Jason Therrien v. Motor Vehicle Accident Claims Fund, 2011 ONFSCDRS 19

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2011 ONFSCDRS 19

FSCO A10-000094

BETWEEN:

JASON THERRIEN

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Suesan Alves

Heard: By telephone conference call on July 9, 2010.

Appearances: David Hollingsworth for Mr. Therrien

Robert W. Kerkmann for the Motor Vehicle Accident Claims Fund

Issues:

The Applicant, Jason Therrien, was injured while operating his motorcycle in Ontario on April 25, 2009. He applied for statutory accident benefits from the Motor Vehicle Accident Claims Fund (“the Fund”), payable under the Schedule.¹ The Fund disputes Mr. Therrien’s entitlement to those benefits. It submits that section 226(2) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, prevents it from paying statutory accident benefits. Mr. Therrien disagrees.

The issues are:

1. Does subsection 226(2) of the Insurance Act prevent the Fund from paying Mr. Therrien statutory accident benefits?

2. Which party is entitled to its expenses of this hearing?

Result:

1. Subsection 226(2) of the Insurance Act does not prevent the Fund from paying Mr. Therrien statutory accident benefits. The Fund is liable to pay Mr. Therrien the statutory accident benefits to which he is entitled.

2. If the parties are unable to agree on expenses that issue may now be addressed.

EVIDENCE AND ANALYSIS:

Agreed facts

The parties agree on the following facts:

Jason Therrien, aged 22, sustained a catastrophic impairment when he fell off his motorcycle while operating it on a private motor cross track on April 25, 2009 in Ontario.

The motorcycle was not insured. After the accident, Mr. Therrien applied to the Motor Vehicle Accident Claims Fund for statutory accident benefits under the Schedule.

Positions of the parties

Mr. Therrien claims entitlement to statutory accident benefits from the Fund. He submits that the Fund should pay those benefits as he was involved in a single vehicle accident and his vehicle was uninsured. He concedes that he is not entitled to housekeeping or loss of income benefits because of the exclusion provisions contained in section 30 of the Schedule.

The Fund relies on subsection 226(2) of the Insurance Act which states: “This Part does not apply to a contract providing insurance in respect of an automobile not required to be registered under the Highway Traffic Act unless it is insured under a contract evidenced by a form of policy approved under this Part.”

The Fund submits that Mr. Therrien’s vehicle was required to be registered under the Off-Road Vehicles Act, R.S.O. 1990, c. O.4, not the Highway Traffic Act, R.S.O. 1990, c. H.8. The Fund submits that there is a legislative gap in that subsection 226(2) should also refer to the Off-Road Vehicles Act. The Fund submits that because of this gap, Mr. Therrien is not entitled to statutory accident benefits which are provided under Part VI of the Insurance Act. The Fund submits that it is therefore precluded from paying Mr. Therrien statutory accident benefits.

Mr. Therrien disagrees with the Fund’s position. Counsel for both parties submit that there are no cases on point.

For the following reasons, I conclude that subsection 226(2) of the Insurance Act does not prevent the Fund from paying Mr. Therrien statutory accident benefits and that the Fund should pay Mr. Therrien the statutory accident benefits to which he is entitled.

I will first deal with the statutory accident benefits scheme, Mr. Therrien’s entitlement to statutory accident benefits and then address the Fund’s submissions.

The statutory accident benefits scheme

Subsection 268(1) of the Insurance Act deems that every motor vehicle liability policy shall provide for statutory accident benefits as set out in the Schedule. As a result, it is possible that two or more insurance policies will be available to respond to a claim for statutory accident benefits where two or more insured vehicles are involved in an accident. Subsection 268(2) of the Insurance Act provides a list of the priority in which available policies must respond to claims for statutory accident benefits.

Subsection 268(2) also addresses the situation of claimants who have no insurance policy to respond to claims for statutory accident benefits. For example, a pedestrian who has no automobile insurance policy and is struck by an uninsured vehicle, or a person who, like Mr. Therrien, was involved in a single vehicle accident in which the vehicle was uninsured.

Where there is no insurance policy available to respond, subsection 268(2) subparagraph 1. iv provides that if the person is an occupant of a vehicle, that person has recourse against the Motor Vehicle Accident Claims Fund. Subparagraph 2. iv provides that non-occupants have similar recourse.

Subsections 268(1), (2) and (3) of the Insurance Act are set out below:

268. (1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule. 1993, c. 10, s. 26 (1).

Liability to pay

(2) The following rules apply for determining who is liable to pay statutory accident benefits:

1. In respect of an occupant of an automobile,

i. the occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the occupant has recourse against the insurer of the automobile in which he or she was an occupant,

iii. if recovery is unavailable under subparagraph i or ii, the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to statutory accident benefits arose,

iv. if recovery is unavailable under subparagraph i, ii or iii, the occupant has recourse against the Motor Vehicle Accident Claims Fund.

2. In respect of non-occupants,

i. the non-occupant has recourse against the insurer of an automobile in respect of which the non-occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the non-occupant has recourse against the insurer of the automobile that struck the non-occupant,

iii. if recovery is unavailable under subparagraph i or ii, the non-occupant has recourse against the insurer of any automobile involved in the incident from which the entitlement to statutory accident benefits arose,

iv. if recovery is unavailable under subparagraph i, ii or iii, the non-occupant has recourse against the Motor Vehicle Accident Claims Fund. R.S.O. 1990, c. I.8, s. 268 (2); 1993, c. 10, s. 1; 1996, c. 21, s. 30 (3,

Liability

(3) An insurer against whom a person has recourse for the payment of statutory accident benefits is liable to pay the benefits. R.S.O. 1990, c. I.8, s. 268 (3); 1993, c. 10, s. 1.

Mr. Therrien’s claim for statutory accident benefits

I find that the motorcycle which Mr. Therrien was using and operating is an automobile within the meaning of subsection 224(1) of the Insurance Act, because it was required to be insured under a motor vehicle liability policy under the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, or under the Off-Road Vehicles Act.²

Section 2 of the Schedule defines 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, denture, hearing aid, prosthesis or other medical or dental device.”

Mr. Therrien was rendered a paraplegic when he fell off his motorcycle on April 25, 2009. I find that the use or operation of an automobile directly caused a catastrophic impairment. I find that Mr. Therrien was therefore involved in an accident within the meaning of section 2 of the Schedule.

I find that since Mr. Therrien was the driver of the motorcycle, he was an occupant of the vehicle at the time of the accident within the meaning of subsection 224(1) of the Insurance Act.³ His situation is therefore addressed by paragraph 1 of subsection 268(2) of that Act.

I find that Mr. Therrien is not entitled to statutory accident benefits under any other available policy of automobile insurance in subparagraphs 268(2) 1. i, or ii, because he was not insured. As this was a single vehicle accident, he does not have recourse against the insurer of any other automobile involved in the accident under subparagraph iii. As Mr. Therrien was an occupant of the vehicle, I find that under subparagraph 1. iv of subsection 268(2) of the Insurance Act, he has recourse against the Motor Vehicle Accident Claims Fund for statutory accident benefits.

Section 6 of the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41, provides that if a person has recourse against the Fund for statutory accident benefits under section 268 of the Insurance Act, the person may apply for payment of benefits out of the Fund; that a reference to an insured person shall be deemed to be a reference to a person who has recourse against the Fund, and that the Minister is obliged to make statutory accident benefit payments to that person out of the Fund.⁴

Legislative intention

In 1989, when the Minister introduced the Ontario Motorist Protection Plan in the Legislature, he stated: “What we are proposing, then, is a new social safety net. The social objective is to provide everyone injured in an automobile accident with the compensation needed to return to as normal a life as quickly as possible.”⁵

I find the intention of the Legislature in providing this scheme of statutory accident benefits was to guarantee that every person injured in a motor vehicle accident would be able to access at least some statutory accident benefits, whether innocent or at fault in the accident. I make this finding based on the statement by the Minister, the provisions of section 268 of the Insurance Act, and the exclusion provisions of section 30 of the Schedule. Those exclusion provisions stipulate that in certain circumstances, such as those of Mr. Therrien, the insurer is not required to pay income replacement, non-earner or housekeeping benefits; however, other statutory accident benefits such as medical rehabilitation and attendant care benefits remain payable.

Section 226(2) – the statutory interpretation argument

Counsel for the Fund submits that Mr. Therrien does not have recourse against the Fund because of section 226(2) of the Insurance Act. That subsection is contained in Part VI of the Insurance Act,

the Part which deals with automobile insurance. Part VI consists of sections 224 to 289.1 and contains various subheadings, as set out below.⁶

Section 226 of the Insurance Act states:

Application of Part

226. (1) This Part does not apply to contracts insuring only against,

(a) loss of or damage to an automobile while in or on described premises;

(b) loss of or damage to property carried in or upon an automobile; or

(c) liability for loss of or damage to property carried in or upon an automobile.

Idem

(2) This Part does not apply to a contract providing insurance in respect of an automobile not required to be registered under the Highway Traffic Act unless it is insured under a contract evidenced by a form of policy approved under this Part.

Idem

(3) This Part does not apply to a contract insuring solely the interest of a person who has a lien upon, or has as security legal title to, an automobile and who does not have possession of the automobile. R.S.O. 1990, c. I.8, s. 226.

Section 226 of the Insurance Act deals with contracts of insurance, more specifically, with those contracts of insurance to which Part VI does not apply. However, Mr. Therrien’s claim is not one based on contract. It is based on the statutory obligation imposed on the Fund by section 268, contained in Part VI of the Insurance Act and in the Motor Vehicle Accident Claims Act, as outlined above. Mr. Therrien had not insured the vehicle.

The definitions of “contract” and “policy” in section 1 of the Insurance Act and the additional definitions of those terms in Part VI of the Insurance Act strongly suggest that subsection 226(2) should not be applied to a claim for non-contractual entitlement to statutory accident benefits.⁷

I find that subsection 226(2) of the Insurance Act has no application to Mr. Therrien’s claim for statutory accident benefits.

The interpretation of subsection 226(2) of the Insurance Act urged by counsel for the Fund is “This Part does not apply to an automobile that is not required to be registered under the Highway Traffic Act.” Construing the subsection in that manner means ignoring 24 words of that subsection and choosing to apply 15 words of the subsection. If words used in legislation are clear, they should be given full effect. There is a presumption of legislative perfection.

The construction of the subsection which the Fund urges me to accept would frustrate the legislative intention of providing a social safety net to persons in Mr. Therrien’s shoes.

For these reasons, I conclude that the Legislature did not intend Mr. Therrien’s circumstances to be addressed by subsection 226(2) of the Insurance Act.

Section 226(2) − the Off-Road registration argument

Counsel for the Fund submits that Mr. Therrien’s vehicle was required to be registered under the Off-Road Vehicles Act, not the Highway Traffic Act and he is therefore not entitled to statutory accident benefits which are provided under Part VI of the Insurance Act. He further submits that there is a legislative gap in the Insurance Act, and the Fund is precluded from paying Mr. Therrien statutory accident benefits.

I am not persuaded that these arguments assist the Fund. I find that whether the vehicle is required to be insured under the Off-Road Vehicles Act or under the Highway Traffic Act, statutory accident benefits are part of the required insurance coverage.

Assuming that Mr. Therrien’s vehicle was required to be registered under the Off-Road Vehicles Act, section 15 of that Act prohibits the operation of an off-road vehicle “unless it is insured under a motor vehicle liability policy in accordance with the Insurance Act.”

Section 1 of the Insurance Act states:

a “motor vehicle liability policy” means a policy or part of a policy evidencing a contract insuring,

(a) the owner or driver of an automobile, or

(b) a person who is not the owner or driver thereof where the automobile is being used or operated by that person’s employee or agent or any other person on that person’s behalf,

against liability arising out of bodily injury to or the death of a person or loss or damage to property caused by an automobile or the use or operation thereof;

Section 268 of the Insurance Act, in turn, deems that statutory accident benefit coverage is provided as part of every motor vehicle liability policy. I am not persuaded that there is any basis for ignoring the deeming provisions of subsection 268(1) of the Insurance Act.⁸

Assuming the vehicle is one that was required to be registered under the Highway Traffic Act, that Act sets out as a Schedule “the Compulsory Automobile Insurance Act, the Dangerous Goods Transportation Act, the Motorized Snow Vehicles Act, the Off-Road Vehicles Act, and the Public Vehicles Act.”

Section 58 of the Legislation Act, 2006, S.O. 2006, c. 21, Schedule F, states that “A reference to an Act or regulation is also a reference to each provision of the Act or regulation.”

The Legislature appears to have devised a comprehensive statutory scheme of interrelated legislation which amongst other matters, deals with the registration, plating and insurance of vehicles which are driven on the highway, off the highway and on or off the highway. I am therefore not persuaded by the submission that there is a legislative omission with respect to the Off-Road Vehicles Act in subsection 226(2) of the Insurance Act.

Section 2 of the Compulsory Automobile Insurance Act prohibits the owner or lessee of a motor vehicle from operating the motor vehicle or causing or permitting it to be operated on a highway unless the motor vehicle is insured under a contract of automobile insurance.

Section 1 of the Compulsory Automobile Insurance Act in turn states that “ ‘automobile insurance’ means insurance against liability arising out of bodily injury to or the death of a person or loss of or damage to property caused by a motor vehicle or the use or operation thereof, and which, (a) insures at least to the limit required by section 251 of the Insurance Act, (b) provides the statutory accident benefits set out in the Statutory Accident Benefits Schedule under the Insurance Act, and (c) provides the benefits prescribed under section 265 of the Insurance Act.”

Thus, whether Mr. Therrien’s vehicle was required to be registered under the Off-Road Vehicles Act or under the Highway Traffic Act, the vehicle was required to be insured under a motor vehicle liability policy which provided for statutory accident benefits. Mr. Therrien failed to insure his vehicle, however, he has recourse against the Fund for those benefits for the reasons given above.

Having rejected the Fund’s submissions, I conclude that the Fund should pay Mr. Therrien the statutory accident benefits to which he is entitled.

EXPENSES:

If the parties are unable to agree on the expenses of this preliminary issue hearing, that issue may now be addressed.

February 24, 2011

Suesan Alves Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2011 ONFSCDRS 19

FSCO A10-000094

BETWEEN:

JASON THERRIEN

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

ARBITRATION ORDER

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

1. Subsection 226(2) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, does not prevent the Fund from paying statutory accident benefits to Mr. Therrien.

2. Mr. Therrien has recourse against the Motor Vehicle Accident Claims Fund under subparagraph 268(2)1.iv of the Insurance Act. The Motor Vehicle Accident Claims Fund shall pay Mr. Therrien the statutory accident benefits to which he is entitled.

3. If the parties are unable to agree on expenses, that issue may now be addressed.

February 24, 2011

Suesan Alves Arbitrator

Date

"automobile" includes,

(a) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and

(b) a vehicle prescribed by regulation to be an automobile;

(a) the driver,

(b) a passenger, whether being carried in or on the automobile,

(c) a person getting into or on or getting out of or off the automobile;

6. (1) Any person who has recourse against the Fund for statutory accident benefits under section 268 of the Insurance Act may make application, in a form approved by the Superintendent, for the payment of benefits out of the Fund. 2002, c. 22, s. 145 (1).

Idem

(2) If a person has recourse against the Fund under section 268 of the Insurance Act,

(a) a reference to an insurer in the Statutory Accident Benefits Schedule shall be deemed to be a reference to the Fund and a reference to an insured person shall be deemed to be a reference to the person who has recourse against the Fund; and

(b) sections 272, 274 and 279 to 287 of the Insurance Act apply with necessary modifications. R.S.O. 1990, c. M.41, s. 6 (2); 1993, c. 10, s. 54 (2).

Idem

(3) The Minister shall make payment out of the Fund of the amounts owing to a person described in subsection (2). R.S.O. 1990, c. M.41, s. 6 (3).

"Today I will be introducing legislation which will ensure affordable auto insurance rates and a comprehensive accident benefit plan to protect the more than six million drivers in Ontario. ...I want to emphasize that the Ontario motorist protection plan is not designed to protect the bad drivers of the province. It will penalize them more than ever. Deterrents will be a key component of the system. ...People who are injured require care and rehabilitation whether they are deemed to be innocent or at fault in accidents. That is why, under the new system, all motorists will receive guaranteed accident benefits regardless of fault. ...What we are proposing, then, is a new social safety net. The social objective is to provide everyone injured in an automobile accident with the compensation needed to return to as normal a life as quickly as possible."

• Interpretation, etc.: sections 224- 226.1

• Approval of Forms sections 227- 228

• Other information: sections 229-230

• Application and Policy: sections 231-238

• Motor vehicle liability policies: sections 239-259.1

• Physical damage cover: sections 260-262

• Direct compensation-property damage: section 263-263.1

• Limited accident insurances: sections 265-267.2

• Court Proceedings for Accidents on or After November 1, 1996: sections 267.3-276

• Other insurance: section 277

• Subrogation: section 278

• Dispute Resolution- statutory accident benefits: sections 279-288

• Changes to the Statutory Accident Benefits Schedule: section 289-289.1

"policy" means the instrument evidencing a contract;

In Part VI, subsection 224(1) of the Insurance Act, there is the additional definition in relation to automobile insurance. That states: "contract" means a contract of automobile insurance that, (a) is undertaken by an insurer that is licensed to undertake automobile insurance in Ontario, or (b) is evidenced by a policy issued in another province or territory of Canada, the United States of America or a jurisdiction designated in the Statutory Accident Benefits Schedule by an insurer that has filed an undertaking under section 226.1;

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Section 224(1) of the Insurance Act defines an automobile as follows:
3. 3"occupant", in respect of an automobile, means,
4. 4Section 6 of the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41, states:
5. 5(Ontario, Legislative Assembly, Official Report of Debates (Hansard), 4 (23 October 1989) at 3176 (Hon. Murray J. Elston) "Statements by the Ministry, Automobile Insurance":
6. 6Part VI of the Insurance Act contains the following sub-headings.
7. 7In section 1 of the Insurance Act, "contract" is defined as "a contract of insurance, and includes a policy, certificate, interim receipt, renewal receipt, or writing evidencing the contract, whether sealed or not, and a binding oral agreement;
8. 8That subsection states: "Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule. 1993, c. 10"