Safety, Licensing Appeals and Standards Tribunals Ontario Licence Appeal Tribunal

Automobile Accident Benefits Service

Mailing Address: 77 Wellesley St. W., Box 250, Toronto ON M7A 1N3

In-Person Service: 20 Dundas St. W., Suite 530, Toronto ON M5G 2C2 Tel.: 416-314-4260

1-800-255-2214

TTY: 416-916-0548

1-844-403-5906

Fax: 416-325-1060

1-844-618-2566

Website: www.slasto.gov.on.ca/en/AABS

Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario Tribunal d'appel en matière de permis

Service d'aide relative aux indemnités d'accident automobile

Adresse postale : 77, rue Wellesley Ouest, Boîte no 250, Toronto ON M7A 1N3 Adresse municipale : 20, rue Dundas Ouest, Bureau 530, Toronto ON M5G 2C2

Tél. : 416 314-4260

1 800 255-2214

ATS : 416 916-0548

1 844 403-5906

Téléc. : 416 325-1060

1 844 618-2566

Site Web : www.slasto.gov.on.ca/fr/AABS

Date: 2017-03-27

Tribunal File Number: 16-002057/AABS

Case Name: 16-002057 v Belair Direct

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

M. F.

Applicant

and

Respondent

ADJUDICATOR: Chris Sewrattan APPEARANCES:

Counsel for the Applicant: Ian D. Kirby Counsel for the Respondent: Sean Miller HEARD: Written Hearing: January 10, 2017

1The applicant was injured in a motor vehicle accident on November 21, 2015. He crashed his All-Terrain Vehicle (ATV) after recently purchasing it. The ATV was purchased on October 25 and the applicant took physical possession on November 20. This is a decision on a preliminary issue. The preliminary issue is whether the ATV was insured at the time of the accident. The Schedule prohibits the payment of an income replacement benefit if at the time of the accident the driver knew he or she was operating an uninsured motor vehicle.

2The applicant applied for benefits under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”). Belair Direct (“Belair”) denied his claim for an income replacement benefit on the basis of s. 31(1)(a)(i) of the Schedule.

Preliminary Issue:

3Is the applicant precluded from receiving the benefits specified under s. 31(1) of the Schedule by the operation of s. 31(1)(a)(i)?

Result:

4The applicant is precluded from receiving the benefits specified under s. 31(1) of the Schedule by the operation of s. 31(1)(a)(i).

Facts:

5The applicant purchased a 2004 Arctic Cat All-Terrain Vehicle (ATV) on October 25, 2015. He was injured in a motor vehicle accident involving the ATV 27 days later, on November 21, 2015.

6The applicant purchased the ATV with a friend in attendance, R. The applicant and R. noticed that the ATV was leaking gas at the time of purchase. The applicant purchased the ATV and loaded it onto R.’s pick-up truck. This was done for three reasons:

The ATV was leaking gasoline, making it dangerous to drive.
The applicant did not have a means of hauling the ATV away from the seller’s location.
The applicant was living and working in a temporary location that was distant from the ATV.

The ATV was transported to R.’s residence the same day.

7The ATV was stored at R.’s residence for 23 days. On November 15, 2015, R. hauled the ATV to the residence of a mechanic he knew. The mechanic worked to fix the ATV for a number of days.

8The applicant picked the ATV up with a trailer on November 20, 2015. This was the first time he was physically in possession of the ATV. The next day, November 21, 2015, the applicant used the trailer to haul the ATV to the applicant’s friend’s residence in Mississauga.

9The motor vehicle accident occurred at the residence of the applicant’s friend on November 21, 2015. The applicant reversed the ATV off of the trailer and attempted to maneuver the ATV into a garage. While attempting to maneuver, he lost control of the ATV and struck a tree. The applicant alleges that the accident caused him to fracture both of his legs and sustain a concussion.

10The applicant reported the acquisition of the ATV and the occurrence of the accident to Belair on November 25, 2015.

11The applicant also owned a Jeep. From May 7, 2015 to May 7, 2016, the Jeep was insured under a standard policy of automobile insurance (OAP-1) by Belair. Apart from the ATV, the Jeep was the only automobile owned by the applicant.

12The applicant seeks the payment of an income replacement benefit.

Discussion:

13Section 31(1)(a)(i) of the Schedule prohibits the payment of an income replacement benefit if at the time of the accident the applicant “knew or ought reasonably to have known that he [] was operating the automobile while it was not insured under a motor vehicle liability policy”. In interpreting the operation of s. 31(1)(a), the Tribunal must answer two questions:

Was the ATV insured under a motor vehicle liability policy at the time of the accident? If it was, then s. 31(1)(a) is not applicable to this case and the analysis ends. If the ATV was not so insured, however, the second question arises.
At the time of the accident was it reasonable for the applicant to believe that the ATV was insured?

A. Was the ATV insured under a motor vehicle liability policy at the time of the accident?

14The answer to this question is found in the contract between the applicant and Belair, the standard policy of automobile insurance (OAP-1). Section 2.2.1 of the OAP-1 states:

Your newly acquired automobile(s) will be insured as long as you inform us within 14 days from the time of delivery and pay any additional premium required.

The word “delivery” is not defined in the OAP-1.

15When was the ATV delivered? The answer has significant implication. If the ATV was delivered within 14 days of the applicant informing Belair of the accident, the ATV was properly insured. If the ATV was delivered before this time period, the ATV was not properly insured.

16The applicant submits that the date of delivery is the date on which he picked up the repaired ATV from R., November 20, 2015. This is one day before the accident and five days before he informed Belair that he had acquired the ATV. If the date of delivery is November 20, the ATV was insured at the time of the accident and s. 31(1)(a)(i) does not apply.

17The applicant is essentially submitting that “delivery” in s. 2.2.1 of the OAP-1 means taking actual, physical possession of the ATV. Under this submission, delivery did not occur earlier, such as when R. hauled the ATV away from the seller’s location, or while it sat on R.’s property for 23 days. In support of this position, the applicant suggests that when it comes to the interpretation of automobile insurance policy, provisions providing coverage should be interpreted broadly in favour of the insured and exclusions interpreted strictly and narrowly against the insurer.

18Even a broad interpretation of “delivery” cannot stretch so far as to begin when the applicant took actual, physical possession of the ATV. If this were the case, the conferral of insurance coverage under s. 2.2.1 would be dependent on where and how a purchaser chose to store their vehicle.

19I interpret “delivery” as it is written in s. 2.2.1 of the OAP-1 to mean the date on which the applicant took constructive possession of the ATV. Constructive possession occurs when a party has knowledge and control over the motor vehicle. A simple method of ascertaining constructive possession is to ask whether the applicant possessed the authority to determine where the vehicle should be.

20The applicant had constructive possession of the ATV on the day he purchased it, October 25, 2015. At the time of purchase the applicant possessed the authority to determine where the ATV would go. In this instance, he chose to have the ATV stay at his friend’s residence and await repair. Presumably, he chose to have the ATV remain at his friend’s residence for 23 days. Although the ATV was not in his physical possession, the applicant had sufficient control over the ATV that one can consider it “delivered” to his possession.

21In order to avoid the application of s. 31(1)(a)(i), the applicant should have informed Belair of his acquisition of the ATV within 14 days from the date he purchased the vehicle. He failed to do this. As such, I find that the ATV was not insured at the time of the accident.

B. At the time of the accident was it reasonable for the applicant to believe that the ATV was insured?

22Section 31(1)(a)(i) of the Schedule applies only if at the time of the accident the applicant ought reasonably to have known that he was operating an uninsured automobile. As a result, while the applicant’s insurance policy with Belair did not apply to the ATV at the time of the accident, s. 31(1)(a)(i) is inapplicable if the applicant reasonably believed that the policy did apply. Phrased differently, notwithstanding that the applicant’s interpretation of s. 2.1.1 of the OAP-1 is wrong, he is still entitled to automobile accident benefits if his interpretation is reasonable.

23To prove his case under this head of analysis, the applicant must show that at the time of the accident he was aware of the existence of s. 2.2.1 of the OAP-1, and he interpreted it to mean that he was within the 14-day requirement to inform Belair of his acquisition of the ATV.

24The applicant has provided no evidence to indicate that he was aware of s. 2.2.1, much less that he relied upon it. In his written statement submitted to the Tribunal, the applicant states that there was an intent to purchase insurance but he did not have the chance to do this between the delivery and actually trying to store it. This falls well short of a demonstrated understanding and reliance on s. 2.2.1.

25I appreciate that the applicant may have intended to obtain insurance once he physically received the ATV. I deeply appreciate the serious injury that he has suffered as a result of his accident. However, the law requires the applicant to at least reasonably believe that he was operating an insured ATV at the time of his accident. The applicant has failed to provide the requisite evidence on this point.

The applicant’s other arguments

26The applicant advanced two additional arguments that I will address. The applicant submits that s. 98 of the Courts of Justice Act is an available remedy in this proceeding. Section 98 states:

Relief against penalties

A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.

Section 98 is unavailable in this proceeding. The Licence Appeal Tribunal is an arm of the Executive branch of government. It is not empowered by the Legislature to use s. 98.

27The applicant also submits that the defence of due diligence is available to him. He cites Kozel v. The Personal Insurance Company, 2014 ONCA 130 for this proposition. Due diligence is not applicable to this proceeding. Due diligence is available as a defence for strict liability offences. It finds its place in regulatory law, where one party prosecutes another for the alleged commission an offence. This proceeding concerns automobile accident benefits. It finds its place in the combination of contract and insurance law, resolving disputes between private parties.

Conclusion:

28The applicant is precluded from receiving the benefits specified under s. 31(1) of the Schedule by the operation of s. 31(1)(a)(i).

Released: March 27, 2017

Chris Sewrattan,

Adjudicator

M. F. v. Belair Direct, 2017 CanLII 19200

Case Summary