M. B. v. Travellers Insurance Company, 2018 CanLII 115647

Date: 2018-10-17

Tribunal File Number: 17-006174/AABS

Case Name: 17-006174 v. Travellers Insurance Company

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. B.

Applicant

and

Travellers Insurance Company

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Karina Kowal

APPEARANCES:

Counsel for the Applicant: Peter Cho

Counsel for the Respondent: Daniel Strigberger

HEARD via teleconference on: February 5, 2018 and March 7, 2018

OVERVIEW

1On July 9, 2017, the applicant, MB, was injured while driving an off-road vehicle, specifically a dirt bike, at a closed course competition.

2The applicant’s claim for accident benefits was denied by the respondent, Travellers Insurance Company, and the applicant filed an appeal with the Licence Appeal Tribunal (the “Tribunal”) for resolution of the dispute.

3The parties participated in a case conference on January 8, 2018 during which, a preliminary issue hearing was scheduled.

4The respondent denied the benefits on the basis that the incident does not qualify as an “accident” as defined in the Statutory Accident Benefits Schedule - Effective September 1, 2010 (“Schedule”)¹, because it involved a vehicle that does not satisfy the definition of an “automobile”.

5In order to determine whether this is an automobile, I must determine whether the dirt bike was required to be insured under its applicable legislation, the Off-Road Vehicles Act (the “ORVA”)². If the dirt bike was required to be insured, then the applicant is entitled to benefits under the Schedule. If there was no requirement for the dirt bike to be insured, the applicant is not entitled to benefits.

ISSUES IN DISPUTE

6The issue in dispute is as follows:

i. Was the applicant involved in an ‘accident’, as defined in the Schedule, and specifically, was the applicant driving a vehicle which meets the definition of an “automobile”?

RESULT

7The applicant was not involved in an “accident” as defined by the Schedule because he was not driving a vehicle that meets the definition of an “automobile” during the incident on July 9, 2017. The applicant’s dirt bike was not required to be insured by virtue of the exemption criteria of the ORVA s. 2(1)(e), as he was driving an off-road vehicle at a closed course competition.

PROCEDURAL ISSUES

8This is a preliminary issue hearing and the respondent, Travellers Insurance Company, was afforded the right of first submissions in writing and right of reply in writing by the case conference adjudicator. The applicant submitted a written response. I heard oral testimony via teleconference on February 5, 2018 from witness Ms. Jan Stallybrass. Both parties delivered closing oral submissions on March 7, 2018. I requested that both parties provide and file further written closing submissions on March 16, 2018 including comments on public policy with respect to the ORVA.

9During the course of the hearing, the following procedural issues were also addressed:

1. Exclusion of Evidence

10In the applicant’s responding submissions, he requests to exclude Tabs #2 through #8 of the respondent’s initial submissions as they did not properly disclose the evidence in accordance with the timelines set out in Rules 9.2 and 9.4 of the Tribunals Rules of Practice and Procedure. In addition the applicant claims that, as the evidence consists of internet documents, it was not proven or authenticated pursuant to the Evidence Act.

11I find that these documents were properly disclosed to the applicant. Rule 3.1 of the Tribunal’s Rules of Practice and Procedure, allows an adjudicator to vary a timeline to ensure an efficient, proportional and timely resolution to a dispute. Adjudicator Daoud, in her case conference order required evidence for use at the hearing to be disclosed along with the submissions for the hearing. The respondent complied with the order.

12Evidence coming before the Tribunal is not required to meet the standard set by the Evidence Act. It must only be relevant to the proceeding. I find that the documents entered from Tabs 2 through 8 are relevant.

2. Improper Reply

13During oral closing arguments, the applicant raised a procedural fairness issue that the respondent submitted an improper reply, having raised new arguments in its reply. The applicant also submitted that he should have had first submissions and right of reply instead. The applicant sought to have the reply excluded.

14The respondent’s reply did not raise a novel argument. The respondent replied to applicant’s response and furthered original arguments. However, in order to preserve procedural fairness, I provided both parties with an opportunity to address these issues further during oral closing arguments as well as in written closing submissions.

3. Adjudicator Change

15The matter was heard by both Adjudicator Lester and myself on February 5, 2018. On March 7, 2018, Adjudicator Lester had to withdraw. I informed the parties that, in accordance with s. 4.4(1) of the Statutory Powers Procedure Act, R.S.O. 1990 Chap S.22 that I would continue with the hearing as sole adjudicator. There were no objections from the parties.

DISCUSSION

Which party bears the onus of proof in this hearing?

16During the course of the hearing, the parties requested that I determine the question of who has the onus of proof at this preliminary issue hearing. Both parties made submissions on this issue in writing, orally during closing submissions, and again in their written closing submissions.

17The applicant argues that the onus rests on the respondent as the issue has been narrowed to only whether a statutory exception applies. The applicant supports his position with the Ontario Court of Appeal’s decision in Meyer v. Bright.³ At the case conference, Adjudicator Daoud seems to have accepted this position as she ordered submissions from the respondent first with the right of reply.

18The respondent argues that, according to the Supreme Court of Canada (SCC) in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.,⁴ there are three phases with respect to onus of proof in accident benefits cases where exemptions and exclusions are at issue.

19In Ledcor, the SCC held that:

In the interpretive phase, the onus is on the insured to show that the loss is covered by the policy in question. Once the insured has done so, the burden shifts to the insurer to establish that one of the exclusions to coverage applies. If the insurer is successful at this stage, the onus then shifts back to the insured to prove that an exception to the exclusion applies.⁵

20I find the SCC decision in Ledcor to be most helpful in assisting my analysis in this case, as the decision sets out a three phase approach:

1. Phase I: the onus rests with the applicant in the interpretive phase in establishing coverage,
2. Phase II: the onus rests with the respondent in establishing the exclusion, and
3. Phase III: the onus rests with the applicant again in establishing the exception to the exclusion.

21This three phase framework will guide my analysis on this preliminary issue.

Phase I: Establishing Coverage

22The applicant is required to establish whether he has coverage under an insurance contract and, in this case, his eligibility to receive benefits under the Schedule. I must determine whether the applicant was involved in an “accident” as identified in s. 3(1) of the Schedule. That, in turn, requires me to determine whether the dirt bike involved in the accident is properly considered an “automobile” for the purposes of the Schedule.

23Section 3(1) of the Schedule defines “accident” as “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.”

24The parties agree that the applicant was involved in an incident which directly caused an impairment. However, the parties disagree over whether the vehicle the applicant was driving, a dirt bike, is properly considered an “automobile.”

25The Schedule does not define “automobile”. Nevertheless, the Court of Appeal for Ontario outlined a three pronged test in Adams v. Pineland Amusements Ltd.⁶ for determining whether a vehicle is an “automobile” for the purpose of auto insurance coverage. The test is as follows:

a. Is the vehicle an “automobile” in the ordinary parlance? If not, then, b. Is the vehicle defined as an “automobile” in the wording of the insurance policy? If not, then, c. Does the vehicle fall within any enlarged definition of an “automobile” in any relevant statute?

26Based on their submissions, the parties are in agreement that the dirt bike the applicant was riding at the time of the incident does not meet the first two prongs of the test. We look then to prong 3 – does the dirt bike fall within an enlarged definition of “automobile” in any relevant statute?

27The parties agree that the relevant statutes in this case are the Insurance Act⁷ and the Off Road Vehicles Act (ORVA)⁸.

28Section 224(1) of The Insurance Act states that an “automobile” includes:

a. A motor vehicle required under any Act to be insured under a motor vehicle liability policy; and, b. A vehicle prescribed by any regulation to be an automobile.

29The parties agree that these are the relevant sections of the legislation to be applied, however they disagree as to its interpretation.

Phase II- Establishing the Exemption(s) under the ORVA

30In the second phase of the analysis, the onus rests with the respondent to establish that the exemption to the regulation applies. In this case, it must show why the applicant is not required to be insured and is therefore not entitled to accident benefits.

31The parties’ positions diverge here.

32The respondent’s position is that the dirt bike does not require insurance and therefore does not meet the definition of ‘automobile”. The respondent argues that although s. 15 of the ORVA⁹ has a general requirement of insurance for off-road vehicles, s. 2(1) of O. Reg. 863¹⁰ enacted under the ORVA lists designated classes of vehicles which are exempt from the requirement of insurance, pointing specifically to item (e):

a. Golf Carts; b. Road- building machines; c. Self-propelled implements of husbandry; d. Wheelchairs; e. Off road-vehicles driven or exhibited at a closed course competition or rally sponsored by a motorcycle association.

33The parties agree that the incident occurred at a closed course competition.

34The respondent argued that the incident occurred on an off-road vehicle at a closed course competition which was sponsored by a motorcycle association. As such, the exemption applies and the applicant is not entitled to benefits.

35The applicant argued that the incident occurred on an off-road vehicle, at a closed course competition, but that the competition was sanctioned rather than sponsored, and therefore the exclusion does not apply.

36The applicant also argued that the CMRC (Canadian Motorsport Racing Corporation) is not a motorcycle club or association as defined by the ORVA, because it did not have a published constitution or roster of at least 24 members. It specified that it is a for-profit organization.

Evidence of Ms. Jan Stallybrass

37On February 5, 2018, I heard sworn evidence from Ms. Jan Stallybrass, director of the Canadian Motorsport Racing Corporation, that the CMRC sanctioned the closed course event on July 9, 2017, that Rockstar Energy Drink sponsored the event and that Stallybrass Promotions Inc. organized the event. Ms. Stallybrass clarified that CMRC is a for-profit corporation and fundamentally different than the Alberta Motorcycle Sport Association (AMSA) which is a not for profit organization that has a published constitution and a roster of members. CMRC runs autonomously from AMSA. CMRC sells insurance for their events.

38On March 7, 2018 the respondent no longer contested whether or not the closed course competition was sponsored. The respondent held that only rallies have a requirement to be sponsored, and in the event that the closed course competition was sponsored, it was not required. As such, the determination on the point of whether the CMRC meets the definition of motorcycle association and/or is it affiliated with AMSA was no longer required.

Statutory Interpretation

39The respondent asserts that the correct interpretation of the statute should be two part:

“Off-road vehicles driven or exhibited at a closed course competition OR rally sponsored by a motorcycle association”.

40The respondent relies on the Last Antecedent Rule of statutory interpretation, confirmed by the SCC in Frank v. The Queen¹¹: when no comma is present, a qualifying clause only applies to the last antecedent. In this case “sponsored by a motorcycle association” only applies to rallies.

41The respondent argues that the words “sponsored by a motorcycle association” only apply to the word “rally” and not to “closed course competition.” In its interpretation of s. 2(1) e, the respondent asserts that a closed course competition need not be sponsored. The sponsorship requirement applies strictly to rallies, which are different than closed course competitions because the risk to public property on a closed course competition is limited by the nature of the event. A rally is a race or competition using public roads and therefore requires sponsorship and additional means of control for the purpose of public safety.

42Further, the respondent argues that this interpretation of the exclusion is consistent with the meaning and intent of the ORVA. The Licence Appeal Tribunal case 17-000907 v. Aviva Ins.¹² dealt with the same provision and held that ORVA’s purpose was to “identify off-road vehicles and control the potential damage to public property”.

43This approach is supported by the 1983 Hansard¹³ submitted by the applicant where the legislature was discussing the passing of the ORVA. The legislature summarized the intent of the ORVA as to “encourage the safe driving of these recreational vehicles and provide a method of control and identification”.

44In other words, the respondent asserts the following:

a. Off-road vehicles driven or exhibited at any and all closed course competitions do NOT require insurance; and b. Off-road vehicles driven or exhibited at a rally sponsored by a motorcycle association do NOT require insurance.

45In summary, the respondent’s position is that the interpretation of the statute should be that sponsorship by a motorcycle association only applies to rallies. Even if the event was sponsored, there is no requirement for sponsorship at closed course competitions. The event where the incident occurred was not a rally. As such, the respondent asserts that this statute excludes the applicant from the requirement of insurance and in turn, his eligibility to receive accident benefits.

Phase III: Establishing the Exclusions to the Exemption

46The applicant’s position is that the dirt bike was required to be insured and as such meets the definition of automobile.

47The applicant needs to establish that the ORVA exemption does not apply, or that there is an exclusion to the exemption. To do so, the applicant must show that the dirt bike had to be insured at the time of the incident and therefore he is entitled to accident benefits under the Schedule.

48In this case, the statute does not specifically identify any exclusions to the exemption.

49The applicant argued that he does not fall within ORVA’s s.15.2 (1)(e) exemption as outlined above (that the closed course competition was not sponsored) and therefore the exclusion does not apply, and that he is entitled to accident benefits.

50Although the applicant did not specifically discuss whether s. 15 of ORVA required his dirt bike to be insured, and whether ORVA applied to him, he did specifically focus on why s. 2(1)(e) of the ORVA did not take him out of this act, and thereby entitled him to coverage under the Schedule.

51The applicant argues that, based on the SCC decision in Bell ExpressVu v. Rex,¹⁴ “today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”

52The applicant asserts that the correct interpretation of the statute is in its entirety: “Off-road vehicles driven or exhibited at a closed course competition or rally sponsored by a motorcycle association”. “Sponsorship by a motorcycle competition association” applies to both closed competitions and rallies. In this case, the applicant asserts that the event was not sponsored, thereby excluding the applicant from the insurance exemption and entitling him to accident benefits.

ANALYSIS

53Both parties presented compelling arguments on the very technical issue of statutory interpretation. It is important to consider the purpose of the ORVA in the analysis.

54The purpose and intent of the ORVA is to protect the public when off-road vehicles are driven on land that the owner does not occupy, and to allow the vehicles to remain uninsured if they are being driven on the owner’s land, which would not pose any risk to the public.¹⁵

55I agree with the respondent on its interpretation that one should read this statute with the use of the Last Antecedent Rule as follows:

Off road-vehicles driven or exhibited at a closed course competition or rally sponsored by a motorcycle association.

56The parties have agreed that the incident took place at a closed course. The respondent maintains that in the case that the event was sponsored, it maintains its position that sponsorship would only apply to rallies, and not to closed course competitions.

57As such, all closed course competitions (regardless of sponsorship) are not required to be insured. For rallies to be exempt from the requirement of insurance, they must be sponsored. If a rally is not sponsored it requires insurance.

58I find this interpretation is also consistent with the intent of the ORVA from a policy perspective as vehicles driven on private property, with little risk to the public do not require insurance, (e.g. a closed course). If a vehicle is in a rally driven on public property, and it is sponsored by an organization, the risk is controlled and the driver is also exempt from insurance. The only situation in which the driver is required to possess insurance is in the event of an unsponsored rally, on public property.

Sanctioned or Sponsored?

59In the event that I am incorrect on the statutory interpretation, on hearing arguments on whether the event was sponsored by a motorcycle association, I find that the event was sanctioned and not sponsored. RRO 1990, Reg. 863, s.1¹⁶, defines “motorcycle association” as a motorcycle club or association that has or is affiliated with a motorcycle club or association that has a published constitution and a membership roster of more than twenty-four persons.

60The organizing body, the CMRC is a for-profit corporation and does not have a published constitution and roster of members, as defined by reg. 863 s.1. However, I find that it is affiliated with the Alberta Motorcycle Sport Association (AMSA), which is a not-for-profit motorcycle club that has a published constitution and a membership roster of more than twenty-four persons. The affiliation between CMRC and AMSA is a strong one. The CMRC provides insurance and licenses to members of both clubs, both clubs advertise, post results and information on each other’s websites.

61As such, should the statute be read in its entirety as argued by the applicant, the result is that the closed course competition is sponsored via CMRC’s affiliation with AMSA. Sponsorship of the closed course competition fulfills the exemption criteria of ORVA’s Reg. 863 s. 2(1)(e) resulting in no entitlement to benefits.

CONCLUSION

62This analysis, on the statutory interpretation, and in the alternative on the affiliation between AMSA and CMRC that the event was sponsored by a motorcycle club, results in the applicant not being entitled to benefits under the Schedule, because he was not involved in an “accident” as he was not driving an “automobile” during the incident on July 9, 2017. He was not required to be insured at the time of the incident by virtue of the exclusion of the ORVA s.15.2(1)(e), as he was driving an off-road vehicle at a closed course competition.

63As such, this application is dismissed.

Released: October 17, 2018

__________________________

Karina Kowal

Adjudicator

Footnotes

1. 1Insurance Act, Ontario Regulation 34/10, Statutory Accident Benefits Schedule-Effective September 1, 2010, s. 3(1).
2. 2Off-Road Vehicles Act, R.S.O. 1990, Chapter O.4, s. 15.
3. 3Meyer v. Bright, 1993 CanLII 3389 (ON CA)
4. 4Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37
5. 5Id., at para 52.
6. 6Adams v. Pineland Amusements Ltd, 2007 ONCA 844, [2007] O.J. No.4724 (C.A.) ONCA 844
7. 7Insurance Act R.S.O. 1990, Chapter I.8 s.224 (1)
8. 8Off-Road Vehicles Act, R.S.O. 1990, Chapter O.4, s. 15.
9. 9Off-Road Vehicles Act, R.S.O. 1990, Chapter O.4, s. 15.
10. 10ORVA, R.R.O. 1990, Regulation 863; General, s. 2(1)
11. 11Frank v. The Queen, 1977 CanLII 152 (SCC), [1978] 1 S.C.R. 95
12. 1217-000907 v. Aviva Insurance Canada, 2017 CanLII 69451 (ONLAT)
13. 13Official Hansard Transcript, Parliament 32, Session 3, June 7, 1983: Off-Road Vehicles
14. 14Bell ExpressVu Limited Partnership v. Rex 2002 SCC 42, [2002] 2 S.C.R. 559
15. 15Matheson v. Lewis, 2014 ONCA 542 at para 28
16. 16ORVA, R.R.O. 1990, Regulation 863; General, s. 1