte blanche to drive anywhere and at any time in the province.

Ontario Regulation 340/94, a regulation under the Highway Traffic Act, R.S.O. 1990, c. H.8, sets out a number of conditions for novice drivers.

One of the important restrictions put on the holder of a G1 licence is that he or she must be accompanied at all times by a qualified accompanying driver, sitting in the seat beside the driver. Even if a novice driver is accompanied by a qualified driver, subsection 5(1) provides that the novice driver may not drive a vehicle on certain high-speed expressways, designated by subsection (4), including all 400 series highways.

As noted above, counsel for Mr. Sesay has agreed that Mr. Sesay was in possession of a restricted G1 licence, and was driving on a 400 series highway with a speed limit in excess of 80 km/h. The Insurer alleges, therefore, that Mr. Sesay was driving without a valid licence, since he did not have a licence that permitted him to drive where he was driving at the time the accident took place.

One of the consequences of driving without a licence is that, pursuant to subsection 30(1)(b) of the Schedule, an insurer is not required to pay income replacement benefits "if the driver was driving without a valid licence." Mr. Sesay's claims in this arbitration are for income replacement benefits, and housekeeping and home maintenance benefits.

There is no question that the onus is on the Insurer to establish that Mr. Sesay was driving without a licence at the time of his motor vehicle accident on January 30, 2002, if it wishes to rely on subsection 30(1)(b) of the Schedule. There is also no question that it is a general rule of interpretation that exclusions are to be strictly construed.

Mr. Sesay, through his representative, has made certain admissions. These were included in the pre-hearing letter. The decision in this preliminary issue hearing turns on whether the facts admitted by Mr. Sesay, through his counsel, constitute proof of the misconduct relied upon by the Insurer.

Although the elements being alleged may also constitute a criminal or quasi-criminal offence, the Insurer must only prove on the balance of probabilities that Mr. Sesay falls within the excluded class.

The courts in Ontario traditionally took the view that an allegation of a crime in a civil action should be proven in a stricter manner than the mere balance of probabilities. Middleton J.A., in Lang Shirt Co.'s Trustee v. London Life Insurance Co. (1928 CanLII 435 (ON SCAD), 62 O.L.R. 83), stated:

while the rule is not so strict in civil cases as in criminal, I think that when a right or defence rests upon the suggestion that conduct is criminal or quasi-criminal the Court should be satisfied not only that the circumstances proved are consistent with the commission of the suggested act but that the facts are such as to be inconsistent with any other rational conclusion that the evil act was in fact committed.

Although this approach was sanctioned by appeal courts for decades, the rigour of the proof demanded lessened. The Supreme Court in Hanes v. Wawanesa Mutual Insurance Co. 1963 CanLII 1 (SCC), [1963] S.C.R. 154 established that a civil burden of proof was all that was required in such cases. In Continental Insurance Co. v. Dalton Cartage Co. [1982] 1 S.C.R. 1664, the Supreme Court affirmed the decision in Hanes and adopted the comments of Lord Denning in Bader v. Bader [1950] 2 All E.R. 458.

Given the nature of the accusation and its potential consequences, the Insurer must meet, in the words of Lord Denning in Bader v. Bader, "...a degree of probability which is commensurate with the occasion."

The Insurer, then, is required to provide cogent evidence, on a balance of probabilities, that Mr. Sesay was subject to the exclusion, as alleged.

It is important to consider the elements necessary for this exclusion to apply. Certas is not alleging that Mr. Sesay knew that his licence was suspended and drove, nonetheless, but that he merely drove in a place where his driver's licence was not valid, and that an accident occurred during that time.

Mr. Sesay's wrongful act of driving in a place where he was not permitted to drive is an anomalous sort of offence. He is not required to have intended to commit the offence, nor to have been aware that he was doing something not permitted. He is deemed to know the law.

Nor must his licence be subsequently suspended, although that, indeed, is a possibility, for the excluded behaviour to crystallize. The crux of the offensive behaviour is his presence, at the wheel of a motor vehicle on a forbidden highway.

Offences arising out of the regulation of driving privileges are in essence regulatory offences, and such matters could traditionally be prosecuted without the need to prove mens rea, or the intent to commit the action in question.

In R. v. Sault Ste. Marie, 1978 CanLII 11 (SCC), [1978] 2 S.C.R. 1299, however, the Supreme Court opened the door to defences to strict liability charges in such matters. The court confirmed that in offences of strict liability, as opposed to offences of absolute liability, a defence would be available if the accused reasonably believed in a mistaken set of facts which, if true, would render the act or omission innocent, or if he or she took all reasonable steps to avoid the happening of the event in question.

Regulations under the Highway Traffic Act (Ontario Regulation 340/94) dealing with Class G licences and novice drivers make it clear that the rule against driving on the 400 series highways is not absolute. For example, subsection 5(5) of the Regulation provides that the restriction does not apply if the accompanying driver is a driving instructor licensed in Ontario.

Likewise, subsection 29(1)(b) provides that a person who would otherwise be classed as a novice driver, is not subject to that classification if they hold the equivalent of a full Ontario licence, issued by certain reciprocal territories and jurisdictions, provided that the equivalent licence has been in force at least 24 of the preceding 36 months.

Section 5 of the Regulation, dealing with the restrictions on the scope of a class G1 licence, uses the term "novice driver" interchangeably with "holder of a class G1 licence." Section 1 of the Regulation refers the definition of "novice driver" back to section 29, referred to above.

Potentially then, a holder of a class G1 licence may drive on a 400 series highway, if he or she is not a "novice driver" or if he or she is accompanied by a driving instructor.

Mr. Sesay, through his representative, submits that he was not charged with the offence of driving without a licence. Without a conviction the Insurer should not be able to rely on the exemption. In support of this he cites a 1994 case, decided under a different Schedule, Bagheri and Allstate Insurance Company of Canada (OIC A-002514, March 4, 1994). In that matter, Arbitrator Mackintosh found for the Applicant.

Mr. Bagheri had been charged with operating a motor vehicle without insurance as well as failing to carry and produce an insurance card. The charge of operating was stayed by a justice of the peace, and no conviction was entered. The insurer, however relied upon a conviction on the charge of failing to carry and produce as grounds for reliance on 17(1)(c) of the then Schedule, which explicitly required a conviction. In the absence of a conviction, the exclusion was not applicable.

The current subsection 30(1)(b) of the Schedule contains no requirement for a conviction. Rather, it requires the Insurer to prove that Mr. Sesay was merely driving without a valid licence. Consequently, the Bagheri case is of little assistance to Mr. Sesay.

The Insurer argued, based on Vanderwal and State Farm Automobile Insurance Company, a decision of the Divisional Court (1994 CanLII 10575 (ON CA), 20 O.R. (3d) 401), that Mr. Sesay did not possess a valid licence to drive on a 400 series highway, notwithstanding that he was in possession of an otherwise valid licence. In Vanderwal, the insured was driving a motorcycle on a highway with a speed limit in excess of 80 kilometres per hour, which was specifically forbidden to his class of licence-holder. The court stated:

Regrettably for the respondent, at the time of the accident, having regard to the circumstances which then existed, he was not authorized to drive his motorcycle. Instead he was specifically prohibited by law from doing so by condition (3) of his licence, which condition appeared on the face of the licence.

In my mind, the phrase "not authorized to drive" is equivalent to "driving an automobile without a valid licence."

A licence is the normal means by which legal permission to drive on public highways is granted. A person driving without a valid licence is prima facie not authorized to drive on a public road. Vanderwal makes it clear that driving beyond the scope of one's licence also constitutes driving without a valid licence.

Such an interpretation is in line with those of other jurisdictions where the requirement of a "valid licence" has been interpreted. In the Québec case of R. c. Mekroud, (1997 J.Q. no.4955), the defendant was charged with "d'avoir conduit un véhicule routier sur un chemin public sans être titulaire dèun permis de la classe appropriée à la conduite de ce véhicule tel que déterminé par règlement." (..having driven a motor vehicle on a public road without holding a licence of the class appropriate to the driving of that vehicle as established by the regulations)

Mr. Mekroud, although having lived in Québec for some four years, also possessed a valid Moroccan driver's licence. Because of his residency status as a resident of Québec, the Moroccan driver's licence, although valid and subsisting in Morocco, was found not to be a valid licence in Québec for a resident of Québec, and he was convicted of driving without a valid licence.

In a similar vein, Derksen v. Insurance Corp. of British Columbia [1995] B.C.J. No. 2779, interpreted the phrase "holds a subsisting driver's licence issued under this Act" in a British Columbia policy of insurance. Mr. Derksen, although living variously in British Columbia and Alberta, held only an Alberta driver's licence, for the appropriate class of vehicle. The court found Mr. Derksen to have been, at the time of the accident, a resident of British Columbia and, notwithstanding his Alberta licence, he was found to not hold a valid driver’s licence.

Lord Goddard C.J. once remarked (Barnes v. Jarvis (1953) 1 W.L.F. 649):

A certain amount of common sense must be applied in construing statutes. The object of the Act has to be considered.

The clear object of the statutory restrictions on novice drivers was to narrow the scope of their privilege to drive until such time as they demonstrate, through testing and experience, an ability to drive anywhere at any time. (See section 39, of the Highway Traffic Act) Put differently, the novice driver is granted a driver’s licence that is valid only under certain specified conditions. In other conditions it is invalid.

It is mere sophistry to argue that because the driver in question holds a licence, valid in some other time or place, that he or she necessarily holds a valid licence for the purpose of subsection 30(1)(b) of the Schedule. Although graduated driver's licences may be relatively new, the same type of restrictions have applied to the licences issued to seagoing officers on commercial ships for more than a century. No one would argue that a person holding a master’s ticket for minor inland waters was entitled to claim that his papers were valid for taking charge of the Queen Elizabeth on a North Atlantic winter crossing. Likewise, Mr. Sesay holds a licence valid only on lesser roadways, at lesser speeds. At the time of the accident he did not hold a licence that was valid for the activity he was engaged in.

I find, therefore, that Mr. Sesay's admission that he was driving on a 400 series highway at the time of the accident, is prima facie evidence that he was not in possession of a valid driver's licence at the time of the accident.

The question still remains whether this satisfies the onus of proof on the Insurer. Although Mr. Sesay's presence on a road forbidden to his class of licence was admitted, he still may have been authorized to drive there by reason of one of the exceptions to the general rule. These include being in the presence of a licenced driving instructor, or by reason of not being a novice driver as defined by the regulations.

The Sault Ste. Marie decision also suggests that Mr. Sesay may answer the accusation of driving without a valid licence by a defence such as mistake of fact or due diligence.

If any of these defences exist, they are known only to Mr. Sesay and his representative. He certainly did not plead them. Nor did he provide any evidence or submissions to suggest that any such defence was available to him.

The burden of proving an exception lies with the person asserting that exception. Mr. Sesay has not met that burden. Faced with prima facie evidence that his licence was not valid for the place where he was driving, it is incumbent upon Mr. Sesay to adduce exculpatory evidence. As noted, he did not.

I find, therefore, that the admissions made by counsel at the pre-hearing, in the absence of responding evidence from Mr. Sesay, provide sufficient, cogent, evidence to decide that he was, at the time of the accident, driving without a valid driver's licence.

Mr. Sesay is, consequentially, barred from claiming income replacement benefits, and housekeeping and home maintenance benefits arising from this accident, by reason of subsection 30(1)(b) of the Schedule.

EXPENSES:

Although the Insurer was successful in this preliminary issue matter, I note that Mr. Sesay significantly shortened the hearing process by agreeing to deal with this matter as a preliminary issue by written submissions.

That being said, I am not inclined to award Mr. Sesay his expenses either. His counsel, Mr. Majid Yazdani, an agent who purports to hold a doctor of Laws from Osgoode Hall, filed materials that can only be characterized as bizarre and inappropriate in support of Mr. Sesay's case. These included pleading the Immigration Act and the federal Interpretation Act in support of his client’s position.

While I have found that Mr. Sesay is barred from proceeding to arbitration in this matter, I am also aware that the quality of his representation may have been a factor in this decision. Clearly, no evidence at all was adduced as to any possible defence to this matter.

I recognize that arbitrators have found that access to justice may be an important consideration in an award of expenses. This may be especially important, given the enormous economic disparity between the Applicant and his insurer.

Mr. Yazdani, however, has done little to advance the cause of his client, or enhance his access to justice. I trust that Mr. Yazdani will bear that in mind in any discussion of his account with his client.

I feel it appropriate, therefore, that each party absorb its own expenses in this matter. There will be no other order as to expenses.

February 12, 2003

John Wilson Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 16

FSCO A02-001141

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ABDUL SESAY

Applicant

and

CERTAS DIRECT INSURANCE COMPANY

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. Sesay is barred from proceeding to arbitration on the issues of income replacement benefits, housekeeping and home maintenance benefits.

February 12, 2003

John Wilson 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.