Neutral Citation: 2003 ONFSCDRS 52

FSCO A02-000721

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MUHAMMAD UMER

Applicant

and

NON-MARINE UNDERWRITERS, MBRS. OF LLOYD'S

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Susan Sapin

Heard:

January 14, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Barry A. Edson for Mr. Umer

Barry A. Percival and Rebecca Balaban for Non-Marine Underwriters, Mbrs. of Lloyd's

Issues:

On October 13, 2001, the Applicant, Muhammad Umer, took his taxi to a garage for repairs. As he watched, gasoline spilled from the gas tank of his taxi and caught fire. Mr. Umer suffered third degree burns to his right hand and lesser burns to both feet. Non-Marine Underwriters, Mbrs. of Lloyd's ("Lloyd's"), refused to pay statutory accident benefits under the Schedule,¹on the basis that Mr. Umer's injuries did not result from an "accident" as defined under the Schedule. The parties were unable to resolve their disputes through mediation, and Mr. Umer 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. Was Mr. Umer injured as a result of an "accident" as defined under subsection 2(1) of the Schedule?

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

Result:

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

2. Mr. Umer is entitled to his expenses of this preliminary issue hearing.

EVIDENCE:

Under subsection 2(1) of the Schedule, "'accident' means an incident in which the use or operation of an automobile directly causes an impairment. . ."

The parties do not dispute that repair of an automobile at a garage falls into the category of uses to which automobiles are normally put for the purpose of subsection 2(1), nor that Mr. Umer's injuries constitute an impairment. Rather, Lloyd's argues that the incident is not an "accident" because it was not the act of repairing his automobile that directly caused Mr. Umer's injuries, but fire, ignited by an independent source. The ignition, argues Lloyd's, constitutes an independent, intervening act which breaks the direct chain of causation begun by the repair of the vehicle, so as to disentitle Mr. Umer from statutory no-fault benefits.

The essential facts in this case are not in dispute. Mr. Umer testified that on the morning of October 13, 2001, he took his taxi to a garage for repairs. The vehicle needed a new fuel pump. The taxi was placed on a hoist and raised about six to eight feet off the floor. The gas tank, containing 50 or 60 litres of gasoline, was detached, placed on a smaller hoist and lowered to the ground. As this was taking place, a large quantity of gasoline spilled onto the floor and spread over a wide area. Mr. Umer testified that the garage employee tried to siphon some of the gasoline into a small red plastic can. Mr. Umer stated that the smell of the spilled gasoline was very strong.

Mr. Umer was standing in the repair bay, where customers are not supposed to be. Not five minutes after the spill, two employees working on one of the vehicles in front of him yelled "fire," and Mr. Umer saw fire at his feet. He jumped back but fell forward onto the ground and his right hand slid into the fire. Mr. Umer testified that he thought the fire came from behind him on his left. He heard a big explosion. He noticed that the roof was also on fire. Mr. Umer and the garage employees ran outside, and Mr. Umer was taken to hospital by ambulance.

Mr. Umer testified that someone told him afterwards that the employees saw the fire come from behind him, and that the fire started behind him. He stated that he did not know it at the time, but was later told there was a natural gas hot water heater against the wall behind him to his left, and that a pilot light in the heater ignited the gasoline.

Michael Potvin, a Fire Investigator with the Office of the Fire Marshall, investigated the scene, interviewed the witnesses, and prepared a report. He testified as an expert witness at the hearing. Mr. Potvin's testimony, contemporaneous notes and report confirm Mr. Umer's evidence.

Mr. Potvin described the fire not as an explosion, but as a "whoosh," a flash fire caused when the explosive mixture of gasoline vapours originating from Mr. Umer's gas tank ignited.² He classified the fire as accidental. He testified that the source of ignition had to be a spark or open flame. He identified the possible sources of ignition in the garage as: the duplex electrical socket hanging from the ceiling near Mr. Umer's vehicle; the two trouble lights used by the mechanics; the open flame of the pilot light in the natural gas hot water heater; electrical equipment in the vicinity; or a spark from a falling piece of metal hitting the concrete floor. He ruled out the trouble lights because the lightbulbs were intact, and the blowtorch lying nearby on the garage floor because it was not in use at the time. He stated that when he interviewed Mr. Umer, Mr. Umer told him the fire spread very quickly over a large area, and that Mr. Umer did not mention where he first noticed the fire.

Although the pilot light in the hot water heater was the only open flame in the garage, Mr. Potvin was reluctant to concede when pressed on cross-examination that it was the most likely source of ignition. He explained that it was not possible to determine where exactly in the garage the particular mix of gasoline vapours and oxygen required for combustion would occur, or be ignited, because one could not know the source or position of air currents in the garage at the time. I understood his evidence to be that, from a factual point of view, he could not know, and was not willing to say for certain, that the pilot light caused this particular fire, although it was "high on his list of possibilities."

In my view, for the purpose of determining causation in this arbitration, the actual source of the ignition is irrelevant. I find that the gasoline spilled from Mr. Umer's gas tank was ignited by a spark or flame originating in the repair bay of the garage.

ANALYSIS:

Prior to the enactment of Bill 59 (the current Schedule) on November 1, 1996, an insured person needed only to establish that his injuries were "indirectly or directly" caused by the use or operation of a motor vehicle to be entitled to statutory no-fault accident benefits. The removal of the term "indirectly" from the definition of accident in the current Schedule was intended to narrow the scope of coverage.

A number of arbitration and court decisions have dealt with the narrower and more stringent direct causation requirement under the current no-fault accident benefits regime.³ The first of these to do so was Petrosoniak and Security National Insurance Company (FSCO A98-000198, November 2, 1998). In that case, Arbitrator Novick found that soft tissue injuries sustained by a cyclist who fell off his bicycle when it slid on a wet patch of road, were directly caused by the use or operation of a motor vehicle, because the fluid on the road originated from a motor vehicle, and no intervening act broke the chain of causation.

In determining the meaning of "directly causes," Arbitrator Novick relied on 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."⁴

More recently, the Ontario Court of Appeal dealt with this issue in Chisholm v. Liberty Mutual Group (2002) 2002 CanLII 45020 (ON CA), 60 O.R. 3d 776, released August 15, 2002. Both Mr. Umer and Lloyd's rely on this decision.

In Chisholm, the Appellant appealed from the decision of a motions judge, that the severe injuries he received in a drive-by shooting by an unknown assailant did not constitute an "accident" because the use or operation of the vehicle did not directly cause his impairment.

Laskin, J.A. upheld the decision and the reasoning of the motions judge, noting with approval that the motions judge and the Financial Services Commission of Ontario had adopted as a test of direct causation the definition from Black's Law Dictionary. Laskin, J.A. agreed that, in Mr. Chisholm's case, the gunshots were a new, independent and intervening act, which clearly broke the chain of causation started by the use or operation of the motor vehicle.

Lloyd's argues that in the case before me, the ignition of the gasoline by the pilot light in the hot water heater was just such a new and intervening act, independent of the repair of Mr. Umer's vehicle, which started the fire that was the direct cause of Mr. Umer's injuries. Lloyd's maintains that the decision in Chisholm supports this argument. Lloyd's further argues that Mr. Umer's case differs from Petrosoniak, because in that case, the cyclist's soft tissue injuries were directly caused by fluid spilled on the road by a motor vehicle, without any intervening act.

Mr. Umer, on the other hand, argues that the act of repairing his vehicle, in particular the ill-considered removal of the full tank of gasoline, causing a large quantity of gasoline to spill on the garage floor, set in motion an unbroken chain of events that resulted in the burns to his right hand and feet. According to Lloyd's, however, this amounts to the far less stringent "but-for" test ("but for the repair, there would be no injuries") rejected by the Court of Appeal in Chisholm.

In my view, Mr. Umer's position is the correct one. In Chisholm, Laskin, J.A. considered a number of related principles that, taken together, comprise a coherent theory of direct causation.

The first of these principles is that the "but-for" test is a test of factual, not legal causation. In other words, it serves only to rule out factual causes of impairment, and does not determine whether the cause attracts legal liability. As stated by Laskin, J.A.: "Legal 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." Legal entitlement to and liability to pay for benefits depend on the facts meeting the legal test of causation, in this case, direct cause - the unbroken chain of events between the use or operation of the motor vehicle, and the impairment. In Mr. Umer's case, the repair of his vehicle, the removal of the gas tank preliminary to installing the new fuel pump, the spilling of gasoline, the presence of the exact composition of air and gasoline vapours necessary for ignition, the presence of several possible sources of ignition in the garage, and the fire itself, can all be said to be factual causes of Mr. Umer's injuries. Each one meets the "but-for" test.

Whether they also meet the legal test of being the direct cause of the injuries brings us to the second principle articulated in Chisholm: "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."⁵ Although the existence of more than one direct cause was not the case in Chisholm, I find that it is the case here. All of the factual causes noted above meet the legal test of direct causation set out in section 2(1) of the Schedule. Laskin, J.A. found support for his conclusion that there could be more than one direct cause, as well as the solution to determining liability under the Schedule, in the Supreme Court of Canada's judgment in Heredi v. Fensom, 2002 SCC 50, 213 D.L.R. (4^th) 1, where the court found the operation of a motor vehicle to be the "direct cause" of a plaintiff's injury because the presence of the motor vehicle was the dominant feature, or constituted the true nature of the claim, and was not ancillary to it. In the case before me, repair of Mr. Umer's vehicle in the garage was clearly the dominant feature of his claim.

The third key principle endorsed in Chisholm is that "an intervening act may not absolve an insurer of liability for no-fault benefits if it can fairly be considered a normal incident of the risk created by the use or operation of the car - if it is "part of the ordinary course of things."⁶ I agree with Mr. Umer's submission that the presence of fire hazards such as sources of sparks or open flame normally found in a garage, such as electrical outlets and equipment, blowtorches, or trouble lights and light switches, are definitely part of the normal risk involved in the repair of motor vehicles in garages. I find the risk includes a natural gas hot water heater. As counsel for Mr. Umer pointed out, garages can hardly be expected to operate without electricity, light, heat or hot water. I find that even the negligent repair of a vehicle is no less a part of the risk assumed by no-fault insurers, than is the negligent operation of vehicles that results in accidents. Negligence is not of itself a new and independent act that would operate to break the chain of causation that began with the repair of the vehicle. (For the purpose of this finding, I consider the normal risk assumed by no-fault insurers to include the presence of Mr. Umer and the hot water tank in the repair bay, regardless of whether either should have been there.)

A final point of some importance that complements the above principles is that it is somewhat simplistic to view causation only as a linear concept. As stated in Leyland Shipping Company Limited v. Norwich Union Fire Insurance Society, and followed in Karshe and Kumar,⁷

Causes are spoken of as if they were as distinct from one another as beads in a row or links in a chain, but - if this metaphysical topic has to be referred to - it is not wholly so. The chain of causation is a handy expression, but the figure is inadequate. Causation is not a chain, but a net. At each point influences, forces, events, precedent and simultaneous, meet; and the radiation from each point extends infinitely . . . Where various factors or causes are concurrent, and one has to be selected, the matter is determined as one of fact, and the choice falls upon the one to which may be variously ascribed the qualities of reality, predominance, efficiency.

The Concise Oxford Dictionary defines metaphysical as "based on abstract general reasoning; excessively subtle or theoretical." Such an approach, however logically correct, is of limited usefulness in determining whether a particular set of facts meets a legal test. I agree with Arbitrator Makepeace that ". . . skepticism is advised when addressing 'this metaphysical topic.' In trying to untangle the causation net, it is tempting to search for the precise formula that describes the boundary of 'accident.' The varying judicial outcomes reflect the difficulty of this exercise."⁸

More useful in sorting out the legal consequences of complex and risky human activities such as the use or operation of motor vehicles is the practical, coherent, reasonable and legally sound approach, consistent with the intent and purposes of no-fault legislation, adopted by Laskin, J. in Chisholm.

In accordance with these principles and for the reasons set out above, I find that Mr. Umer's injuries were directly caused by the sequence of events that began with the repair of his vehicle.

EXPENSES:

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

April 3, 2003

Susan Sapin

Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 52

FSCO A02-000721

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MUHAMMAD UMER

Applicant

and

NON-MARINE UNDERWRITERS, MBRS. OF LLOYD'S

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. Umer was injured in an "accident" within the meaning of section 2(1) of the Schedule.

April 3, 2003

Susan Sapin

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. 2Mr. Potvin explained that the explosion Mr. Umer heard was caused by the tires exploding.
3. 3For an exhaustive examination of the pre- and post-Bill 59 case law, see the decisions of the Director's Delegate in Kumar and Coachman Insurance Company (FSCO P01-00026, August 9, 2002) and Elensky and Royal & SunAlliance Insurance Company of Canada (FSCO P01-00030, August 9, 2002).
4. 4The decision was not appealed, but this definition of direct cause has since been cited with approval by both this tribunal and the courts: see footnote #3 and Chisholm, below.
5. 5Chisholm, paragraph 31
6. 6Chisholm, paragraph 29
7. 7Karshe and Non-Marine Underwriters, Mbrs. of Lloyd's, (FSCO A99-000855, December 15, 2000) and Kumar and Coachman (supra)
8. 8Kumar and Coachman (supra), at page 31.