Neutral Citation: 2004 ONFSCDRS 61

FSCO A03-000586

BETWEEN:

SAMUEL CRISTALES

Applicant

and

AVIVA CANADA INC. (FORMERLY CGU GROUP)

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Beth Allen

Heard: January 20, 2004 at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Manuel Castro for Mr. Cristales

Bill Evans for Aviva Canada Inc. (formerly CGU Group)

The Applicant, Mr. Samuel Cristales, was injured in a motor vehicle accident on December 10, 2001 and claims entitlement to accident benefits from Aviva Canada Inc. (formerly CGU Group) ("Aviva"). Aviva argues that the Applicant should be excluded from pursuing his claim for income replacement benefits pursuant to subsection 30(1)(d) of the Schedule.¹ The parties were unable to resolve their dispute through mediation, and the Applicant applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Should the Applicant be excluded from pursuing his claim for income replacement benefits pursuant to subsection 30(1)(d) of the Schedule on the basis that he knew or ought to have known that he was operating the owner's automobile without their consent at the time of the accident?

The Applicant is not excluded by subsection 30(1)(d) of the Schedule from pursuing a claim for income replacement benefits.

Overview:

The Applicant, 41 years of age at the time, was involved in a single car accident on Monday, December 10, 2001, while driving a 1984 or 1985 GMC Vandura van owned by his employer. He sustained injuries to his lower back and neck and applied for income replacement, attendant care and housekeeping benefits from Aviva under the Schedule. Aviva paid income replacement benefits at $400 per week from December 17, 2001 to February 2002 as well as housekeeping benefits.

Aviva subsequently took the position that the Applicant is excluded from receiving income replacement benefits pursuant to subsection 30(1)(d) of the Schedule which provides in its relevant part:

30.(1) The insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under section 20, 21 or 22 in respect of a person who was the driver of an automobile at the time of the accident,

(d) if the driver knew or ought reasonably to have known that he or she was operating the automobile without the owner's consent.

Aviva submits that, at the time the Applicant was involved in the accident, he knew or ought to have known that he did not have his employer's permission or consent to drive the company van.

The Applicant submits that he believed that he had his employer's consent to drive the van and should not be excluded from pursuing his claim for income replacement benefits.

Background:

At the time of the accident on December 10, 2001, the Applicant had been employed as a labourer with Georgian Equipment & Contracting Services Ltd. ("Georgian") for about two years. The accident occurred when he was returning to a job in Collingwood from a trip to Toronto. The company office is located in Thornbury, Ontario near Collingwood. Georgian is involved with demolition, paving, excavation and maintenance of sewers and water mains. Mr. Peter Chomyn testified that he is the retired owner of Georgian and his son Jeffrey Chomyn, the general manager. Jeffrey Chomyn was more active in the operations of the company than his father due to his father's health issues, but Peter Chomyn continued to undertake some company-related tasks. Peter Chomyn indicated that his sons had authority over business decisions. Jeffrey Chomyn stated that he directly oversaw the work sites and the company's daily activities.

The Applicant had worked about four years with the Chomyns, since he had previously worked as a labourer for about two years with another company they owned called Telco. He had also worked for Georgian on sites in Stoney Creek and London before the Collingwood job where he was working at the time of the accident. The Applicant lived in Toronto and was transported to work sites from pre-arranged spots by either Jeffrey Chomyn or the job foreman, Mr. Bob Ellis. At the time of the accident, the Applicant had been working for about one week on a demolition site in Collingwood. Georgian also employed a friend of the Applicant on the Collingwood job. Both the Applicant and his friend are Spanish-speaking. Jeffrey Chomyn, who is English-speaking, testified that he spoke to the Applicant in broken English or spoke to him through his friend and other Spanish-speaking workers who had better English skills than the Applicant. Jeffrey Chomyn testified that he was certain that the Applicant understood his instructions regarding his duties, as well as his privileges with respect to the company van, because the Applicant would nod in response to instructions and would duly perform the jobs he was requested to do. The Applicant testified that despite his weak English skills, he did not have communication problems with his bosses. Georgian did not have a written policy as to the use by the workers of company vehicles.

The Applicant's duties as a labourer were to load and unload tools; to use the van and the bobcat to move the tools throughout the site; to run errands in the van; to cut steel; and to clean up the site with a wheelbarrow. Jeffrey Chomyn testified that the Applicant was a reliable, hard worker.

The Applicant did not return to Toronto after work each night. For the Collingwood job, Peter Chomyn arranged for the Applicant to stay in the Beaver Motel in Thornbury, which is about a half an hour drive from Collingwood. The head office for Georgian was about a half kilometre from the Beaver Motel. Peter Chomyn testified that he arranged for the Applicant and his friend's stay at the motel for a week at a time and would make further reservations as needed. He testified that he made the reservations when the Applicant and his friend arrived, and paid cash in advance for their stay on this occasion from Monday, December 3 to Monday, December 10, 2001.

Aviva produced a Beaver Motel & Restaurant guest registration receipt dated December 3, 2001 for $249.90 for seven days, made out to Georgian Equipment. At the top of the receipt is a hand written note of what appears to be two names, Cristales and Onetto, the latter name referring to the Applicant's friend and co-worker. Aviva presented that receipt as evidence of the Chomyns' intention that the Applicant and his friend stay in Thornbury that weekend and as support for their contention that they did not authorize the Applicant to use the company van that weekend.

The Chomyns and the Applicant gave contrary evidence as to what the rules were in respect to the Applicant's use of the company van.

Aviva's Evidence:

Jeffrey Chomyn testified that the Applicant used the van within the site to transport tools and would run errands with the van during working hours. According to Jeffrey Chomyn, the Applicant would park the van at Georgian's office in the evenings and unload the more valuable equipment. The Applicant would take the keys to the van with him to the motel to expedite his departure from the office to the work site in the morning. Each morning, the Applicant would walk from the motel to Georgian's office, load the van and drive it to the work site.

Jeffrey Chomyn testified that he did not have direct knowledge, but he understood that the Applicant was not permitted to drive the van in the evenings. He explained that he lived in Wasaga Beach and would return there in the evenings after working in Collingwood and that his brother and father, both of whom lived in Thornbury, would be in charge of the van and locking the office in the evenings. However, Peter Chomyn testified that he did not have authority over the van and did not recall whether the Applicant left the van at the office at the end of the day or took it to the motel.

The evidence is that the Applicant took the company van from the Georgian office and drove with his friend to Toronto on Saturday, December 8, 2001. Jeffrey Chomyn testified that while he did not always work on Saturdays, he and the Applicant worked the whole day that Saturday until about 5:00 p.m. because of the short deadline for the Collingwood job. Jeffrey Chomyn testified that he went home and did not go to the office in Thornbury after work at 5:00 p.m. on December 8. Peter Chomyn testified that he did not recall much, if anything, about what occurred at the office with respect to the van after work on December 8.

Peter and Jeffrey Chomyn both testified that the Applicant was only permitted to use the van locally on work sites and to run local errands. They both stated that the van was old and not in a state of repair that would make it appropriate for highway driving, so the Applicant would never be permitted to drive to Toronto. This evidence is supported by a written statement to Aviva's adjuster by Georgian's past accounts controller, Ms. Georgina Stogian. Neither of the Chomyns recalled the Applicant ever stating in advance that he had to go to Toronto that weekend. However, Ms. Stogian commented in her written statement that the Applicant mentioned, when he started at the Collingwood site, he would have to go back to Toronto on the weekend to do his laundry.

The Applicant's Evidence:

The Applicant confirmed the Chomyns' evidence that he drove the company van for errands and on the work sites. He stated that when he was given the keys to the van at the Collingwood site, he was given no restrictions on the use of the van. He stated that he was asked to drive the company van long distance on one occasion, from Kitchener to Toronto. He also stated that on two occasions when working for Telco, he was allowed to take the company vehicle. The Applicant testified that he would never take the van anywhere without permission because he would be labelled "a car thief." The Applicant testified that the only time while he was working for Georgian he was ever allowed to take the van home was on December 8, 2001. On cross-examination, Aviva's counsel asked the Applicant about his statement to the adjuster on December 3, 2002, that at his job around Hamilton and London, he was not allowed to use the company vehicle, only buses from one place to another. The Applicant denied that they ever used buses as part of the job because they were doing demolition.

The Applicant testified that he had the use of the van after work on the Collingwood job and that he did not unload the tools after work for that entire week. He would generally see only Peter Chomyn after work. The Applicant testified that he would use the van to run errands and get something to eat after work.

The Applicant confirmed that he finished work on Saturday, December 8 at about 5:00 p.m. The Applicant testified that on the first day he arrived at Collingwood, he told Jeffrey and Peter Chomyn that he had to go to Toronto on the weekend to see his family. According to the Applicant, the Chomyns said that was all right at that time. The Applicant also testified that he spoke to Peter Chomyn on December 8 on the site and reminded him that he had to go to Toronto. The Applicant indicated that Peter Chomyn had previously told him he could use the van and instructed him to unload the tools and wash the van before he left for Toronto, which the Applicant did before leaving.

The Applicant stated that he believed Peter Chomyn had the authority to permit him to use the van. This belief is based on the Applicant's evidence that Peter Chomyn would often give employees their pay and undertake other tasks. He also testified that he asked Peter Chomyn for the updated insurance documentation for the van before he left for Toronto. According to the Applicant, Peter Chomyn asked him to wait five minutes until he (the Applicant) had finished cleaning the van and he would give him the new insurance documentation. The Applicant stated that Peter Chomyn provided him the documentation.

The Applicant also pointed out that Peter Chomyn told him that he had called the nearby gas station to tell them that he was going to have the van filled with gas. The Applicant indicated that after he and his friend picked up their clothes at the motel, the Applicant drove the van to the gas station with Peter Chomyn following in his own car. The Applicant stated that Peter Chomyn paid for the gas. According to the Applicant, before he left for Toronto, Peter Chomyn instructed him not to take the van directly to the site on Monday morning, but to first pass by the office and load the tools. The Applicant indicated that the van was in good condition when he left for Toronto.

Aviva's adjuster took several statements from both the Applicant and his co-worker and friend that were basically consistent with the Applicant's evidence on the issue of Peter Chomyn giving permission to the Applicant to use the van on the weekend of December 8, 2001.

Reasons for Decision:

I find that Jeffrey Chomyn, as the general manager who oversaw daily on-site activities, had the principal authority over the Applicant as an employee of Georgian. However, I find that Peter Chomyn continued to have authority, as the "retired" owner of the company who continued to work for the company at the relevant time. I conclude from the evidence that no matter how Peter Chomyn might have seen his own authority, the Applicant reasonably perceived that Peter Chomyn was a boss with the authority to consent to his use of the van. In support of this finding, I considered the Applicant's testimony that he frequently saw Peter Chomyn on work sites paying employees and undertaking other tasks. Very importantly, Jeffrey Chomyn testified that his brothers and Peter Chomyn had authority over the van after work.

This case basically requires a determination on credibility. I must decide whether I accept the Applicant's evidence about whether he knew or ought to have known that he was using his employer's vehicle without the employer's consent. After a careful review of the evidence, I conclude that I accept the Applicant's evidence over that of Peter and Jeffrey Chomyn.

The Applicant testified in a very straightforward, unembellished manner. I found that his evidence provided a more complete picture of the circumstances surrounding the use of the company van than the Chomyns. I found gaps in Jeffrey Chomyn's knowledge about the Applicant's use of the van generally, and in particular, about the circumstances around the Applicant's use on Saturday, December 8, 2001. There were also crucial gaps in Peter Chomyn's memory of the circumstances surrounding the use of the van after work that day three years ago. I find it is clear from the evidence that Jeffrey Chomyn only had first-hand knowledge of the Applicant's use of the van on the work site, and not after work, because he left Collingwood for his home in Wasaga Beach each evening. Peter Chomyn did not give evidence about the Applicant's daily use of the van after work. He testified that he did not recall whether the van was left at the office or whether the Applicant had use of the van after work. The Applicant testified that he used the van after work to go for dinner and on errands. I find that the Applicant was allowed to use the van more extensively than Jeffrey Chomyn was aware.

The gaps in Jeffrey Chomyn's knowledge and Peter Chomyn's memory of the use of the van after work on December 8, are central to my finding in favour of the Applicant. As was his practice after work, on December 8, Jeffrey Chomyn left Collingwood for home and did not go to Georgian's office where the van was parked after work that day. Importantly, Peter Chomyn conceded that he did not remember the circumstances with the van or any communications with the Applicant on that day.

I find the Applicant gave detailed and credible evidence about his communications with Peter Chomyn and his activities before he left for Toronto. His oral evidence was basically consistent with his and his co-worker's post-accident statements to Aviva's adjuster. The Applicant testified, and I accept, that it was reasonable for him to believe that Peter Chomyn consented to his use of the van to go to Toronto for the weekend. To support this belief, the Applicant pointed to various communications with Peter Chomyn and his own activities before he left Collingwood. I accept: that the Applicant retained the keys to the van after work; that he requested and received from Peter Chomyn updated insurance documentation for the van; that Peter Chomyn instructed the Applicant, and he undertook to unload the tools and wash the van before the trip; and that Peter Chomyn paid to fill the van with gas before the trip.

I found persuasive the Applicant's testimony that he would not have taken the van without his employer's consent because he would be seen as a "car thief." The Applicant had been employed with the Chomyns for over four years and was viewed as a reliable, hard worker. I find it does not stand to reason that the Applicant would risk his job by trying to surreptitiously take the van to Toronto. It is not likely that this would have been undetected by the Chomyns and I heard no evidence that they reported the van missing.

I considered the evidence of the motel receipt and accept that it showed that a motel room was booked for the Applicant that weekend. Aviva asserts that the receipt is evidence that Georgian did not consent to the use of the van that weekend. However, I find this evidence is not sufficiently weighty to overcome the Applicant's evidence. I find that the Chomyns might have intended that the Applicant remain in Collingwood for the weekend when Peter Chomyn booked the room earlier that week. But I find that intention changed when Peter Chomyn allowed the Applicant to take the van to Toronto.

I also considered the Chomyns' evidence that the early model van was not sufficiently road worthy for highway use. It may be that given the age of the van it might not have been in optimum condition, but I accept the Applicant's evidence that it was in good enough shape to drive to and from Toronto that weekend.

In conclusion, I find it was reasonable for the Applicant to believe he had the consent of the owner to use the vehicle he was driving at the time of the accident. For these reasons, I find that the Applicant is not excluded by subsection 30(1)(d) of the Schedule from pursuing a claim for income replacement benefits.

EXPENSES:

I will reserve the issue of expenses to the arbitrator hearing the merits of this case.

April 29, 2004

Beth Allen

Arbitrator

Date