Citation: Sexsmith v. Certas Home and Auto Insurance Company, 2023 ONLAT 21-000943/AABS

Licence Appeal Tribunal File Number: 21-000943/AABS

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:

Riley Sexsmith Applicant

and

Certas Home and Auto Insurance Company Respondent

DECISION AND ORDER

ADJUDICATOR: Stephanie Kepman

APPEARANCES:

For the Applicant: Bryan Rumble, Counsel

For the Respondent: Aly Pabani, Counsel

HEARD: By way of written hearing

REASONS FOR DECISION AND ORDER

BACKGROUND

1The applicant was involved in an automobile accident on June 8, 2020, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016)¹ (“Schedule”). The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

PRELIMINARY ISSUES

2The preliminary issue to be determined is whether the applicant is precluded from receiving benefits specified in section 31 of the Schedule by operation of section 31(1)(a)(i) of the Schedule.

RESULT

3I find that the applicant is precluded from receiving benefits.

FACTUAL BACKGROUND

4The parties agree that the applicant was involved in an accident on June 8, 2020, while riding a 2003 Kawasaki Z1000 motorcycle, when another vehicle struck him.

5The parties also agree that the applicant owns several automobiles and motorcycles. At the time of the accident, the applicant carried an insurance policy with the respondent² for a 2003 Yamaha WF450 and a 1976 Yamaha DT400 and also, held insurance with the Guarantee for a Subaru Impreza and a Ford F150.

6The parties agree that the motorcycle driven by the applicant during the accident was not a described vehicle on the applicant’s insurance policy with the respondent or any other insurer.

7The applicant worked as a mechanic and was riding his motorcycle to work at the time of the accident. This was the first time he had ridden the vehicle.

PARTIES’ POSITIONS AND SUBMISSIONS

8Section 31(1)(a)(i) of the Schedule states that an insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under sections 21, 22 or 23 if, the person who was the driver of an automobile at the time of the accident knew, or ought to have reasonably known that he was operating the automobile while it was not insured under a motor vehicle liability policy.

9Section 2.2.1 of the Ontario Automobile Policy (“OAP-1”) states that a newly acquired automobile is an automobile or trailer a person acquires as an owner that is not covered under any other policy, so long as the insurer insures all the vehicles the person owns. Furthermore, the new automobile will be insured so long as the owner informs the insurer within 14 days from the time of its delivery.

10Section 2.2.3 of the OAP-1 states that automobiles, other than described automobiles, are also covered, so long as certain special conditions apply.

11Section 268(1) of the [Insurance Act]³ states that every contract providing motor vehicle liability insurance, including those in force when the Schedule was made or amended, is deemed to provide the benefits set out in the Schedule, subject to its exclusions.

12The respondent submitted that the motorcycle driven at the time of the applicant’s accident was not listed on either of the applicant’s insurance policies, despite him knowing he was operating his motorcycle while it was not insured.

13The respondent submitted that section 2.2.1 OAP-1 sets out that a newly purchased motor vehicle is insured under the existing insurer, as long as the insurer insured all owned vehicles, and the insurer is notified of the purchase within fourteen days. The respondent argued that this is not applicable to the applicant, as he held two different insurance policies:⁴ one with the respondent and the other with Guarantee.

14The respondent submitted that based on the applicant’s cross-examination⁵, he failed to advise the respondent of the acquisition of this motorcycle. Though the applicant testified that he recalled that he purchased the motorcycle sometime between March and June of 2020, he could not remember the specific date. The applicant did not provide evidence that this was within fourteen days of his accident.

15The respondent submitted that at the time of the accident, the applicant had six or seven motorcycles and a small auto garage and repair shop in his home. The respondent noted that the applicant’s evidence showed that he stored the motorcycle for a few weeks in his home garage, while he waited for parts to repair it.

16Based on the applicant’s cross-examination⁶, at the time of the accident, the applicant was riding his motorcycle to his employer’s business in order to sell the vehicle. The respondent did acknowledge that the applicant ordered a used vehicle package from the Ministry of Transportation⁷ (“Ministry”) which did not contain a bill of sale.

17Though the respondent was aware that the applicant’s affidavit⁸ argued that he could not transfer ownership due to Service Ontario being closed as a result of the Covid-19 pandemic, the respondent also noted that during his cross-examination⁹, the applicant acknowledged that there were Service Ontario locations open, and he did not inquire whether the Service Ontario locations that were open would be able to transfer ownership of his motorcycle¹⁰.

18The respondent relied on M. F. v Belair Direct¹¹, where the Tribunal found that the applicant was precluded from receiving benefits due to section 31(1)(a)(i) because the applicant purchased an all-terrain vehicle and owned it for 23 days prior to notifying the insurer. Thus, the applicant did not comply with section 2.2.21 of OAP-1 by notifying the insurer of purchasing the vehicle within fourteen days.

19The respondent argued that in this case the applicant has not provided evidence that his motorcycle was obtained in the fourteen days leading up to the accident and that he tried to obtain registration, a licence plate or insurance while the motorcycle was stored in his garage or being repaired.

20The respondent also took issue with the exact date the applicant purchased the motorcycle. The respondent noted that given the heart of the issue turns on what date the applicant purchased his motorcycle, and he has failed to provide an exact date, the applicant cannot proceed with the application.

21In terms of the applicant’s reasonable belief of insurance, the respondent relied on M. F. v Belair Direct¹², where the Tribunal found that the applicant had failed to provide evidence that the applicant was aware of section 2.2.1 of OAF-1 or that this section could be relied on. The respondent submitted that given that the applicant owned two separate vehicle insurance policies, he would have had knowledge of vehicle insurance policies and how to obtain one.

22The respondent submitted that M. F. v Belair Direct creates a 2-part test with respect to section 31(1)(a)(i), which is: 1) was the vehicle insured under a motor vehicle liability policy at the time of the accident? And 2) if not, was it reasonable for the applicant to believe that his vehicle was insured at the time of the accident? The respondent argued that in this case, it was clear that, the applicant’s motorcycle was not insured, and also that it was not reasonable for him to believe otherwise. As noted above, the respondent submitted that as a mechanic, the applicant ought to have known he was not insured at the time of the accident.

23The respondent also relied on Sadni v Allstate Canada¹³, where the Tribunal considered whether an applicant’s motorcycle was insured at the time of the accident in light of section 31(1)(a)(i) of the Schedule. The Tribunal found the fact that the applicant was a mechanic at the time of his accident undermined his claim that he was confused or unaware of how to obtain insurance in Ontario¹⁴. The Tribunal also did not accept that the applicant believed his existing policy would automatically attach to a motorcycle without the need for further documentation¹⁵.

24The respondent argued that since the applicant is also a mechanic¹⁶, he had time between March 2020 and the date of his accident to contact the respondent about his purchase and to obtain insurance while he was repairing the vehicle. Therefore, the respondent submitted that it was not reasonable for the applicant to believe that his motorcycle was insured at the time of his accident.

25The applicant submitted that his motorcycle was insured at the time of his accident pursuant to section 2.2.3 of OAP-1.

26The applicant argued that the motorcycle was purchased after March 2020 but before June 2020 via Facebook marketplace for $500.00 and he received the motorcycle and a signed copy of the motorcycle’s ownership. The applicant argued that due to the Covid-19 pandemic, he was unable to transfer ownership of the motorcycle.

27Moreover, the applicant argued that based on section 2.2.3 of the OAP-1., his motorcycle was insured at the time of his accident based on the special conditions, which state:

i. Both the other automobile and a described automobile must not have a manufacturer’s gross vehicle weight rating (GVWR) of more than 4,500 kilograms.

ii. The named insured is an individual, or if the described automobile is owned by two people, the named insureds are spouses of each other.

iii. Neither you nor your spouse is driving the other automobile in connection with the business of selling, repairing, maintaining, storing, servicing or parking automobiles.

iv. The other automobile is not being used to carry paying passengers or to make commercial deliveries at the time of any loss.

v. For all coverages, except Accident Benefits, the other automobile cannot be an automobile that you or anyone living in your dwelling owns or regularly uses. (For the purposes of this paragraph, we don’t consider use of an automobile rented for 30 or fewer days to be regular use.) Nor can the other automobile be owned, hired or leased by your employer or the employer of anyone living in your household. However, if you drive one of these other automobiles while an excluded driver under the policy for that automobile, this policy will provide Liability and Uninsured Automobile coverage while you drive that automobile.

28The applicant argued that he fulfils all five special conditions:

i. Both the applicant’s insured motorcycles, meaning his Yamaha DT 400 and his Yamaha WR405F have gross vehicle weight ratings (“GVWR”s) of 130 and 111 kilograms, while the applicant’s Kawasaki Z1000 has a GVWR of 1980 kilograms.

ii. The applicant submitted he was the named individual.

iii. The applicant was driving his motorcycle for his own personal use.

iv. The applicant was driving his motorcycle without passengers or making commercial deliveries.

v. In terms of condition five, the applicant argued this condition would only apply to a vehicle that was owned by the applicant. The applicant argued that the respondent has not presented evidence that he regularly drove the motorcycle. Moreover, as the ownership of the motorcycle had not been transferred at the time of the accident, he reasonably believed that this condition was not applicable and his motorcycle was insured by the “other automobile” provisions of section 2.2.3 the O.A.P.

29In the alternative, the applicant argued that it was reasonable that he could believe his vehicle was insured at the time of his accident given the circumstances.

30The applicant relied on Rougoor v. Co-Operators General Insurance Co.¹⁷, where the Court of Appeal found that a person who was injured on a dirt bike in Florida was covered by his automobile insurance in Ontario, where one of his described vehicles was the same make and model as the insured bike.

31The applicant directed the Tribunal’s attention to several cases including ones where the Tribunal extended an insured person’s insurance coverage based on section 2.2.3 of the OAP-1.

32The respondent submitted that the caselaw relied on by the applicant was not relevant, as it spoke to entitlement under the Schedule and not exclusions under section 31.

33Moreover, the respondent submitted that based on section 31(a)(i) of the Schedule, a specified benefit cannot be paid if the driver of the vehicle knew or ought to have known that the vehicle being operated was not insured, which the respondent submitted is the case here.

ANALYSIS

34After considering the submissions and evidence of the parties, I find that the applicant is precluded from receiving benefits specified in section 31 of the Schedule by operation of section 31 (1)(a) of the Schedule.

35I agree with the submissions that section 2.2.1 of OAP-1 sets out the system for dealing with newly purchased vehicles and that this system applies as long as the applicant insured all of his vehicles and notified the respondent of the purchase within fourteen days.

36I also find M. F. v Belair Direct to be convincing, as it addressed a similar situation as in the case before me. The applicant purchased a vehicle and had an accident outside of the fourteen-day registration period. In that case, the applicant could not proceed with the application. I also agree with the application of the two-part test set out in M. F. v Belair Direct and have incorporated it into this decision.

37In terms of when the motorcycle was purchased, I agree with the respondent’s submissions that the applicant has not been able to demonstrate that his accident occurred within fourteen days of the purchase of the motorcycle. The purchase date remains unclear.

38I would have expected the applicant to provide copies of his Facebook messages and/or evidence of payment via a cash withdrawal or cheque to support his position. Instead, I was only presented with evidence from his cross-examination, which did not clarify the issue.

39I also find Sadni v Allstate Canada applicable, as it dealt with a similar situation, and agree with its reasoning that as a mechanic, the applicant ought to be aware of how to obtain insurance in Ontario and that an existing policy would automatically provide insurance coverage. Moreover, I find that given the applicant’s job as a mechanic, he would be aware of insurance requirements and his obligation to notify the respondent of his new vehicle purchase.

40Though there is some evidence that the applicant did order a used vehicle package from the Ministry, the evidence does not show when the applicant actually paid for the vehicle and received possession of it. Therefore, I cannot find that the applicant’s accident occurred during the fourteen-day registration period.

41In terms of the applicant’s argument that he could not transfer ownership of the vehicle due to the pandemic, I agree with the respondent that the applicant did not persuasively show that he was unable to register his motorcycle, as he acknowledged that other Service Ontario locations were open and available to him.

42In terms of the applicant’s arguments with respect to the special conditions of section 2.2.3 of the OAP-1, I disagree with the argument that he fulfilled all five conditions. Instead, I find that the applicant owned his motorcycle at the time of his accident. Though the applicant was not able to show exactly when he purchased his vehicle, I was unable to reconcile his argument that he purchased the motorcycle within fourteen days of his accident but did not actually own it. Therefore, I do not find the argument convincing.

43I also do not find Rougoor v. Co-Operators General Insurance Co. persuasive, as this matter dealt with an applicant injured on a vehicle that was the same make and model as the one the applicant had insurance for. Those are not the facts before me. Therefore, this case is not of assistance.

44Finally, I find that the case law submitted by the applicant was not helpful or relevant, as it did not speak to the subject of exclusions under section 31 of the Schedule.

45Therefore, I find the applicant cannot proceed with his application.

CONCLUSION and order

46The applicant is precluded from receiving benefits specified in section 31 of the Schedule by operation of section 31 (1)(a) of the Schedule.

47The application is dismissed.

Footnotes

1. 1O. Reg. 34/10, as amended.
2. 2Bearing policy number XD89915.
3. 3Insurance Act, R.S.O. 1990, c. I.8
4. 4Based on the applicant’s AutoPlus Gold report dated August 28, 2020.
5. 5Cross-examination of the applicant dated November 11, 2021.
6. 6Ibid.
7. 7Based on a copy of the applicant’s Used Vehicle Package from Service Ontario, incomplete.
8. 8Affidavit of the applicant dated October 27, 2021.
9. 9Cross-examination of the applicant dated November 11, 2021
10. 10Ibid.
11. 11M. F. v Belair Direct, 2017 CanLII 19200 (ON LAT) at paras. 20,21, 23 to 25.
12. 12M. F. v Belair Direct, 2017 CanLII 19200 (ON LAT) at paras. 20,21, 23 to 25.
13. 13Sadni v Allstate Canada, 2021 CanLII 57281 (ON LAT).
14. 14Ibid at para 19.
15. 15Ibid at para 15.
16. 16Cross-examination of the applicant dated November 11, 2021.
17. 17Rougoor v. Co-Operators General Insurance Co., (2010) 2010 ONCA 54, 266 O.A.C. 353 (CA) at para. 10.