Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2017 ONFSCDRS 44
Appeal P15-00053
OFFICE OF THE DIRECTOR OF ARBITRATIONS
ALI MADINEI and MARYAM ALIZADEH-EBADI
Appellant
and
TD GENERAL INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Ali Madinei and Maryam Alizadeh-Ebadi represented themselves
Tricia J. McAvoy for TD General Insurance Company
HEARING DATE:
On the record, by written submissions received by July 4, 2016
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:
The appeal is allowed. Paragraphs 1 and 2 of the Arbitrator’s August 14, 2015 decision are rescinded and replaced by the following:
Ali Madinei was involved in an accident as defined by s. 3(1) of The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as it read immediately prior to April 1, 2016.
Maryam Alizadeh-Ebadi was involved in an accident as defined by s. 3(1) of The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as it read immediately prior to April 1, 2016.
There shall be no order as to legal appeal expenses.
February 10, 2017
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Ali Madinei and Maryam Alizadeh-Ebadi appeal Arbitrator Kelly’s order that they were not involved in a “legitimate accident” and so could not claim statutory accident benefits under the 2010 SABS.1
For the reasons below, I find that the Arbitrator erred in finding that an accident under the SABS has to be “accidental.” In doing so, he relied on outdated case law.
II. BACKGROUND AND ANALYSIS
The issue before Arbitrator Kelly was whether Mr. Ali Madinei and Mrs. Maryam Alizadeh-Ebadi were involved in a motor vehicle accident on July 23, 2010, as defined in the SABS.
The definition of “accident” in s. 2(1) of the 1996 SABS and s. 3(1) of the 2010 SABS provides that “‘accident’ means an incident in which the use or operation of an automobile directly causes an impairment…” The only issue in this case related to the use or operation of an automobile. The initial inquiry is whether that use or operation occurred in the course of the ordinary and well-known activities to which automobiles are put, known as the Amos test.2
However, with respect to that test, the Arbitrator stated that, to fit the definition of “accident,” “the collision must be accidental and not staged,” and cited four cases in support, discussed below. He found that the Appellants paid a third party to be involved in the collision, so he found the collision was staged.
The Arbitrator had the evidence to support his conclusion that the accident was staged.
However, the Arbitrator went on to state that since the accident was staged and not “accidental,” he concluded that “the Applicants have failed to satisfy their burden of proof, on a balance of probabilities, that they were involved in a legitimate accident.” In other words, although there was a collision, there was no accident.
Mr. Madinei and Mrs. Alizadeh-Ebadi appealed. Their appeal relates almost entirely to the fact-finding process, so has little merit regarding that aspect of the appeal.
However, after the submissions were received from the parties, I issued my decision in Elmi and State Farm Mutual Automobile Insurance Company, (FSCO P14-00043, March 22, 2016), in which I rejected the proposition that there can be a collision but no accident. Accordingly, I asked for further submissions. Only the Insurer responded, and its submissions essentially expanded on the cases mentioned by the Arbitrator, which I will now discuss.
The four cases mentioned by the Arbitrator were Shakur v. Pilot Insurance Co., (1990) 1990 CanLII 6671 (ON CA), 74 O.R. (2d) 673, TTC Insurance Company Limited and Deborah Wootton, (FSCO P04-00004, November 2, 2004), Agyemang et al. and Pafco Insurance Company, (FSCO A11-001755, A11-001757, and A11-001867, May 26, 2015); Economical Mutual Insurance Company and J. E., (OIC P96-00033, June 25, 1996).
Shakur is irrelevant for the purposes of this case. It dealt with the issue of the shifting burden of proof and was referred to in Wootton. Wootton is not relevant either, as it dealt with whether there was an incident tied to an automobile in the first place, not the use made of the automobile.
That leaves J.E. and Agyemang. The arbitrator in Agyemang found that J.E. was binding on him. In J.E., the Director’s Delegate found that the term “accident” has a common law history that is not irrelevant, that it is the perspective of the insured person that is critical, and so it is not an accident if the insured intentionally causes his or her own injuries. The Arbitrator in Agyemang applied J.E., and agreed that the definition of “accident” should be restricted to incidents which are “accidental” in nature. TD General also referred to Tran and Vu and State Farm Mutual Automobile Insurance Company, (FSCO A13-000958 and A13-001548, November 3, 2015), in which it was also held that the accident reported was not “accidental.”
The insurer relies on these cases for its submission that such a planned event is not accidental and does not reflect the ordinary use or operation of a motor vehicle. In other words, this use or operation fails the Amos test.
This contradicts what I stated in Elmi, namely that driving a car fulfils its purpose, citing the example given in Citadel General Assurance Co. v. Vytlingam, [2007] 3 SCR 373, 2007 SCC 46 that even purposefully driving a car off a bridge still satisfies the Amos test.
Beyond that, J.E. is an old case, and the principles in it were expressly overruled by the Court of Appeal in Vijeyekumar v. State Farm Mutual Automobile Insurance Co., 1999 CanLII 1640 (ON CA), 44 O.R. (3d) 545. The Court was dealing with the same Amos purpose test as in this case, the only difference being that the causation test was the older “directly or indirectly” test. Vijeyekumar is cited in over 20 FSCO cases, mainly for its discussion of the broadening of the meaning of “accident” and what use or operation means, as set out in the latter part of the judgment. Nonetheless, the first part of the judgment specifically deals with intentional occurrences that ordinarily might not be considered accidental but are still “accidents” under the statutory definition, including self-injury. The Court found compelling a number of points made by the trial judge, including:
- A statutory definition may expand the usual meaning of a word, as shown by the use of the broader and more neutral term “incident,” which can include both intentional and unintentional events and occurrences.
- The unqualified word “incident” extends the meaning of “accident” to include some events that in popular parlance might not be so considered.
- Interpreting the word “incident” to have the same meaning as “accident” would offend the presumption against tautology.
- The distinction between an intentional act of the insured or of a third party does not alter the definition of “accident” in the SABS.
Accordingly, pursuant the Vijeyekumar, the previous common law history is not relevant in light of the statutory definition, which in turn does not distinguish between intentional and unintentional incidents now, and so contrary to what was stated in J.E. and the cases that followed it, an incident does not have to be “accidental” to meet the definition of “accident” under the SABS.
As for policy grounds to find otherwise, s. 53 of the 2010 SABS provides that an insurer may terminate the payment of benefits to or on behalf of an insured person, if the insured person has wilfully misrepresented material facts with respect to the application for the benefit and if the insurer provides the insured person with a notice setting out the reasons for the termination. As discussed in Szabo and CAA Insurance Company (Ontario), (FSCO P03-00015, March 31, 2004), s. 53 (and its equivalent under the previous SABS, s. 48) is a powerful anti-fraud tool: it is intended to impose a penalty beyond repayment in cases of wilful material misrepresentation, the penalty being the denial of benefits, even if no benefits were ever paid.
The insurer should have applied s. 53 here, instead of trying to distort the meaning of “accident” based on old case law that has been overruled by the Court of Appeal. As there was a collision, there was an incident meeting the statutory definition of “accident,” even though the incident was not “accidental” in common parlance. It is only on this basis that I am allowing the appeal, as I find no error in the Arbitrator’s fact-finding process.
III. EXPENSES
I am not inclined to award any appeal expenses in this case. It would offend the sensibilities to award any expenses to Ali Madinei and Maryam Alizadeh-Ebadi, given the Arbitrator’s findings. The appeal was only allowed because of my concerns about the distortion of the law introduced by the Insurer into the process. And precisely because of that distortion, I am not prepared to award legal appeal expenses to the Insurer either.
February 10, 2017
David Evans Director’s Delegate
Date
Footnotes
- Effective September 1, 2010, the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “new SABS”) came into force. Although the incident occurred before then, the transition rules in the new SABS provide that, subject to certain exceptions, benefits that would have been available pursuant to the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the “old SABS”) shall be paid under the new SABS, but in amounts determined under the old SABS. As a result, both the old SABS and the new SABS are applicable to accidents that occurred on or after November 1, 1996 and before September 1, 2010 and both should be considered.
- Amos v. Insurance Corporation of British Columbia, 1995 CanLII 66 (SCC).