Neutral Citation: 2004 ONFSCDRS 22

FSCO A03-000763 and A03-000776

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SHELLEY EADE and ROY PSIKLA

Applicants

and

ALLIANZ INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

David Leitch

Heard:

By telephone conference call on January 21, 2004.

Appearances:

John H. Hornak for Ms. Eade; Gavin Freitag for Mr. Psikla

Philippa Samworth for Allianz Insurance Company of Canada

Issues:

The Applicants, Shelley Eade and Roy Psikla, were injured in a propane explosion on May 19, 2002. Allianz Insurance Company of Canada ("Allianz") insured the motor vehicle involved in the explosion but denied that the Applicants were injured in an "accident" as defined by the Schedule.¹ The parties were unable to resolve this dispute through mediation, and Ms. Eade and Mr. Psikla applied for arbitration at the Financial Services Commission of Ontario in accordance with the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Were the Applicants injured as a result of an "accident" as defined under section 2(1) of the Schedule?

Result:

The Applicants were injured as a result of an "accident" as defined under section 2(1) of the Schedule.

The Facts

The parties filed an Agreed Statement of Facts which reads as follows:

The Applicant, Roy Psikla, was born on March 29, 1948 and the Applicant Shelley Eade, was born on June 15, 1962. They both sustained serious burn injuries as a result of an explosion that occurred on May 19, 2002.
Mr. Psikla was the owner of a 1999 Mazda truck. The Mazda Truck comes with a standard six foot bed and extended cab. It does not come equipped with a camper.
Mr. Psikla built a homemade camper which he would slide on to the back of the Mazda Truck and bolt on to the bed of the Mazda Truck. It was affixed by way of turn buckles at the front and back corners of the Mazda Truck. This homemade camper contained a bed, storage area and a propane stove. The propane tank was located outside of the camper unit but was affixed to the outside of the unit. The camper unit was inaccessible from the cab of the Mazda Truck.
On the day in question, May 19, 2002, both Applicants went camping to Nonwatin Lake. When they awoke the next morning, there was a smell of propane within the camper. Mr. Psikla opened the door to clear out the smell and then proceeded to light the stove with a sparker. There was an explosion due to the propane in the camper being ignited and both Mr. Psikla and Ms. Eade sustained burns.
The explosion occurred as a result of the attempt to ignite the propane stove and Ms. Eade sustained first and second degree burns and Mr. Psikla sustained second and third degree burns to approximately 48% of his body.
Mr. Psikla's Mazda Truck was covered under a policy of automobile insurance with Allianz Insurance Company of Canada, under policy no. GB40682592.

In addition to this Agreed Statement of Facts, the partes filed a Joint Book of Documents consisting of three volumes. Ms. Samworth also filed, without objection, the originals of the photographs found at Tab 6 of Volume I of the Joint Book of Documents and a copy of the November 1, 1996 Standard Ontario Automobile Policy for Owners.² Ms. Samworth reviewed these additional documents in the course of her submissions in order to establish the following:

The Ontario Provincial Police Occurrence Report described interior damage to the camper but no detectable defect in either the propane stove or tank. It identified "human error" as the probable cause of the explosion.³
The Fire Marshal's Investigation Report also described interior damage to the camper but no damage to the exterior or the interior of the Mazda pick-up truck. The Report stated that the stove and elements were working properly and that there were no "leaks that would enable propane gas to be introduced into the camper without turning on the element control dial." The Report concluded that the cause of the "flash fire" was "the misuse of the ignition source and equipment. Specifically, the propane stove within the camper."⁴
The Mazda owner's manual stated at page 8-8: "Your Mazda vehicle is not designed to be used with a slide-in camper."⁵
Section 2.1 of the Standard Ontario Automobile Policy for Owners states: "A described automobile is any automobile or trailer specifically shown on your Certificate of Automobile Insurance." The certificate of automobile insurance issued by Allianz described only Mr. Psikla's Mazda pick-up truck, not the slide-on camper he installed thereon.⁶ Ms. Samworth submitted that if the camper was a trailer, as suggested by Mr. Freitag, then it was owned by Mr. Psikla, it was not described in the Policy and it was designed or used for living in or carrying passengers. Ms. Samworth urged me to find that these facts bring the case within section 2.2.4 of the Policy and that this section excludes coverage.

I address below the relevance of the Ontario Provincial Police Occurrence Report, the Fire Marshal's Investigation Report and the Mazda owner's manual. I will address immediately the relevance of the Standard Ontario Automobile Policy for Owners.

The Standard Auto Policy

I fail to see how an exclusion contained in the Standard Ontario Automobile Policy for Owners can defeat the Applicants' claims for statutory accident benefits. Section 268 of the Insurance Act states that the availability of statutory accident benefits is determined by the Schedule itself.⁷ Part IX of the Schedule contains its own list of exclusions, none of which was relied upon by Allianz.

Nevertheless, as noted by Ms. Samworth, it was Mr. Freitag who referred to section 2.2.4 of the Policy. I see no need to set out or analyse the wording of this section because it deals with trailers. Section 2.4.1 of the Policy makes it clear that trailers are towed or pulled by automobiles. The slide-on camper at issue in this case was installed on, not towed or pulled by, Mr. Psikla's Mazda pick-up truck. I, therefore, find that Mr. Psikla's camper was not a trailer and that the sections of the Policy dealing with trailers would have no application to this case in any event.

I also note that there was no evidence or argument that Mr. Psikla's automobile was used "to carry explosives or radioactive material" or for any of the other excluded purposes specified in section 1.8.1 of the Policy. Moreover, consistent with section 268 of the Insurance Act, this section also states that the exclusions specified there do not apply to "accident benefits."

The Law

The definition of accident contained in the Schedule applicable to this case, the SABS-1996 definition, is different from the definition of "accident" contained in the previous Schedules, the SABS-1994 and the SABS-1990 definitions.

SABS-1996:

"accident" means an accident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device.

SABS-1994:

" accident" means an incident in which, directly or indirectly, the use or operation of an automobile causes an impairment or causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device.

SABS-1990:

"accident" means an accident in which the use or operation of an automobile causes, directly or indirectly, physical, psychological or mental injury or causes damage to any prosthesis, denture, prescription eyewear, hearing aid or other medical or dental device.

The critical difference is the removal of the word "indirectly" from the SABS-1996 definition, leaving only the word "directly." This difference means that the scope of the SABS-1996 definition is not governed, at least not in the same way, by the Supreme Court of Canada's 1995 decision in Amos v. ICBC.⁸

The Amos decision involved the interpretation of the words "death or injury caused by an accident that arises out of the ownership, use or operation of a vehicle." The Supreme Court held that the proper interpretation of those words depended upon the answers to two questions: first, "did the accident result from the ordinary and well-known activities to which automobiles are put?", and second, "is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the [...] injuries and the ownership, use or operation of [the] vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?"

In the 1999 case of Vijeyekumar v. State Farm⁹, the Ontario Court of Appeal held that Amos governed the scope of the SABS-1994 definition. In the 2002 case of Chisholm v. Liberty¹⁰, the same Court held that "the stringent causation requirement – 'directly causes' – in the definition of accident under the 1996 Schedule means that the Amos test, or at least the causation part of that test, can no longer be used to interpret" the scope of the SABS-1996 definition of "accident."

While the Chisholm decision thus makes the second question posed in Amos irrelevant to the definition of accident under the 1996 Schedule, it also underlines the continued relevance of the first question posed in Amos. It confirms that the direct causation test requires judges and arbitrators to distinguish between, on the one hand, injuries caused by "an unbroken chain of events" involving the use or operation of a vehicle and, on the other hand, injuries caused by "an intervening act, independent of the vehicle's use or operation." But it also contains the following important observation about whether an intervening act breaks a chain of events: "An intervening act may not absolve an insurer 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'."

In my opinion, this observation effectively replaces the second question posed by the Supreme Court in Amos. I am fortified in this view by the comments made in the case of Belair Insurance Company Inc. and Seale where, after herself quoting the above-mentioned observation of the Court of Appeal in Chisholm, the Director's Delegate added:

Justice Laskin [in the Court of Appeal] appears to approve of Justice Chapnik's [the trial judge's] comment that "a criminal assault which does not take place within the context of the vehicle's ordinary and well-known use is not a risk that is sought to be protected by a motor vehicle liability policy". In my view, this common sense focus on the nature of the risk underlies the varying judicial and arbitral statements of the rule.¹¹

The Arguments

Mr. Hornak argued that at the time of the explosion, the Applicants were putting Mr. Psikla's vehicle to a well -known use which vehicles of that type are ordinarily put: camping. A stove and propane tank are, he submitted, "necessary appertinences [sic] to a camper unit and as such form part" of a "truck/camper" vehicle of the type at issue in this case. Characterizing the lighting of the stove as an act performed "in conjunction with motor/camping activities ", Mr. Hornak maintained that this act could not be described as an "intervening event" within the meaning of the Chisholm decision.

In support of these submissions, Mr. Freitag emphasized the following facts: the camper was constructed with a narrow base so that it would slide over the wheel wells of Mr. Psikla's flat-bed vehicle, it was bolted to the bed of the vehicle with turn buckles at the front and the back corners, its lights were connected to the vehicle's battery and its propane stove (as opposed to its propane tank) was not portable but was rather built into a counter inside the camper. Mr. Freitag submitted that these facts supported Mr. Psikla's statement that his camper was "unusable unless affixed to a truck."¹² He also relied upon these facts to distinguish the present case from the case of Chateauvert Estate v. Economical Mutual Insurance Co.¹³ In that case, the Ontario Supreme Court rejected claims made by the survivors of occupants of a van who died, apparently while sleeping, as a result of breathing the fumes emitted by a portable hibachi lit inside the van.

Mr. Freitag also drew my attention to the highlighted words of the definition of "automobile" found in section 1 of the Insurance Act:

"automobile" includes a trolley bus and a self-propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway rolling stock that runs on rails, watercraft or aircraft

Applicants counsel relied on the Alberta Court of Queen's Bench and Court of Appeal decisions in the case of Bedard v. Cooper.¹⁴ Unfortunately, the facts of that case are not entirely clear. The accident appears to have happened inside the camper portion of a "truck/camper" when the hose attached to a propane tank was moved from a lamp to a heater. The governing legislation provided recovery for injuries "arising out of the use or operation within Alberta of a motor vehicle." Applying the two-part Amos test, both courts allowed recovery. Applicants' counsel placed particular importance on the following finding of the trial court, upheld on appeal: "camping i’s an ordinary and well -known activity to which motor vehicles of the type of this truck and camper are put."¹⁵

Ms. Samworth submitted that since Allianz insured only Mr. Psikla's pick-up truck, with no reference to his camper, camping could not be described as an anticipated or a normal use of his vehicle. She also denied that the camper and fixtures were "accessories and equipment of automobiles" within the meaning of the definition of automobile mentioned above. In support of these submissions, Ms. Samworth pointed to the statement in the owner's manual that the "vehicle is not designed to be used with a slide-in camper."

Turning to causation, Ms. Samworth argued that the explosion was not caused by the use or operation of the vehicle but rather, as the Police and Fire Marshal reports confirmed, by the misuse of the propane stove. For this reason, she maintained that "the Chateauvert case stands on all fours with the present case", that is, even if camping were included in the use or operation of Mr. Psikla's vehicle, the misuse of the propane stove constituted an intervening act making it impossible to trace a continuous chain of causation between the use or operation of the vehicle and the injuries sustained by the Applicants. Ms. Samworth relied upon the following paragraph of the Chateauvert decision:

I have found that the use of the van as sleeping quarters does not constitute the "use or operation" of the van. Even if I had found, however, that the "use or operation" of the van included sleeping in the interior, I would find that the lighting of the hibachi in the rear of the van, which ultimately led to the deaths, constituted a new, intervening act of negligence, in that the occupants of the van failed to take adequate precautions to ensure their own safety. There was no continuous chain of causation between the use and operation of the motor vehicle (whether it be as a means of transportation, or as sleeping quarters) and the deaths. Instead, this chain was broken by an intervening act of negligence, consisting of the lighting of the hibachi, and leaving it to smoulder overnight.¹⁶

Analysis and Conclusion

Based on the following analysis, I find that the injuries sustained by the Applicants were a normal incident of the risk created by the use or operation of the kind of automobile at issue in this case.

1. the camper and fixtures were "accessories and equipment of" Mr. Psikla's vehicle

It is settled law that the relevant definition of "automobile" for present purposes is not the one found in section 1 of the Insurance Act but rather the one found in section 224(1) of Part VI of the Insurance Act which in turn refers to the definition of "motor vehicle" found in section 1 of Compulsory Automobile Insurance Act, R.S.O. 1990, C.C.25.¹⁷ However, since this last definition also includes "accessories and equipment of a motor vehicle"¹⁸, the first question is still whether the camper and fixtures constituted "accessories and equipment of" Mr. Psikla's vehicle.

It may be that the word "of in the expression "accessories and equipment of a motor vehicle" serves to exclude objects which are only transported on or by a motor vehicle and off-loaded for independent use on arrival. Therefore, for purposes of the present case, I will assume that this expression only includes objects which are somehow integrated into the use or operation of the vehicle and are not off-loaded for independent use on arrival.

Mr. Psikla's vehicle was a small, flat-bed, pick-up truck, capable of carrying large objects on its rear platform. I accept Mr. Psikla's statement that his camper was unusable unless affixed to a truck of this description. It can be reasonably inferred that he had no intention of off-loading either the camper or its fixtures on arrival at his destination. The camper was bolted to the vehicle, the propane stove was built into the camper and the camper's lights were powered by the vehicle's battery. The camper and its fixtures depended entirely on the vehicle for their own usefulness and the usefulness of the vehicle was enhanced by the installation of the camper and its fixtures on its rear platform. In my view, the camper and fixtures constituted "accessories and equipment of" Mr. Psikla's vehicle.

2. camping is an ordinary and well-known activity to which a motor vehicle of Mr. Psikla's type is put; cooking with propane inside a truck/camper is an ordinary and well-known activity to which such a vehicle is put.

The facts of the Bedard case relied upon by the Applicants are different from the facts of the present case in two respects. First, while both accidents involved the use of propane equipment inside a camper, the Bedard accident involved portable equipment, a lamp and a heater, not a stove built into the camper. Second, the Bedard vehicle was only described as a "truck/camper"; there were no additional findings about how or when the truck and the camper were put together or about how the vehicle was described in insurance certificates.

Despite these factual differences, I accept the Bedard case as good authority for the following two findings of fact.

First, I find that camping is an ordinary and well-known activity to which a motor vehicle of the type at issue in this case is put. This is not, and in my view, need not be, a finding that all flat-bed pick-up trucks are put to this use or that all "truck/campers" are exactly alike. It is only a finding that to install a camper on a flat-bed, pick-up truck is to put that type of vehicle to an ordinary and well-known use. Truck/campers of the type shown in the photographs of Mr. Psikla's vehicle¹⁹ are a common sight on Ontario highways.

Second, I find that cooking with a propane stove inside a truck/camper is an ordinary and well-known activity to which such a vehicle is put. Again, this is not, and in my view, need not be, a finding that all truck/campers are equipped with built-in propane stoves. It is only a finding that to cook with a propane stove inside a truck/camper is to put that type of vehicle to an ordinary and well-known use. In this regard, I agree with the following comments of the Alberta Court of Appeal in Bedard:

...suppose someone elected to chop wood in a camper and injuries resulted. No one would seriously contend that chopping wood (though clearly a camping activity) was an ordinary and well-known use of a camper. On the other hand, the heating and lighting of a camper is commonplace. And it matters not whether the propane tank and other equipment used for that purpose is "built-in" or "brought-in". Nor should the "use or operation" question be dependent on whether the equipment was brought in by the owner of the vehicle or by his guest.

I do not subscribe to the Appellant's contention that the truck/camper is "used" only when an activity is conducted that relates directly to its motorized or conveyance-oriented function.²⁰

I find that these comments apply equally to cooking with a propane stove inside a truck/camper of the type at issue in the present case.

I do not agree that I am prevented from making these findings by the fact that the camper and stove were not referred to in the insurance certificate issued by Allianz to Mr. Psikla. The application of the first part of the Amos test requires judges and arbitrators to decide whether particular uses of automobiles are, or are not, ordinary and well-known. In my view, these decisions can, and must be, based on common knowledge about the ordinary and well-known uses of automobiles. This kind of knowledge, being common, is equally available to insurers and can be used by them in deciding whether or not to undertake the risk of insuring automobiles or in determining the premiums they will charge for doing so.

There was certainly no evidence or argument in this case to suggest that the addition of the camper somehow rendered Mr. Psikla's vehicle uninsurable or that Allianz would have refused to insure the vehicle had it been made specifically aware of Mr. Psikla's camper.²¹ Nor was there any allegation that Mr. Psikla had failed to disclose a material change in risk under section 30(2)(a) of the Schedule. Of course, even if he had, that would not result in the dismissal of these claims in their entirety, the relief sought by Allianz in this preliminary hearing.

Finally, Allianz cannot defeat these claims by relying upon the statement in the owner's manual or Mr. Psikla's negligent operation of the stove. It may well be that Mr. Psikla ignored a clear warning that his vehicle was not designed to be used with a slide-in camper. There can be no doubt that he attempted to light the stove without first ensuring that the inside of the camper was free of propane gas. However, this is neither a products liability action against Mazda nor a tort action against Mr. Psikla by Ms. Eade. It is a claim by the Applicants for no-fault automobile accident benefits. Issues of negligence only arise, if at all, under the exclusions stipulated under Part IX of the Schedule, none of which was relied upon by Allianz.

3. the lighting of the propane stove was not an intervening act that breaks the chain of events required by the test of direct causation.

The last question is this: was Mr. Psikla's attempt to light the propane stove without first ensuring that the inside of the camper was free of propane gas part of an unbroken chain of events connecting the use or operation of his vehicle with the Applicants' injuries or was it an intervening act, independent of the vehicle's use or operation?

The answer to this question depends, in large part, on how one describes the "intervening" act. Relying on the Police Report, the Fire Marshal reports and the Chateauvert decision, Allianz describes that act as the misuse of the propane stove or the negligent lighting of the propane stove. In my view, there are two errors in this description, one legal and one factual.

The legal error has already been mentioned: negligence plays no part in determining eligibility to no-fault automobile accident benefits, except perhaps under the exclusions stipulated under Part IX of the Schedule. In this regard, I note that the Chateauvert case was decided a decade before the introduction of the first statutory no-fault automobile accident benefits scheme in 1990. The particular passage of the Chateauvert decision cited by Ms. Samworth refers not simply to an intervening act but to an "intervening act of negligence, in that the occupants of the van failed to take adequate precautions to ensure their own safety."

The factual error is that this description is incomplete. The attempt to light the propane stove, by itself, does not explain the explosion or the injuries. To explain the cause of the Applicants' injuries, one must include in the description the fact that Mr. Psikla failed to ensure that the inside of the camper was free of propane gas before he attempted to light the stove.

The correction of these errors does not, however, lead automatically to the conclusion that the Applicants were injured in an accident under the 1996 Schedule.

The Chisholm decision confirms²² that the capacity of a motor vehicle to confine or trap someone or something inside its interior may not, by itself, satisfy the test of direct causation. This point is perhaps best illustrated by the case of Lombard General Insurance Company of Canada and Liu, a case involving injuries sustained by a passenger of a hijacked bus when he was assaulted while captive in the bus. The Arbitrator allowed the claim but, in overturning this decision, the Director of Arbitrations wrote:

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 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.²³

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." 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,²⁴ 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.²⁵ (Emphasis added)

In the present case, I have already found that cooking with a propane stove inside a truck/camper is an ordinary and well-known activity to which such a vehicle is put. I now further find that Mr. Psikla's attempt to light the propane stove without first ensuring that the inside of his camper was free of propane gas was part of an unbroken chain of events connecting the use or operation of his vehicle and the Applicants' injuries. In my view, this act cannot be regarded as an intervening act independent of the vehicle's use or operation but can and should, in the words of the Court of Appeal in Chisholm, "fairly be considered a normal incident of the risk created by the use or operation of the [automobile in question] – [...] it [was] 'part of the ordinary course of things'."

I, therefore, conclude that the Applicants' injuries were directly caused by the use or operation of Mr. Psikla's vehicle and that the Applicants were injured in an accident as defined in the 1996 Schedule.

EXPENSES:

In the event the parties cannot agree, I will entertain their submissions on expenses in accordance with the procedure set out in the Dispute Resolution Practice Code, Fourth Edition (Updated October 2003).

February 19, 2004

David Leitch Arbitrator

Date