Motors Insurance Corporation v. Cassondra Bouchard, 2012 ONFSCDRS 96

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2012 ONFSCDRS 96

Appeal P11-00003

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MOTORS INSURANCE CORPORATION Appellant

and

CASSONDRA BOUCHARD Respondent

BEFORE: David Evans

REPRESENTATIVES: J. Claude Blouin for Motors Insurance Corporation Charles E. Gluckstein for Ms. Bouchard

HEARING DATE: October 17, 2011

APPEAL ORDER

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

1. The appeal of the Arbitrator’s order dated January 7, 2011 is allowed. Paragraph 1 of the Arbitrator’s order is revoked, and the following substituted:

2. Ms. Bouchard was not involved in an accident within the meaning of s. 2(1) of The Statutory Accident Benefits Schedule – Accidents On or After November 1, 1996.

3. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested pursuant to the Dispute Resolution Practice Code (Fourth Edition, Updated - August 2011), but as set out below and within sixty days of the date of this decision.

June 20, 2012

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Motors Insurance Corporation appeals Arbitrator Ashby’s decision dated January 7, 2011, in which she held that Cassondra Bouchard was involved in an accident on January 13, 2008, entitling her to statutory accident benefits under the SABS–1996.¹ In doing so, she held that the gas-powered miniature motorcycle Ms. Bouchard was operating, a “pocket bike,” was an automobile because it was supposed to be insured under a motor vehicle liability policy.

II. BACKGROUND

This is the first of three decisions concerning three appeals that were heard jointly, the other two being appeals of Therrien and Motor Vehicle Accident Claims Fund, (FSCO A10‑000094, February 24, 2011) and of Buckle and Motor Vehicle Accident Claims Fund, (FSCO A10‑000010, February 3, 2011). The parties in all the cases shared their written submissions, attended at the appeal hearing, and were free to hear all parties’ oral submissions.

These cases turned on whether the vehicles involved had to be insured under an automobile insurance policy, in which case they were automobiles involved in an accident. Due to the provisions of the Off-Road Vehicles Act, R.S.O. 1990, c. O.4 (the ORVA) and the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25 (the CAIA), the need for insurance depended on where the vehicles were operated.

In this case, Bouchard, a pocket bike was operated off-road on land occupied by the bike’s owner: the ORVA did not require a motor vehicle liability policy in accordance with the Insurance Act in such circumstances. In Therrien, a dirt bike was operated off-road on property not occupied by the bike’s owner (a public track): insurance was required, but the MVAC Fund took the position that the required policy does not include accident benefits. In Buckle, a golf cart was operated on a public highway: golf carts are a special case, as the ORVA specifically excludes them from its operation.

The arbitration hearing in Bouchard proceeded on an agreed statement of facts. Ms. Cassondra Bouchard was injured while riding Mr. Kristin Stratton’s uninsured pocket bike at Mr. Stratton’s property on January 13, 2008. If the pocket bike had required insurance, that would have made it an “automobile,” and Ms. Bouchard would have access to accident benefits under her father’s automobile policy.

Arbitrator Ashby determined the issue based on this sentence in the agreed statement of facts: “The owner, Kristin Stratton, used the pocket bike on his own property and the property of a friend.”

This appeal decides that a pocket bike, while it is being operated on land occupied by the bike’s owner, is not required to be insured and is therefore not an “automobile,” despite its having been occasionally operated on other land.

III. ANALYSIS

The crux of this case is whether the pocket bike was an automobile as, under s. 2(1) of the SABS, accidents are incidents in which the use or operation of an automobile directly causes an impairment. Only insureds involved in accidents can claim accident benefits.

In Adams v. Pineland Amusements Ltd., 2007 ONCA 844, the Court of Appeal adopted a three-part test in finding that a go-kart was not an automobile:

(i) Is the vehicle an “automobile” in ordinary parlance?

If not, then,

(ii) Is the vehicle defined as an “automobile” in the wording of the insurance policy?

If not, then,

(iii) Does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?

In applying Adams, the Arbitrator first found that a pocket bike is not an automobile in common parlance as it is not designed to be used on a public highway. Motors’ evidence showed that pocket bikes are not street legal because they do not have VIN numbers, are too low to the ground for highway safety, and need not be driven by licensed drivers. This finding is not appealed.

Second, it was common ground that the bike was not defined as an “automobile” in the wording of the insurance policy, as it was not insured and no similar type of vehicle was listed in the policy issued to Ms. Bouchard’s father.

That left the remaining issue of whether the bike met any enlarged definition of “automobile” in any relevant statute. The Court of Appeal in Morton v. Rabito, 1998 CanLII 5865, clarified that the only enlarged definition of automobile that applies here is in s. 224(1) of the Insurance Act, namely a vehicle that is either (a) required to be insured or (b) prescribed as an automobile. As the Arbitrator noted, it was common ground that the pocket bike is not prescribed by regulation to be an automobile pursuant to s. 224(1)(b), leaving the core of the dispute under s. 224(1)(a): whether the pocket bike was “A motor vehicle required under any Act to be insured under a motor vehicle liability policy.”

The Compulsory Automobile Insurance Act does not apply, as s. 2(1) of the CAIA provides that only motor vehicles operating on highways need to be insured under a contract of automobile insurance. The pocket bike was not being operated on a highway nor, as conceded by Ms. Bouchard, could it be registered due to its size and lack of safety equipment.

This leads to the Off-Road Vehicles Act. As the Arbitrator found, the pocket bike met the definition of an off-road vehicle under s. 1 of the ORVA as it was “a vehicle propelled or driven otherwise than by muscular power or wind and designed to travel [on] not more than three wheels…” The pocket bike was not excluded, as s. 2(1) provides that the ORVA “does not apply in respect of off-road vehicles being operated on a highway.” Section 15(1) then goes on to require off-road vehicles to be insured under a motor vehicle liability policy in accordance with the Insurance Act, with the exception under s. 15(9) “where the vehicle is driven on land occupied by the owner of the vehicle.” That is, an off-road vehicle driven on land occupied by the owner of the vehicle is not required to be insured under a motor vehicle liability policy.

The Arbitrator concluded that the pocket bike was nonetheless required to be insured under the ORVA despite the time and circumstances of the incident because

[s. 15(9)] is a very narrow exclusion. Clearly the legislature intended that off-road vehicles be insured unless they were used solely on lands occupied by the owner. I agree that it would be an absurd result if each time an owner was to drive the vehicle on lands other than those she or he occupied insurance had to be procured. In my view, the consequence of the owner of the pocket bike driving it at “my friend’s house” was the necessity to insure it.

The Arbitrator distinguished Copley v. Kerr Farms Ltd., 2002 CanLII 44900 (ON CA). Mr. Copley was in the process of attaching a tomato wagon to his truck when he was injured. The issue was whether the tomato wagon required motor vehicle insurance. In determining it did not, the Court of Appeal considered s. 2(1) of the CAIA but not ss. 15(1) and (9) of the ORVA. The Arbitrator stated that “As the Off-Road Vehicles Act specifically excludes vehicles which are being operated on the highway the provisions of the Compulsory Automobile Insurance Act do not apply.” As I see it, she treated Copley as only being relevant to a discussion of the CAIA.

However, considering both the legislation and the time and circumstance of the incident, I am not persuaded that Copley is distinguishable on that basis. To start with the legislation, s. 2(1) of the Compulsory Automobile Insurance Act, provides:

Subject to the regulations, no owner or lessee of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated,

on a highway unless the motor vehicle is insured under a contract of automobile insurance.

Section 15 of the Off-Road Vehicles Act provides:

(1) No person shall drive an off-road vehicle unless it is insured under a motor vehicle liability policy in accordance with the Insurance Act.

(2) No owner of an off-road vehicle shall permit it to be driven unless it is insured under a motor vehicle liability policy in accordance with the Insurance Act.

(3) Every driver of an off-road vehicle who is not owner thereof shall, upon the request of a peace officer, surrender for inspection evidence that the vehicle is insured under a motor vehicle liability policy in accordance with the Insurance Act.

(9) Subsections (1), (2) and (3) do not apply where the vehicle is driven on land occupied by the owner of the vehicle.

With respect to the time and circumstances of the incident, while Mr. Copley used the tomato wagon regularly to transport tomatoes along public highways, at the time of the incident it was still sitting unattached in the tomato field. Here, while Mr. Stratton may have operated the bike on another’s property at other times, at the moment of the incident on that day Ms. Bouchard was operating it on property occupied by him. The court in Copley considered the time and circumstances of Mr. Copley’s injury in its ruling:

The tomato wagon was not being operated on the highway when the accident occurred. Section 2(1) of the Compulsory Automobile Insurance Act did not require Kerr Farms to have the tomato wagon insured under an automobile insurance policy at the time and place where the accident occurred. The fact that the tomato wagon was regularly taken on the highway and that Mr. Copley intended to take it on the highway as soon as it was hooked up to his truck does not extend the reach of s. 2(1) of the Compulsory Automobile Insurance Act. That section does not prohibit the use of an uninsured motor vehicle intended to be taken on the highway, or regularly used on the highway, or used at any time on the highway. The prohibition in s. 2(1) speaks in terms of a motor vehicle that is operated on the highway. As I read the section, the prohibition speaks only to motor vehicles that are being operated on the highway. [Para. 32.]

The Court of Appeal reiterated the point in Adams, which also dealt with s. 2(1) of the CAIA, stating that the proper question in Copley was whether the motor vehicle “required motor vehicle insurance at the time and in the circumstances of the accident.”

By way of contrast, the Arbitrator stated that “Clearly the legislature intended that off-road vehicles be insured unless they were used solely on lands occupied by the owner [emphasis added].” That is, she interpreted s. 15(9) of the ORVA as meaning that insurance is not required “where the vehicle is driven solely on land occupied by the owner of the vehicle.”

To bolster her point, she found that “it would be an absurd result if each time an owner was to drive the vehicle on lands other than those she or he occupied insurance had to be procured.” However, the same point applies in Copley, since Mr. Copley intended to take the wagon onto the highway as soon as it was attached to the truck.

With respect to the legislation, s. 2(1) of the CAIA states that “no owner or lessee of a motor vehicle shall … operate the motor vehicle … on a highway unless the motor vehicle is insured under a contract of automobile insurance.” Subsections 15(1) and (9) of the ORVA provide that “No person shall drive an off-road vehicle unless it is insured under a motor vehicle liability policy in accordance with the Insurance Act” except “where the vehicle is driven on land occupied by the owner of the vehicle.” Both provisions relating to the motor vehicle are in the present tense. The general rule of construction set out in s. 63 of the Legislation Act, 2006, S.O. 2006, c.21, Schedule F, is that “The law is always speaking, and the present tense shall be applied to circumstances as they arise.” The only difference between the two is that the CAIA uses the active voice – no owner of a motor vehicle shall operate the motor vehicle – whereas the ORVA uses the passive – where the vehicle is driven. I am not persuaded that this serves to convert the focus on the present, as required by the Legislation Act, into a presumption that the exception does not apply if a vehicle was ever driven off-property in the past. That is not applying the present tense to the circumstances as they arise. Furthermore, the Court of Appeal in Copley did not distinguish between the active and the passive voice but instead stated that “The prohibition in s. 2(1) [of the CAIA] speaks in terms of a motor vehicle that is operated on the highway.” Similarly, the exception in s. 15(9) of the ORVA speaks in terms of a vehicle that is driven on land occupied by the owner of the vehicle.

I find that Copley is not distinguishable on the basis set out by the Arbitrator and that her interpretation of s. 15(9) was incorrect. It follows that the Copley “time and circumstances” analysis applies in this case. The pocket bike was being operated on Mr. Stratton’s property when the incident occurred. In those circumstances and at that time, the ORVA did not require Mr. Stratton’s pocket bike to be insured under an automobile insurance policy.

Therefore, Ms. Bouchard was not operating a motor vehicle and was not involved in an accident within the meaning of s. 2(1) of the SABS. The appeal is allowed.

IV. EXPENSES

If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested within sixty days of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as written submissions regarding entitlement to or the quantum of these expenses, or both, as are in dispute.

June 20, 2012

David Evans Director’s Delegate

Date

Footnotes

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