Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 2

Appeal P02-00030

OFFICE OF THE DIRECTOR OF ARBITRATIONS

LOMBARD GENERAL INSURANCE COMPANY OF CANADA

Appellant

and

BING QIU LIU

Respondent

Before:

David R. Draper

Representatives:

Harry P. Brown for Lombard

G. Jonathan Franko for Mr. Liu

Hearing Date:

June 27, 2003, with additional written submissions filed in October and November 2003.

APPEAL ORDER

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

The appeal is allowed. Paragraph 1 of the arbitration order, dated October 4, 2002, is rescinded and replaced with the following:
Mr. Liu was not involved in an accident, as defined in s. 2(1) of the Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
If the parties cannot agree on appeal expenses, they may request a determination of this issue by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.

January 8, 2004

David R. Draper Director of Arbitrations

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal involves the definition of "accident" in the 1996 version of the SABS — "an incident in which the use or operation of an automobile directly causes an impairment . . . "¹ It is being released with three other decisions that consider this definition in different fact situations.² In this case, Bing Qiu Liu was injured when he was assaulted in a robbery on a commercial bus scheduled to travel to Casino Rama. The Arbitrator concluded this was an accident. The Insurer, Lombard General Insurance Company of Canada ("Lombard"), appeals. For reasons set out below, the appeal is allowed.

II. BACKGROUND

The arbitration hearing proceeded on a limited evidentiary record: an "Executive Summary," setting out the facts; a signed statement from Mr. Liu, dated March 21, 2001; a signed statement from Bill Bradley, the bus driver, dated March 1, 2001; Mr. Liu's application for benefits, dated February 20, 2001; and a disability certificate, dated February 23, 2001. The Arbitrator synthesized this evidence, stating that the parties agreed on the following facts:

Mr. Liu is 29 years old, married, and employed as a chef. On January 17, 2001, he boarded a bus headed for Casino Rama in Orillia. The bus was operated by Tai Pan Bus Tours, which provides a specialty service for clients requiring transportation to and from casinos.
The bus driver was Mr. William Bradley, who regularly drove the round trip from Toronto to Casino Rama. The bus was owned by AZ Bus Tours which had an ongoing contract with Tai Pan Bus Tours to transport clients to and from Casino Rama.
Before heading to Casino Rama, the bus stopped at various pre-established pick-up points in Toronto, where passengers boarded. All the pick-ups are located at shopping malls.
Mr. Liu boarded the bus at Pacific Mall, a large shopping centre in Markham, at 10:00 p.m. Pacific Mall was the final pick-up point for passengers.
By the time Mr. Liu boarded the bus there were approximately 22 passengers. He was the last passenger to board. He took a seat and promptly fell asleep.
At a few minutes after 10:00 p.m. Mr. Bradley boarded the bus and sat down in the driver's seat, ready to depart for Casino Rama. The interior lights were on and the bus was running at this point.
Before Mr. Bradley could close the doors, three men followed him onto the bus. They were wearing balaclavas and each had a gun drawn. One of the assailants held a gun to the driver's throat and ordered him to close the doors, turn off the interior lights, and drive out of the parking lot at slow speed. For the next ten minutes he directed the driver through the main roads into a residential area.
A bystander in the mall observed the assailants boarding and sealing the bus, and ran to the Tai Pan office to alert them. An employee of Tai Pan then called the driver on his emergency phone, but the assailants ordered him not to answer.
While the first assailant was navigating the bus the other two circulated among the passengers and robbed them of their money, jewellery and credit cards. As Mr. Liu was asleep one of the assailants smashed a gun into his head and chest to awaken him, whereupon he immediately surrendered his valuables, which included $1,500 in cash.
The navigator then ordered the bus driver to stop the bus behind a parked vehicle on a side street within the residential area. He pistol whipped the driver into unconsciousness and the three assailants then left the bus with a bag containing the stolen goods. One of the passengers then revived the driver, who drove back onto a main street and stopped at a grocery store, whereupon the police were notified.
Mr. Liu was taken to a hospital with head and chest injuries. He suffered headaches and dizzy spells and was absent from work for two weeks, and then returned part-time on light duties.
None of the three assailants has been apprehended.

The Arbitrator acknowledged the stricter definition of "accident" in the SABS-1996, but found this case distinguishable from other cases involving assaults. In her view, the bus was the unifying factor in the sequence of events from the initial entry by the assailants to their assault on Mr. Liu and ultimate escape. This is described on page 9 of the decision, as follows:

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

The Arbitrator found that the gun wielded by the assailant was the most immediate cause of Mr. Liu's injuries, but held it was not the sole cause. In her view, the gun and the bus were both critical weapons in the crime that resulted in Mr. Liu's injuries. Nor was the Arbitrator convinced that the pistol-whipping was a later intervening act that broke the chain of causation:

. . . not only did the assault occur while the vehicle was being operated, but the forced extraction of valuables from the passengers was essential to the success of the entire incident. It is significant that the assailants were in complete control of the vehicle at the same time that Mr. Liu was injured; under those circumstances, the attack on Mr. Liu was not a later intervening act but an integral part of a well-calculated, premeditated plan to both overtake the bus and rob its passengers. Far from being an intervening act, the violent behaviour by the assailants was an integral part of their use of the vehicle. (p. 10)

Lombard appeals, claiming the Arbitrator erred in concluding that Mr. Liu was involved in an accident, as defined in the SABS-1996.

III. ANALYSIS

Lombard raises a factual issue. In its submission, the Arbitrator misconceived or misunderstood the facts in describing the bus as a "moving prison," and in finding that "while the bus was moving and under their control, the assailants robbed the passengers and pistol whipped Mr. Liu and the bus driver." Lombard claims the bus was not moving at the time of the assault. In support of this submission, it relies on the following part of Mr. Liu's written statement:

I got on the bus at 10:00 p.m. I sat in my seat waiting for the bus to move. The bus is supposed to start at 10:15. I fell asleep. The bus didn't start yet. Someone hit my head while I was sleeping & I woke up. There were three hijackers holding guns. After I was hit a lot of blood came out of my head. I was hit on the top of my head, on the right close to the middle. One of them was holding a gun to the driver. One stood next to me & the other one was at the back of the bus. The one who stood at the back told us all to put our hands on our head & we all did. They told us to get the money out, one by one. After the hijacker hit me the other one told the driver to drive the bus away. When the bus got somewhere near Kennedy & Dennison, the hijacker hit the driver & made him unconscious. [emphasis added]

This statement certainly seems to suggest that the bus was not yet in motion when Mr. Liu was assaulted. Nor does the other evidence provide any obvious support for the Arbitrator's finding, although there is arguably some ambiguity about the precise sequence of the events. It is not clear, however, that this factual finding was critical to the Arbitrator's conclusion. Even if Mr. Liu was assaulted before the bus started moving, the Arbitrator could still say that the attack was "an integral part of a well-calculated, premeditated plan to both overtake the bus and rob its passengers."³ The more important question is whether this is enough to bring Mr. Liu within the definition of accident.

Lombard submits that the Arbitrator erred in failing to follow other decisions interpreting the definition of "accident" in the SABS-1996, particularly Chisholm v. Liberty Mutual Group (2002), 2002 CanLII 45020 (ON CA), 217 D.L.R. (4th) 145 (Ont. C.A.).⁴ I agree. It is no longer sufficient for the vehicle to be implicated in the person's impairment, or even a "factual cause" of the impairment — accident benefits are only payable if the insured person’s impairment is directly caused by the use or operation of an automobile.⁵ The Arbitrator's error, in my view, was in blurring the necessary connection between Mr. Liu's impairment and the use or operation of the bus.

What is the impairment? Mr. Liu's claim is based on injuries to his head that he concedes were caused by one of the assailants hitting him with a pistol. What was the use or operation? This is less straightforward. Mr. Liu clearly was using the bus in a normal manner — he was a passenger. The driver was also using or operating the vehicle in an ordinary way — he was idling the bus and admitting passengers, and, at some point, drove the bus to another location. It cannot be said, however, that any of these uses or operations directly caused Mr. Liu’s impairment. At most, they satisfy the kind of "but for" test of causation the Court of Appeal rejected in Chisholm.⁶

The Arbitrator focused on the hijacker’s use of the bus. She found that they used the bus to confine the passengers and rob them. It was the hijacking that "set in motion the chain of events resulting in injury to Mr. Liu." And, the attack on Mr. Liu was not an intervening event, but "an integral part of their [the hijackers ] use of the vehicle."⁷ In my opinion, this is the wrong perspective. While a hijacking can involve the use or operation of an automobile, the hijacking itself is not a "use or operation of an automobile" that encompasses an assault. Applying the first part of the Amos test, which is still applicable,⁸ hijacking is not an ordinary and well-known activity to which automobiles are put. Therefore, the Arbitrator erred in basing Mr. Liu’s entitlement on the connection between the hijacking and his impairment.

This is not to suggest that hijacking precludes entitlement. As in all of these cases, difficult lines must be drawn. If the bus had crashed, injuring Mr. Liu, he would have been entitled to accident benefits. There would have been a direct causal connection between his impairment and the use or operation of the bus — either his use as a passenger or the operation of the bus by the driver. Further, as crashes are a normal incident of the risk created by the use or operation of the bus, Lombard probably would have been obligated to pay accident benefits even if it could point to another cause of the crash, such as the actions of the hijackers or an obstacle in the road.⁹

Finally, I conclude that the Arbitrator’s reliance on Amos and Saharkhiz,¹⁰ while cautious, was misplaced. The Court of Appeal has made it clear that the SABS-1996 introduced a different, more stringent causation requirement — direct causation. This suggests "something knocking over the first in a row of blocks after which the rest falls down without the assistance of any other act."¹¹ Or, using 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."¹²

Judges and arbitrators have consistently held that impairments resulting from assaults are not covered under this test.¹³ Director's Delegate Makepeace carefully reviewed most of these decisions in Kumar, Elensky and Seale, cited above. I adopt her analysis, and find the Arbitrator’s decision in this case out-of-step.

Both Kumar and Elensky involved assaults. Mr. Kumar, a taxi driver, was injured when a passenger in the back seat of his cab hit him on the head with a hard object. Mr. Elensky, a long-haul trucker, was attacked and shot as he returned to his truck after asking for directions. In both cases, Director’s Delegate Makepeace upheld the Arbitrator’s conclusion that the assault, not the use or operation of the automobile, caused the impairment. It was not enough that, in Kumar, the taxicab provided the opportunity, location and motivation for the assault. Or, in Elensky, that the truck brought Mr. Elensky to the location, provided a target for robbery and ultimately allowed him to flee. In both cases, the impairment was caused by an intervening event — the assault.

The Arbitrator attempted to distinguish Kumar and Elensky. She noted that in Kumar, the Director’s Delegate found "no evidence that Mr. Kumar’s attacker attempted to seize control of the vehicle, hijack it or steal it" [emphasis added by the Arbitrator]. Similarly, in Elensky, there was no evidence that the assailants intended to steal the truck. While these are legitimate factual distinctions, I am not persuaded they suggest a different outcome. As Director’s Delegate Makepeace held in Elensky, the assailant's motivation is not determinative.¹⁴ Nor is the fact that Mr. Liu and the other passengers were confined in the vehicle.¹⁵ The question is whether the use or operation of the automobile directly caused the impairment — was it an active, efficient cause that set in motion a train of events which brought about the impairment without the intervention of any source started and working actively from a new and independent source?¹⁶ As in Chisholm, Karshe, Kumar, Elensky, and Swaby, it was the assault, not the use or operation of the automobile, that caused Mr. Liu’s impairment.

In summary, the assault cases are relatively clear. Where, as in this case, the impairment is caused by an assault, the assault will be treated as an intervening act and accident benefits will not be payable. The result could be different, however, if the use or operation of the automobile continues beyond the assault and the impairment is caused by that ongoing use or operation. An example might be a driver being struck by a passenger, losing control, and suffering injuries in the resulting crash. Both the assault and the use or operation of the automobile could be viewed as direct causes of the impairment, but benefits would probably be payable under the definition of accident in the SABS-1996.

IV. APPEAL EXPENSES

The parties did not address the question of appeal expenses. If they are unable to reach an agreement, they may request a determination of this issue by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.