Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 176

Appeal P03-00022

Appellant

and

Respondent

Before:

Nancy Makepeace

Representatives:

Claude Blouin for CGU

Sandev Purewal for Mr. Irving

Hearing Date:

May 7, 2004

Written submissions completed September 20, 2004

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

The appeal is allowed. The arbitration order, dated May 21, 2003, is revoked and replaced by the following:

Mr. Irving was not impaired as a result of an "accident," as defined in s. 2(1) of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996.

If the parties are unable to agree on appeal expenses, the matter may be resolved in accordance with Rule 79 of the Dispute Resolution Practice Code.

November 29, 2004

Nancy Makepeace

Director's Delegate

Date

CGU Insurance Company of Canada ("CGU") appeals from the Arbitrator's ruling that Mr. Irving was injured as a result of an "accident" as defined in s. 2(1) of the SABS-1996¹ The arbitration proceeded mainly by way of agreed facts, set out at pages 2-3 of the decision. Essentially, Mr. Irving was cycling northbound when he was struck by a beer bottle thrown by the driver of a southbound pickup truck. The Arbitrator found that the truck's velocity "played a central role in contributing to the severity of the impact of the bottle shattering on Mr. Irving's face and the resulting injuries to Mr. Irving."² Therefore, she held that the operation of the truck was a direct cause of Mr. Irving's impairment, along with the beer bottle.

I find the Arbitrator erred in law by failing to apply the "accident" definition, which requires that use or operation of an automobile directly cause an impairment. I conclude that throwing the bottle was not part of "use or operation" of the truck, but constituted an intervening event in the causal chain between use or operation of the truck and Mr. Irving's injuries. Alternatively, the dominant character of the incident was that of an assault, not an automobile accident. The Arbitrator's conclusion was inconsistent with FSCO case law and judicial authorities.

C. The Forensic Engineering Report

The arbitration hearing, held on March 26, 2003, proceeded on the basis of agreed facts, with one exception: the Arbitrator admitted the report of Mr. Peter G. Keith, a forensic engineer. CGU submits the Arbitrator should not have admitted the report because the parties had agreed to an electronic (telephone conference) hearing based on an agreed statement of facts. Though Mr. Keith's report was served on February 24, 2003, thirty days before the hearing, CGU submits it had no effective notice that Mr. Irving intended to rely on the report until it received Mr. Irving's brief a week before the hearing. The Insurer submits it was denied reasonable notice of the case it had to meet and an opportunity to test Mr. Keith's evidence on cross-examination, and therefore the Arbitrator erred in law by admitting the report and relying on it. The Arbitrator accepted Mr. Keith's evidence about the likely velocity of the truck, and on that basis concluded that the velocity of the truck significantly contributed to the impact of the bottle as it struck Mr. Irving's head.

To understand the significance of the report, it is necessary to compare its key findings with the agreed statement of facts. The parties agreed to the following description of the accident (excerpted from the agreed statement):

Joseph Irving was injured on September 22, 2001, at approximately 10:40 pm while he was riding his bicycle home from his part-time job at Zehrs.
Joseph was riding his bicycle northbound on Janette Avenue in Windsor, Ontario.
Moments before the accident, Irving had been forced to slow down almost to a complete stop when a southbound car turned left across his path into a driveway on the east side of the street.
Joseph was just starting to speed up again when he saw a westbound pickup truck turn left from Caroline Street southbound onto Janette Avenue.
He then saw the driver's arm come out of the open driver's window followed by an upward movement of the driver's arm. Something with fluid in it came out of the driver's hand, but Joseph had no idea what it was, since the headlights of the oncoming truck were in his eyes.
The aforementioned object was later found to be a full, or near full, bottle of beer (by the police).
Joseph was struck on the left eye and forehead with the beer bottle.
The said beer bottle shattered when it struck Joseph's face/head causing severe lacerations to the left front area of his head and further lacerations to his left leg.
The (unidentified) pickup truck left the scene without stopping.
Joseph was taken by ambulance to Metropolitan Hospital emergency, where 72 stitches were put into his face and a further 8 stitches were put into his left leg.
Dr. Curran, Ophthalmologist also performed a surgery on Joseph's left eye on September 23, 2001, involving placing 15 stitches into Joseph's left eye to repair a large corneal laceration.
John Doe, the driver of the oncoming vehicle (a 1999 Ford pickup truck), was later charged and convicted of aggravated assault and assault with a weapon by the police. He was a 17 year old minor who cannot be named under the Young Offenders Act. Shortly after the assault on Joseph, John Doe threw another beer bottle at a 44 year old Windsor man and hit his van. This man then called the police which lead to the arrest of John Doe.

In contrast, Mr. Keith's report indicates it was based on the "Charge Summary Follow-Up" prepared by the police, medical documentation about Mr. Joseph's injuries, photographs of the injuries, Mr. Irving's statement, and newspaper clippings about the incident. None of these documents was admitted into evidence before the Arbitrator.

Mr. Keith was asked to comment on "the effects of the bottle . . . being thrown from a moving vehicle on its impact speed and the severity of the injuries suffered by Mr. Irving."

In addition to the agreed facts, Mr. Keith "understood" that Mr. Irving was "about 10-15 yards/metres from the intersection with Caroline Street" when he saw the pickup truck. Neither the report nor the arbitration decision indicates the source of this information.

Mr. Keith's report includes a number of untested assumptions and inferences:

The typical turning speed of a car or pickup truck in an intersection is in the range of 20-25 km/h, so by the time the driver lobbed the beer bottle from the window, the speed of the truck had probably increased to about 30 km/h (25-35 km/h), or 8.3 metres/second (7.0-9.7 metres/second). Irving's description of the accident suggests the driver lobbed the bottle underhand from the driver's window. In view of the difficulty of lobbing a bottle in this manner, and the probability that the driver was right-handed, the speed of the throw itself was probably only about 1.5-2.5 metres/second. The speed of the bicycle is estimated to be about 10-15 km/h, based on Irving's evidence that he was just starting to speed up after having to brake almost to a halt to avoid a car turning left across his path. These assumptions put the closing speed of the truck and the bicycle at about 42 km/h (35-50 km/h), or 12 metres/second (10-14 metres/second). When the throw speed of the bottle is added to the closing speed, the actual impact speed of the bottle would have been about 50 km/h (40-59 km/h), or 14 metres/second (11-16 metres/second).

If the bottle had been lobbed underhand by a pedestrian on the sidewalk, the impact speed of the bottle would have been about 20 km/h (15-25 km/h), or 5.5 metres/second (4.3-6.7 metres/second). Accordingly the impact speed of the bottle thrown from a moving pickup truck was roughly two and a half times as high as it would have been if it had been thrown by a pedestrian.

If the bottle had been thrown by a pedestrian, it is most unlikely that it would have shattered when it struck Irving's face, and so this impact would most likely have produced only bruising and perhaps some minor lacerations to the left side of his face.

Mr. Keith drew the following conclusion, which was accepted by the Arbitrator:

Accordingly, the fact that the bottle was thrown from a vehicle moving at about 30 km/h, (25-35 km/h) was a major factor contributing to the severity of the impact by the bottle and the resulting injuries to Joseph Irving.

Mr. Irving submits that the report was served on CGU 30 days before the hearing, in accordance with the Dispute Resolution Practice Code and the order of the pre-hearing Arbitrator. He notes that CGU's counsel did not request an adjournment of the hearing in order to cross-examine Mr. Keith, despite the obvious implications of the report. Further, when asked by the Arbitrator, at the outset of the hearing, whether he wished an adjournment, CGU's counsel declined, arguing that the report should be excluded. Finally, Mr. Irving submits that Mr. Keith's report only bolstered the Arbitrator's common sense inferences from the agreed facts. The Arbitrator concluded the report was relevant. CGU disputed Mr. Keith's expertise, but the Arbitrator accepted him as "a highly experienced mechanical automobile engineer" with 20 years of experience in accident reconstruction.³

In its appeal submissions, CGU again challenged Mr. Keith's expertise, referring to a number of judicial decisions in which his opinions were not accepted. In response, Mr. Irving provided a new report, dated March 1, 2004, by engineers Scott P.W. Walters and Jeff Archbold, and a letter from Mr. Keith, dated February 18, 2004, commenting on the decisions referred to by CGU.

On receiving Mr. Irving's submissions, CGU's counsel requested a telephone conference to consider whether the new evidence put forward by Mr. Irving should be admitted in the appeal. After hearing from the parties on March 23, 2004, I struck out the two new documents and the corresponding paragraphs from the parties' appeal submissions. The main reasons set out in my letter decision were as follows:

The criteria for admitting fresh evidence on appeal are well-established in the courts and in FSCO proceedings (i) whether the party seeking to admit the fresh evidence could have obtained the evidence by due diligence before the hearing; (ii) whether the evidence is reasonably capable of belief; (iii) whether the evidence is relevant in that it bears upon a potentially decisive issue; and (iv) whether the evidence, considered together with the rest of the evidence admitted at the hearing, could reasonably be expected to have affected the result.

Mr. Blouin submits that the two new expert reports are intended to bolster Mr. Irving's case, and should not be admitted, as there is no evidence they could not have been obtained with due diligence before the hearing. Mr. Purewal submits that the new reports are not fresh evidence, but are intended to respond to CGU's attack on Mr. Keith's expertise.

My review of the appeal record supports Mr. Purewal's submission that CGU did not challenge Mr. Keith's expertise before making its written appeal submissions, and that the new material in Mr. Irving's submissions was prepared in response.

I find that the Walters/Archbold report, dated March 1, 2004, was adduced to bolster Mr. Keith's conclusions about the cause of Mr. Irving's injuries. As there is no reason to believe it could not have been obtained before the arbitration hearing, it falls squarely within the ambit of "fresh evidence," and is not admissible in the appeal.

Mr. Keith's letter of February 18, 2004 does not address the engineering issues. Instead, he comments on the court decisions mentioned in CGU's submissions. In my view, the arbitration hearing was the appropriate place for this exchange as to Mr. Keith's expertise and the treatment of his testimony in other proceedings. The propriety of the arbitration hearing process is one of the issues in this appeal. That is a separate issue from the question of Mr. Keith's expertise. On the latter point, I am not persuaded CGU has identified a question of law.

This left the question whether the Arbitrator erred in admitting Mr. Keith's (original) report.

Parties are encouraged to proceed by way of agreed facts where possible, and may agree that an electronic hearing is the most efficient and least expensive way to proceed. However, while the Commission does not have formal rules governing summary proceedings akin to Rules 20 and 21 of the Rules of Civil Procedure, the parties should carefully consider the implications of proceeding in this way. For example, Rule 37 of the Dispute Resolution Practice Code, which authorizes electronic hearings,⁴ states that the Arbitrator will not hold an electronic hearing if satisfied that doing so would "significantly prejudice" a party (Rule 37.3).

In most cases, the manner of hearing is decided at the pre-hearing. Once the parties have agreed to proceed by way of agreed facts, neither should put forward additional evidence except with the prior consent of opposing counsel or an order from the Arbitrator. At the very least, Mr. Irving's counsel should have served the report on CGU's counsel, well in advance of the hearing, along with a covering letter clearly stating the intended use of the report and requesting consent to its introduction, or inviting a discussion to reconsider the format of the hearing. If he had done so, CGU might well have requested that an oral hearing be held because Mr. Keith's report suggests many areas for cross-examination. As it happened, CGU's counsel was placed in a difficult position on the day of the hearing.

I do not accept the submission of Mr. Irving's counsel that Mr. Keith's report merely bolstered the Arbitrator's common-sense inferences from the agreed facts. The only reference to speed in the agreed statement of facts pertains to Mr. Irving. The parties agreed that Mr. Irving had slowed down "almost to a complete stop" "moments" before the incident. He "was just starting to speed up again" when he saw the westbound truck turn left (southbound). He "then saw the driver's arm come out of the open driver's window." Nothing in the agreed facts addressed the speed of the truck or the bottle, or the relative positions of the truck and the bicycle on the street, making it difficult to draw inferences about the physics of the incident.

Mr. Keith's conclusion was based on a number of assumptions about these critical factors. The Arbitrator gave little weight to his assumption that Mr. Doe was right-handed and threw the bottle with his left hand at a speed of 1.5-2.5 metres per second, or his assumption about the likely speed of an underhanded throw by an assailant standing on the sidewalk, because she found there was no evidence to support either assumption. However, she accepted as "reasonable" Mr. Keith's assumption that the truck was traveling at 25-30 kilometres per hour as it turned the corner, and his conclusion that its velocity contributed to Mr. Irving's injuries. She based her conclusion on ordinary driving experience and Mr. Keith's expertise. She did not comment on the relative positions of the truck and the bicycle. This was an important factor that was not addressed in the report, apart from Mr. Keith's comment that Mr. Irving was 10-15 yards/metres from the intersection when he saw the truck.

This was not a case for taking judicial notice or drawing "common-sense inferences." On the Arbitrator's "significant contribution" analysis, Mr. Keith's opinions addressed the crucial factual issues. If not for Mr. Keith's report, the Arbitrator would have had no basis for finding that the speed of the truck added to the impact of the bottle.

I am not prepared to criticize either counsel in this matter. Mr. Purewal explained that he took carriage of the case after the pre-hearing, soon after joining the firm. Since the Code contains no specific rule about evidence in summary proceedings, and the pre-hearing letter included the usual rules about exchange of documents before a hearing, he assumed it would be sufficient to serve the report 30 days before the hearing, and his brief a week before. For his part, Mr. Blouin failed to respond because he assumed the electronic hearing would proceed as agreed, based on the agreed statement of facts. These were reasonable assumptions.

Arbitrators enjoy considerable latitude in controlling the hearing process to ensure a fair and cost-effective hearing. On appeal, a considerable amount of deference is appropriate, because procedural and evidentiary rulings must be made quickly in circumstances that may offer no clear right answer, and because the Arbitrator is generally in a better position than an appellate adjudicator to assess the dynamics of the situation and the value of any particular piece of evidence in the context of the proceeding.

In this case, I am not satisfied the Arbitrator erred in law in finding that the report was relevant and had been served in strict accordance with the Code. As fairness required, she asked CGU's counsel whether he would request an adjournment because of the late notice of the intended use of the report. He declined, probably because Mr. Keith was located in Alberta, the case did not involve a lot of money, and adjourning would likely mean a substantial delay in disposing of the matter. He may also have felt he could challenge the report in argument. That was not an unreasonable calculation.

The Arbitrator may not have anticipated that her decision would turn on Mr. Keith's report, but that is what happened. In hindsight, she might have decided to re-open the hearing once she realized the importance of the report. However, by giving CGU's counsel an opportunity to comment she satisfied the requirements of procedural fairness.

In any event, I conclude that the incident was not an "accident" as defined, even if the velocity of the truck added to the velocity of the bottle: this was an assault.

B. The Definition of "Accident"

(i) The Law

Subsection 2(1) of the SABS-1996 defines "accident" as "an incident in which the use or operation of an automobile directly causes an impairment . . ." This definition governs incidents occurring after November 1, 1996. There is no dispute it is narrower than the definitions in the SABS-1990 and SABS-1994, which included incidents in which use or operation of an automobile caused an injury or impairment "directly or indirectly."

The scope of the amended definition has been considered in a number of FSCO and court decisions.⁵ I need not review them in detail because the general principles, which were reviewed by the Arbitrator, are now relatively well-settled.⁶

Briefly: the starting point for the "accident" analysis is the decision of the Supreme Court of Canada in Amos v. ICBC, (1995), 1995 CanLII 66 (SCC), 127 D.L.R. (4^th) 618. The accident benefit legislation at issue in that case provided benefits for death or injury "caused by an accident that arises out of the ownership, use or operation of a vehicle." After reviewing the jurisprudence, the Court summarized the "two-part test" for coverage as follows:

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?

Though the two-part test provides a useful analytical framework, there is ultimately one test for coverage: use or operation of an automobile must directly cause an impairment. It is not sufficient that use or operation of an automobile was involved in some way in an incident that directly caused an impairment.

Applied in the SABS context, the purpose test focuses on the "use or operation" part of the "accident" definition. "Use or operation" has been given a broad interpretation in judicial and FSCO decisions, extending beyond driving to include other "ordinary and well-known activities to which automobiles are put"- for example, getting into and out of an automobile, loading and unloading cargo, refueling, changing a tire, performing repairs and maintenance, or extricating a vehicle from ice and snow.

The "chain of causation" test is the focus of most "accident" decisions, in part because of the ease of passing the purpose test, and in part because of theoretical difficulties and policy considerations related to the legal principles of causation. Prior to the SABS-1996 amendment of the "accident" definition, the Ontario Court of Appeal held that the liberal Amos interpretation of the "chain of causation" test applied to the "directly or indirectly" definition of "accident" in the SABS-1990 and SABS-1994.⁷ The same court has held it no longer applies to the more stringent language of the SABS-1996; by removing the words "or indirectly," the legislature "clearly shortened the link" required between use or operation of an automobile and the resulting impairment.⁸ However, the legislature's decision not to amend the "use or operation" part of the "accident" definition, despite its clear intent to narrow the causation requirement, suggests it did not intend to alter the broad reading of "use or operation" adopted in judicial and FSCO decisions.⁹

Defining "accident" is, to some degree, a line-drawing exercise,¹⁰ and for that reason, the " accident" cases are relatively fact-driven. There are several broad categories, but the assault cases are the most settled.¹¹ At this point, it is fair to say that an assault committed on or by a driver or occupant of an automobile is not an "accident," as defined in the SABS-1996, unless the automobile was the instrument of injury (for example, the driver intentionally ran down the claimant), or the assault caused an automobile to lose control and the claimant was injured in the subsequent collision. It is now clear that an assault is not an "accident" under the SABS-1996 just because it occurred in or near an automobile, it was provoked by road rage, it happened in the course of an attempt to steal an automobile or its contents or rob the driver, or an automobile provided a means of escape for the assailant.¹²

Therefore, the dispute in this case comes down to whether the truck provided merely the platform for or location of the assault, and a means of escape for Mr. Doe, as CGU argues, or instrumentally caused Mr. Irving's impairment through transmission of force, as he claims.

In my view, the Arbitrator erred in relying on a "significant contribution" test to decide whether use or operation of an automobile directly caused Mr. Irving's impairment. The significant (or material) contribution test applies where there are multiple causes of impairment, only some of which are accident-related. It has no application in deciding the initial coverage question – whether use or operation of an automobile directly caused an impairment.

However, Mr. Irving finds support for his position in the "efficient cause" definition of "direct cause" that has been accepted by FSCO adjudicators and the courts. It was first adopted by the Arbitrator in Petrosoniak and Security National Insurance Company:

"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"¹³

This definition implies that a direct cause need not be the only cause or the immediate cause (the causal event immediately preceding the injuring incident) but may be separated from it by "an unbroken chain of events involving the use or operation of an automobile."¹⁴ To use a common causation metaphor: use or operation of an automobile must be what "started the ball rolling," but other factors may influence where and when it stops. Thus, the Arbitrator in Petrosoniak found that the cyclist's injuries resulted from use or operation of an automobile – the truck that had released the oily fluid on which the cyclist lost control – without any other causal agency.

The "efficient cause" definition has been approved in subsequent FSCO decisions, and, most recently, in Chisholm v. Liberty Mutual, where Laskin J.A., writing for the court, stated:

When one thinks of direct causation one thinks of something knocking over the first in a row of blocks, after which the rest falls down without the assistance of any other act.¹⁵

Applying the "efficient cause" definition to the facts, Justice Laskin approved the conclusion of the motions judge that:

"there was not an unbroken chain of events." Instead "the shooting constituted an intervening act, independent of the vehicle's use or operation which clearly broke the chain of causation", thus disentitling Chisholm to accident benefits.¹⁶

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. That, however, is not the case here. The only direct cause, the only effective cause of Chisholm's injuries, was the gun shots.¹⁷

Justice Laskin also suggested an alternative rationale for the court's conclusion: "the dominant feature of Chisholm's claim is the gun shots. The use or operation of his car is at best ancillary."¹⁸

The Ontario Court of Appeal recently reaffirmed the Chisholm analysis in Greenhalgh. Ms. Greenhalgh got lost while driving in the country with a friend. Her car got stuck on a rock on a private road, and eventually stalled. After failing in her attempts to get the car moving and to call for help (her cell phone battery died), she and her friend left the vehicle to look for help. They got lost, and walked through the night for nine or ten hours. Along the way, they fell into an ice-covered river, and Ms. Greenhalgh lost her boots. She suffered severe frostbite, requiring the amputation of her fingers and her legs below the knees. Her insurer denied her claim for accident benefits. On the motion of Ms. Greenhalgh's insurer, Justice Kitely concluded this was an "accident," essentially because it resulted from automobile-related risks, and, alternatively, there was "an unbroken chain" of events between Ms. Greenhalgh's use of her vehicle and her frostbite injuries.

The decision was overturned on appeal. Justice Labrosse, writing also for Charron and Goudge JJ.A., agreed that the incident satisfied the purpose test, but held it did not meet the causation test. The Court summarized its approach at paragraph 12:

.... What will amount to direct causation will depend much on the circumstances. However, some of the following consideration may provide useful guidance in ascertaining whether or not it has been established in a given case:

(a) the "but for" test can act as a useful screen;

(b) in some cases, the presence of intervening causes may serve to break the link of causation where the intervening events cannot be said to be part of the ordinary course of use or operation of the automobile; and

(c) in other cases it may be useful to ask if the use or operation of the automobile was the dominant feature of the incident; if not, it may be that the link between the use or operation and the impairment is too remote to be called "direct".

I need say little about the "but for" test because it is not a sufficient condition for coverage, even under the broader "directly or indirectly" definition of "accident." In Greenhalgh v. ING, the Court of Appeal reaffirmed that it could only act as a screen or exclusionary test.

Of more interest is the Court's reliance on "intervening cause" analysis. The critical factors, for the Court, were that use or operation of the car had ended by the time Ms. Greenhalgh suffered her injuries, and no automobile was the instrument of injury. The Court cited Alchimowicz v. Continental Insurance Co. of Canada, 1996 CanLII 1313 (ON CA), [1996] O.J. No. 2989 (Ont. C.A.), and Hanlon and Guarantee Company of North America, (OIC P95-00003, March 18, 1997), both of which pre-dated the amendment narrowing the "accident" definition, and Mahadan and Co-operators General Insurance Company, a SABS-1996 decision:¹⁹

Here, as in Hanlon, Alchimowicz and Mahadan, the use of the car had ended without injury being suffered, the insured had physically left the car; no automobile contributed physically to the insured's injuries; and there was temporal distance between the end of the use of the car and the injuries. As in Hanlon, the problem with the car could be said to have led to the injuries, but one could not say that it caused the injuries. As in Mahadan, the factor that physically caused the injuries, in the present case the weather, was unrelated to the use or operation of the automobile.²⁰

Labrosse J.A. then listed nine intervening "acts" that occurred between when the car got stuck and when Ms. Greenhalgh suffered her injuries (her cell phone died, the weather was very cold, it was dark, she became disoriented, she walked a long way, she fell into a river, she lost her boots, she kept walking without boots, she was found miles away from her car). None of these was considered "a normal incident of the risk created by the use or operation of the car."²¹

Finally, the Court considered the "dominant feature" test, adopted by Justice Laskin in Chisholm, from the decision of the Supreme Court of Canada in Heredi v. Fensom, 2002 SCC 50. The issue in that case was whether Ms. Heredi's damages were "occasioned by a motor vehicle." If so, the one-year time limit under the Saskatchewan Highway Traffic Act would bar her lawsuit. Mr. Fensom, the driver of a paratransit bus, helped Ms. Heredi put her crutches under her right shoulder, and then, as found, drove the bus in such a way as to cause the crutches to jar and injure the shoulder. Rejecting an approach dependent on the contract/tort distinction, the Supreme Court of Canada adopted "a substantive approach" that asks whether the motor vehicle was "the dominant feature" or "true nature" of the claim, or merely ancillary to the essence of the action. In that case, the Court found that operation of the bus was the direct cause of the injury and therefore the action was barred.

The provision at issue in Heredi v. Fensom was broader than the SABS-1996 "accident" definition, but Justice Laskin held that even applying the dominant feature test, Mr. Chisholm’s injuries were not caused by an "accident," since the dominant feature of the incident was the shooting, not use or operation of the automobile. In Greenhalgh v. ING, Justice Labrosse held that the facts were:

closer to Chisholm than to Heredi. It seems that the "dominant feature of the insured's injuries could best be characterized as exposure to the elements, and that the use of the motor vehicle was ancillary to that injury. This too supports the conclusion that the use was not a direct cause of the impairment.²²

The Court concluded:

The legislation at issue is automobile legislation, and is specific in its applicability. The injuries suffered by the insured are tragic, but it cannot be said that the injuries were suffered as a "direct" result of an "accident", within the meaning of the legislation.²³

CGU submits that Greenhalgh further supports its position that Mr. Irving was not injured in an "accident" as defined. In the Insurer's submission, it was an assault (throwing the beer bottle), not use or operation of an automobile, that set in motion the chain of events that led to Mr. Irving's injuries. Alternatively, the injuries were sustained from a new and independent source, namely, the beer bottle.

Mr. Irving submits that Greenhalgh is distinguishable on its facts because of the lengthy series of intervening acts cited by the Court of Appeal. In contrast, Mr. Doe's throwing the beer bottle cannot be separated from his use of the truck, which, because it was moving and added to the impact of the bottle when it hit him, became "a weapon and played a central and ongoing role" in the assault. He relies on the Arbitrator's finding that the facts in this case are unique, and "differ from all other 'assault-accident' cases decided after November 1, 1996."²⁴

(ii) Application to this Appeal

(a) The Purpose Test

The Arbitrator spent little time on the purpose test, stating only:

. . . at the time Mr. Doe threw the bottle, he was seated in his truck engaged in one of the most ordinary use[s] or operation[s] of a motor vehicle, namely, driving his truck down a street.²⁵

This statement illustrates the importance of properly framing the "purpose" question. It is not enough that the assailant is driving an automobile at the time of the injury. An additional link to the injury is required. The proper question, in this case, was much more specific: "is throwing a beer bottle at a cyclist an 'ordinary and well-known' use of an automobile?" The Arbitrator did not consider that question.

The purpose test is important because it focuses on the ultimate coverage question: was this the sort of loss the legislature intended the SABS to cover? Justice Labrosse gave renewed attention to the purpose test in Greenhalgh v. ING, stating that it remains relevant to the SABS-1996 because:

(a) it is consistent with and gives effect to the intent and expectations of the parties; and

(b) it circumscribes the proper scope of application of the legislation.²⁶

Later, he elaborated:

neither insurance companies nor the insured would expect coverage to extend to any and every use to which a car may be put, no matter how unforeseen or unprecedented. (For example, would a car insurance policy cover an accident which arose where an insured attempted to lift his car solely to show his strength, thereby hurting his back?) If that is the case, then the Amos purpose test may act as a sort of filter; before determining whether the accident was causally connected to the use of the car, it has to be determined whether the car was being used in a manner that would be covered by the insurance at all.²⁷

The answer to the purpose test, if properly drawn, seems obvious: automobile insurance is not intended to cover injuries caused by intentionally throwing beer bottles (or other projectiles) from vehicles, moving or otherwise.

However, I need not deal at length with the purpose test because I find that the incident does not satisfy the causation test, either on an intervening cause or a dominant feature analysis.

(b) Intervening Cause

In Seale, I reaffirmed the principle "that 'direct cause' need not be the only cause, that physical contact with an automobile is not required, and that a subsequent contributing cause may not break the chain of causation if it is 'part of the ordinary course of things'."²⁸ The latter principle comes from the decision of the Court of Appeal in Chisholm, where Laskin J.A. discussed the " efficient cause" approach to causation:

. . . even accepting that the use of Chisholm's car was a cause of his impairment, a later intervening act occurred. He was shot. 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." See J.G. Fleming, The Law of Torts [citation omitted]. Gun shots from an unknown assailant can hardly be considered an intervening act in the "ordinary course of things". The gun shots were the direct cause of his impairment, not his use of his car.²⁹

Applying this principle in Seale, I concluded that there was a "perfect chain" between Mrs. Seale's use of her automobile and her injury because every link formed "part of the ordinary course of things." Labrosse J.A. also adopted Justice Laskin's analysis in Greenhalgh, concluding that none of the nine intervening acts between when Ms. Greenhalgh's car got stuck and when she suffered her injuries "can be considered 'a normal incident of the risk created by the use or operation of the car' or, in other words, the use or operation of the car cannot be said to be a 'direct cause' of the injuries."³⁰

If anything, Ms. Greenhalgh arguably presented a stronger case for coverage than Mr. Irving; the chain of events that led to her injuries started when she got lost in the country and her car got stuck in the snow, both of which could be considered "part of the ordinary course of things" for winter driving. In contrast, throwing the bottle at Mr. Irving had nothing to do with Mr. Doe’s use or operation of his automobile or the risks associated with driving. Though Mr. Doe was driving his truck at the time, that was not what led to Mr. Irving’s injury; it resulted from an assault, an entirely independent intervening event. Use or operation of an automobile was neither a necessary ("but for") nor a sufficient cause of the injury, which could just as well have resulted from a pedestrian throwing a bottle. That an automobile provided a platform for the assault and a means of escape did not turn it into a weapon.

The dominant feature analysis dictates the same result.

(c) Dominant Feature

The concept of intervening cause reflects the need to define the extent of liability for the consequences of a negligent act. It makes an awkward fit in a "no-fault" accident benefit scheme based on a statutory contract.³¹ In contrast, the strength of the dominant feature analysis is that it focuses directly on the scope of coverage under the claimant's policy, and asks a common sense question about the reasonable expectations of insurers and insured persons. In Seale, I identified four factors as important in defining the nature of the incident – time, proximity, activity and risk.³² Director Draper took a similar approach in Souchuk, stating, at p. 5:

While Chisholm provides important guidance on the meaning of "direct," each case will turn on its particular facts. I agree with Director's Delegate Makepeace that the decisions, including Chisholm, reflect a common sense focus on the nature of the risk covered by automobile insurance, and that various factors are relevant in evaluating the connection between the use or operation of the automobile and the impairment — time, proximity, activity and risk. [footnote omitted]

I am aware of no SABS-1996 decisions that have considered bottles or other objects thrown from an automobile. Since bullets are also projectiles, the gunshot cases provide some guidance. I am aware of no case in which a shooting by or of a driver or occupant of an automobile has been found to be an "accident" under the SABS-1996 definition. However, the Arbitrator’s analysis suggests she drew a distinction between a drive-by shooting (Chisholm) and other projectile injuries. Perhaps the difference is one of relative speed. It is easy to imagine that the speed of an automobile might add to the impact of a thrown beer bottle, but the same idea seems ludicrous when applied to a gunshot. Similarly, a fist-fight that starts with road rage or a cab fare dispute seems more closely related to use or operation of an automobile than a random shooting.

Even if there is some validity to that distinction, I am not persuaded use or operation of an automobile was the dominant feature or true nature of Mr. Irving's injury. Mr. Irving was not an occupant or driver of an automobile. Mr. Doe was, but his action in throwing the bottle was well outside the scope of "ordinary and well-known activities to which automobiles are put," even if " use or operation" is broadly defined. Mr. Irving was struck by a bottle, not an automobile or an object associated with use or operation of an automobile. Nor was use or operation of an automobile the first link in a chain of events that led to injury. In my view, this case is closer to Chisholm than the non-assault cases in which non-occupants have established coverage. Its dominant feature was that of an assault. This is an unfortunate result for Mr. Irving, the innocent victim, but it is dictated by the coverage limitations of the SABS.

III EXPENSES

Pursuant to Rule 79 of the Dispute Resolution Practice Code, I may be contacted within 30 days of this decision if the parties are unable to agree on appeal expenses.

November 29, 2004

Nancy Makepeace

Director's Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
Arbitration decision, p. 17.
Ibid, p. 16.
In accordance with sections 5.2 and 25.1 of the Statutory Powers Procedure Act.
At the time of the arbitration hearing in March 2003, the leading decisions were Kumar and Coachman Insurance Company, (FSCO P01-00026, August 9, 2002), and Chisholm v. Liberty Mutual Group, 2002 CanLII 45020 (ON CA), [2002] O.J. No. 3135 (Ont.C.A.). Further elucidation of the principles has come from court and Commission decisions released since then. The Divisional Court dismissed Mr. Kumar's application for judicial review of my appeal decision on June 3, 2004. After considering the trial and appellate decisions in Chisholm and Liberty Mutual, the panel stated, "We are all of the view that the decision of the Director's Delegate is not patently unreasonable and indeed reflects a correct interpretation of the law." At the request of the parties, the filing of written submissions in this appeal was stayed pending release of the appeal decisions in Liu and Lombard General Insurance Company of Canada, (FSCO P02-00030), Swaby and Allstate Insurance Company of Canada, (FSCO P03-00004), Saad and Federation Insurance Company of Canada, (FSCO P03-00017), and Souchuk and State Farm Mutual Automobile Insurance Company, (FSCO P02-00039). Director Draper released these decisions concurrently on January 8, 2004. At the oral appeal hearing on May 7, 2004, I stated that I would give the parties an opportunity, post-hearing, to file additional written submissions on Greenhalgh v. ING Halifax Insurance Co. , [2003] O.J. No. 2740, which was then pending before the Court of Appeal. On August 27, 2004, the appeal was allowed: 2004 CanLII 21045 (ON CA), [2004] O.J. No. 3485. The parties' supplementary submissions were completed on September 20, 2004.
See Kumar for a detailed analysis of the cases to that point, as well as the decisions cited in note 6. The Arbitrator summarized the decisions at pp. 9-12.
Vijeyekumar v. State Farm Mutual Automobile Insurance Company ,(1999), 1999 CanLII 1640 (ON CA), 44 O.R. (3d) 545 (Ont.C.A.), affg 1998 CanLII 14669 (ON CTGD), [1998] O.J. No. 426 (Ont.Gen.Div.), leave to appeal to the Supreme Court of Canada denied [1999] S.C.C.A. No. 438; reaffirmed in Saharkhiz v. Underwriters, Members of Lloyd's, 2000 CanLII 5719 (ON CA), [2000] O.J. No. 1760 (C.A), confg 1999 CanLII 15099 (ON SC), [1999] O.J. No. 3816 (Ont.S.C.J.).
Chisholm v. Liberty Mutual, para. 20; Greenhalgh v. ING, para. 32.
For example, see Chisholm v. Liberty Mutual, para. 12 and 23-25.
Kumar, at p. 30; Saad, at p. 4.
The non-assault cases, including the "interrupted journey" and other non-occupant cases, have proven more difficult. Typically, in these cases, use or operation of an automobile precipitated a series of events leading to an injury, without the intervention of a criminal or negligent act, and the injury did not occur through physical contact with an automobile. The incident was found not to be an "accident" under the SABS-1996 in the following cases: the insured person got his foot caught in a groove in the pavement of his underground parking lot after taking his groceries out of the trunk: Mahadan and Co-operators General Insurance Company, (FSCO A00-000489, March 15, 2001); the insured person suffered a fatal heart attack while driving, causing his vehicle to hit a tree: Waters and Royal & SunAlliance Insurance Company of Canada, (FSCO A00-001143, October 18, 2001); the insured person slipped while pulling a trailer towards a trailer hitch on a van, and the trailer, which was not an "automobile," struck and injured his hand: Prajza and AXA Insurance (Canada), (FSCO A02-000286, November 14, 2002). See also, more recently: Wootton and TTC Insurance Company Limited, (FSCO P04-00004, November 2, 2004). Director Draper referred the matter for re-hearing because the Arbitrator, in finding that the insured person was injured in an "accident," improperly put the onus on the insurer and failed to answer the critical factual question. However, all of the following were found to fall within the SABS-1996 definition of "accident": the insured person lost control of his bicycle when he rode over an oily fluid that had been released by a truck: Petrosoniak and Security National Insurance Company, (FSCO A98-000198, November 2, 1998); the insured person fell as she ran after her car, which had slid down the ramp to her parking garage after she left the car to use the key box: Shantz and Dominion of Canada General Insurance Company, (FSCO A01-001147, May 13, 2002); the insured person slipped on the icy road while running after her van, which had lost control: Seale and Belair Insurance Company Inc., (FSCO P02-00005, January 28, 2003); the insured person suffered burns when gasoline spilled from the gas tank of his taxi as it was being repaired at a garage: Umer and Non-Marine Underwriters, Mbrs. of Lloyd s, (FSCO A02-000721, April 3, 2003); a car crashed into the insured person’s house, and he fell while rushing upstairs to investigate: Grewal and Dominion of Canada General Insurance Company, (FSCO A03-000750, December 2, 2003); the insured person stopped on the road to help her friends in the car ahead, which had just been struck by an out of control vehicle: Souchuk and State Farm Mutual Automobile Insurance Company, (FSCO P02-00039, January 8, 2004); the insured person slipped while returning to his car after filling his tires: Saad and Federation Insurance Company of Canada, (FSCO P03-00017, January 8, 2004); the insured person attempted suicide by setting himself on fire about three weeks after the automobile accident: Sohi and ING Insurance Company, (FSCO A03-001125, July 15, 2004), under appeal; the insured person suffered a panic attack, jumped out of his moving automobile and leapt over a guardrail to the road below: Gill and Certas Direct Insurance Company, (FSCO A03-000634, August 26, 2004), under appeal. See also Correia and TTC Insurance Company Limited, (FSCO P00-00061, July 16, 2001): the insured person was injured in treatment she required as a result of the accident. It is too early to know whether Greenhalgh v. ING will alter the analysis or outcome in such cases.
Apart from the arbitration decision in Liu and Lombard General Insurance Company of Canada, (FSCO A01-001429, October 4, 2002), which was overturned on appeal, (FSCO P02-00030, January 8, 2004), FSCO decisions have been consistent. The insured person in that case, a passenger on a casino charter bus, was pistol-whipped by a hijacker in the course of a robbery. The Arbitrator did not have the advantage of the appeal decision in Liu, and relied on the arbitration decision in her reasons. The assault decisions were reviewed in Kumar and Coachman Insurance Company (FSCO P01-00026, August 9, 2002), application for judicial review dismissed. In that case, the insured person, a cab driver, was struck on the head by an assailant. See also: Elensky and Royal & SunAlliance Insurance Company of Canada, (FSCO P01-00030, August 9, 2002): Mr. Elensky, a trucker, was ambushed and shot while returning to the truck after stopping to get directions; Quraishi and Belair Insurance Company Inc., (FSCO A02-000575, November 5, 2002): the insured person, a cab driver, was stabbed and seriously injured in a robbery attempt; and Swaby and Allstate Insurance Company of Canada, (FSCO P03-00004, January 8, 2004): the insured person was shot in the leg and had his throat cut by unknown assailants who stole his car. The principles governing assault cases should now be regarded as settled, in accordance with Chisholm v. Liberty Mutual Group. That decision stands in contrast to the decision of the Court of Appeal in a "directly or indirectly" case, Saharkhiz v. Underwriters, Members of Lloyd's, 2000 CanLII 5719 (ON CA), [2000] O.J. No. 1760, note 8, above, holding that Mr. Saharkhiz' injuries "were caused, at least indirectly, by the use and operation of the taxi-cab."
Petrosoniak, at p. 7. The definition comes from Black's Law Dictionary.
Ibid.
Chisholm, at paragraph 27.
Ibid., paragraph 30.
Ibid., paragraph 31.
Ibid., paragraph 34.
Some 25 minutes after being dropped off at a beach, an intoxicated Mr. Alchimowicz dove off a dock and suffered serious injuries. The Court of Appeal agreed that "'indirect' is broader than 'direct'," but found it was not broad enough to cover these facts: "it must be remembered that this is automobile legislation." Hanlon was a road rage case. After an accident, the driver hit Mr. Hanlon over the head with his cellphone; neither driver was in his vehicle at the time. Mr. Mahadan had just finished removing groceries from the trunk of his car when he twisted his foot in a groove in the parking garage pavement, and fell.
Paragraph 44.
Paragraph 46.
Paragraph 49.
Paragraph 52.
Arbitration decision, p. 13.
Arbitration decision, p. 16.
Paragraph 11.
Paragraph 24.
At p. 27.
At para. 29.
At paragraph 46.
See, for example, the discussion in the Correia appeal decision, note 11 above.
At p. 27.

CGU Insurance Company of Canada v. Joseph Irving, 2004 ONFSCDRS 176

Case Summary

C. The Forensic Engineering Report

B. The Definition of "Accident"

(i) The Law

(ii) Application to this Appeal

(a) The Purpose Test

(b) Intervening Cause

(c) Dominant Feature

III EXPENSES

Footnotes