Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 304 Appeal P15-00062

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ELEANOR CARR, a minor by her representative, Amy Thomson Appellant

and

TD GENERAL INSURANCE COMPANY Respondent

BEFORE: Richard Feldman

REPRESENTATIVES: Siona Sullivan for the Appellant Peter Soltysiak for the Respondent

HEARING DATE: November 2, 2016 (by written submissions and by oral submissions, via teleconference call)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, R.R.O. 1990, as amended, it is ordered that:

This appeal is granted.
The order of October 30, 2015 in FSCO arbitration File Number A14-003622 is rescinded and replaced with the following:
1. The June 18, 2011 incident is an “accident” within the meaning of the Schedule.
The Respondent shall pay to the Appellant her expenses of this appeal, fixed in the amount of $2,000.00.
Any remaining issues in arbitration File Number A14-003622, including the issue of the expenses of the arbitration proceeding (i.e., expenses up to and including the preliminary issue hearing that led to the issuance of the decision of October 30, 2015 and any expenses incurred thereafter in relation to that proceeding) shall be decided by an arbitrator other than the one who issued the decision of October 30, 2015.

November 17, 2016

Richard Feldman Director’s Delegate Date

REASONS FOR DECISION

I. BACKGROUND

The facts in this case are not in dispute.

On June 18, 2011, Eleanor Carr, then five years old, attended a classmate’s birthday party. A fire truck (a pump truck) had been brought to the location (i.e., parked in the driveway of the home where the party was taking place) for the entertainment and education of the children. Children, including Ms. Carr, were invited inside the passenger compartment of the truck. In the process of exiting the vehicle, Ms. Carr fell down the interior stairs of the fire truck and struck her head on the asphalt below. As a result, she sustained impairments. A first-party claim for accident benefits was made on her behalf to her father’s auto insurer, TD General Insurance Company (“TD”). TD denied the claim for accident benefits on the basis that Ms. Carr had not been involved in an “accident” within the meaning of the Statutory Accident Benefits Schedule (the “Schedule”).

The Schedule defines an “accident” as “an incident in which the use or operation of an automobile directly causes an impairment…” This definition is the same in both the version of the Schedule that existed prior to September 2010 (subsection 2(1) of Ont. Reg. 403/96) and the version in place at the time of this incident (subsection 3(1) of Ont. Reg. 34/10).

The Supreme Court of Canada¹ has established two elements that must be satisfied by an insured person for an incident involving a motor vehicle to be considered to be an “accident” within the meaning of no-fault insurance:

It must be proven that the incident resulted from the ordinary and well-known activities to which motor vehicles are put (the “purpose test”); and
It must be proven that there is a direct causal relationship between the insured person’s impairments and the use or operation of the vehicle in question (the “chain of causation test” or, simply, the “causation test”).

In this case, TD does not dispute that Ms. Carr sustained impairments when she fell from the fire truck on June 18, 2011 (i.e., TD confirmed during the hearing of this appeal that it was not disputing that the causation test had been met). TD took the position, however, that this was not an “accident” because at the time of the incident, the fire truck was not being used as a motor vehicle. The Arbitrator at first instance agreed.

In a decision issued October 30, 2015 in File Number A14-003622, Arbitrator Fry (the “Arbitrator”) found (at page 5 of her reasons) that the ordinary and well-known uses of fire trucks include using them for entertainment and educational purposes, especially for children.² Thus, she held that the manner in which the fire truck was used by Ms. Carr on June 18, 2011 was ordinary and well-known. The Arbitrator nevertheless held that, at the relevant time, the fire truck was being used as a display and not as a motor vehicle and, therefore, Ms. Carr had failed to meet the “purpose” test. As a result, the Arbitrator held that this was not an “accident” and awarded TD its expenses of the preliminary issue hearing (in an amount to be determined).

II. NATURE AND SCOPE OF THE APPEAL

Eleanor Carr appeals from that decision. Written submissions were delivered by both parties to this appeal and, on November 2, 2016, I heard oral arguments by counsel for each of the parties (via teleconference call).

Pursuant to subsection 283(1) of the Insurance Act, a party may only appeal an order of an arbitrator to the Director of Arbitrations (or his delegate) on a question of law. In the context of proceedings at the Financial Services Commission of Ontario (“FSCO”), errors of law include the erroneous interpretation or application of provisions of the Insurance Act and/or regulations thereunder.

The Appellant argues that the Arbitrator erred in her interpretation and application of the relevant legal principles. She submits that the Arbitrator misdirected herself in the application of the “purpose test” to the facts of this case and, thereby, erred in law in concluding that the June 18, 2011 incident was not an “accident” within the meaning of the Schedule.

The Respondent (TD) argues that there is no error of law in the Arbitrator’s decision. TD submits that the use of the fire truck as a display constituted a use as something other than a motor vehicle. TD argues that this is a finding of fact over which I have no jurisdiction.

III. THE LAW

While the Supreme Court of Canada established in Amos what is now a well-known two-part test for determining whether a particular incident involving a motor vehicle constitutes an “accident”, it is perhaps worth noting that, in Amos, the insured person was unsuccessful due to the application of the second part of the test (the “causation test”). In Amos, the insured person was shot while driving away from attackers. It was held that driving is an ordinary and well-known use of a motor vehicle. It was found that this was not an “accident”, however, because his injuries did not result from the ownership, use or operation of the vehicle;³ the vehicle was the place of his injury but not the cause of his injury.

It is also worth repeating some of that Court’s comments concerning the “purpose test”:

The "purpose" test, as it is now known, can be traced back to Stevenson v. Reliance Petroleum Ltd., supra. That case involved the negligence of the driver of the insured, a company engaged in the distribution of oil and gas, which led to gasoline overflowing, igniting and destroying the premises. A majority of this Court held that the accident arose out of the use or operation of a motor vehicle, per Rand J. at p. 941:

An analogous "use", as distinguished from "operation", is exemplified in the case of a bus. The undertaking in such a case includes the entrance and exit to and from the bus of passengers. If the steps are defective and a passenger is injured, could it be said that injury did not arise out of the "use"? The expression "use or operation" would or should, in my opinion, convey to one reading it all accidents resulting from the ordinary and well-known activities to which automobiles are put, all accidents which the common judgment in ordinary language would attribute to the utilization of an automobile as a means of different forms of accommodation or service.⁴

The Supreme Court also ended its decision with the following cautionary note⁵:

Invariably, each case must be decided on its own facts, applying the two-part test outlined above. It is not possible to predict every circumstance where an injury can be said to arise out of the ownership, use or operation of a vehicle… The words … chosen by the legislature are broad and should be interpreted to give meaning to the legislative intention that extends coverage where some connection is found between ownership, use or operation of a vehicle and the injuries sustained as a result of an accident.

The Supreme Court of Canada had the opportunity to revisit this issue a decade or so later in Vytlingam, a case from Ontario. In this case, a person used his vehicle to transport large rocks to a highway overpass; he then removed the rocks from his vehicle and hurled them from the overpass at oncoming vehicles below. The occupants of one such vehicle were seriously injured as a result. The question arose as to whether their injuries resulted from an “accident”. As in Amos, the case was decided based upon the causation test (not the purpose test). The Court held that the tort of throwing rocks broke the chain of causation.

Binnie J., writing for a unanimous Court in Vytlingam, had this to say about the purpose test:

[16] 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” (para. 17), he was simply signalling that someone who uses a vehicle for a non-motoring purpose cannot expect to collect motor vehicle insurance. If, for example, a claimant got drunk and used her car as a diving platform from which to spring head first into shallow water, and broke her neck, she could not reasonably expect coverage from her motor vehicle insurer, even though, in a sense, she “used” her motor vehicle. The same conclusion is compelled under s. 239(1)(a) because an injury resulting from such an off-beat use could not sensibly be said to arise “directly or indirectly from the use or operation” of the motor vehicle as a motor vehicle.

[19] …[T]he appellant insurer’s argument overstates the scope of the Amos purpose test. The “ordinary and well-known activities to which automobiles are put” limits coverage to motor vehicles being used as motor vehicles, and would exclude use of a car as a diving platform (as above) or retiring a disabled truck to a barn to store dynamite (which explodes), or negligently using the truck as a permanent prop to shore up a drive shed (which collapses, injuring someone). In 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. That is the sort of aberrant situation that the Amos purpose test excludes, and nothing more. Here, as in Amos, it is the causation test that did the work, not the purpose test.

[20] In Holdbrook, an individual attempting to commit suicide in a truck parked in a warehouse caused an explosion. The fire insurer sought recovery from the truck auto insurer alleging that the damages occurred as a result of the ownership, use or operation of the truck. The claim was dismissed. Pugsley J.A., for the Court of Appeal, held, correctly, that the truck was not being operated or being used as a motor vehicle.

[21] Similarly in Continental Stress Relieving Services, damage was caused by a vehicle repairman whose careless use of a cutting torch caused gasoline fumes to ignite damaging the building and disrupting the businesses carried on there. The insurers of the businesses sought to recover against the motor vehicle insurers but it was held that the careless repairman could not be considered to be an at-fault motorist.

[22] However, to take another bizarre example for illustrative purposes. If instead of throwing rocks from the overpass Farmer had tried to jump his car at high speed over the interstate highway, Evel Knievel style, and crashed down on the Vytlingam vehicle, the insurer might want to argue that Farmer was not making an “ordinary and well‑known” use of his vehicle. However, there is no doubt that Farmer would have been driving the vehicle and driving meets the Amos purpose test. Further, in the language of the OPCF 44R, the Vytlingam’s claim in such a case would have arisen “directly or indirectly from the use or operation” of the tortfeasor’s vehicle being used as a motor vehicle. The OPCF 44R is a big tent and not much will be excluded as aberrant to the use of a motor vehicle as a motor vehicle.

The case law establishes that to satisfy the purpose test, the activity to which the person is putting the vehicle at the time of the incident (i.e., the manner in which the motor vehicle is being used or operated) must simply be a well-known, ordinary use for that particular vehicle.

Thus, for a party bus that provides guests with access to alcohol and a “stripper pole”, cavorting and doing a headstand with the assistance of that pole was considered to be an ordinary use of that vehicle.⁶ Similarly, using the stairs of a bus to exit the vehicle is a normal (in fact, integral) use of that type of a vehicle.⁷

To satisfy the purpose test, the use of the vehicle (i.e., the activity to which it is put) need not be active. There are cases in which it has been held that a parked vehicle is still being “used” as a vehicle, even when there is no person in (or on) the vehicle.⁸ The Ontario Court of Appeal recently held (in Caughy) that it was an “accident” (within the meaning of the Schedule⁹) when a person tripped over a parked motorcycle.¹⁰ The Court in that case held that “parking a vehicle is an ordinary and well-known activity to which vehicles are put”.¹¹ The motorcycle was still being “used” during the time it was parked and that use was not found to be aberrant to the use of the motorcycle as a motor vehicle.

IV. ANALYSIS

The real function of the “purpose test”, as pointed out by the Supreme Court of Canada in Vytlingam, is to exclude coverage for off-beat or aberrant uses of vehicles, such as:

using a vehicle as a diving platform;
retiring a disabled truck to a barn to store dynamite;
using a truck as a permanent prop to shore up a shed.

The Supreme Court stated that in each of the above examples, it could not be said that the motor vehicles were being used as motor vehicles. The Supreme Court has also implied that such cases will be extremely rare since, coverage is intended to be quite broad and “not much will be excluded as aberrant to the use of a motor vehicle as a motor vehicle.”¹²

TD argues that, in the present case, the Arbitrator found that, at the relevant time, the fire truck was not being used as a motor vehicle. It submits that the activities to which the truck was put were aberrant and, accordingly, the Arbitrator’s decision was correct. TD also argues that this is a finding of fact and that, as such, I have no jurisdiction to intervene. For the reasons that follow, I disagree.

First, this is not simply a finding of fact by the Arbitrator. The only evidence adduced by the parties at the original hearing of this preliminary issue was a joint document brief; that joint document brief included transcripts of examinations under oath of certain key witnesses who, in all important respects, were in agreement with one another as to what transpired on June 18, 2011. No facts were in dispute in the arbitration proceeding. To decide the issue before her, the Arbitrator had to interpret the purpose test and apply it to the undisputed facts of this case. That involved a question of law or of mixed fact and law. It was not a pure question of fact.

Second, I find that the Arbitrator erred in her analysis of the law and her application of the law to the facts of this case. She erred in law in finding that the incident of June 18, 2011 was not an accident with the meaning of the Schedule.

It is logically inconsistent and an error in law for the Arbitrator to have found that it is an ordinary and well-known use of fire trucks to invite children to enter the passenger compartment for purposes of education and entertainment (i.e., that this is a normal and well-known use of this type of vehicle) but to hold that when the vehicle is being used for just such a purpose, it ceases to be used as a vehicle.

In addition, leaving aside the unique nature of this vehicle and its normal and well-known use in the education and entertainment of children, there cannot be a more normal use of any vehicle than exiting the vehicle. Ms. Carr was invited into a parked vehicle and she was injured while in the process of exiting that vehicle.

The Court of Appeal has held that a parked vehicle is still in use as a vehicle when it has no occupants (Caughy). A person who sustains impairments as a direct result of that use (i.e., the mere presence of the parked vehicle) is entitled to no-fault benefits. The argument in favour of coverage (under the purpose test) seems to me to be even stronger for a person who is invited into a parked vehicle and who then is injured while in the process of exiting that vehicle (in a normal fashion).

This was not, as counsel for TD suggests, analogous to a situation where a vehicle has become a fixture in an exhibit, museum or playground and there was no evidence before the Arbitrator to support such a conclusion. This was not some derelict, abandoned or non-functioning vehicle on display. This was a functioning fire truck that, temporarily, was parked at a location designed to give these children access to it. Unlike the examples cited in Vytlingam, the fire truck in this case was not “retired”, “disabled” or used as a “permanent” fixture to prop up a shed. Thus, I find that the Arbitrator erred in law in concluding that this was some sort of aberrant use of this vehicle by Ms. Carr that would, under the purpose test, preclude this incident from meeting the definition of an “accident” within the meaning of the Schedule.

This was a normal and well-known use of a fire truck as a fire truck and a normal use of a motor vehicle as a motor vehicle. I find that the Arbitrator erred in law by reading the purpose test too narrowly and applying that test incorrectly to the facts of this case.

V. CONCLUSION

For the foregoing reasons, this appeal is allowed. The order of October 30, 2015 in arbitration File Number A14-003622 shall be rescinded and replaced with a determination that on June 18, 2011, Eleanor Carr was involved in an “accident”, within the meaning of the Schedule. I shall leave the issue of the expenses of the arbitration proceeding and any other outstanding issues to be decided by an arbitrator other than the one who issued the decision under appeal.

VI. EXPENSES

During the hearing of this appeal, counsel for both parties agreed that that a reasonable amount at which to fix the expenses of this appeal would be $2,000.00.¹³ As the Appellant has been successful, I shall order the Respondent to pay to the Appellant her expenses of this appeal, fixed in the amount of $2,000.00 (inclusive of all fees, disbursements and any applicable taxes).