Neutral Citation: 2005 ONFSCDRS 48

FSCO A04-000602

BETWEEN:

PETER FU

Applicant

and

KINGSWAY GENERAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Edward Lee

Heard:

January 12, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Nicholas A. Papas for Mr. Fu

Tricia McAvoy for Kingsway General Insurance Company

The Applicant, Peter Fu, was involved in an incident on May 15, 2003. Kingsway General Insurance Company ("Kingsway"), takes the position that any impairment Mr. Fu may have sustained during the incident on May 15, 2003 was not the result of an "accident" as defined under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Fu 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:

Did the incident that occurred on May 15, 2003 constitute an "accident" within the meaning of that term pursuant to section 2 of the Schedule?

The incident that occurred on May 15, 2003 constituted an "accident" within the meaning of that term pursuant to section 2 of the Schedule.

Agreed Facts:

Counsel for the parties filed an agreed statement of facts with the Commission, and I have summarized the relevant portions of that statement as follows:

The insured, Peter Fu, was driving his car in downtown Toronto on May 15, 2003, when he came to a stoplight at the corner of Wellesley and Yonge Streets. As he waited at the stoplight, concrete debris fell from a condominium building on Wellesley Street, and hit the roof, windshield and hood of his car. Mr. Fu stated that as a result of the impact, he struck his head against the roof of the car.

At the preliminary issues hearing, counsel for Kingsway did not dispute Mr. Fu's statement, and I find that Mr. Fu's head did indeed strike the roof of the car as a result of the impact of the falling debris. On the other hand, there was no evidence, discussion or agreement as to the nature or extent of the injury suffered by Mr. Fu. For the purposes of the present analysis, I am assuming, without making a finding, that Mr. Fu did suffer an impairment as a result of the incident of May 15, 2003.

Introduction:

Subsection 2(1) of the Schedule defines "accident" as follows:

" accident" means an incident in which the use or operation of an automobile directly causes an impairment ... "

The parties did not dispute that Mr. Fu was in the act of driving his car when the falling debris struck his car. The real question is whether the use and operation of the automobile directly caused any impairment that might have occurred to Mr. Fu.

The Test of Direct Causation

The test of direct causation has been set out in several decisions by judges and arbitrators. In Chisholm v. Liberty Mutual Group², Mr. Justice Laskin made the following comments at paragraphs 27 and 28:

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.

In his text Handbook of the Law of Torts, 4^th ed. (St Paul: West Publishing Co., 1971) at 263-4, Dean Prosser defined "consequences" directly caused as "those which follow in sequence from the effect of the defendant's act upon conditions existing and forces already in operation at the time, without the intervention of any external forces which come into active operation later."

In Petronsoniak and Security National Insurance Company³, the arbitrator made the following observation in regard to direct cause and intervening acts at page 7:

The definition I find the most useful, however, is the definition of "direct cause" found in Black's Law Dictionary. It is defined as "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."

As I understand that definition, a series of events can be the direct cause of an incident, as long as there is no intervening agency or act.

[emphasis in original]

In Greenhalgh v. ING Halifax,⁴ Labrosse, J.A., enunciated the direct causation test at paragraph 10:

Accordingly, the language of the provision itself sets out the test as involving a consideration of the following two questions:

Did the incident arise out of the use or operation of an automobile?
Did such use or operation of an automobile directly cause the impairment?

... 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".

Finally, in addition to these statements of the test, the comments of Director of Arbitrations Draper in Federation Insurance Company of Canada and Saad ⁵ (at page 5) are noteworthy when examining any set of facts for causation:

The test is easily stated, but difficult to apply. Causation is an elusive concept. Although Chisholm provides important guidance, 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. [emphasis mine]

Arguments of Counsel:

Mr. Fu's position is that he was in the very act of driving when his car was struck by falling debris. As a result of the impact, his head struck against the roof of the car and thus the automobile physically caused the injury. Accordingly, he characterized this event as a single incident with no links of causation to be broken. Mr. Fu cited a number of Court and arbitral decisions (Souchuk, Saad, Seale, Eccleston, Grewal and Umer)⁶ which involved long chains of events with intermediary occurrences. In each of these cases, the judges and arbitrators held that the incidents were accidents as defined under the Schedule.

In response, Kingsway did not dispute that Mr. Fu had met the first branch or the "purpose" test as set out in Greenhalgh. Nevertheless, Kingsway argued that Mr. Fu failed to satisfy the second and third branches of the Greenhalgh and the Chisholm test. Rather than viewing the incident as a single occurrence, Kingsway characterized this as a chain of incidents and suggested that the falling debris amounted to a new and "intervening act or event" that broke the causal chain. The falling debris was analogous to the gunshots in Chisholm, and the Court and arbitral decisions dealing with assaults (including Chisholm, Liu, Swaby, Sarkisian)⁷ correctly precluded Mr. Fu from obtaining relief under the Schedule. In fact, the automobile was no more than the situs of the incident, and Mr. Fu failed the third branch of the Greenhalgh test because the dominant feature of the incident was the falling debris and not the use or operation of the automobile.

Analysis:

Intervening Acts and Assaults

In support of its case, Kingsway characterized the falling debris as an intervening act or force and directed me to the two Court of Appeal decisions. In Greenhalgh, a car stalled when it became lodged on a rock on a country road. The driver then wandered lost, and overnight, fell into a river, and eventually suffered severe frostbite and other injuries. The Court found that the occurrences that took place between the car stalling and the injuries suffered were intervening acts that could not be considered a "normal incident of the risk created by the use or operation of the car." Thus, the use or operation of the vehicle did not cause the impairment because the casual chain was broken.

I cannot agree with Kingsway’s assertion that the falling debris of the instant case resembled the intervening acts in the Greenhalgh case. In Greenhalgh, no less than nine discrete events took place between the time the insured left her car and the time she suffered her injuries. They included the failure of the insured’s cellphone, the weather, the darkness, the long period she walked, her disorientation, the loss of her boots, and the fact that she fell in the river. Each of these activities progressively distanced the insured from the original use and operation of the automobile to the point that all connection with the automobile was lost.

Unlike the Greenhalgh scenario, no occurrences separated the first event in Mr. Fu's case (the falling debris), and the event that led to the injuries (the striking of the insured’s head against the roof of the car). The effect of the falling debris was immediate and instantaneous, and there was physical contact between the car and the insured’s head. Clearly, this incident demonstrated "time, proximity, activity" (three of the four factors listed by the Director in the Saad (supra) decision as relevant factors in an examination of causation).

Alternatively, Kingsway invites the conclusion that the originating incident (the falling debris) was itself an intervening cause, given that it originated from a source other than the car. In this regard, I do not doubt that the falling debris might be characterized as another contributing or direct cause of the incident, but that in itself would not necessarily preclude a determination that the incident was an accident. In Chisholm, Mr. Justice Laskin held the following at paragraph 31:

[c]onceivably 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. [emphasis mine].

Thus, there may be more than one direct cause of an accident, and both Greenhalgh and Chisholm hold that some intervening events will not break the causal chain so long as they are within the "normal incident of the risk created by the use or operation of the car." In Mr. Fu's case, the question to determine is whether falling debris represents such a normal incident of that risk.

Kingsway's response is that falling debris is not a normal incident of the risk created by the use or operation of an automobile, and suggested that Chisholm is directly on point. In Chisholm, a driver was injured when an unknown assailant fired shots into his car. The Court held that the injuries received in a random shooting did not constitute an accident because the use or operation of the automobile did not directly cause the impairment. The gunshots were a new, independent and intervening act which broke the chain of causation started by the use or operation of the automobile. In that decision, Laskin J.A. made the following statement at paragraph 29:

Put differently, 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" ... Gunshots from an unknown assailant can hardly be considered an intervening act in the "ordinary course of things". [emphasis mine]

Kingsway argues that the flying bullets and the falling debris are similar in that they fell or travelled through the air and struck the drivers in their respective vehicles. As in the instant case, no events or occurrences separated the firing of the gun from the impact of the bullets in the driver's body. Despite some physical similarity, I am not convinced that falling debris is exactly analogous to flying bullets. As Mr. Justice Laskin stated, "Gunshots from an unknown assailant can hardly be considered an intervening act in the 'ordinary course of things.'" This reasoning has been followed in other decisions involving the acts of assailants. In Lombard and Liu (supra), Director of Arbitrations Draper made the following statement:

Judges and arbitrators have consistently held that impairments resulting from assaults are not covered under this test" (p.8)

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 (p.9).

In CGU Insurance Company of Canada and Irving,⁸ Director's Delegate Makepeace held that an injury caused to a cyclist by the impact of a projectile thrown from a moving truck did not constitute an "accident." She stated the following at page 11:

There are several broad categories, but the assault cases are the most settled. 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.

The common factor in the decisions of Chisholm, Liu, Swaby, Sarkisian, and Lenti⁹ is a human act or intervention that intentionally caused an injury to an insured. Simply put, apart from the exceptions listed in Irving, it is this assailant’s intervention which is outside the risks associated with the "normal incident of the use or operation of an automobile." As this element is absent from the case at bar, I do not accept Kingsway’s argument, and I do not find that the falling debris can be likened in law to flying bullets, thrown projectiles, or an act of an assailant that breaks the causal chain. Given this, to what might the falling debris be likened? Is falling debris within the "normal incident of the risk created by the use or operation of an automobile"?

Road Hazards, Snow Falling, and Garage Fires

Mr. Fu argues that the falling debris more closely resembles the inanimate objects which contributed to the injuries in the decisions of Saad, Seale, Shantz, Souchuk and Grewal.¹⁰In Saad, the insured left his car and slipped on an icy surface at a gas station after filling his tire with air. Although the insured's impairment resulted from the slip on the icy surface, it was held that "... this was not a new, intervening event that broke the chain of causation between Mr. Saad's use or operation of the automobile and his injuries." In Seale (supra), the insured slipped on an icy road as she walked toward her van after it had stalled in the snow and rolled down a hill. The Director's Delegate held the following:

In my view, these factors - time, proximity, activity and risk - are important in defining the incident that resulted in injury. It is clear 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.

... There was a "perfect chain" between the two events, in my view. Putting it another way, the entire sequence of events was one incident."

In Shantz, the insured slipped and fell on a concrete ramp after attempting to use a key box in a parking garage. The arbitrator held that the presence of the concrete pavement on the ramp did not "... represent an active intervening force which interrupted the chain of events precipitated by the use and operation of the automobile." In Souchak, the insured fell on the road as she ran from her vehicle to aid her friends in another vehicle. The arbitrator held that the injury was "not the result of a new and independent force." In Grewal, the insured was upstairs in his house when a car struck his home. He fell and was injured while running downstairs to investigate the incident. The arbitrator held that this, too, was an accident and that there was no "... intervening act or, at the very least, there was no subsequent contributing cause that broke the chain of causation."

In each of these decisions, the judges and arbitrators examined the circumstances of each particular set of facts and applied a common sense focus to the nature of the risk. In each case, it was determined that the incidents or occurrences (slipping on an icy road, falling on a concrete ramp, coming to the aid of friends on a highway, etc.) were within the normal and ordinary risks associated with the use or operation of an automobile.

I am of the opinion that the falling debris in the instant case closely resembles the icy surfaces, concrete ramps, and roads encountered in the Seale, Souchak, Shantz, and Saad (supra) decisions. All are inanimate objects; in no case was there direct human intervention, and the falling debris can easily be likened to a "road hazard." Nor is negligence on the part of the owners of the building from which the debris fell an issue. As stated by Director of Arbitrations Draper in the Saad decision at page 4:

Consider the driver who loses control of his vehicle and crashes. The insurer can not avoid paying accident benefits by showing that the accident was caused by ice on the road, or some other road hazard. It is also irrelevant whether the hazard was due to negligence, or that the driver could have avoided it. [emphasis mine].

In Umer and Non-marine Underwriters, Members of Lloyd's¹¹, the insured was injured when he was burned by gasoline that had spilled from his car as it was being repaired in a garage. He was not in the car at the time of the accident but standing in a repair bay. The gasoline was ignited by a spark or flame that originated in the same area. At issue was whether the ignition of the gasoline by a pilot light in a water heater was a "...new and intervening act, independent of the repair of Mr. Umer’s vehicle, which started the fire that was the direct cause of Mr. Umer’s injuries." The arbitrator held the following at page 7:

... the presence of fire hazards such as sources of sparks or open flame normally found in a garage, such as electrical outlets and equipment, blowtorches, or trouble lights and light switches, are definitely part of the normal risk involved in the repair of motor vehicles in garages. ...

The reasoning is clear: what is a normal risk in the use or operation of an automobile is determined by an examination of the physical situation and circumstances surrounding the incident. Like the fire hazard in the garage in the Umer case, road hazards such as ice, slippery roads and potholes will be encountered while driving in the city or country.

Similarly, it is not difficult to imagine that objects might very well fall upon a car during normal use or operation and indeed cause accidents. In the decision of Sklar v. Saskatchewan Government Insurance Office,¹² a motorist took shelter in his stalled vehicle during a snowstorm (cited in Seale at page 14):

Eventually snow piled up, blocking the exhaust pipe. He died from carbon monoxide poisoning, and was found the next day... Sirois J. held that Mr. Sklar "suffered an accident through getting stuck in the snowbank, while driving, riding in and operating a moving motor vehicle." [emphasis mine]

Falling snow, rain, hail, icicles from bridges or overhanging street lamps, tree branches, water and debris from bridges might strike a car travelling or idled or parked underneath. Such an occurrence would not be much different from a car driving over an icy or slippery surface or striking some other such road hazard. If, in the instant case, the concrete slab had fallen onto the road a moment before, and Mr. Fu then drove over the slab, there would be little question that the incident would be labelled an accident. Therefore, I find that encountering falling debris can be considered "... a normal incident of the risk created by the use or operation of an automobile."

Miko, Mahadan, and Dominant Features

Kingsway cited two other arbitral decisions in support of its position that the falling debris amounted to an intervening act that broke the causal chain. In Miko and York Fire & Casualty¹³", the insured was struck by a bicycle after retrieving a package from his van. The arbitrator held the incident was not an accident as defined under the Schedule and made the following observation at page 3:

In my view, Mr. Miko’s proximity to the vehicle and retrieval of the package is coincidental, but not the direct cause of his injuries. I find that the bicycle striking Mr. Miko is a new and independent intervening force because it did not emanate from or arise out of an ordinary use normally attached to an automobile.

In Mahadan and Co-operators,¹⁴ the insured had removed bags of groceries from the trunk of his car, turned from his car, and stepped into a crack in the pavement. The arbitrator held the following at page 6:

I find that while Mr. Mahadan’s motor vehicle led him to the location of his injuries, his injuries, nevertheless, were sustained from a new and independent source other than his car. I find that what caused Mr. Mahadan to trip and fall was the crack in the pavement. This crack in the pavement had nothing to do with the use and operation of a motor vehicle, but was there because of the construction work being done on the parking lot.

I am not convinced that either of these cases is helpful to Kingsway’s position. In Miko, the insured had already gone to his van, retrieved his package, locked his van, turned, and stepped onto the adjoining sidewalk when he was struck by the cyclist. In Mahadan, the arbitrator determined that the insured had taken his groceries and locked his trunk when he turned and slipped on the crack in the pavement. In both instances, the causal chain was complete; the use or operation of the automobile had ended when the subsequent intervening event took place. This is not the situation in Mr. Fu’s case where the insured was in the act of driving when the falling debris struck his car.

Finally, Kingsway argues that the "dominant features" test from the Greenhalgh decision should lead to the conclusion that the dominant feature of the instant case was the falling debris and not the automobile. Again, I am not convinced by this argument. In Greenhalgh, the insured left the automobile, distanced herself and was lost or wandered into the woods. Over ten hours separated her last usage of the car and the time she was found the next morning. Under those circumstances, it is undisputable that the automobile was not the dominant feature of the incident. That is simply not the situation here. In the instant case, I find that the falling debris was one direct cause of the injuries, but so was the use or operation of the automobile. I do not find that Mr. Fu's case fails the dominant features test.

Conclusion:

Mr. Fu was driving downtown and stopped at a red light when falling debris from a nearby building fell upon his car, causing him to strike his head against the roof of his car. The circumstances of this case demonstrate proximity of both space and time. The activity - driving - was one which is clearly within the normal use of an automobile. Further, I find that falling debris is a normal incident of the risk created by use or operation of an automobile. Therefore, I find that the incident of May 15, 2003 constituted an "accident" as defined under section 2 of the Schedule.

EXPENSES:

The expenses of this proceeding in the amount of $150.00 are awarded to Mr. Fu.

April 11, 2005

Edward Lee Arbitrator

Date