Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 213

FSCO A05-002296

BETWEEN:

GERALD BOUDER Applicant

and

ING INSURANCE COMPANY OF CANADA Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Jeffrey Rogers

Heard: By telephone conference call on September 24, 2007.

Appearances: Mr. Graham F. Sirman, solicitor for Mr. Bouder Mr. Chris T. J. Blom, solicitor for ING Insurance Company of Canada

Issues:

The Applicant, Gerald Bouder, sustained serious injures when he fell to the ground as he was trimming trees from a bucket, attached to a 1990 Ford F-700 pick-up. He applied for statutory accident benefits from ING Insurance Company of Canada (“ING”), payable under the Schedule.¹ ING denied his entitlement to benefits on the grounds that he was not injured as a result of an “accident” as defined in section 2(1) of the Schedule. The parties were unable to resolve their dispute through mediation, and Mr. Bouder 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:

1. Was Mr. Bouder injured as a result of an “accident” as defined in section 2(1) of the Schedule?

Result:

1. Mr. Bouder was not injured as a result of an “accident” as defined in section 2(1) of the Schedule.

FACTS

The facts are agreed. On March 15, 2005, Mr. Bouder was working in a bucket, attached to a boom on a 1990 Ford F-700 pick up truck. He was trimming trees. The boom failed and he fell to the ground, sustaining extensive injuries. The Ministry of Labour conducted an investigation and concluded that the lower arm of the boom failed and that the manufacturer of the device knew, or ought to have known of the deficiencies but failed to take steps to ensure that Mr. Bouder’s employer was aware of them.

At the time of the incident, Mr. Bouder was working for a company his father owned. He had been so employed for approximately 27 years. The company provided tree removal and trimming services to homeowners. The company owned the Ford. It was purchased in Canada in 1989 and sent to the United States to have the boom and bucket permanently attached to it, before the company took possession. The Ford was insured under an ING Canada automobile policy, as a commercial vehicle.

When the incident happened, Mr. Bouder was in the bucket, cutting branches with a chainsaw. Following their usual practice, Mr. Bouder’s father had driven the Ford to the jobsite, while Mr. Bouder arrived in another company vehicle. After Mr. Bouder’s father parked the Ford in the driveway of the residence where they were to remove a tree, Mr. Bouder had moved it to the correct position, and then he exited the truck, lowered the stabilizers and checked the bucket.

He then put on a safety harness, entered the bucket and raised it to begin cutting the tree.

About thirty minutes later, Mr. Bouder lowered the bucket so that his father or brother could refill the chainsaw, which had run out of gas. Once the saw was refilled, he again raised and extended the bucket and continued trimming the tree. The incident occurred about three minutes later. There was WSIB coverage, but Mr. Bouder elected to pursue a tort claim against the manufacturer and distributor of the aerial device and made an application to ING for accident benefits.

ANALYSIS

(i) Definition

Mr. Bouder is entitled to accident benefits under the Schedule if his injuries result from an “accident” as defined in section 2 of the Schedule. “Accident” is defined as “an incident in which the use or operation of an automobile directly causes an impairment....”

The definition of “automobile” is not found in the Schedule, but in section 224 of the Insurance Act. It is as follows:

“automobile” includes a motor vehicle required under any Act to be insured under a motor vehicle liability policy;

Two further statutes come into play in determining which motor vehicles are required to be insured under a motor vehicle liability policy.

First, the Compulsory Automobile Insurance Act, R.S.O. 1990 c. C.25, imposes in section 2 a requirement for a “contract of automobile insurance” where a “motor vehicle” is operated on a highway. The CAIA does not contain a definition of “motor vehicle.” It incorporates the definition of “motor vehicle” in the Highway Traffic Act, R.S.O. 1990, c. H.8:

“motor vehicle” includes an automobile, motorcycle, motor assisted bicycle unless otherwise indicated in this Act, and any other vehicle propelled or driven otherwise than by muscular power, but does not include a street car, or other motor vehicles running only upon rails, or a motorized snow vehicle, traction engine, farm tractor, self-propelled implement of husbandry or road-building machine within the meaning of this Act.

Notably, the section 1(1) of the CAIA does specifically provide that a motor vehicle “includes trailers and accessories and equipment of a motor vehicle.”

(ii) Parties’ Positions

ING concedes that the Ford is an “automobile” as defined and that the boom and bucket are accessories or equipment, and therefore part of the Ford, by virtue of the extended definition of “motor vehicle” in the CAIA. Its position focuses on the term “use or operation” in the definition of “accident”. It submits that the Ford was not being used or operated as an automobile, but as a tree trimming device, when Mr. Bouder was injured.

Mr. Bouder argues that his injuries result from using and operating the Ford in precisely the manner in which his employer contemplated it would be used as part of its business operations. Not only was it a normal and well-known activity to which this vehicle could be put, it was the only activity to which it was commercially put. He submits that ING is bound to pay benefits because it insured the Ford as a commercial vehicle, knowing its commercial use and did not exclude accident benefits coverage for situations in which injuries are sustained through use of equipment and accessories, as permitted by section 248 of the Insurance Act.

(iii) Case Law

The definition of “accident” divides into two parts. The first part is concerned with the “use or operation of an automobile”. The second part is concerned with causation of impairment. In its decision in Greenhalgh v. ING Halifax Insurance Company ², the Court of Appeal recognized this division and adopted the two-part test established by the Supreme Court in Amos v. I.C.B.C. The two parts of the test are described as the “purpose test” and the “causation test.”

This dispute involves only the first part of the test. If Mr. Bouder was injured while using or operating an automobile, that was the direct cause of his injuries. The purpose test involves the consideration of two questions:

1. For what purpose was the automobile being used or operated at the relevant time?

2. Did the incident arise out of the ordinary and well-known activities to which automobiles are put?

Mr. Bouder submits that, in answering the question of whether the incident arose out of the ordinary and well-known activities to which automobiles are put, the type of automobile must be considered. He argues that he satisfies the purpose test, because he was injured while doing exactly what the Ford was designed to do. For instance, in Eade and Allianz Insurance Co. of Canada³ , Arbitrator Leitch found that injuries caused by a propane explosion while cooking in a truck/camper, resulted from an “accident” as defined. The applicant had built a homemade camper which was attached to his truck at the time of the incident. The explosion occurred while trying to light a propane stove in the camper. Arbitrator Leitch found that the camper and its fixtures were “accessories and equipment of” the applicant’s truck. He ruled as follows:

“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.”⁴

ING relies on a different line of cases that address the use of multi-purpose vehicles.

In F.W. Argue, Ltd. v. Howe,⁵ the Supreme Court of Canada found that the damage caused as a result of overfilling a fuel tank was not “occasioned by a motor vehicle”, as defined in the predecessor of the HTA. The Court ruled that the damage was caused by the use or operation of the pump mounted on the motor vehicle, while the motor vehicle itself was stationary. The Court noted that it had made a distinction in its earlier decision in Dufferin Paving v. Anger⁶ between damage caused when a cement truck was being operated as a “motor vehicle” and when it was being operated as a cement mixer.

In its decision in Argue, the Supreme Court adopted the following test from the decision Trywhitt-Drake, L.J.S.C., in Harvey v. Shade Brothers Distributors Ltd.⁷:

“Shortly put, the test to be applied when considering the character of a multi-purpose article at any given time is the purpose for which, at that time, it was being used. To take an extreme example: to hold that in all circumstances a self-propelled gun is a vehicle, and never a piece of artillery, would be an obvious absurdity. Similarly, to say that a self-propelled supply tank is invariable as a vehicle and never a supply tank--these uses being exclusive in essence--does not make sense;”⁸

I applied that test in Clement and ING Insurance Company of Canada⁹ when I found that the applicant’s husband did not die in an “accident” as defined, when he was electrocuted while operating a mobile crane, on a construction site.

Mr. Bouder submits that the multi-use cases may be distinguished on several grounds. First, in Clement, the only case decided in an accident benefits context, the crane was not insured under an automobile policy, but under a commercial general liability policy that specifically excluded coverage for injury arising from the operation of an automobile and the crane was not an “automobile” as the term was defined in the policy. As noted earlier, he submits that, once ING agreed to insure the Ford, including the boom and bucket, as an automobile, it was bound to pay accident benefits. Second, none of the other cases deal with entitlement to accident benefits. Third, none of the other cases considered the specific definition of “automobile” that must be applied in determining entitlement to accident benefits under the Schedule.

Conclusion

I will first address Mr. Bouder’s submission that ING could have excluded coverage, but failed to do so. Section 248 of the Insurance Act provides as follows:

Subject to the limitations and exclusions of the endorsement, the insurer may provide by endorsement to a contract evidenced by a motor vehicle liability policy that it shall not be liable for loss or damage resulting from the ownership, use or operation of any machinery or apparatus, including its equipment, mounted on or attached to the automobile while such automobile is at the site of the use or operation of that machinery or apparatus.

Assuming that section 248 would have allowed ING to exclude entitlement to accident benefits for injuries resulting from use of the boom and bucket attached to the Ford, I find that its failure to do so does not remove the necessity of applying the purpose test. Entitlement is still dependent upon a finding that injuries were caused by use or operation of an “automobile” as defined.

For the same reason, I find that the fact that the Ford was insured under an automobile policy is not conclusive. It is conceded that the Ford, including its boom and bucket, was insured as an “automobile.” That does not mean that it was insured for all purposes.

I do not accept the submission that the cases dealing with multi-purpose vehicles cannot be applied when the issue is entitlement to accident benefits. In Argue the Supreme Court set out a general approach to the characterization of a “multi-purpose article.” Had the approach been adopted in characterizing something other than a “motor vehicle”, it might have been simply given persuasive value. I find that I am bound to apply it, when the Supreme Court applied it to the same term, in the same Act at issue in this decision.

The Supreme Court addressed this issue in its recent decision in Citadel General Assurance Co. v. Vytlingam stating as follows:¹⁰

While no-fault insurance and indemnity insurance rest on different statutory provisions, both fall to be interpreted in the context of a motor vehicle policy. When Major J. said in Amos that it was a condition of no-fault coverage that the claim relate to “the ordinary and well-known activities to which automobiles are put”, he was simply signalling that someone who uses a vehicle for a non-motoring purpose cannot expect to collect motor vehicle insurance. If, for example, a claimant got drunk and used her car as a diving platform from which to spring head first into shallow water…she could not reasonably expect coverage from her motor vehicle insurer, even though, in a sense, she “used” her motor vehicle.

In addition, in its decision in Greenhalgh, the Court of Appeal recognized the broad application the same principles of interpretation to various pieces of automobile insurance legislation, with the following statement:

The “purpose test” is common to the interpretation of all automobile insurance legislation. Indeed, this is the very kind of inquiry that informed the first part of the test in Amos, as elaborated upon below, and remains relevant in the interpretation of the differently worded legislation that governs this case. The “purpose test” inquiry is relevant because:

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

(b) it circumscribes the proper scope and application of the legislation.¹¹

Applying the “purpose test” in deciding what is and is not an “automobile” is not a mechanical exercise. Broad principles must inform the decision. As noted in Amos, the expectations of the parties and the proper scope of the legislation form the backdrop. The statutory definition of “automobile” is not exhaustive. The HTA only lists specific vehicles that are included. If a vehicle is not on the list, the ordinary meaning of the term must be applied. Nevertheless, in applying the “purpose test” it must be remembered that both in its specific definition and its broader, ordinary meaning, an automobile is primarily a means of transportation.

Applying the test, along with the directive of the Supreme Court concerning multi-purpose articles, I find that Mr. Bouder’s injuries were not caused by the “use or operation of an automobile”, but by the use or operation of the tree-trimming devices attached. When the incident occurred, Mr. Bouder was well into his tree-trimming job. The Ford had been stationary, with its outriggers in place, long enough for his chainsaw to have run out of gas and be refilled, and he had started into another tank. Looking at it from a practical, common sense perspective, Mr. Bouder was involved in a workplace accident, not an automobile accident. The parties could not reasonably have contemplated coverage from the automobile policy for injuries sustained in this way. I therefore find that Mr. Bouder was not injured as a result of an “accident” as defined in section 2(1) of the Schedule.

EXPENSES

If the parties are unable to resolve the issue of expenses, either party may make an appointment for me to determine the matter in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

November 5, 2007

Jeffrey Rogers Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 213

FSCO A05-002296

BETWEEN:

GERALD BOUDER Applicant

and

ING INSURANCE COMPANY OF CANADA Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Bouder was not injured as a result of an “accident” as defined in section 2(1) of the Schedule.

2. If the parties are unable to resolve the issue of expenses, either party may make an appointment for me to determine the matter in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

November 5, 2007

Jeffrey Rogers Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2(2004) 2004 CanLII 21045 (ON CA), 72 O.R. (3d) 338 (C.A.) at page 344
3. 3FSCO A03-000763 and A03-000776, February 19, 2004
4. 4At Paragraph 25
5. 51968 CanLII 35 (SCC), [1969] S.C.R. 354
6. 6[1940] S.C. R. 707
7. 7(1967), 1967 CanLII 811 (BC SC), 61 W.W.R. 187
8. 8At Page 363
9. 9FSCO A03-001764, September 21, 2004
10. 10Docket 31083, October 19, 2007, at paragraph 16
11. 11At Page 344, paragraph 11