Intact Insurance Company v. Malaya Roberts, 2017 ONFSCDRS 78

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2017 ONFSCDRS 78

Appeal P16-00009

Appellant

and

Respondent

BEFORE:

David Evans

Philippa Samworth for Intact Insurance Compay

Duncan Macgillivray for Ms. Malaya Roberts

By written submissions received by January 26, 2017

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 of the Arbitrator’s order dated January 4, 2016, is allowed. Paragraphs 1 and 2 thereof are rescinded and replaced with the following:
The Applicant was not involved in an accident as defined by Section 3(1) of the Statutory Accident Benefits Schedule.
If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, an expense hearing may be arranged in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

March 15, 2017

David Evans Director’s Delegate

Date

I. NATURE OF THE APPEAL

Intact Insurance Company appeals the decision of Arbitrator Musson dated January 4, 2016, in which he found Ms. Roberts was involved in an “accident.”

Ms. Malaya Roberts is quadriplegic because she dived off the back of a Ford pickup truck into the shallow water of a lake. She can only claim accident benefits from the truck’s insurer, Intact, if the incident was an accident as defined in the 2010 SABS, namely an incident in which the use or operation of an automobile directly caused an impairment.¹

The Arbitrator found that Ms. Roberts was using the truck for its purposes — its ordinary and well-known activities — in the incident, and that the incident directly caused her injuries, so she was in an accident and entitled to claim accident benefits.

However, the Arbitrator failed to follow binding case law establishing that treating a truck as a diving platform is an aberrant purpose and not one covered by automobile insurance. Therefore, Ms. Roberts was not in an accident and is not entitled to claim accident benefits.

II. BACKGROUND

The parties proceeded to arbitration on a statement of agreed facts.

Ms. Roberts and some friends had been partying at a Manitouwadge, Ontario bar until, around 2:00 a.m. on August 13, 2011, they headed in two trucks to nearby Sand Lake. On arrival, Michael Kelly, the owner of one of the trucks, backed his 2008 Ford F-150 down the beach and parked it with the tailgate extending over the water.

Mr. Kelly and his friend, Dusk Fairservice and others, used the box and tailgate of the F-150 to run and jump into the lake doing “cannonballs.” Ms. Roberts did not initially join in. However, after he did a cannonball, Dusk Fairservice saw Ms. Roberts standing up in the box of Kelly’s truck and, as set out in the arbitration decision:

Mr. Fairservice retrieved his towel from the side of the box of Mr. Kelly’s truck and then walked approximately 10-20 feet past the front of Mr. Kelly’s truck to look for the others in the group. Mr. Fairservice turned around and saw the Applicant floating face down in the lake about 10-20 feet away from the shore. According to Mr. Fairservice, less than a minute occurred between seeing the Applicant standing in the box of the truck to seeing her face down in the water. None of the Applicant’s friends witnessed how the Applicant entered the water nor does the Applicant remember how she entered the water. Based on the severity of the Applicant’s injuries and where she was last observed standing up in the bed of the truck, it is within the balance of probabilities that the Applicant had jumped into the water from the tailgate of the pick-up truck in a similar manner to others in the group that night. Unfortunately, it was determined that after jumping into the lake, the Applicant landed in water that was approximately a foot in depth.

After Ms. Roberts told Mr. Fairservice she could not feel anything, an ambulance was called. She was taken to the hospital, where it was confirmed that her spinal cord was completely severed. Ms. Roberts now resides in a long-term care facility. She applied for accident benefits from Intact pursuant to its policy on Mr. Kelly’s F-150. Intact disputes that the incident was an “accident” within the meaning of the 2010 SABS.

The Arbitrator found that Ms. Roberts was an insured under Mr. Kelly’s insurance coverage with Intact as an occupant of his truck. He also found that, based on the severity of her injuries, common sense, and the general laws of physics, a reasonable inference was that Ms. Roberts jumped into the lake from the tailgate of Mr. Kelly’s pickup truck.

The Arbitrator then discussed the two main tests of whether an incident is an accident, the purpose and causation tests. As set out by the Court of Appeal in Greenhalgh v. ING Halifax Insurance Co. (2004), 2004 CanLII 21045 (ON CA), 72 OR (3d) 338, the purpose test asks whether the incident arose out of the ordinary and well-known activities to which automobiles are put. If it did, the causation test asks whether that use or operation directly caused the impairment. The causation test has three bases or prongs. The first “but for” test merely rules out irrelevant causes. The second “intervening act” test asks if there was any intervening act that resulted in the impairment that cannot be said to be part of the “ordinary course of things.” The third “dominant feature” test asks if the dominant feature of the incident was the use or operation of the automobile.

Regarding the purpose test, Intact relied on the Supreme Court’s formulation in Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46: Did the accident occur in the course of the ordinary and well-known activities to which automobiles are put? Binnie J. noted that the sort of aberrant situation that the test excludes would be, for example, use of a car as a diving platform. The Arbitrator distinguished Vytlingam on the basis that it was a “tort” coverage case and involved a third party dropping boulders onto the plaintiffs.

The Arbitrator also found that using the truck bed in a recreational manner as Ms. Roberts did is an ordinary use. He found that the truck was being used in a manner consistent with its design, in that she and her friends were “tailgating,” or conducting a social event on or around the open tailgate of a truck. He noted that automakers promote tailgating by installing accessories such a cup holders in truck boxes.

The Arbitrator thus distinguished Olesiuk and Kingsway General Insurance Company, (FSCO A10-002609, September 7, 2011), where the insured was using the truck’s hood as a platform, an activity for which it was not designed. He found that, since Ms. Roberts jumped from the truck bed into the lake, and not the hood, she passed the purpose test. In the same way he distinguished Savard v. Royal & SunAlliance Insurance Co. of Canada, 2012 ONSC 715, where a vehicle that was being converted to a disabled shell fell on the insured in the process. He found that no such conversion of purpose took place here.

The Arbitrator referred to Economical Mutual Insurance Company and Whipple, (FSCO P10‑00020, October 6, 2011) for the statement that context, as it relates to an accident, is important. He found the context was directly tied to the recreational use of the bed of the pick-up truck.

The Arbitrator noted that both parking and disembarking are ordinary uses. He found that the 2010 SABS does not define what disembarking is or that it only occurs at the end of a trip. He found that disembarking can include not only stepping out of a vehicle but also rolling, hopping or jumping out of it. He also found that the type of surface an insured disembarks onto makes no difference, whether it’s water or ice.

Turning to the causation test and the but for test, the Arbitrator found that but for the truck being parked at the edge of the lake and Ms. Roberts disembarking from the tailgate as she did, she would not have been injured.

As for the intervening act test, the Arbitrator distinguished Greenhalgh, where the insured suffered numerous occurrences after abandoning her car in the woods. The Arbitrator found that there were no intervening occurrences between Ms. Roberts disembarking from the tailgate of the pickup truck and landing in the water. He disagreed with the Insurer’s position that the manner of use was an intervening act.

Regarding the dominant purpose test, Intact had relied on Certas Direct Insurance Company and Gill, (P04-00031, April 27, 2005), where Mr. Gill had rolled out of his vehicle and then jumped off a bridge, allegedly due to a panic attack. Intact submitted that I ruled that the use or operation of the vehicle was not the dominant feature of the accident because of Mr. Gill’s mental state. The Arbitrator found that there was no other dominant feature that could be the cause of the accident other than the use of the truck.

The Arbitrator found that since Ms. Roberts passed both the purpose and the causation tests, she was in an accident when she dived off the tailgate of the truck. She was therefore entitled to claim accident benefits from Intact. He also awarded her expenses, although he had received no submissions on expenses and provided no reasons for the award.

III. ANALYSIS

I agree with some of the Arbitrator’s general conclusions about the purpose and causation tests in this case regarding the use or operation of a pickup truck. For instance, I agree that a common use of a truck bed is recreational. Whether any particular truck has coffee cup holders would make no difference in the analysis; in referring to accessories like cup holders, the Arbitrator was merely illustrating how manufacturers accommodate existing uses.

I also agree that, just based on the facts and common sense, it was a reasonable inference that Ms. Roberts jumped off the tailgate that night. I also agree that the surface she landed on makes no difference to the analysis, so whether you disembark onto water, ice or rough concrete, as long as you are still in the process of disembarking and suffer an impairment, you are entitled to benefits, as long as you are not using the vehicle in an aberrant manner.

I also agree with the Arbitrator when he found that there can be more than one exit from a vehicle, and an exit is not limited to exiting at the time of arrival. For instance, in Carr and TD General Insurance Company, (FSCO P15-00062, November 17, 2016),² a fire truck had been brought to a young children’s birthday party for fun and education. One of the children, invited into the truck, injured herself on leaving. This was an example of a number of people entering and leaving the vehicle after it arrived, so its use or operation was not limited to the time when the firefighters arrived and parked the vehicle.

I also agree with the Arbitrator that an unusual exit from a vehicle may still pass the purpose test. For instance, in the Gill case, as I discussed on its appeal, “the arbitrator also found that the initial mishap of rolling out of the car passed the purpose test. Essentially, Mr. Gill was driving his car when the incident started and exiting a car is part of its use or operation.” I found no error in that reasoning. But the overall context was driving a vehicle, which is not an aberrant use.

Similarly, it is likely that even a drunken exit from a vehicle would still be considered an accident. One of the cases Intact relies on is Economical Mutual Insurance Company v. Caughy, 2016 ONCA 226, where the Court of Appeal confirmed that even a parked motorcycle still passes the purpose test when an intoxicated person stumbles into it. I see little difference in principle between stumbling into a vehicle and stumbling off it, where the overall context involves an ordinary and well-known activity.

I also agree that, as I discussed in Whipple, the context around an incident is important in determining if the purpose test was met. But this is where I part company with the Arbitrator, as the contexts between the two cases are quite different. In Whipple, Mr. Whipple performed an action — flipping himself upside down on a pole — that would almost never attract insurance coverage except in the very specific context of his partying on a commercial party bus that advertised its partying purpose, so he was fulfilling the bus’s purpose. By way of contrast, getting out of the bed of a pickup truck would almost always attract insurance coverage, except in the very specific context of performing cannonballs from it. This was a private vehicle, and there was no evidence that the Ford Motor Company ever advertised its use as a diving platform. I find the Arbitrator failed to give effect to the clear direction regarding purpose that the Supreme Court laid out in Vytlingam, a direction that was followed in Carr and, more importantly, Caughy.

First, I will quote what the Arbitrator said about Vytlingam:

There are some distinct differences in that case compared to the case before me. First, it is a “tort” coverage case, not a case based on the Schedule, and second, it involved a third party act i.e., individuals used a truck to haul boulders to a bridge and then dropped those same boulders from a bridge onto the Vytlingam’s car causing an accident and subsequent injuries. In the case before me, there was not a third party act such as someone pushing the Applicant into the water. Ms. Roberts went into the water as a result of disembarking directly from the back of the pick-up truck.

I find the Arbitrator dismissed Vytlingam in too cavalier a fashion. Vytlingam dealt with an insurance claim under an insurance policy and discussed both the purpose and the causation tests. The Vytlingams were driving on a highway when a large boulder, dropped by the tortfeasors from an overpass, struck their vehicle. The Vytlingams received no-fault benefits from their insurer and also sought to recover damages from it, pursuant to the inadequately insured motorist coverage found in s. 3 of the Ontario Policy Change Form 44R. Under this endorsement, an insurer is obliged to “indemnify an eligible claimant for the amount that he or she is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury to…an insured person arising directly or indirectly from the use or operation of an automobile.”

The issue there was the use or operation by the tortfeasors of their truck. Ultimately, the court found that the tort of throwing the rocks was an intervening act that broke the chain of causation, so there was no coverage for that reason. Ms. Roberts therefore submits that what Binnie J. stated regarding the purpose test is obiter. However, the Court of Appeal in Caughy specifically noted that Binnie J. provided guidance with respect to the scope of the purpose test, and the purpose test was explicitly at issue in Caughy. Accordingly, if the Court of Appeal followed what Binnie J. said about the purpose test in a statutory accident benefits case, so should the Arbitrator. Not only that, Binnie J. refers three times to the use of a motor vehicle as a diving platform as aberrant. First, at para. 11, he pointed out that “the focus here is on the use of the tortfeasor’s vehicle” and “whether the Vytlingams’ claim is in respect of an inadequately insured tortfeasor whose fault occurred in the course of using a motor vehicle as a motor vehicle and not for some other purpose (as a diving platform, for example, as hereafter discussed)…” Then, after noting that “the ordinary and well-known activities to which automobiles are put” purpose test set out in Amos v. Insurance Corp. of British Columbia, 1995 CanLII 66 (SCC), [1995] 3 S.C.R. 405, simply signals that someone who uses a vehicle for a nonmotoring purpose cannot expect to collect motor vehicle insurance. He wrote:

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. [Para. 16.]

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. [Para. 19.]

Ms. Roberts submits that Justice Binnie’s example referred to diving off a car, whereas she dived off a pickup truck. However, I find that is no distinction, as Binnie J. also referred to the car as a motor vehicle, so the example is more general than just a car. What he was focused on was the particular aberrant use.

Ms. Roberts submits that the example makes no sense, as Binnie J. referred to a “tortfeasor,” and of course there is no tortfeasor under first party coverage, so there is no one whom the driver could sue. However, since Binnie J. was concerned with the use that the tortfeasors had made of their truck, his use of the term in para. 19 is perfectly understandable and does not detract from the overall point he was making. Further, the Court of Appeal applied Vytlingam in Caughy, even though there was no tortfeasor and it was a statutory accident benefits case, not a tort coverage case.

Ms. Roberts submits that, if we follow Vytlingam, then we start down a slippery slope where insurers could raise issues about how a person disembarked from a vehicle and onto what surface. However, I find that the example given by Binnie J. points to a very particular, aberrant use of a motor vehicle, namely the precise activity Ms. Roberts was engaged in – using the truck as a diving platform. As I already stated above, almost any other disembarkation from the bed of a truck would attract insurance coverage as part of the ordinary use of a truck. Only this aberrant use is excluded.

But finally, and most importantly, the Court of Appeal specifically applied Vytlingam in its analysis of the situation in Caughy, finding that parking a vehicle did not constitute the type of aberrant use contemplated in Vytlingam and stating that “The examples cited by Binnie J. were limited to circumstances in which a vehicle is not being used as a vehicle but for some other purpose.” [Para. 17.]

Accordingly, I find the Arbitrator erred in distinguishing Vytlingam. The incident in question fails the purpose test, as the vehicle was not being used as a vehicle. It was being used for some other purpose.

Therefore, Ms. Roberts was not involved in an “accident” and cannot claim accident benefits.

The appeal is therefore allowed. Given my finding that Ms. Roberts was not involved in an accident, the Arbitrator’s order awarding expenses to her cannot stand either. I note that in the body of the arbitration decision, the Arbitrator stated that the parties made no submissions on expenses, yet he awarded Ms. Roberts her expenses in his order. That order was therefore made without reasons or submissions, so on those grounds alone his expenses decision would be rescinded.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

March 15, 2017

David Evans Director’s Delegate

Date

Footnotes

Definition of “accident” in s. 3(1) of The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
Since this decision was issued some time after the original submissions were provided in this appeal, the parties were invited to and did make further submissions regarding it.