J.T. v. Aviva Canada Inc., 2018 CanLII 8097

Safety, Licensing Appeals and Standards Tribunal 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

RECONSIDERATION DECISION

Before: Linda P. Lamoureux, Executive Chair

Date: January 22, 2018

File: 16-003674/AABS

Case Name: J.T. and Aviva Canada Inc.

Written Submissions By:

For the Applicant: Tally Vanounou, Counsel

For the Respondent: Marnie E. Miller, Counsel

BACKGROUND

1On July 11, 2015, J.T. was a passenger on an all-terrain vehicle or “ATV” driven by his friend, A.E. They were driving on a private rural property (the “Property”) that A.E.’s parents had recently purchased. Unfortunately, J.T. and A.E. collided with a tree. J.T. was left catastrophically injured.

2The central question in this case is whether the collision was an “accident” as defined by the Statutory Accident Benefits Schedule – Accidents on or after September 1, 2010¹ (the “Schedule”). In order to make the determination, the Licence Appeal Tribunal (the “Tribunal”) had to decide whether the ATV was an “automobile” within the meaning of the Schedule, a question that required it to apply the three-part test that the Court of Appeal for Ontario outlined in Adams v. Pineland Amusements Ltd.² Purporting to apply that test to the parties’ evidence, the Tribunal held that the ATV was not an “automobile” and, thus, that the collision was not an “accident” for the purposes of the Schedule.

3J.T. now asks me to reconsider the Tribunal’s decision. For the reasons that follow, I find that the Tribunal made significant errors in rendering its decision. I therefore grant his request.

ANALYSIS

4Section 3(1) of the Schedule defines an “accident” as “an incident in which the use or operation of an automobile directly causes an impairment” [emphasis added]. While the Schedule does not define the term “automobile,” the Court of Appeal’s decision in Adams v. Pineland Amusements Ltd. provides that the following 3-part analysis (the “Adams test”) must be used to determine whether a vehicle is properly considered an “automobile”:

1. Is the vehicle an “automobile” in the ordinary sense of the word?
2. If not, is the vehicle defined as an “automobile” in the wording of the insurance policy?; and
3. If not, does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?

5An affirmative answer to any of these questions leads to the conclusion that the vehicle is both insured for the purposes of the Insurance Act, R.S.O. 1990, C. I.8 (“Insurance Act”) and qualifies as an “automobile” within the meaning of the Schedule.

6In this case, the Tribunal erred in failing to address the relevant evidence and provide clear findings concerning parts 2 and 3 of this test. I recognize that the Tribunal is not required to mention or address all of the evidence or arguments it considered in rendering its decisions. However, the Tribunal’s failure to accept or even discuss certain important evidence, noted below, resulted in the Tribunal rendering a fundamentally flawed decision that should not be allowed to stand.

A. Is the vehicle an “automobile” in the ordinary sense of the word?

7Case law has established that an ATV is not considered an “automobile” in the ordinary sense of the word.³ The parties concede that part 1 of the Adams test is not met and is not at issue in this hearing.

B. Is the vehicle defined as automobile in the wording of the insurance policy?

8In this case, the Tribunal failed to address whether the subject ATV was defined as an automobile in the wording of an insurance policy.

9Shortly before the accident, A.E.’s parents, G.E. and L.S. (the “Purchasers”), bought the Property from S.H. and R.H. (the “Sellers”). As part of this deal, the Purchasers also purportedly purchased from the Sellers, among other things, the ATV. The identity of the ATV’s owner at the time of the collision is part of the parties’ dispute. In this case, the Tribunal determined that the Purchasers did not own the ATV at the time of the collision. On that basis, it held, at para. 13, that “part 2 of the Adams test [was] not satisfied.”

10Problematically, the Tribunal offered no analysis or determination of whether the ATV was actually insured under a standard Ontario Automobile Policy, let alone whether that policy defined the ATV as an “automobile.” That exercise is what the Adams test required it to perform. In failing to conduct the analysis, the Tribunal erred.

11Further, while the Tribunal noted that the Purchasers attempted to add the ATV to their existing policy as a newly acquired vehicle, it failed to address whether that retroactive coverage was effected and, if so, whether the Purchaser’s policy defined the ATV as an “automobile.”

12In its response to this request for reconsideration, Aviva highlights the fact that the Purchaser’s insurer, Northbridge, denied coverage for the collision at issue. Aviva argues that this denial is evidence that part 2 of the Adams test does not apply and that this is the end of the analysis for this Tribunal. I disagree. The Tribunal should have conducted the requisite analysis under part 2 of the Adams test.

C. Does the vehicle fall within any enlarged definition of “automobile?

13The Tribunal also made significant errors in its assessment of the evidence and its analysis of part 3 of the Adams test.

14Section 224 of the Insurance Act, defines an automobile as a motor vehicle that is both required under any Act to be insured under a liability policy and prescribed by regulation to be an automobile. Given this definition, a case will usually turn on where the vehicle is operated and whether it is legally required to be insured.

15In the case of ATVs, the relevant statutes are the Off-Road Vehicles Act, R.S.O.1990, c. O.4. (“ORVA”) and the Compulsory Automobile Insurance Act, R.S.O. 1990, c. O.4. Together, those statutes make clear that whether an off-road vehicle requires insurancedepends on where the vehicle is operated.

16Rightly so, the focus of the Tribunal’s decision was on whether the ATV falls within a definition of “automobile” in the ORVA.

17The Tribunal correctly recognized that “off-road motor vehicles require insurance under the ORVA when operated off-road and not on their owner’s property.”⁴ Significantly, s. 15(9) exempts an off-road vehicle from being insured where it is driven on land occupied by the vehicle’s owner. This is why the issue of ownership of the ATV became significant to the Tribunal’s decision.

18The Tribunal had to determine who occupied the Property and owned the ATV on the date of the collision. This was unclear because the Property was purchased before the incident with a closing date scheduled to take place about a month after the incident. But there were also other agreements between the Sellers and the Purchasers regarding the ATV and the rental of the Property prior to the closing date.

19The applicant’s position was that ownership of several chattels and the ATV was transferred to the Purchasers before the closing date. Accordingly, the exemption from insurance would not apply because, on the day of the incident, the occupier of the land (the Sellers) and the vehicle’s owner (the Purchasers) were not the same. Therefore, the ATV required insurance in accordance with the ORVA and met the definition of ‘automobile” pursuant to the Adams test. The Tribunal disagreed with the applicant and found the applicant’s evidence with respect to the ATV’s ownership on the date of the incident insufficient. The Tribunal determined that the ATV was still owned by the Sellers on the date of the incident and, therefore, the ATV’s owner and the Property’s occupier were indeed the same.

20As a result of its finding, the Tribunal held that the ORVA insurance exemption applied, the ATV was not an “automobile”, and that the collision was not an “accident” under the Schedule.

21In my opinion, the Tribunal failed to provide adequate reasons, make clear findings or properly deal with the relevant evidence regarding the ATV’s ownership as outlined below. The Tribunal also failed to ask and assess ‘Who occupied the Property on the date of the incident?’ Instead, the Tribunal relied on the parties’ agreement and assertions that the Sellers remained the occupiers of the Property. The Tribunal should have assessed all of the evidence and determined the occupier of the Property at the time of the incident, in addition to deciding and providing adequate reasons and findings on who owned the ATV on the day of the incident.

The Tribunal failed to assign appropriate weight to affidavit evidence

22The Tribunal failed to assign appropriate weight to the affidavit evidence provided by the applicant on the issue of the ATV ownership. Instead, it assigned the evidence little or no weight for the wrong reason.

23The Tribunal stated the following:

[21] I found the evidence submitted by the applicant with respect to ownership insufficient. For example, all evidence was submitted through the affidavit of Lisa Stark, Accident Benefit Supervisor with the applicant’s representative’s firm. Ms. Stark provided background information with respect to the incident, information pertaining to third party litigation arising as a result of the incident, and the applicant’s version of the sequence of events. As part of the exhibits attached to Ms. Stark’s affidavit was the affidavit of G.E. (Family A). However, this affidavit was not made in support of this application but in support of third party litigation against his insurance company. Affidavit evidence directly in support of this application from Family A and B may have been more compelling.

In fact, the affidavit was made in support of the LAT application and was directly relevant to the issues before the Tribunal. It included many relevant exhibits, among them, an affidavit from the purchaser of the Property and the ATV that outlined facts related to the chattels, the Property, and the incident. However, the Tribunal disregarded this evidence without providing any adequate reason for doing so.

24The Tribunal was wrong in its assessment of this key evidence because it essentially dismissed sworn unchallenged testimony without evaluating its reliability or probative value.

The Tribunal did not make clear findings or properly deal with evidence in respect to the issue of the ATV’s ownership

25Additionally, the Tribunal’s reasons are insufficient in that they do not explain the Tribunal’s evidentiary preferences, or, likewise, fail to support its findings.

26For instance, although the Tribunal listed and identified some of the evidence before it regarding the ATV’s ownership (para. 23-27), it did not sufficiently explain its preference of this evidence, its value, and why it deemed it more probative and convincing than the other evidence. The Tribunal noted, for example, a verbal agreement to purchase the ATV along with other chattels that took place prior to the incident (para. 23) but did not elaborate on the evidence regarding this agreement and why it chose to give it little or no weight. Similarly, the Tribunal noted post-accident emails (para. 24) discussing the purchase of the ATV but did not elaborate on the emails’ contents or why it rejected this evidence.

27Essentially, the Tribunal adopted Aviva’s position (para. 27) that “common sense dictates that the parties intended for the chattels to be transferred upon the closing of the sale of the house and Property.” In doing so, the Tribunal failed to address voluminous and relevant evidence before it. For instance, the Tribunal did not adequately discuss, explain or distinguish why the following evidence was of little or no value to its finding on ownership of the ATV and the occupier of the Property:

1. A draft rental agreement that includes the ATV as chattels sent via email.⁵
2. Pleadings by the Sellers in another proceeding that the ATV and other chattels were purchased prior to the incident.⁶
3. Receipt for the $20,000 payment dated July 11, 2015, signed by the seller.⁷
4. List of chattels with pricing including the ATV.⁸
5. An email from the purchaser to his insurance broker inquiring as to coverage of the ATV in his existing auto policy on July 21, 2015.⁹
6. Evidence that the Seller was showing the driver of the ATV, A.E. how to operate the ATV on the date of the incident.¹⁰
7. Evidence that the ATV was driven several times on the date of the incident.¹¹
8. The Motor Vehicle Accident Report identifying the Purchasers as the owners of the ATV.¹²
9. Police General Occurrence Report identifying that the Purchasers were renting the house on the Property prior to the closing date, moving their belongings into the house, and confirming their purchase of the ATV from the Sellers.¹³
10. Supplementary Occurrence report by Halton Regional Police Service concluding the purchaser (G.E.) is the owner of the ATV.¹⁴
11. Statement of the seller (S.H.) discussing the need for the Purchasers to obtain tenant insurance for the rental period.¹⁵
12. Police file obtained through WAGG motion including the audio recording of A.E. (driver of the ATV and son of the purchaser), describing how the Purchasers were unloading their belongings at the new Property on the day of the incident.¹⁶
13. Evidence that the Purchasers obtained a key to the Property before the closing date and prior to the incident¹⁷and that the Purchasers were moving their boxes into the Property on the date of the incident.¹⁸
14. Evidence that the Sellers moved out before the closing date: Statement of Defence and Cross-claim of the Sellers¹⁹, Statement of the seller (S.H.) to the police dated Jul 17, 2015²⁰, and Affidavit of G.E. at para. 16.²¹

28The Tribunal did not address any of the evidence noted above. Instead, in determining the issue of the ATV’s ownership, it appears to have focused only on two pieces of evidence: the $20,000 cheque; and the fact the ATV was not listed in the memo line on the cheque. While later in the decision the Tribunal noted that “the number of discrepancies in the evidence, do not add up”, it failed to adequately discuss these discrepancies or demonstrate consideration of the facts outlined above. Generally, the Tribunal’s reasons regarding the ATV’s ownership reflect a description of the parties’ positions rather than clear and evidence-based factual findings.

29The Tribunal also analyzed provisions in the Sale of Goods Act, R.S.O. 1990, c. S.1 (“Sale of Goods Act”) to assist in determining who owned the ATV. However, as in the rest of the decision, the Tribunal failed to substantiate its findings or, likewise, properly deal with the parties’ evidence.

30The Tribunal found that there was no intention for the Purchasers to take possession of the ATV prior to the closing date of the Property. In coming to this conclusion, the Tribunal relied on the theory of unclear intention regarding the transfer of the ATV’s ownership as a trigger of s. 19 of the Sale of Goods Act, which deals with when property in goods passes to a buyer. The Tribunal applied the first two rules in s. 19.

31Rule 1 states that “where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment or the time of delivery or both is postponed.”

32Overall, the Tribunal neglected to focus on the actual agreement or the “meeting of the minds” from the perspective of the Sellers and Purchasers. It did not deal with the evidence relating to the nature of the contract and did not set out essential findings of fact related to the agreement between the contracting parties. It did not identify or assess relevant evidence, such as the verbal agreement between the parties or the email containing the unsigned rental agreement. It did not explain how evidence of the Sellers granting early access to the Property and the ATV to the Purchasers affected the analysis or findings.

33The Tribunal rejected Rule 1 of s.19 by referencing the same set of reasons regarding the $20,000 cheque and evidence that, on the day of the incident, the ATV’s driver, A.E., asked one of Sellers, S.H., for permission to ride the ATV. In doing so, it again overlooked or failed to address the multitude of evidence mentioned in para. 26 above concerning the ATV’s ownership.

34In addition, the Tribunal noted that the Purchasers’ attempt to add the ATV as a newly acquired vehicle to their insurance policy after the incident was contrary to another statement in his affidavit regarding possession of the ATV on the closing date. However, the Tribunal misquoted the Purchaser’s statement in his affidavit and may have confused concepts of ownership and possession. The Tribunal stated that the Affidavit of G.E. indicates, “he did not intend to take ownership of the chattels along with the ATV until the date of closing August 19, 2015, after the incident” (para. 31). But the Affidavit actually states, “I understood that we would take possession of the additional chattels on the closing date” (para. 10).

35The Tribunal then assessed Rule 2 under s. 19 of the Sale of Goods Act to determine whether the ATV was in a deliverable state on the day of the incident because according to this rule, the property does not pass to the buyer until the seller puts it in a deliverable state.

36Again, the Tribunal did not explain its findings. It relied on s. 8 of the ORVA, which sets out the requirements that must be met for the transfer of ownership for an off road vehicle but the Tribunal did not explain how the ORVA’s requirements trigger a ‘deliverable state’ in this case.

37One of these requirements related to the plating of an off-road vehicle. The Tribunal found that, since the ATV was not plated at the time of the incident, it was not in a deliverable state. However, the fact that the ATV was not plated merely points to the fact that it was not licensed. I note the Supplementary Occurrence Report by Halton Regional Police Service, which concluded, “the owner of the ATV, G.E., is also the occupier of the land on which it was being operated. This exempts them from most requirements under the Act, such as the requirement to wear a helmet and have a permit and number plates.”²² The Tribunal did not discuss this evidence.

38Significantly, the Tribunal’s reasoning process on the issue of the ATV’s ownership did not set out and reflect consideration of the main and relevant evidence on the agreement or intention of the parties regarding the transfer of ownership in the ATV. Accordingly, the reasons were inadequate and the result reached by the Tribunal was not properly justified.

The Tribunal did not err in determining the applicant’s estoppel argument

39Another issue raised by the applicant as a basis for his reconsideration request was the Tribunal’s decision on the issue of estoppel.

40The Tribunal found that Aviva, which had paid accident benefits for 11 months, was not estopped from terminating the benefits because estoppel is an equitable remedy that the LAT does not have jurisdiction to grant. In addition, the Tribunal found that the Schedule contemplates an ongoing obligation regarding entitlement and the adjusting of claims.

41The applicant argued that the Tribunal has jurisdiction to grant equitable relief because s. 280 of the Insurance Act gives the Tribunal exclusive jurisdiction to resolve disputes regarding statutory accident benefits. The Tribunal disagreed. It stated (at para. 41):

If it was the intention of the legislature to include equitable relief such as estoppel as an allowable remedy, it would have expressly conferred it on the Tribunal in the enabling legislation. Therefore, I am unable to grant the applicant this remedy.

I agree with the Tribunal on this point. Section 280(4) of the Insurance Act provides that accident benefits disputes “shall be resolved in accordance with the Statutory Accident Benefits Schedule.” An administrative tribunal does not have the ability to craft remedies that are the exclusive purview of the common law courts. The Statutory Powers and Procedure Act²³ give tribunals some latitude to control process and procedure and the law allows tribunals to inquire into issues of procedural fairness or natural justice and, in limited circumstances, constitutional issues, but there is no jurisdiction to provide equitable remedies.

42Two recent reconsiderations, Y.D. v. Aviva Insurance Canada²⁴ and G.A. v. Co-operators General Insurance Company²⁵, addressed the issue of equitable relief. However, neither of those cases gave rise to the need to exercise equitable jurisdiction given the facts at issue.

43Likewise, the facts of this case do not require the exercise of equitable jurisdiction because it is an established principle in accident benefits dispute that the onus rests with the applicant to prove that he or she meets the definition of ‘accident’ under the Schedule. Aviva’s initial payment of benefits to the applicant does not override the applicant’s obligation to prove that the Schedule applies to this case in that the incident qualifies as an accident. That onus remains intact regardless of Aviva’s initial payment of benefits. In this sense, applying estoppel as requested would undermine the very purpose of the Schedule, namely to provide insured person’s with coverage relating to their “accidents.” In these circumstances, therefore, I find no role for the doctrine.

CONCLUSION

44In a complex case, the Tribunal made several errors of law or fact that are significant enough to warrant that this matter be reheard. Accordingly, I exercise my discretion under Rules 3 and 18 of the Tribunal’s Rules of Practice and Procedure to allow this reconsideration and order that this matter be reheard.

45The Tribunal’s decision of July 14, 2017 is hereby cancelled. I strongly suggest that a case conference be held to determine what is the most appropriate mode and method of hearing for this case and whether, for some witnesses or issues an in person hearing might be more appropriate.

Linda P. Lamoureux Executive Chair Safety, Licensing Appeals and Standards Tribunals Ontario

Footnotes

1. 1O. Reg. 34/10.
2. 22007 ONCA 844, [2007] O.J. No. 4724.
3. 3Unifund Assurance Company v Security National Insurance Company, 2016 ONSC 6798, 2016 CarswellOnt 17327and Motor Vehicle Accident Claims Fund v. Therrien, [2012] O.F.S.C.D. No. 167, 2012 CarswellOnt 16974 [Therrien].
4. 4Therrien, note 3 at pages 2-3.
5. 5Tab G - affidavit of Lisa Stark.
6. 6Tab C - affidavit of Lisa Stark.
7. 7Tab K - affidavit of Lisa Stark.
8. 8Tab H - affidavit of Lisa Stark.
9. 9Tab Y - affidavit of Lisa Stark.
10. 10Purchaser’s statement (L.S.) at Tab Q - affidavit of Lisa Stark. Seller’s statement (S.H.) at Tab D - affidavit of Lisa Stark. Purchaser’s affidavit at para. 21 (G.E.), Audio statement of A.E (purchaser’s son) to the police at Tab R - affidavit of Lisa Stark.
11. 11Tab F - affidavit of Lisa Stark, Audio statement of A.E. at Tab R - affidavit of Lisa Stark.
12. 12Tab BB - affidavit of Lisa Stark.
13. 13Tab I - affidavit of Lisa Stark.
14. 14Tab S - affidavit of Lisa Stark.
15. 15Tab D - affidavit of Lisa Stark.
16. 16Audio statement of A.E. at Tab R - affidavit of Lisa Stark and Supplementary Occurrence Report at Tab S - affidavit of Lisa Stark.
17. 17Tab D - affidavit of Lisa Stark.
18. 18Tab Q - affidavit of Lisa Stark.
19. 19Tab C - affidavit of Lisa Stark.
20. 20Tab D - affidavit of Lisa Stark.
21. 21Tab F - affidavit of Lisa Stark.
22. 22Tab S - affidavit of Lisa Stark.
23. 23R.S.O. 1990, C. S.22
24. 242017 CanLII 84463 (ON LAT).
25. 252017 CanLII 39602 (ON LAT), at para. 20 – 23.