Neutral Citation: 2016 ONFSCDRS 105

FSCO A13-012038

BETWEEN:

KHURAM SAMAD Applicant

and

NORTH WATERLOO FARMERS MUTUAL INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Barry S. Arbus, Q.C.

Heard: In person in Hamilton on December 17, 2015, and by written submissions completed on March 10, 2016

Appearances: Ms. Samia M. Alam for Mr. Khuram Samad Mr. Nicholaus de Koning and Ms. Caroline Meyer for North Waterloo Farmers Mutual Insurance Company

Issues:

The Applicant, Mr. Khuram Samad, was involved in an incident (the “Incident”) on December 31, 2012 that gives rise to the dispute between the parties. The Applicant applied for statutory accident benefits from North Waterloo Farmers Mutual Insurance Company (“North Waterloo”) payable under the Schedule.¹ An issue arose between the parties as to whether the Applicant had been involved in an “accident” as defined by Section 3(1) of the Schedule. The parties were unable to resolve their dispute through mediation and Mr. Samad, 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 parties requested that this Hearing be restricted to one preliminary issue and the hearing of all other issues be postponed until determination of the preliminary issue.

The issue in this Preliminary Issue Hearing is:

Was the Applicant involved in an “accident” as defined by Section 3(1) of the Schedule?

Result:

The Applicant was involved in an accident as defined by Section 3(1) of the Schedule.

EVIDENCE AND ANALYSIS:

Background

On December 31, 2012, Mr. Samad was on shift as a taxi driver operating his 2005 Dodge Caravan vehicle. Some time before 10:00 p.m., the Applicant responded to a call for pick-up and picked up three passengers at a grocery store on Yonge Street in Newmarket. All three passengers were teenagers, two males and one female. The female requested to be driven to an address but failed to specify in which town the location was situated. An argument then resulted between the passengers and Mr. Samad, whereupon one of the passengers punched the Applicant in the face. Mr. Samad then stopped the van on the side of Yonge Street and the passengers exited the van, leaving one of the rear doors ajar. Mr. Samad exited the van from the driver’s side, went around to the other side of the van to close the rear door and was shoved once by one of the passengers, whereupon he fell into the ditch and was injured. The passengers then fled on foot. Mr. Samad climbed out of the ditch, re-entered the van and attempted to drive further north on Yonge Street, with the pain intensifying, at which time he pulled over and called the police and was taken by ambulance to the hospital.

The Applicant’s Position

Section 3(1) of the Schedule reads as follows:

3(1) “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.

Relying on Smith v. Co-operators,² the Applicant states that the Schedule is to be read liberally and in favour of Insureds whenever possible, keeping in mind the Insurer’s duty of utmost good faith.

The Court of Appeal in Greenhalgh v. ING Halifax³ stated that the applicable test involves a consideration of the following two questions: (1) did the incident arise out of the use or operation of an automobile; and (2) did such use or operation directly cause the impairment.

The first question addresses what has been referred to as the “purpose test”, in other words: “for what purpose was the automobile used or operated at the relevant time and did the incident arise out of the ordinary and well-known activities to which automobiles are put?”

The Applicant’s counsel points out that the Court of Appeal in Lefor v. McClure⁴ stated that stopping vehicles to pick up and drop off passengers is a well-known aspect of the use and operation of an automobile.

The second question concerns direct causation, and the legislation requires a direct link of causation that will often depend on the circumstances in each case. The Applicant’s counsel also points out that per the Greenhalgh case, there are two questions that must be answered in order to determine the “causation test” and they are as follows: (1) the “but for” consideration; and (2) the “intervening act” consideration. The Applicant’s counsel submits that but for the Applicant driving his van, with the resulting incident, the Applicant would not have suffered the impairment. The Applicant acknowledges the “but for” test is designed to be an exclusionary rule which seeks to exclude factually irrelevant causes, and does not determine legal causation. Nonetheless, but for Mr. Samad driving passengers in the taxi, he would not have sustained the injuries on December 31, 2012.

Delegate Blackman pointed out in Wawanesa and Webb⁵ that there can be more than one direct cause of the victim’s injuries, so long as one of the direct causes arises from the use or operation of a motor vehicle. The Applicant’s counsel argues that Mr. Samad’s use of the car had not ended; at the very least, it was the dominant feature of his injuries. In Greenhalgh, the Court of Appeal also dealt with what is referred to as the “dominant feature” of the injuries. The Applicant’s counsel argues that the entire transaction or series of events started with the use or operation of an automobile, and ended in an injury because of the use or operation of the automobile. The Applicant’s counsel therefore claims that the Applicant sustained an impairment as a direct result of the use or operation of an automobile.

The Insurer’s Position

Ms. Meyer, counsel for the Insurer, points out that in 1997, the definition of “accident” was changed by deleting the word “indirectly”, leaving a much narrower and more stringent causation requirement for an Applicant to meet. This change reflects a government policy decision to hold insurance companies responsible only for injuries directly caused by the use or operation of an automobile. The Insurer takes the position that the Applicant failed to meet both the purpose test and the causation test as set out Greenhalgh. The Insurer submits that the Applicant’s automobile was involved in the incident in question, but only in a very “incidental or peripheral” way. The Insurer points us to the facts of Clarke and TTC⁶ heard by Arbitrator Pressman where it was argued by the Insurer that Clarke was not involved in an accident and it was stated that, “the elements of location and contact with vehicle do not automatically satisfy the purpose test.” It was noted that, “it is simply not enough that a vehicle provides the location, opportunity or even motivation for assault to satisfy the purpose test.”

The Insurer argues that the use or operation of the vehicle had come to an end once the Applicant exited and walked around the side of the vehicle. The Insurer points out that in Downer v. Personal Insurance Company,⁷ the Court of Appeal stated that the but for test only serves to eliminate from consideration factually irrelevant causes but does not conclusively establish legal causation. The Insurer noted that in Wawanesa and Webb, heard by Delegate Blackman, the Insurer stated in that case that “disembarking in the presence of snow and ice in winter in Ontario is an ordinary and usual use or operation, and although the use of Ms. Webb’s motor vehicle led her to the location of her injury, her injuries, nevertheless, were sustained from a new and independent source other than the car.” The Insurer’s counsel analogizes that the Applicant was injured because he was assaulted by one of the passengers, not because he was engaged in the use or operation of the motor vehicle. Accordingly, the Insurer’s counsel argues that the Applicant does not meet the first part of the test (the “purpose test”) and, even if he did, he does not meet the second part (the “causation test”).

The Law

Tests to Apply

Since 1996, the change of the definition of an “accident” has become a crucial part of the case law. At that time, the definition of an accident was changed to remove the word “indirectly”, leaving a much more restrictive definition of accident.

In Chisholm v. Liberty Mutual Group,⁸ the Court of Appeal stated that Ontario’s 1996 version of the Schedule⁹ meant that the British Columbia decision of Amos v. Insurance Corporation of British Columbia¹⁰ no longer applied. The Amos test, or at least the causation part of that test, can no longer be used to interpret the definition. The Court in Chisholm stated:

The 1996 Schedule reflects a government policy decision. The government decided to circumscribe the insurance industry’s liability to pay no-fault benefits by holding it responsible only for injuries directly caused by the use or operation of a car. Like almost any statutory standard, the direct causation requirement will, at the margins, produce hard cases, perhaps even sympathetic cases and seemingly arbitrary results.

The Applicant’s counsel cites the Greenhalgh v. ING Halifax case where the Court of Appeal utilized two tests (the purpose test and the causation test), both of which must be satisfied for the Applicant to succeed. The purpose test asks whether the incident arose out of the ordinary and well-known activities to which automobiles are put. I am satisfied that the purpose test has been satisfied and that the Applicant was driving his van in the ordinary and well-known activities to which automobiles are put. The taxi was being used for its ordinary purpose, which was to pick up and transport passengers.

The second test, which is the causation test, asks whether the use and operation of the automobile directly caused the impairment. In Greenhalgh, the Court of Appeal analyzed this causation test by stating that the legislation requires a direct link of causation which they stated will depend on the circumstances of each case. Greenhalgh provided three bases or prongs under which the causation could be met.

A. The “But For” Test

Chisholm made it clear that the “but for” test is an exclusionary test to rule out irrelevant causes without establishing the legal causation on its own. Clearly, in our case, the Applicant’s impairment would not have occurred had he not been driving the van and operating his taxi on New Year’s Eve. His driving of the van clearly would not be an irrelevant cause.

B. Intervening Act

The “intervening act” test is stated in Greenhalgh. In Wawanesa and Webb, Delegate Blackman stated that a “direct cause does not mean the only cause or the most immediate cause. There can be more than one direct cause of the victim’s injuries but one of the direct causes must be the use or operation of a motor vehicle” and that in addition, “the motor vehicle need not come into physical contact with the accident victim.” I am satisfied that the Applicant has met this test and met the burden of establishing that the use and operation of the vehicle caused the impairment. I do not find that the intervening act of the assault by one of the passengers or the Applicant slipping on the ice is sufficient to disentitle the Applicant’s claim.

C. Dominant Feature Enquiry

In Chisholm, the Court of Appeal examined the dominant feature of the accident. That case clearly states that the “dominant feature” is that aspect of the situation that most directly caused the injuries. I am satisfied in this case that there is not one dominant feature that is the cause of the Applicant’s impairment. I do accept the argument of the Applicant that it is the entire series of events that started with the use or operation of the automobile and ended in an injury because of the use and operation of the vehicle which caused the impairment. I do not feel that you can isolate either the assault by one of the passengers or the slipping on the ice by the Applicant from the entire chain of events which was tied into the use and operation of the automobile.

Conclusion

I am satisfied that the Applicant was able to satisfy the purpose test and has also met the three prongs of the causation test. Accordingly, I am satisfied that the Applicant was involved in an accident as defined by Section 3(1) of the Schedule.

EXPENSES:

The parties made no submission on expenses. They are encouraged to resolve this issue. If they are unable to do so, they may schedule an Expense Hearing before me according to the provisions of Section 79 of the Dispute Resolution Practice Code.

April 1, 2016

Barry S. Arbus, Q.C. Arbitrator

Financial Services Commission of Ontario