Gerald Bouder v. ING Insurance Company of Canada, 2008 ONFSCDRS 121

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2008 ONFSCDRS 121

Appeal P07-00034

OFFICE OF THE DIRECTOR OF ARBITRATIONS

GERALD BOUDER Appellant

and

ING INSURANCE COMPANY OF CANADA Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Graham F. Sirman for Mr. Bouder Mr. Chris T. J. Blom and Mr. J. Cutler for ING

HEARING DATE: May 22, 2008 in Whitby, Ontario Written submissions were received by June 20, 2008

APPEAL ORDER

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

1. The Arbitrator’s November 5, 2007 order is rescinded and replaced by:

   1. Mr. Bouder was injured as a result of an “accident,” as defined in subsection 2(1) of the Schedule.

2. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003).

July 17, 2008

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

The facts in this proceeding are agreed.

On March 15, 2005, Mr. Bouder (the “Appellant”) was trimming trees with a chainsaw from the bucket of a boom attached to a 1990 Ford F-700 pick-up truck. The boom and bucket are known as a Holan Aerial Device. At the time of the incident, the Ford was parked in the driveway of a private residence with its stabilizers in place. The vehicle’s ignition was running in order to operate the boom and bucket apparatus. The lower arm of the boom failed, causing the Appellant to fall to the ground, sustaining extensive injuries. The truck was owned by the Appellant’s father’s company and had been purchased in 1989. Prior to the company taking possession of the truck, the boom and bucket had been permanently attached to the vehicle.

The parties specifically agree that at the time of this incident, the Ford was insured with ING Insurance Company of Canada (the “Respondent”) under its automobile policy as a commercial vehicle. There is no disagreement that the Appellant was a named insured under this policy and that there was no exclusion in the policy for the equipment and accessories of the Ford. Neither in argument nor in the exhibits filed at arbitration, including transcripts of prior examinations under oath, is there any indication that the Respondent was under any misapprehension as to the nature of the insured vehicle.

The Appellant elected to pursue a tort claim against the manufacturer of the vehicle, rather than apply for workers’ compensation. The Appellant also claimed statutory accident benefits against the Respondent pursuant to the Schedule. ¹

The Respondent denied coverage on the basis that the Appellant’s injuries did not result from the use or operation of an automobile as the Ford was not being used as an automobile at the time of the incident, but as a tree trimming device.

In his November 5, 2007 preliminary issue decision, Arbitrator Rogers (the “Arbitrator”) found that the Appellant was not injured as a result of an “accident,” as that term is defined in subsection 2(1) of the Schedule.

II. THE APPELLANT’S SUBMISSIONS

The Appellant submits that the Arbitrator misapplied the “multi-purpose vehicle” case law to statutory accident benefits. Further, the Arbitrator ignored the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25 (the “CAIA”) which required the Ford to be insured, even in its parked state, and subsection 1(1) thereof, which defines a “motor vehicle” as including its accessories and equipment. The Appellant submits that the relevant terminology is different than ordinary language and as remedial legislation, should be interpreted in a broad and liberal manner.

The Appellant relies on the decision of Arbitrator Leitch in Eade and Allianz Insurance Co. of Canada, (FSCO A03-000763 and A03-000776, February 19, 2004) which held that the CAIA definition included “objects which are somehow integrated into the use or operation of the vehicle and are not off-loaded for independent use on arrival.” The boom and bucket apparatus constituted part of the motor vehicle. The Ford was insured as a commercial vehicle under the Respondent’s policy of insurance and was being used in the precise normal manner in which this specific motor vehicle was contemplated to be used and operated, namely trimming trees.

At the time of the incident, the Ford was also being used and operated as its ignition was running. The Appellant relies on the Ontario Court of Appeal decision in Vijeyekumar et al. v. State Farm Mutual Automobile Insurance Co. (1999) 1999 CanLII 1640 (ON CA), 44 O.R. (3rd) 545, which confirmed that a motor vehicle is being operated “if it is merely sitting idle with its engine running.” In Ash and Wawanesa Mutual Insurance Company, (FSCO A05-001372, August 11, 2006), Arbitrator Wilson held that parking constitutes a normal use of an automobile.

The Appellant raises a new argument on appeal that the Respondent could have contracted out of its obligation to pay accident benefits in the event of injuries sustained as a result of the use of the boom and bucket apparatus pursuant to an OPCF-30 endorsement, but failed to do so.

The Appellant states that the Respondent was aware of the OPCF-30 endorsement. In Optimum Frontier Insurance Company and ING Halifax Insurance Company, (August 23, 2004), a private arbitration proceeding was held before Arbitrator Jones pursuant to the Arbitration Act, S.O. 1991, c. 17. In that decision, released more than six months before this incident, the Respondent relied on the OPCF-30 endorsement to avoid responsibility for payment of statutory accident benefits in a dispute between insurers pursuant to Ont. Reg. 283/95.

The Appellant thus submits that the use of the tree trimming device was within the reasonable contemplation of the parties. The Respondent insured a commercial vehicle which it knew or ought to have known, by definition, included the attached equipment. The OPCF-30 allowed the Respondent to limit its risk. It failed to do so and, therefore, must provide accident benefits. Hence, the Arbitrator’s November 5, 2007 decision should be set aside and an order issued that Appellant was injured in an accident as defined in subsection 2(1) of the Schedule.

III. THE RESPONDENT’S SUBMISSIONS

The Respondent submits that the Schedule represents a more exacting causal connection, the onus being on an insured person to establish that the use or operation of an automobile directly caused an impairment. That test is not satisfied where an impairment is caused by the operation of tree trimming equipment.

The Respondent concedes that the Ford was an automobile, that the Holan aerial device was affixed to and part of that vehicle and that the Ford was required to be insured under the CAIA.

However, citing Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46, [2007] S.C.J. No. 46, as well as Hanlon and Guarantee Company of North America, (OIC P95-00003, March 18, 1997) and Mahadan and Co-operators General Insurance Company, (FSCO A00-000489, March 15, 2001), the Respondent submits that the mere presence of a motor vehicle at the scene of the incident is insufficient to meet the definition of “accident.”

Rather, it is the manner in which the vehicle is being used at the time of the incident that is material. As stated in F.W. Argue Ltd. v. Howe, 1968 CanLII 35 (SCC), [1969] S.C.R. 354, it does not matter whether the machinery, in that case a pump, was being operated by the same machinery that propelled the truck; rather, one must consider the use of the vehicle at the relevant time.

At the time of this incident, the Ford was not being used as an automobile. Its transmission was in park, the vehicle was parked off of the road, its stabilizers had been lowered to prevent it from moving, the Appellant was in the bucket and not in the driver’s seat and the aerial device was being operated by controls in that bucket. In this case, the impairment sustained by the Appellant did not arise from the use of the Ford as an automobile.

The Respondent thus submits that “purpose test” set out in Amos v. Insurance Corporation of British Columbia (1995), 1995 CanLII 66 (SCC), 3 S.C.R. 405 was not met, and argues that the “fact that the Ford is an automobile when driven on a roadway, is incidental to the manner in which it was used at the time of the accident.”

The Respondent relies on cases involving multiple-use automobiles. These include Lanteigne v. Nova Scotia (Workers’ Compensation Appeal Tribunal), [2002] N.S.J. No. 519, which involved a similar fact situation wherein a crane toppled from a boom truck. The Court held that the Workers' Compensation Appeals Tribunal was not patently unreasonable in finding that the incident did not involve the use or operation of a motor vehicle. Citing R.A. Beamish Stores Co. v. F.W. Argue Ltd., 1966 CanLII 23 (ON CA), [1966] 2 O.R. 615, the Respondent submits that a “motor vehicle is primarily a conveyance,” or, as stated in Vytlingam:

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.

The Respondent submits that many of the multiple-use cases address the same definition of motor vehicle in the Highway Traffic Act, R.S.O. 1990, c. H.8. It concedes that if different legislation were being considered, these cases would be of little help, but here they are persuasive authority.

The Respondent further argues that the chain of causation in this case was broken when the Appellant left the driver’s compartment. The failure of the bucket was an intervening act brought about by external forces, namely the failure of the lower arm of the aerial device. This further removed the impairment sustained by the Appellant from the use or operation of the Ford as an automobile.

The Respondent submits that there was no evidence that it was the reasonable expectation of the parties that this incident would be covered by the automobile insurance policy. While the legislation should be interpreted liberally, one cannot torture the wording beyond its true meaning.

The Respondent distinguishes Optimum Frontier where, unlike here, the parties agreed that the insured was injured in an accident and there was no discussion of the “multiple-use” cases. The existence of an OPCF-30 endorsement merely clarifies the extent of insurance coverage; its absence does not signify that there is coverage. It must first be established that there was a motor vehicle and that the motor vehicle was being used for a motoring purpose at the time of the incident before one addresses the OPCF-30 endorsement.

IV. ANALYSIS

Entitlement to accident benefits under the Schedule requires that an insured person sustain an impairment as a result of an “accident.” Subsection 2(1) of the Schedule defines an accident as:

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

The Schedule does not define the term “automobile.” Section 224 of the Insurance Act, under which the Schedule is promulgated, provides that an “automobile” includes a motor vehicle required under any Act to be insured under a motor vehicle liability policy.

Accordingly, the definition in the CAIA is important. Subsection 2(1) of the CAIA requires a motor vehicle to be insured under a contract of automobile insurance if it is caused or permitted to be operated on a highway. “Highway” is defined under the Highway Traffic Act as including a common and public street, any part of which is intended for or used by the general public for the passage of vehicles. Subsection 1(1) of the CAIA defines “motor vehicle” as having:

… the same meaning in the Highway Traffic Act and includes trailers and accessories and equipment of a motor vehicle;

The definition of motor vehicle in the Highway Traffic Act simply lists certain means of conveyance which are or are not included in the definition of “motor vehicle.” An automobile is included within the definition. A road-building machine, which was the subject of Arbitrator Rogers’ decision in Clement and ING Insurance Company of Canada, (FSCO A03-001764, November 18, 2004), is specifically excluded. Regarding a pick-up truck with an attached boom and bucket being used in the process of trimming trees, the legislation is silent.

The Insurance Act itself contains the following provision:

Liability for damage caused by machinery, etc.

248. 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.

The Appellant now submits that section 248 allowed an insurer to exclude accident benefits. However, section 227 of the Insurance Act allows an insurer to limit its liability in special cases by using an endorsement approved by the Superintendant of Financial Services. Subsection 227(2) of the Insurance Act provides:

Approval of policies in special cases

(2) Where, in the opinion of the Superintendent, any provision of this Part, including any statutory condition, is wholly or partly inappropriate to the requirements of a contract or is inapplicable by reason of the requirements of any Act, he or she may approve a form of policy, or part thereof, or endorsement evidencing a contract sufficient or appropriate to insure the risks required or proposed to be insured, and the contract evidenced by the policy or endorsement in the form so approved is effective and binding according to its terms even if those terms are inconsistent with, vary, omit or add to any provision or condition of this Part.

OPCF-30 is a brief endorsement, entitled “Removing Coverage for Attached Machinery.” The parties agree that this endorsement was available at the time of the accident. It consists of two paragraphs. The first sets out the purpose of the endorsement as removing “coverage for loss or damage resulting from the ownership, use or operation of attached machinery or apparatus.” The second paragraph states:

Limitations on Your Coverage

In return for the premium charged, we will not provide coverage for loss or damage under section 3, “Liability Coverage,” or Section 4, “Accident Benefits Coverage,” of your policy for loss or damage resulting from the ownership, use or operation of the following machinery or apparatus, including its equipment, mounted on or attached to the automobile, while at the site of the use or operation of the machinery or apparatus.

I find that it is pertinent to ask why would the Legislature enact a provision to allow insurers to remove coverage of something that it is argued was never covered in the first place.

If one starts with the presumption that machinery or an apparatus attached to a motor vehicle are part of the motor vehicle and the use or operation of those accessories are part of the use or operation of the vehicle, then both section 248 of the Insurance Act and the OPCF-30 endorsement created pursuant to subsection 227(2) of that legislation have an obvious purpose, namely allowing an insurer to remove or limit coverage otherwise in place.

However, if one starts with the proposition that such machinery or apparatus are not part of the motor vehicle and/or that the use or operation of such machinery or apparatus are not the use or operation of the motor vehicle, then it is not readily apparent what purpose section 248 of the Insurance Act or the OPCF-30 endorsement serve. Nor is it readily apparent why or how the attached equipment or apparatus in this specific case would be distinguishable from attached machinery or apparatus generally.

The Arbitrator gave the following reasons for finding that the Appellant was not injured in an accident, as defined under the Schedule. Respectfully, I am persuaded that the Arbitrator erred in law in this regard.

1. The failure of an insurer to provide an endorsement pursuant to section 248 of the Insurance Act does not eliminate the “purpose test” enunciated by the Ontario Court of Appeal in Greenhalgh v. ING Halifax Insurance Company (2004), 2004 CanLII 21045 (ON CA), 72 O.R. (3d) 338.

The Supreme Court of Canada, in Amos, in interpreting the meaning of “death or injury caused by an accident that arises out of the ownership, use or operation of a vehicle” in subsection 79(1) of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, held that the provision should not be stretched beyond its plain and ordinary meaning or given a technical construction that defeated the object and insuring intent of the legislation providing coverage. The Court found that a two-part test (the first part being known as the “purpose” test) was to be applied:

1. Did the accident result from the ordinary and well-known activities to which automobiles are put?

2. Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the insured person’s injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

Sullivan and Driedger on the Construction of Statutes, Fourth Edition (Ottawa: Butterworths, 2002) states that it is “presumed that the legislature avoids superfluous or meaningless words, that it does not pointlessly repeat itself or speak in vain. Every word in a statute is presumed to make sense and to have a specific role to play in advancing the legislative purpose.”

This presumption against tautology was confirmed by the Ontario Court of Appeal in Vijeyekumar “that the legislature is presumed to avoid unnecessary or meaningless language. Every word in a statute or regulation is to have a meaning and a function.”

The importance of section 248 in this case is not whether it itself allows insurers to be exempted from accident benefit coverage on the use or operation of attached equipment. Rather, in determining the meaning of “automobile” within the definition of accident in the Schedule, it is a significant indication of the legislative intent that unless specifically excluded, such use or operation is part of the use or operation of the vehicle. Otherwise, section 248 is superfluous.

Amos, in finding that the plaintiff’s injuries from being shot while driving arose out of the ownership, use and operation of his van, did not consider section 248 of the Insurance Act, the OPCF-30 endorsement, subsection 1(1) of the CAIA or equivalent provisions in British Columbia.

In any event, the use and operation of the permanently attached bucket and boom was an ordinary and well-known activity to which this vehicle was put, and the running of the ignition at the time of this incident was an ordinary and well-known activity to which automobiles in general are put.

2. That the Ford was insured under an automobile policy is not conclusive. Although it was 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.

The Supreme Court, in Vytlingam, held that “an off-beat use” of a motor vehicle such as using it as a diving platform to spring head first into shallow water or other “bizarre” uses could not reasonably be expected to be encompassed under the coverage of motor vehicle insurance.

In this case, the parties agree that the Ford was insured as a commercial vehicle. At the time of the incident, the Ford was not being used for an off-beat use or some bizarre purpose. Rather, it was being used precisely for the commercial purpose for which it had been purchased sixteen years prior and used thereafter, namely, trimming trees. The Ford did not cease to be a motor vehicle when it was stopped. It did not cease to be a motor vehicle when it was parked. I am persuaded that it did not cease in law to be a motor vehicle when the vehicle itself was being used to access and trim trees.

3. The cases dealing with multi-purpose vehicles, including the Supreme Court of Canada decision in Argue are binding. These decisions address the same term of “motor vehicle” in the same Act at issue and are equally applicable to accident benefit cases.

The “multi-purpose” cases mainly arise in the context of whether the interpretation of the term “motor vehicle” allowed the plaintiff to circumvent a tort limitation defence.

Dixon Cable Laying Co. Ltd. v. Osborne Ltd. (1974), 1974 CanLII 1400 (BC SC), 49 D.L.R. (3d) 243 (B.C.S.C.), considered the limitation defense under subsection 79(1) of the Motor-vehicle Act, R.S.B.C. 1960, c. 253, which provided that no action could be brought for the recovery of damages occasioned by a motor vehicle after the expiration of twelve months from when the damages were sustained. The Court held that the damage alleged to have occurred while a backhoe loader was being used to fill in a ditch was not being used as a motor vehicle and that “the statutory bar only operates when the vehicle in question is being used as a motor vehicle.”

L. Blackburn Excavating Ltd. v. Salmon Arm Machine Shop Ltd. (1977), 1977 CanLII 1738 (BC SC), 76 D.L.R. (3d) 190 (B.C.S.C.) pertained to a dump truck dumping a load of dirt when the hoist collapsed, causing damage. This was also a limitation case under subsection 79(1) of the British Columbia Motor-vehicle Act. The Court held that “the damage was occasioned by the use of the auxiliary hoist, while it was being used to dump material, a purpose unrelated to the operation of the truck as a motor vehicle.” The Court noted prior cases where:

… a distinction was drawn between the two or more functions that a piece of equipment can perform. When it travels along the highway, acting as a commercial carrier of cement, or oil, or in transporting a shovel or a gun, it is a motor vehicle. When it is stationary, by the side of the road, in a ditch or a field, being used as a pumping machine, and to dig ditches (with a shovel at either end), then it is functioning for a purpose other than a purely vehicular one of conveying cargo on the highway. [emphasis added]

Blackburn followed the reasoning of Dickson J. in Dufferin Paving & Crushed Stone Ltd. v. Anger & Derbyshire, 1939 CanLII 9 (SCC), [1940] S.C.R. 174, that “damages occasioned by a motor vehicle or by the operator thereof” do not “embrace situations where the damage is occasioned – the vehicle being stationary – by the use of auxiliary equipment attached to, but not forming an integral part of, a vehicle, and used for a purpose unrelated to the operation of the vehicle qua vehicle.” Dufferin Paving was also a limitation defence case, specifically under section 53 of The Highway Traffic Act, R.S.O., 1927, c. 251, as amended.

At issue in Harvey v. Shade Bros. Distributors Ltd., [1967] B.J.C. No. 39 was also the limitation period in subsection 79(1) of the British Columbia Motor-vehicle Act. The British Columbia Supreme Court held that “… 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.” The Court held that the conveying of oil from a delivery tank truck was “a purpose other than the purely vehicular one of conveying cargo upon the highway; and so, the (tortious) occurrence in question was not one in which a motor vehicle was involved.” It was an obvious absurdity “to hold that in all circumstances a self-propelled gun is a vehicle, and never a piece of artillery” or “that a self-propelled supply tank is invariably a vehicle and never a supply tank.” Accordingly, the action was not barred by the aforesaid limitation provision and could proceed.

Harvey referred to R.A. Beamish Stores Co. v. F.W. Argue Ltd., 1966 CanLII 23 (ON CA), [1966] 2 O.R. 615, which addressed the limitation period under the Highway Traffic Act, R.S.O. 1960, c. 172. The British Columbia Court could not “withstand the good sense of Laskin J.A.” in R.A. Beamish that a “motor vehicle … is primarily a conveyance; and it follows that when it is not being used as such, it is not necessarily a motor vehicle.” In my view, “not necessarily” means that it may still be a motor vehicle even when not being used as a means of conveyance. On appeal to the Supreme Court of Canada, in F.W. Argue Ltd., Spence J. stated that:

I am of the opinion that the Dufferin Paving case is an authority only for the proposition that when damage is occasioned by a motor vehicle used as such whether that damage sounds in negligence or in nuisance or in breach of statutory regulations, the section is a bar to actions instituted by the issuance of a writ more than twelve months after the damage occurred.

The Supreme Court, while allowing the cross-appeal on another point, agreed with Laskin J.A. that the limitation provision applied:

only where the damage is occasioned by a motor vehicle which is used in that character and not where it is used for another purpose to which it has been adapted, as for example, a stationary pumping machine.

Lanteigne involved individuals inside a steel bucket at the end of an extended boom attached to a truck crane when the truck crane toppled, causing severe injuries. The truck crane (as in this case) had its outriggers extended and (unlike this case) its wheels lifted off the ground. A civil action was commenced for damages. The Nova Scotia Workers’ Compensation Appeals Tribunal (“WCAT”) found that the civil action was barred as the truck crane was not a “motor vehicle” when it was stationary and being operated as a crane at a worksite. The Nova Scotia Court of Appeal dismissed the appeal, holding that the decision was not patently unreasonable as the crane falling did not involve the “use or operation” of a motor vehicle.

A major consideration in Lanteigne was the legislative context of workers’ compensation which, as stated in Pasiechnyk v. Saskatchewan (Workers’ Compensation Board), 1997 CanLII 316 (SCC), [1997] 2 S.C.R. 890, involved a:

… “historic trade-off” by which workers lost their cause of action against their employers but gained compensation that depends neither on the fault of the employer not its ability to pay.

WCAT had noted that the exemption from workers’ compensation coverage “must be interpreted in the light of the necessity of providing employers protection from lawsuits with respect to workplace injuries.” The Nova Scotia Court of Appeal noted that WCAT chose not to follow the second, causal relationship, part of the two-part test in Amos, but rather followed the multi-use vehicle analysis in Argue, which was not mentioned in Amos.

Perhaps a high water mark of this line of cases is Longley v. General Motors of Canada Ltd., [2008] O.J. No. 998. Here, the plaintiff was standing on a rear bumper unpacking a truck. The rear tailgate of the truck collapsed, causing the plaintiff to fall and injure her wrist. Addressing the limitation period under subsection 206(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, the Court found that a tailgate was not an integral part of the conveyance of the motor vehicle, as “the truck could be operated to convey the driver and any passengers in the cab area whether or not the tailgate functioned. Also, the cargo bed of the truck could be used to transport some types of cargo without a properly functioning tailgate.” Accordingly, the claim was not statute barred.

In Karakas et al. v. General Motors Limited et al., 2004 CanLII 48168 (ON SC), [2004] O.J. No. 5231, the action was found to be statute barred under the Highway Traffic Act. This action involved a property loss caused by allegedly defective wiring in a motor vehicle. The Court held that “one cannot make a distinction between the motor vehicle and its wiring. This is not a case where something has been mounted on or added to the motor vehicle and this mounted or added equipment caused the damage.” The Court did state that it did “not understand Argue v. Howe to stand for the proposition that when a motor vehicle is not in use the limitation in s. 206 of the Highway Traffic Act does not apply.”

The above cases do not address the meaning of “use or operation of an automobile” within the context or purpose of the Schedule or the Insurance Act. Rather, they address the term “motor vehicle” largely in the context of limitation periods found in other legislation. In this case, the route from the Schedule to the Highway Traffic Act is through the Insurance Act and the CAIA. Section 224 of the Insurance Act defines “automobile” as including a motor vehicle required to be insured. The CAIA definition includes a motor vehicle’s accessories and equipment.

Sullivan sets out the principle that legislative interpretation is contextual, that “the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”

Lanteigne itself stated that:

It is apparent from reviewing the case authority that … there is no “bright line of authority” that had to be followed. None of the Supreme Court of Canada cases, Amos, Stevenson and Argue, while helpful, was decided in a similar statutory context or involved a close factual situation. None is clearly determinative as to the approach that should be taken nor as to the result in a situation involving a multiple purpose vehicle such as that before WCAT.

While a court may strictly interpret a limitation period rather than foreclose a right of action, the Schedule, in accordance with the Legislation Act, 2006, S.O. 2006, c. 21, Sch. F, is to be "interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects," consistent with the comments in Bapoo v. Co-operators General Insurance Company, 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616, that "[a]voiding unjust or unacceptable results is an essential part of the court's task in interpreting statutory language."

As set out in Hernandez et al. v. Palmer et al., [1992] O.J. No. 2648, on January 8, 1990, the Hon. Murray Elston, Minister of Financial Institutions, appearing before the Standing Committee on General Government while they were convened to consider a predecessor Insurance Statute Law Amendment Act, 1989 (Bill 68), indicated that the government's objectives in this legislation were affordability, availability, timely delivery and comprehensive protection. A restrictive interpretation in this case would be contrary to at least the principle of comprehensive protection.

4. As noted by the Supreme Court in Amos, the expectations of the parties and the proper scope of legislation form the backdrop, that in both its specific definition and its broader, ordinary meaning, an automobile is primarily a means of transportation.

The Supreme Court re-enunciated in Vytlingam, that “[i]nsurance policies must be interpreted in a way that gives effect to the reasonable expectations of both insured and insurer” [emphasis in the original]. The Court did note, however, that it was not addressing “no-fault statutory accident benefits payable to an insured,” but rather an underinsurance endorsement. Citing cases such as where a car was used as a diving platform, the Court held that “[i]n none of these cases could it be said that the tortfeasor was at fault as a motorist. In none of these cases could it be said that the motor vehicle was being used as a motor vehicle.” In Vytlingam, the tort was dropping rocks from a highway overpass onto a passing car. The car-related activities, including the transporting of those rocks, were found to be severable from that tort.

However, in Vytlingam there was no dispute that driving a vehicle when rocks are dropped on it from an overpass resulting in injury is an “ordinary and well-known” activity to which automobiles are put, which is the first part of the Amos test.

Vijeyekumar was a case where death was caused by carbon monoxide poisoning from a car. The trial judge found that the deceased had committed suicide. The Ontario Court of Appeal did not agree with the argument, based on the purpose branch of the Amos test, that “the ‘mere’ operation of the engine in a motor vehicle in order to convert it into a ‘gas chamber’ … to cause one’s own death is not …the normal way an automobile is operated.” Rather, the Court agreed with the reasoning of the trial judge that:

A car is being operated if it is being driven or if it is merely sitting idle with its engine running. The operation of the engine is part of the ordinary operation of a car. If the use of a vehicle as a weapon to injure somebody else meets the test for “operation”, then surely the use of a vehicle to injure oneself must also meet the test.

The Court held that the trial judge’s approach reflected the expansive approach taken by courts to the purpose test. The Court also agreed with the trial judge’s view that “use” and “operation” were disjunctive and it was sufficient in meeting one of them. Although the manner of death in this case was not an ordinary use of an automobile, it fell within the ordinary operation of a car.

In Eade, Arbitrator Leitch rejected the argument that the misuse of a hibachi in the rear of a van (leading to an explosion and subsequent injury) was an intervening act of negligence. Noting that the CAIA definition of motor vehicle includes “accessories and equipment of a motor vehicle,” he found that this “includes objects which are somehow integrated into the use or operation of the vehicle and are not off-loaded for independent use on arrival.” Here, 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. Arbitrator Leitch found that 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.” Therefore, the camper and its fixtures constituted “accessories and equipment” of the vehicle.

Arbitrator Leitch held that camping was an ordinary and well-known use for the type of vehicle in question and that cooking with a propane stove inside a truck/camper was an ordinary and well-known activity to which such a vehicle is put. I agree with Arbitrator Leitch that the activity in question need not be one for which all vehicles are necessarily equipped.

In Optimum Frontier, the vehicle in question was “a flatbed truck to which was attached a boom, crane-like device used to unload and load materials onto the flatbed.” The cable supporting the load broke, causing damage. It was agreed that the occupant was injured in an “accident” within the meaning of the Schedule. It was, however, disputed whether the vehicle, when parked and the crane was in use, was an automobile within the meaning of the Insurance Act and the Schedule.

Arbitrator Jones, following the Ontario Court of Appeal in Regele v. Slusrczyk (1997), 1997 CanLII 3648 (ON CA), 33 O.R. (3rd) 556, found that the flatbed truck with the boom attached was an “automobile” within the normal meaning of the term and also fell within the definition of subsection 224(1) of the Insurance Act as a “motor vehicle required under any Act to be insured by a motor vehicle liability policy.”

Arbitrator Jones addressed the exclusionary clause in the ING Halifax OPCF-30 policy endorsement as follows:

the crane or boom was being used after the vehicle had arrived at the work site. The flat bed had legs that were planted into the ground in order to allow the boom to operate properly. As such, the boom was really operating as a piece of machinery on a work site and not as a motor vehicle. Accordingly, it was properly the subject matter of an OPCF-30. In light of the above, I am of the view that the exclusionary clause set out in the OPCF-30 was applicable and therefore Optimum Frontier Insurance rather than ING/Halifax should be responsible for paying the statutory accident benefits.

The Prudential Assurance Company Limited v. The Manitoba Public Insurance Corporation, [1989] I.L.R. 1-2492, involved the question as to which insurance policy was responsible for a liability claim. The first policy was a comprehensive general liability policy which excluded coverage in respect of losses arising from the use of motor vehicles, but included an endorsement extending coverage to “machinery or apparatus,” including equipment mounted or attached to a motor vehicle. The second policy provided motor vehicle liability coverage, but excluded coverage for “loss or destruction … arising directly or indirectly out of the use or operating of equipment attached to an insured vehicle for a purpose other than the operation of the vehicle.”

The insured vehicle was a truck permanently attached to a machine which pumped concrete. The machine could not be used independently of the truck from which it derived its energy. The pumping machine contained a boom which was maneuvered with hydraulic controls separate from the steering mechanism and brakes of the truck. While the truck was stationary at a construction complex with its outriggers in place to stabilize the vehicle and the machine was in motion, an electrical current passed through the machine causing resultant damage.

The Manitoba Queen’s Bench referred to the Supreme Court of Canada decision in Stevenson v. Reliance Petroleum Limited, 1956 CanLII 27 (SCC), [1956] S.C.R. 936, which involved a tank truck. The Court held that the term “use” included “not only the transportation of gasoline from the company’s premises to the service station, but also its delivery into the tanks at the service station.” In that decision, Rand J., in considering examples such as “a circus truck carrying a cage from which a lion escapes and does mischief,” determined that the question to be answered was whether there was “a severable activity” and in so doing, looked at the purpose for which the tank truck was used.

Prudential Assurance noted the caution of Spence J. in Argue “against using cases dealing with the interpretation of a statute as authority for cases dealing with the interpretation of a policy of insurance.” Spence J. did not deem Stevenson relevant because it:

… dealt with the liability of an insurance company under a policy and depended for their decision upon the words of the policy. In my view, it mattered not that the words of the policy were also the words of the statute because if there was a statute involved that statute was not a limitation provision of the Highway Traffic Act but was a provision of the Insurance Act of Ontario.

The Manitoba Queen’s Bench held that the “truck in question was not merely a vehicle which was used to carry concrete pumping equipment from one job site to another … Rather the concrete pumping machinery was an integral part of the truck. The purpose and function of the truck was to pump concrete. Accordingly … even though the truck may have been stationary at the time of loss, it can properly be said that the truck was being used for the purpose for which it was intended and that the damage which was caused arose out of the use of a motor vehicle within the meaning” of the Manitoba Public Insurance Corporation Act.

The Respondent submits that Prudential Assurance involved different facts and does not accord with the Supreme Court of Canada in Vytlingam and that if Prudential was argued after the Vytlingam decision, the result could well have been different.

I do not agree. In Vtylingam, the Supreme Court of Canada stated that:

The insurer was liable in Amos because entry into the insured vehicle was the objective of the attackers and the claimant driving in his van was engaged in “ordinary and well-known” activity to which his insured vehicle could be put. Motorists generally believe that, when an accident occurs while they are making “ordinary and well-known” use of their vehicles, no-fault benefits will be available. This is the mutual expectation of both the insured and the insurer. [emphasis added]

The use of the words “his” and “their” as modifier rather than “an” insured vehicle highlight, in my view, that what is important in cases under the Schedule is the objective “ordinary and well-known” use of the type of vehicle in question and what use or operation within that area of initial coverage may have been specifically excluded, as permitted by the legislation.

In this case, one does not merely presume the Respondent to be cognizant of the OPCF-30 endorsement. Rather, Optimum Frontier shows that the Respondent was specifically aware of the endorsement and had used it to its advantage. The Respondent agrees that the Ford was insured as a commercial vehicle. There is no submission that the Ford, at the time of this incident, was being used other than for its specifically intended purpose. The Respondent had the option of using the OPCF-30 endorsement to remove coverage regarding statutory accident benefits for loss or damage resulting from the use of an attached apparatus while at the site of the use or operation of the machinery or apparatus. It did not do so. Accordingly, it is within the proper scope of the legislation and the reasonable expectation of the parties that the loss herein would be covered under this policy of insurance.

5. Applying the purpose test in Amos, the Appellant’s injuries were caused not by the “use or operation of an automobile,” but by the use or operation of the attached tree-trimming device. When the incident occurred, the Ford had been stationary with its outriggers in place long enough for the Appellant’s chainsaw to have run out of gas and be refilled. The Appellant was well into his tree-trimming job. “Looking at it from a practical, common sense perspective, [the Appellant] was involved in a workplace accident, not an automobile accident.”

In Chisholm v. Liberty Mutual Group (2002), 2002 CanLII 45020 (ON CA), 60 O.R. (3d) 776, a motorist was severely injured in a drive by shooting. Laskin J.A. stated that “[w]hen 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 Chisholm, there was an intervening act when the plaintiff was shot.

In this case, there is no dispute that the operation of an integral part of the Ford, namely the failure of the permanently attached lower arm of the boom directly caused the injury in question. It is not the second part of the Amos test, the nexus or causal relationship that is seriously challenged. Rather, it is the purpose test that is in question.

In Greenhalgh the question before the Ontario Court of Appeal was not whether the automobile was being used as an automobile, but whether the automobile was the direct cause of the insured person falling into a river after her vehicle became lodged upon a rock and she had walked, disoriented, for nine or ten hours. The Court stated that in that factual situation, as in Hanlon (a road rage case where the insured was assaulted with a cellular phone), Alchimowicz (where an individual drove to a swimming area and dove into shallow water) and Mahadan (where the insured, after closing the trunk of his vehicle, twisted his foot on a groove in the pavement),

the use of the car had ended without injury being suffered, the insured had physically left the car; no automobile contributed physically to the insured’s injuries; and there was temporal distance between the end of the use of the car and the injuries. As in Hanlon, the problem with the car could be said to have led to the injuries, but one could not say that it caused the injuries. As in Mahadan, the factor that physically caused the injuries, in the present case the weather, was unrelated to the use or operation of the automobile.

The Court continued:

It cannot be said that the insured’s injuries in the Amos case “resulted from” the regular activity to which his automobile was being put, in the causal sense of these words. Rather, it meant that the insured’s injuries flowed out of the regular activity to which his automobile was being put.

The Appellant’s case is not one of a vehicle merely being present at the time of injury. It is not a case of the injured person having left the vehicle. Nor is it a case of the vehicle not contributing to the insured’s injuries. Rather, this is a case where the Appellant’s injuries flowed directly out of a regular activity to which the Ford, which the Respondent concedes was an automobile and was required to be insured, was put.

As in Eade, the permanently attached boom and bucket were “integrated into the use or operation of the vehicle and [were] not off-loaded for independent use on arrival.” Also as in Eade, the boom and bucket “depended entirely on the vehicle for their usefulness.” As in Prudential Assurance, the “machine could not be used independently of the truck from which it derived its energy.”

To say that this is a workplace, not an automobile, accident implies that one should perhaps not be concerned as there is alternative coverage available. However, what if the lower arm of the boom had fallen on a non-employee pedestrian? Alternatively, does one differentiate, in the absence of an OPCF-30 endorsement, between the driver door of the vehicle falling off of its hinges and causing injury and the boom falling on the same person?

It is argued that at the time of this incident, the Ford was being operated as a tree trimming device and not as an automobile normally would be operated, namely, as a means of conveyance. I find that this, by itself, under the provisions of the Schedule and the Insurance Act, does not mean that there was no coverage. Rather, the significance would be limited, using the words of Arbitrator Jones in Optimum Frontier, to whether the automobile was “properly the subject matter of an OPCF-30.”

This government sanctioned endorsement would have allowed the Respondent to exclude coverage on the use or operation of the attached boom and bucket if, using the words of subsection 227(2) of the Insurance Act, coverage in these circumstances was wholly or partly inappropriate to the requirements of the contract or inapplicable by reason of the requirements of any Act. By failing, however, to take advantage of this legislative option, the Respondent retained responsibility for coverage.

In the absence of the OPCF-30 endorsement, to read into the definition of accident under the Schedule that the use or operation of the attached equipment was not part of the use or operation of the automobile would be to render section 248 of the Insurance Act, the OPCF-30 endorsement and the definition of “motor vehicle” in subsection 1(1) of the CAIC as including accessories and equipment of a motor vehicle, meaningless. Accordingly, the decision dated November 5, 2007, which found that the Appellant was not injured as a result of an accident, as defined, is rescinded.

V. EXPENSES

If the parties are unable to agree on the legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003). I wish to sincerely thank counsel for both parties for their most comprehensive and exceedingly helpful written and oral submissions.

July 17, 2008

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.