Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 205

FSCO A14-007479

BETWEEN:

AUSTIN BENSON

Applicant

and

BELAIR INSURANCE COMPANY INC.

Insurer

Before:

Arbitrator Jeff Musson

Heard:

In person at ADR Chambers on June 30, 2015

Appearances:

Mr. Ian Furlong for Mr. Austin Benson

Mr. Eric Grossman for Belair Insurance Company Inc.

Issues:

The Applicant, Mr. Austin Benson, was injured in a motor vehicle accident on June 23, 2013 and sought accident benefits from Belair Insurance Company Inc. (“Belair”), payable under the SABS.¹ The parties were unable to resolve their disputes through mediation and Mr. Benson, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Preliminary Issue Hearing are:

Did the Applicant's incident, while using an All-Terrain Vehicle (“ATV”) in the province of British Columbia, meet the definition of an automobile “accident” under Section 3(1) of the SABS, and thus, entitle him to accident benefit coverage under the SABS?
Is the Applicant liable to pay Belair’s expenses in respect to this Preliminary Issue Hearing?
Is Belair liable to pay the Applicant’s expenses in respect to this Preliminary Issue Hearing?

Result:

The Applicant’s incident, which occurred while utilizing an ATV in the province of British Columbia, does not meet the definition of an automobile “accident”, under Section 3(1) of the SABS, and therefore, does not entitle the Applicant to accident benefit coverage under the SABS.
The Applicant is liable to pay Belair’s expenses in respect to this Preliminary Issue Hearing.

EVIDENCE AND ANALYSIS:

Background

At the Preliminary Issue Hearing, both parties submitted their own individual factums supported by written evidence. There were no witnesses called by either party, however, both parties provided cases as part of their submissions. The parties are generally in agreement as to the factual background of this matter; the dispute centers on the application of the law to those facts.

In terms of factual background, the Applicant was involved in an ATV accident on June 23, 2013. He was riding on the rear seat of the ATV as a passenger. The Applicant was 20 years old at the time of the accident and was working in British Columbia. His official residence was and is in the Province of Ontario. The Applicant states that he had been working in British Columbia since September 2012.² At the time of the accident, the Applicant was insured for automobile coverage on a policy issued under the laws of the Province of Ontario through Belair Insurance Company Inc. On August 20, 2013, the Applicant filed an application for accident benefits, from which this dispute arises.

The ATV involved was driven by Mr. Lee Askin, who resides in the Province of British Columbia. From the evidence presented, the Applicant advised at his EUO³ that he believes that Mr. Askin is the owner of the ATV involved in his accident.⁴ The Insurer did not present conflicting evidence regarding the ownership of the ATV.

According to the submissions of both the Applicant and the Insurer, they agree that this ATV incident occurred on lands owned by the Northern Rockies Regional Municipality in Fort Nelson, British Columbia. From the evidence presented, in the early morning hours of June 23, 2013, the Applicant was thrown off the back of the ATV and sustained a head injury which rendered him unconscious. At 2:24 a.m. that morning, North Rockies RCMP received a call to assist ambulance personnel on the community trail by Tamarack Crescent where this incident occurred.⁵

There were 2 RCMP Constables and an RCMP Sergeant which attended to this call: Constables Romanchych and Craig along with Sergeant Roy. When Constable Craig arrived on scene, the Applicant was being treated by the responding ambulance attendants. Through the RCMP investigation, using analysis of the road rash and other evidence, the RCMP “believed Mr. Benson fell off an ATV at a high rate of speed”.⁶ The Applicant was transported to the hospital via ambulance after this accident and was discharged from the hospital after a week and a half.⁷ According to the police report, the Applicant did not give further information or details surrounding this case and the RCMP concluded their report.⁸

There are 2 main parts of the decision that require analysis. Is the ATV that the Applicant was riding considered an “automobile”, and if so, is this considered an accident as defined under the SABS? As a follow up to this analysis, the relevancy of jurisdiction plays a role in determining which provincial regulations should be adhered to.

The Law

The following are legal issues that are to be addressed. First, does an ATV accident meet the definition of an accident under the SABS, and second, would a person from Ontario who was involved in an ATV accident in British Columbia be able to claim accident benefits under their Ontario Automobile Insurance Policy (“OAIP”)?

For an accident within the jurisdiction of the SABS, the SABS and jurisprudence interpreting it, clearly provides that accident benefits are available only if the Applicant's injuries arose from a ‘motor vehicle accident.’ The SABS defines an accident as follows:

(1) In this Regulation,

“accident” means 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.

Although the SABS definition of “accident” uses the term “automobile”, the SABS, however, does not define what an “automobile” is. The case law, in turn, has developed a widely accepted three part test – known as the “ordinary parlance test”⁹ as the threshold mark for determining if a vehicle is an “automobile” for the purposes of insurance coverage. The three-part ordinary parlance test asks:

Is the vehicle an “automobile” in the ordinary parlance?
If not, is the vehicle defined as an “automobile” in the wording of the insurance policy?
If not, does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?

As stated in Grummett v. Federation Insurance Company of Canada¹⁰ and in Adams v. Pineland Amusements Ltd.,¹¹ one of the three questions must be answered in the affirmative for the vehicle to be considered an automobile.

Positions of the Parties

The parties are in agreement that an ATV does not qualify as an “automobile” under the first two points of the ordinary parlance test.¹² Specifically, under the first point, an ATV is not designed for vehicular traffic on highways or municipal roadways as more fully discussed below, and under the second point, it is not specifically insured under the wording of the policy. Therefore, the dispute turns on whether this is an automobile “under ‘any relevant’ statute”.

The Applicant submits that although the incident occurred in British Columbia, he can claim accident benefits under his OAIP, because “relevant” Ontario laws require an ATV to be insured under a motor vehicle policy, thus satisfying the third point of the ordinary parlance test.

The Insurer submits that because an ATV is not an “automobile” within the ordinary parlance, and this accident occurred out-of-province, it must be determined which jurisdiction’s laws govern the incident and thus provide the “relevant” statutes under the third point.¹³ The Insurer concludes that under the principle of lex loci delicti (law of the place of occurrence), British Columbia law governs this incident. Under British Columbia law, the ATV was not required to be insured as a motor vehicle, and thus the Applicant fails on the third point of the ordinary parlance test. Therefore this incident is not considered an automobile accident as defined under the SABS.

Given the parties’ dispute, one of the key questions to be answered is, “Which jurisdiction should apply?” Should the laws from the Province of Ontario apply or should the laws from the Province of British Columbia apply? The accident occurred in British Columbia, however, the individual applying for accident benefits has automobile insurance in the Province of Ontario. The rules related to insurance requirements for ATVs vary greatly between both jurisdictions.

If, for argument sake, this accident involved someone residing in British Columbia who was injured in British Columbia falling off an ATV similar to the Applicant, that individual would not be entitled to benefits through an accident benefits claim on his auto insurance policy under British Columbia law. The only reason why this claim is being put forward by the Applicant was that his permanent residence is listed in Ontario and as such, his automobile insurance policy is from Ontario. Ontario laws related to ATV insurance were more favorable to the Applicant than the laws of British Columbia at the time of the accident.

Does an ATV fall within any enlarged definition of “automobile” in any relevant statute, in Ontario?

The Insurance Act of Ontario provides two definitions of automobile:¹⁴

In this Act, except where inconsistent with the definition sections of any Part, “automobile” includes a trolley bus and a self-propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway rolling stock that runs on rails, watercraft or aircraft;
1. (1) In this Part,

“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.

The Ontario Court of Appeal has determined that the overriding definition of “automobile” is to be found in subsection 224(1) of the Insurance Act. It specifies that an “automobile” includes a motor vehicle required to be insured under any act under a motor vehicle liability policy.¹⁵

On June 23, 2013, the date of the accident, under Ontario Law, off-road vehicles, including ATVs, are required by Ontario law to be insured under a motor vehicle liability policy and the only exception being when the ATV is driven on land owned/occupied by the owner of the ATV.¹⁶ In this case, the parties agree that the ATV was owned by Mr. Askin and was being driven on lands not owned by him, but rather owned by the Northern Rockies Regional Municipality. If Ontario law applied to this incident, Mr. Askin would have been driving the ATV off of his property, and he would have been required to have insured the ATV.

Is an ATV considered an automobile for the purposes of insurance in British Columbia, the location of the accident?

In other words, under the third part of the ordinary parlance test, does an ATV fall within any enlarged definition of “automobile” in any relevant statute, in British Columbia? It is noted from the submissions that ATVs are not designed for ordinary vehicular traffic on highways or municipal roadways.¹⁷ Even though they can physically drive on a highway, this would be in violation of the British Columbia Motor Vehicle Act.¹⁸ In British Columbia, there is a specific act – different from British Columbia’s general Motor Vehicle Act - designated to regulate ATVs called the Motor Vehicle (All Terrain) Act.¹⁹ Therefore, at the time of the accident, ATVs were not covered under the general Motor Vehicle Act in British Columbia.

From the Insurer’s perspective, however, in British Columbia at the time of the accident, the law lays out in specific terms when an ATV is required to be insured. On June 23, 2013, in the Province of British Columbia, the only requirement in the Motor Vehicle (All Terrain) Act for there to be insurance coverage available for an ATV is when an ATV is being rented out to the public by a dealer, and the insurance for an ATV only requires the provision of a public liability policy, not a motor vehicle liability policy. ²⁰

When a rental ATV requires insurance, the Province of British Columbia has optional coverage for ATVs under its Unlicensed Vehicle Policy (APV 45); the ICBC Autoplan Optional Policy. It is this policy which covers insurance for ATV’s in the Province of British Columbia. ²¹ This Unlicensed Vehicle Policy describes in specific terms what is covered and when coverage applies. An ATV is not considered an automobile, therefore it would fall within the ICBC Autoplan Optional Policy. ²²

It can be assumed that the reason for the lack of mandatory accident benefit coverage at the time of the accident for ATVs is a direct result of the drafters of the policy never intending for an ATV to be considered as an automobile and therefore afforded similar coverage.

In this case, while Mr. Askin was utilizing the ATV off of his property, a triggering event for insurance in Ontario, Mr. Askin was not renting his vehicle to the public which is the triggering event in British Columbia. Therefore, Mr. Askin had no requirement in the province of British Columbia to insure the ATV under an automobile policy. With this case, on the balance of evidence provided me, I am of the opinion that the ATV involved in this accident is not considered an automobile in British Columbia under any relevant act, and not required to be insured.

Which jurisdiction’s laws cover this accident?

Since British Columbia doesn’t mandate compulsory automobile insurance coverage for ATVs and the Province of Ontario does, the Applicant is attempting to obtain accident benefits coverage under his OAIP. In my opinion, the Applicant is incorrectly relying on Ontario legislation in relation to this case. The Applicant argues that he is covered by Ontario legislation, regardless of the jurisdiction in which the accident took place. I disagree with this analysis. Rather, I agree with the Insurer’s analysis that the starting point of the analysis begins with the principle of lex loci delicti, which is a rule of private international law. The Supreme Court of Canada has stated that Canada's Constitution supports a rule that is certain and that ensures that an act committed in one part of this country will be given the same legal effect throughout country; lex loci delicti principle.²³ Its support of this law is unequivocal because it allows for uniformity of legal effect throughout the country. On the whole, there is little to be gained and much to lose in creating an exception to lex loci delicti.²⁴

The Supreme Court of Canada decisions of Tolofson v. Jensen²⁵ and Lucas v. Gagnon²⁶ are particularly relevant when analyzing which provincial laws should be adhered to in the case before me. These cases address the “choice of rule of law”, which law should govern auto accidents involving residents of different provinces.²⁷

As it relates to the case before me, given that this incident occurred in British Columbia and using the Supreme Court of Canada decision as guidance; the laws of British Columbia and specifically the laws of British Columbia that relate to insurance requirements of an ATV at the time of the accident, should apply in this case. In fact, to find otherwise, creates a result that the Supreme Court sought to avoid. Specifically, one would need to conclude that although Mr. Askin lived in British Columbia, owned, registered, and operated his vehicle in British Columbia and was compliant with British Columbia insurance laws, that somehow, his ATV should have been insured according to Ontario law. Clearly, Ontario law has no relevance to the insurance coverage regarding this vehicle. While the Applicant’s argument is creative, I am not convinced that the usage of the term “any relevant law” in the third part of the ordinary parlance test can be used to impose an Ontario insurance requirement on Mr. Askin’s ATV in British Columbia. Rather, common sense and the lex loci delicti rule points to the “relevant” laws being those of British Columbia.

Conclusion

Based on the evidence presented before me, I am of the opinion that, with the case law and the evidence of this case, the Applicant’s Ontario based automotive accident benefits policy is not responsible for covering his injuries related to the June 23, 2013 accident. The ATV he was riding on was not an automobile as defined in the three part test and under British Columbia law where the ATV was being operated, it didn’t require insurance. Therefore, it is not considered an automobile and the claimant is not entitled to benefits under the SABS. For these reasons, I find Mr. Benson is not injured as a result of an “accident” as defined in the SABS.

EXPENSES:

The parties made no submissions on expenses. If they are unable to agree on the legal expenses of this case, an Expense Hearing shall be requested within thirty days of the date of this decision in accordance with Rule 79 of the Dispute Resolution Practice Code. The request shall be accompanied by a Bill of Costs describing the expenses claimed, services received and the costs, as well as submissions regarding entitlement to and/or the amount of such expenses.

October 9, 2015

Jeff Musson

Arbitrator

Date