Hernandez v. 1206625 Ontario Inc. carrying on business as Mr. Biggs Sports Bar & Eatery et al.

[Indexed as: Hernandez v. 1206625 Ontario Inc.]

61 O.R. (3d) 584

[2002] O.J. No. 3667

Docket No. C36802

Court of Appeal for Ontario,

Goudge, Macpherson and Armstrong JJ.A.

September 30, 2002

Insurance -- Automobile insurance -- Bar in s. 267.6(1) of Insurance Act against recovery of damages for bodily injury or death arising from use or operation of automobile by person who did not have automobile insurance applies only to damages for vehicular negligence -- Section 267.6(1) does not preclude recovery of damages by uninsured driver from taverner for negligence in permitting him to leave in intoxicated condition -- Insurance Act, R.S.O. 1990, c. I.8, s. 267.6(1).

The plaintiff was served liquor at a bar owned by the defendant, left in an intoxicated condition and drove off. Five minutes later, he collided with a parked car, caromed into a light standard and suffered devastating injuries. The plaintiff did not have automobile insurance. He brought an action against the defendant claiming that the bar was negligent in permitting him to leave in an intoxicated condition. The defendant took the position that the plaintiff's action could not succeed because of s. 267.6(1) of the Insurance Act, which provides that a person is not entitled in an action in Ontario to recover any loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile if, at the time of the accident, the person was contravening subsection 2(1) of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25 in respect of that automobile. Section 2(1) of the Compulsory Automobile Insurance Act requires all motor vehicle owners to obtain automobile insurance. A motion by the defendant for a declaration that the plaintiff was precluded from recovering any damages from it was dismissed. The motions judge was unwilling to extend s. 267.6 beyond the confines of the Insurance Act and the Compulsory Automobile Insurance Act, noting that, although the plaintiff's injuries arose out of the use of a motor vehicle, the motor vehicle was incidental to the defendant's alleged negligence. The defendant appealed.

Held, the appeal should be dismissed.

Section 267.6(1) of the Insurance Act applies only to damages for vehicular negligence. The courts should not rigidly apply past interpretations of a given legislative phrase, but rather should look to the nature of the cause of action and the [page585] purpose of the legislative provision, and determine whether the provision should be applied on the facts of the case. In this case, while an automobile was clearly the instrument of the plaintiff's injuries, this fact was incidental to his cause of action. The specific purpose of s. 267.6(1) is to address the problem of uninsured drivers. An interpretation of s. 267.6(1) that precludes recovery of damages for vehicular negligence but permits a cause of action in taverner's negligence promotes both the general and specific purposes of the provision. A contrary interpretation would lead to the absurd result that taverners have a reduced responsibility towards patrons who happen not to have automobile insurance.

APPEAL from a judgment of Rogin J. (2001), 2001 62780 (ON SC), 30 C.C.L.I. (3d) 121 (S.C.J.) dismissing a motion by a defendant for a declaration that the plaintiff was precluded from recovering damages from the defendant.

Amos v. Insurance Corp. of British Columbia, 1995 66 (SCC), [1995] 3 S.C.R. 405, 10 B.C.L.R. (3d) 1, 127 D.L.R. (4th) 618, 186 N.R. 150, [1995] 9 W.W.R. 305, [1995] I.L.R. 1-3232, 13 M.V.R. (3d) 302; Clarke v. 449136 Ontario Inc. (1997), 1997 14543 (ON CA), 34 O.R. (3d) 742, 30 M.V.R. (3d) 167 (C.A.) [Leave to appeal to S.C.C. refused (1998), 227 N.R. 194n], affg (1996), 1996 7958 (ON SC), 27 O.R. (3d) 658, 28 C.C.L.T. (2d) 262, 46 C.P.C. (3d) 19, 20 M.V.R. (3d) 274 (Gen. Div.); Clost v. Colautti Construction Ltd. (1985), 1985 2021 (ON SC), 52 O.R. (2d) 339, 35 C.C.L.T. 259, 5 C.P.C. (2d) 11, 36 M.V.R. 38 (H.C.J.); Derksen v. 539938 Ontario Ltd., 2001 SCC 72, 205 D.L.R. (4th) 1, 273 N.R. 356, [2001] I.L.R. 1-4029, 15 M.V.R. (4th) 1; Heredi v. Fensom, 2002 SCC 50, 219 Sask. R. 161, 213 D.L.R. (4th) 1, 289 N.R. 88, 272 W.A.C. 161, [2002] 8 W.W.R. 1, 25 M.V.R. (4th) 85, 19 C.P.C. (5th) 1; Vijeyekumar v. State Farm Mutual Automobile Insurance Co. (1999), 1999 1640 (ON CA), 44 O.R. (3d) 545, 175 D.L.R. (4th) 154, [1999] I.L.R. 1-3726, 44 M.V.R. (3d) 280 (C.A.) [Leave to appeal to S.C.C. refused (2000), 256 N.R. 198n], affg (1998), 1998 14669 (ON SC), 38 O.R. (3d) 590, [1998] I.L.R. 1-3592, 37 M.V.R. (3d) 105 (Gen. Div.), consd Rutherford v. Niekrawietz, 1998 939 (ON CA), [1998] O.J. No. 5001 (Quicklaw) (C.A.), affg [1996] O.J. No. 1924 (Quicklaw) (Gen. Div.); Durant v. Blandford, [2000] O.J. No. 1710 (Quicklaw) (C.A.), affg [1999] O.J. No. 3128 (Quicklaw) (S.C.), distd Other cases referred to Air Canada v. British Columbia, 1989 95 (SCC), [1989] 1 S.C.R. 1161, 36 B.C.L.R. (2d) 145, 59 D.L.R. (4th) 161, 95 N.R. 1, [1989] 4 W.W.R. 97, 41 C.R.R. 308; Berardinelli v. Ontario Housing Corp., 1978 42 (SCC), [1979] 1 S.C.R. 275, 90 D.L.R. (3d) 481, 8 C.P.C. 100, 23 N.R. 298; Crocker v. Sundance Northwest Resorts Ltd., 1988 45 (SCC), [1988] 1 S.C.R. 1186, 64 O.R. (2d) 64n, 29 O.A.C. 1, 51 D.L.R. (4th) 321, 86 N.R. 241, 44 C.C.L.T. 225; Goodyear Tire & Rubber Co. of Canada v. T. Eaton Co., 1956 2 (SCC), [1956] S.C.R. 610, 4 D.L.R. (2d) 1, 56 D.T.C. 1060; Jordan House Ltd. v. Menow (Can.), 1973 16 (SCC), [1974] S.C.R. 239, 38 D.L.R. (3d) 105 (sub nom. Menow v. Honsberger); Slaight Communications Inc. v. Davidson, 1989 92 (SCC), [1989] 1 S.C.R. 1038, 59 D.L.R. (4th) 416, 93 N.R. 183, 40 C.R.R. 100, 26 C.C.E.L. 85, 89 C.L.L.C. 14,031 (sub nom. Davidson v. Slaight Communications Inc.) Statutes referred to Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21 Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, s. 2(1) Health Insurance Act, R.S.O. 1990, c. H.6, s. 30(4) Insurance Act, R.S.O. 1990, c. I.8, ss. 267, 267.1, 267.6 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(1) (a) Authorities referred to Sullivan, R., Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994) [page586]

Alan Rachlin and William Chapman, for respondent. James Townsend and George Tsakalis, for appellants.

The judgment of the court was delivered by

MACPHERSON J.A.: --

A. Introduction

[1] Section 267.6(1) of the Insurance Act, R.S.O. 1990, c. I.8, precludes uninsured drivers from recovering "loss or damage from bodily injury . . . arising directly or indirectly from the use or operation of an automobile". The principal issue on this appeal is whether this provision prevents an uninsured driver from suing a sports bar for negligence for permitting him to leave in an intoxicated state and to injure himself.

B. Facts

[2] The facts, as alleged in the statement of claim, are as follows: On August 8, 1997, the plaintiff, Disraeli Mendoza Hernandez, attended the defendant's commercial establishment, Mr. Biggs Sports Bar & Eatery ("the bar"). He was served liquor. At approximately 2:00 a.m., he left the bar in an intoxicated condition. He got into his car and drove off. Approximately five minutes into the drive, he collided with a parked car and caromed into a light standard. His car "exploded", causing him devastating physical and psychological injuries.

[3] Mr. Hernandez admits that he was driving the car, he was its owner and he did not have automobile insurance. This last fact means that he cannot make a claim to any automobile insurer for compensation for his injuries.

[4] Mr. Hernandez decided to sue the bar that served him drinks through the evening. He claims that the bar was negligent in permitting him to leave the premises in an intoxicated condition.

[5] The bar takes the position that Mr. Hernandez's action cannot succeed because of s. 267.6(1) of the Insurance Act, which provides:

267.6(1) Despite any other Act, a person is not entitled in an action in Ontario to recover any loss or damage from bodily injury or death arising [page587] directly or indirectly from the use or operation of an automobile if, at the time of the incident, the person was contravening subsection 2(1) of the Compulsory Automobile Insurance Act in respect of that automobile.

Section 2(1) of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, requires all motor vehicle owners to obtain automobile insurance.

[6] Relying on s. 267.6(1) of the Insurance Act, the bar brought a motion, pursuant to rule 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a declaration that Mr. Hernandez was precluded from recovering any damages from it.

[7] Rogin J. dismissed the bar's motion. Although he determined that "the plaintiff's injuries were caused directly or indirectly from the operation of the vehicle", he was unwilling "to extend s. 267(6) beyond the confines of the Insurance Act and the Compulsory Automobile Insurance Act". He reasoned:

The claim against the defendant is founded in [the] Taverner's negligence. It is alleged that the Tavern breached its common law and statutory duty to the plaintiff by over serving him among other things, to the point where he was not capable of protecting himself. Although the plaintiff's injuries arose out of the use of a motor vehicle, the motor vehicle was incidental to the Taverner's negligence. The plaintiff could have been injured by falling or being struck by a motor vehicle, and the allegations of negligence against the Tavern would have been the same. Section 267.6(1) does not entitle the defendant to use the defalcations of the plaintiff to absolve itself of responsibility for the damage suffered by him for which it is alleged, that it is in part responsible.

[8] The bar appeals from Rogin J.'s judgment.

C. Analysis

The competing interpretations of s. 267.6(1)

[9] At issue on this appeal is the precise scope of s. 267.6(1) of the Insurance Act. The appellants argue that one purpose of the provision is to preclude uninsured drivers from recovering any damages in actions arising directly or indirectly from their ownership, use or operation of an automobile. Since Rogin J. found that the plaintiff's injuries arose from the use of his car, the appellants argue that he should not be entitled to claim damages under any cause of action.

[10] The respondent argues that a person has a vested right of action for Taverner's negligence which s. 267.6(1) does not affect. Essentially, the respondent argues that s. 267.6(1) limits the source of damages that uninsured drivers can claim. Uninsured drivers cannot claim damages related to the use of their vehicle. However, relying on the concept of "damage apportionment", the respondent argues that a portion of the plaintiff's damages are [page588] attributable to Taverner's negligence. A claim for these damages falls outside the ambit of a provision dealing with car insurance.

[11] As a starting point, Rogin J. found on the authority of Amos v. Insurance Corp. of British Columbia, 1995 66 (SCC), [1995] 3 S.C.R. 405, 127 D.L.R. (4th) 618 ("Amos"), that the plaintiff's injuries were caused directly or indirectly from the operation of his vehicle. In Amos, the Supreme Court of Canada interpreted the phrase "accident arising out of the ownership, use or operation of a vehicle", setting out a two-part test at p. 415 S.C.R.:

1. Did the accident result from the ordinary and well-known activities to which automobiles are put?

2. Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant's injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

[12] This court applied the Amos test in Vijeyekumar v. State Farm Mutual Automobile Insurance Co. (1999), 1999 1640 (ON CA), 44 O.R. (3d) 545, 175 D.L.R. (4th) 154 in interpreting the former definition of "accident" under the Statutory Accidents Benefits Schedule. At issue in Vijeyekumar was whether "directly or indirectly, the use or operation of an automobile cause[d]" an injury.

[13] Applying the Amos test to the facts of this case, there is no doubt that the plaintiff's injuries arose from, or were caused at least indirectly by, the use of his vehicle. He was driving his car when he crashed it, which started the fire that burned him.

[14] Nonetheless, in my view, Amos and Vijeyekumar are not determinative of this appeal. Both those cases concerned a plaintiff's entitlement to no-fault benefits. As a matter of statutory interpretation, the courts give entitlement provisions a broad interpretation in favour of the insured: See Amos, supra, at pp. 414-15 S.C.R. Further, the language being interpreted in Amos and Vijeyekumar differs significantly from the provision in issue in the present appeal. In Amos, the question was whether an accident arose out of the ownership, use or operation of a vehicle. Vijeyekumar turned on whether the use or operation of an automobile directly or indirectly caused injury. Unlike the provisions in those two cases, s. 267.6 of the Insurance Act introduces the additional concepts of loss and damage. It is a bar to recovery of "loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile".

[15] There are different ways to interpret this phrase, depending on whether the bar to recovery is linked to the words "loss or damage" on the one hand, or "injury or death" on the other. First, [page589] s. 267.6(1) may be interpreted to mean that no recovery is possible where a car is involved in causing personal injury. On this interpretation, the question is whether the injuries arise from the use of a car. Applying the Amos test, the plaintiff is barred from recovering damages.

[16] A second interpretation is that s. 267.6(1) creates a bar to recovery of "loss or damage" arising from the use of a car. I think it is this interpretation that underlies the plaintiff's damage apportionment argument. Applying the test in Amos, the question becomes whether the plaintiff's "loss or damage", as opposed to his injuries, were caused by the use of his car, or whether the "connection between the [loss or damage] and the ownership, use or operation of the vehicle [was] merely incidental or fortuitous".

[17] The recent Supreme Court of Canada decisions in Heredi v. Fensom, 2002 SCC 50, 213 D.L.R. (4th) 1 and Derksen v. 539938 Ontario Ltd., 2001 SCC 72, 205 D.L.R. (4th) 1 provide support for the second interpretation. In Heredi, the court interpreted the words "damages occasioned by a motor vehicle". This case involved a plaintiff who was injured while riding on a paratransit bus, and the issue was whether her action was statute barred by the limitation period in s. 88 of the Saskatchewan Highway Traffic Act, S.S. 1986, c. H-3.1. Section 88 barred bringing an action for any "damages occasioned by a motor vehicle" after the expiration of 12 months from the time the damages were sustained.

[18] Writing for the court, Iacobucci J. concluded at para. 27 that the legislature could not have intended that:

all claims in tort, regardless of the true substance of the claim, should be within the purview of this limitation period merely because of the presence of a motor vehicle somewhere within the chain of causation leading to damage sustained. Conversely, I am not persuaded that the legislature would have regarded all claims in contract, however tendentiously framed, as beyond the limitation period's reach.

[19] In order to distinguish between those cases that will be caught by the limitation period, and those that will not, Iacobucci J. adopted a substantive approach, looking to the essence of the claim being made and determining whether a motor vehicle played a merely ancillary role. Iacobucci J. stated at paras. 34-35:

Thus, in order to determine whether an action is for "damages occasioned by a motor vehicle", and thus subject to the Highway Traffic Act limitation period, a substantive approach ought to be taken. The nature of the facts and the nature of the action ought to be considered together in order to make a determination as to the fundamental nature of the action. Are the damages sought to be recovered in the action, in their essence, damages that were occasioned by a motor vehicle? In light of the way in which the action is framed, and the facts giving rise to the damages claimed, is the action one [page590] that could be primarily classified as an action for damages occasioned by a motor vehicle? If the role of the motor vehicle in the causal chain is too insignificant, as in Argue, or if the causal chain is itself not the most illuminative way to characterize the claim, as in Bruell or as in Clost, the action ought not be regarded as subject to the limitation. If, on the other hand, the dominant feature of the damages is their relation to a motor vehicle accident, the limitation period ought to be applied.

In other words, the true intent of the statute is that "damages occasioned by a motor vehicle" requires that the presence of a motor vehicle be the dominant feature, or constitute the true nature, of the claim. Conversely, claims, whether framed in contract or in tort, where the presence of the motor vehicle is a fact ancillary to the essence of the action, ought not be regarded as within the scope of that phrase.

[20] The Clost and Clark cases, cited with approval by Iacobucci J. in Heredi, offer concrete examples of how this substantive distinction can be made.

[21] In Clost v. Colautti Construction Ltd. (1985), 1985 2021 (ON SC), 52 O.R. (2d) 339, 36 M.V.R. 38 (H.C.J.), Osborne J. considered whether an action against a toy manufacturer for product liability was barred by the limitation period under the Highway Act, R.S.O. 1980, c. 198. In this case, a child rode his toy truck into the street and was hit by a car, and the issue was whether his action was for "damages occasioned by a motor vehicle". Osborne J. set out the test at p. 345 O.R.:

In my view, the intellectual exercise required must focus on the claim being made against the defendant seeking the protection of the Highway Traffic Act limitation period. What claim is being made against that defendant? That is a far different exercise than asking the simplistic question, how was the plaintiff injured? or, did a motor vehicle occasion the physical injury referred to as the basis for the plaintiff's damage claims?

(Emphasis added)

[22] Applying this test to the facts in Clost, Osborne J. found at p. 345 O.R. that the fact that the toy manufacturer's alleged negligence resulted in a car-pedestrian accident was incidental to the essence of a claim for product liability where the product involved is not a motor vehicle: "Here the claim of the plaintiff is that the manufacturer's negligence is what caused or occasioned the damages claimed."

[23] In Clark v. 449136 Ontario Inc. (1996), 1996 7958 (ON SC), 27 O.R. (3d) 658, 20 M.V.R. (3d) 274 (Gen. Div.), affd (1997), 1997 14543 (ON CA), 34 O.R. (3d) 742, 30 M.V.R. (3d) 167 (C.A.), leave to appeal denied [1997] S.C.C.A. 570, 227 N.R. 194n, J. Macdonald J. applied similar reasoning in a case of Taverner's negligence. As in Clost, this case involved the application of the limitation period under the Highway Traffic Act. The plaintiff was in a car accident after an evening drinking at the defendant's tavern, and brought an action for Taverner's negligence five years [page591] later. J. Macdonald J. adopted a three-step approach to determining whether a given action is subject to the statutory limitation period at p. 669 O.R. This test can be paraphrased as follows:

1. Characterize the facts, by examining the substance of the claim and determining its legal character.

2. Interpret the statutory language to determine its intended scope or ambit.

3. Determine whether the legal character of the claim falls within the intended scope or ambit of the limitation provision.

[24] Applying this test, J. Macdonald J. distinguished between damages caused or contributed to by the alleged negligence of the plaintiff in the operation or use of the motor vehicle, and those caused by Taverner's negligence at p. 678 O.R.:

I therefore conclude that prevailing theories of multiple causality indicate that I should regard the plaintiff's damages as divisible into portions which are capable in law of attribution to the competing characterizations herein. It is helpful to note again at this point that it is only the damages occasioned by a motor vehicle which are subject to the H.T.A. limitation provisions.

[A]ny damages occasioned by taverners' negligence are not properly characterized as occasioned by a motor vehicle, even if a motor vehicle was the instrument through which such negligence caused the damages.

[25] Thus, in Heredi, Clost and Clark, the analysis begins by examining the nature of the claim being made, and then determining whether some or all of the damages can be attributed to a cause of action that is substantively distinct from the use or operation of a vehicle.

[26] In Derksen, supra, the Supreme Court of Canada reached a similar conclusion with respect to s. 267.1 of the Insurance Act, which closely resembles the language of s. 267.6(1). In this case, a child was killed and three others injured when a steel base plate flew off a supply truck and into the windshield of a school bus. The motions judge found that there were two concurrent causes of the accident, negligent clean up of the work site ("non-auto-related negligence") and operation of the truck ("auto-related negligence"). Section 267.1 prevents plaintiffs from recovering damages for pecuniary loss from "the owner of an automobile", for "loss or damage from bodily injury or death arising directly or indirectly from the use or operation of the automobile". However, the motions judge found that under s. 267.1 the contractor wore two hats. For the purpose of auto-related negligence, the [page592] contractor was "the owner of an automobile". For the purpose of non-auto- related negligence, the contractor could not rely on s. 267.1. In the words of the motions judge, quoted by Major J. at para. 15"the statutory immunity merely dictates the different forms of relief which may arise against the various defendants."

[27] The finding that the contractor was not protected by s. 267.1 from liability for pecuniary damages with respect to liability arising from non-auto-related negligence was not challenged in Derksen at the Supreme Court of Canada. Thus, Major J. did not provide a detailed interpretation of the provision. Nonetheless, it follows that the court must have accepted that the loss or damage attributable to non-auto- related negligence did not arise "directly or indirectly from the use or operation of the automobile".

[28] The appellants cite Rutherford v. Niekrawietz, [1996] O.J. No. 1924 (Quicklaw) (Gen. Div.), affd 1998 939 (ON CA), [1998] O.J. No. 5001 (Quicklaw) (C.A.) and Durant v. Blandford, [1999] O.J. No. 3128 (Quicklaw) (S.C.), affd [2000] O.J. No. 1710 (Quicklaw) (C.A.) for the principle that the phrase "loss or damage arising directly or indirectly from the use or operation of an automobile" has been interpreted to be clear and unambiguous and to mean that the loss or damage can arise from a negligent party's use or operation of a car even where another concurrent cause not related to use or operation has been alleged to be the source of damage or injuries suffered.

[29] In Rutherford, this court considered s. 267 of the Insurance Act, and whether a plaintiff who had recovered insurance benefits following an accident could also recover damages from the Ministry of Transportation as a result of its negligence in failing to erect a larger stop sign at a dangerous intersection. The applicable portion of s. 267 provided:

(1) The damages awarded to a person in a proceeding for loss or damage arising directly or indirectly from the use or operation of an automobile shall be reduced by,

[No fault benefits, past and future, medical and hospitalization benefits, benefits for loss of income and sick leave benefits related to employment are excluded]

(6) This section applies to damages awarded for loss or damage arising directly or indirectly from the use or operation . . . of an automobile.

[30] Weiler J.A. rejected the appellant's submission that her action was not for damages arising from the use of an automobile, but rather from the defendant's breach of its statutory duty of repair. Instead, Weiler J.A. found at para. 16 that"[t]he damages [page593] awarded to Mrs. Rutherford were for her loss. That loss arose when she was operating her automobile." On this reasoning, the phrase "loss or damage arising from the use or operation of an automobile" applies to any situation where an individual is injured while driving a car.

[31] Durant v. Blandford considered a somewhat different legislative provision. In this case, the issue was whether OHIP was entitled on a subrogated claim to recover from a tavern that was found 25 per cent liable for an accident caused by its intoxicated patron. Under s. 30(4) of the Health Insurance Act, R.S.O. 1990, c. H.6, OHIP's right of subrogation was restricted in the following terms:

Despite subsection (1), the Plan is not subrogated to the rights of an insured person in respect of personal injuries arising directly or indirectly from the use or operation . . . of an automobile . . . .

[32] The trial judge applied the Amos test and found that there was a nexus between Taverner's negligence and the plaintiff's use of a car at para. 25:

The over-serving of alcohol to the defendant Blandford caused his ability to operate his motor vehicle to be impaired and therefore contributed to Blandford's negligent use and operation of his motor vehicle which resulted in the injuries suffered by the plaintiff. Therefore s. 30(4) would apply to the subrogated claim by OHIP and would preclude them from recovering as against both the defendants Blandford and Barbarella's Lounge.

[33] On appeal, this court upheld the trial judge's result, on the basis that the reasons of Weiler J.A. in Rutherford provided a complete answer to the issues raised on the appeal.

[34] In my view, Rutherford and Durant are distinguishable on their facts. In Rutherford, the issue was not whether the plaintiff could recover damages from the Ministry, but rather whether no-fault benefits already paid to the plaintiff would be deducted from any damage award. The purpose of the provision at issue was to prevent double recovery. In a no-fault system benefits flow from the extent of the accident victim's injuries irrespective of who caused them. Those same injuries are the basis of the plaintiff's action in negligence against the Ministry as a road maintainer. Consequently, there was a real risk of double recovery, and an interpretation addressing that concern makes sense. In the present appeal, there is no risk of double recovery. The plaintiff is only entitled to receive the portion of his damages that are attributable to Taverner's negligence.

[35] Durant can also be distinguished from the present appeal. Section 30(4) of the Health Insurance Act creates a bar to subrogation where the plaintiff's "injuries" arise directly or indirectly [page594] from the use or operation of a car. As Rogin J. found, there is no doubt that Mr. Hernandez's injuries arose from the use of his car. At issue in the present appeal is whether damages attributable to Taverner's negligence are precluded by s. 267.6(1) of the Insurance Act.

[36] Moreover, it should be pointed out that this court's brief reasons in Rutherford and its short endorsement in Durant both pre-date the recent decisions of the Supreme Court of Canada in Heredi (which discusses favourably the decisions of Ontario courts in Clost and Clark) and Derksen (which is an Ontario case). In my view, the focus on "the true nature of the claim" required by Heredi, supra, at para. 35, and the recognition in Derksen, supra, at para. 37, that some accidents are "the result of two concurrent sources of causation" tell in favour of the respondent's interpretation of the Insurance Act in the present appeal.

The purpose of s. 267.6(1)

[37] Heredi, Clost and Clark also mandate that it is important to consider the purpose of a legislative provision to assist in settling its interpretation. Accordingly, s. 267.6(1) must be interpreted in light of the overall purpose of the Insurance Act, and the Automobile Insurance Rate Stability Act, S.O. 1996, c. 21, which introduced s. 267.6 along with several amendments to the Insurance Act.

[38] The long title of the Automobile Insurance Rate Stability Act is "An Act to provide Ontario drivers with fair, balanced and stable automobile insurance and to make other amendments related to insurance matters". While the Act may serve several purposes, it is clear that one main purpose is to stabilize automobile insurance premiums. The respondent's interpretation of s. 267.6 is consistent with this purpose. It would limit the class which can recover from the automobile insurance pool to those who have paid premiums into that pool. Uninsured owners could not seek to recover damages that would ultimately be paid by automobile insurers, thus advancing the goal of matching claims and premiums. To permit recovery of damages for Taverner's negligence would not upset that balance because it would not be paid by automobile insurers.

[39] Several principles of statutory interpretation support the respondent's interpretation. First, as described by R. Sullivan in Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994) at p. 368, it is a well- established principle of law that it is presumed that the legislature does not intend to change existing law in the absence of a clear provision to the contrary. [page595] See also: Goodyear Tire & Rubber Co. of Canada v. T. Eaton Co., 1956 2 (SCC), [1956] S.C.R. 610 at p. 614, 4 D.L.R. (2d) 1 and Slaight Communications Inc. v. Davidson, 1989 92 (SCC), [1989] 1 S.C.R. 1038 at p. 1077, 59 D.L.R. (4th) 416. As I will describe below, there is a well established common law right of action for Taverner's negligence.

[40] Second, s. 267.6(1) creates a statutory exception to a plaintiff's right to recover damages for negligence leading to car accidents. As noted in Driedger, citing La Forest J. in Air Canada v. British Columbia, 1989 95 (SCC), [1989] 1 S.C.R. 1161 at p. 1207, 59 D.L.R. (4th) 161, such an exception "should not be construed more widely than is necessary to fulfil the values which support it". It does not appear that either party led evidence with respect to how many accidents involving uninsured drivers also lead to claims in Taverner's negligence. Nonetheless, it is clear that even if s. 267.6(1) does not preclude recovery in Taverner's negligence, it will apply in countless other cases of vehicular negligence.

[41] Third, there is a specific presumption against interfering with the right to bring an action. In Berardinelli v. Ontario Housing Corp, 1978 42 (SCC), [1979] 1 S.C.R. 275, 90 D.L.R. (3d) 481, Estey J. stated at p. 280 S.C.R.:

Section 11 [of the Public Authorities Protection Act], being a restrictive provision wherein the rights of action of the citizen are necessarily circumscribed by its terms, attracts a strict interpretation of any ambiguity found upon the application of the proper principles of statutory interpretation should be resolved in favour of the person whose right of action is being truncated.

[42] Finally, the appellant's interpretation would lead to an unreasonable, if not absurd, result. The purpose of the provision is to keep uninsured drivers off the road. The appellant would achieve this result by effectively absolving tavern owners of their duty to keep drunk drivers off the roads specifically when those drivers are not insured. One would think that the threat posed by uninsured drivers is greatest when they also happen to be drunk.

The nature of an action in taverner's negligence

[43] The leading case on Taverner's negligence is the Supreme Court of Canada decision in Jordan House Ltd. v. Menow (Can.), 1973 16 (SCC), [1974] S.C.R. 239, 38 D.L.R. (3d) 105. The duty of care arises from the invitor/invitee relationship between a bar and its patrons. The standard of care follows from the inability of the intoxicated patron to take care of himself or herself. Laskin J. described the duty and standard in Jordan House at p. 249 S.C.R.:

Given the relationship between Menow and the hotel, the hotel operator's knowledge of Menow's propensity to drink and his instruction to his employees [page596] not to serve him unless he was accompanied by a responsible person, the fact that Menow was served not only in breach of this instruction but as well in breach of statutory injunctions against serving a patron who was apparently in an intoxicated condition, and the fact that the hotel operator was aware that Menow was intoxicated, the proper conclusion is that the hotel came under a duty to Menow to see that he got home safely by taking him under its charge or putting him under the charge of a responsible person, or to see that he was not turned out alone until he was in a reasonably fit condition to look after himself.

[44] The essence of an action in Taverner's negligence, then, is the failure on the part of the tavern to take charge of intoxicated patrons, and take reasonable steps to prevent them from hurting themselves. In Crocker v. Sundance Northwest Resorts Ltd., 1988 45 (SCC), [1988] 1 S.C.R. 1186, 51 D.L.R. (4th) 321, for example, the Supreme Court of Canada held a ski resort liable for injuries caused to an intoxicated patron who participated in an inner tube race down a ski hill. Clearly, this duty goes far beyond preventing car accidents. On Iacobucci J.'s reasoning in Heredi at para. 35"the presence of the motor vehicle is in fact ancillary to the essence of the action, [and] ought not to be regarded as within the scope of that phrase."

D. Conclusions and Disposition

[45] I conclude that s. 267.6(1) of the Insurance Act applies only to damages for vehicular negligence. While the facts and legislative provisions in Heredi, Clost and Clark differ from the present appeal, these cases endorse a substantive approach to limitation and exclusion provisions in an automobile insurance context that is of general application. Essentially, these cases hold that courts should not rigidly apply past interpretations of a given legislative phrase, but rather should look to the nature of the cause of action and the purpose of the legislative provision, and determine whether the provision should be applied on the facts of the case. This approach is perfectly in keeping with the principles of statutory interpretation.

[46] In the present appeal, Mr. Hernandez has claimed damages in Taverner's negligence. While an automobile was clearly the instrument of his injuries, this fact is incidental to his cause of action. The broad purpose of the Automobile Insurance Rate Stability Act is to stabilize insurance costs. The specific purpose of s. 267.6(1) is to address the problem of uninsured drivers. An interpretation of s. 267.6(1) that precludes recovery of damages for vehicular negligence but permits a cause of action in Taverner's negligence promotes both the general and specific purposes of the statute and provision. A contrary interpretation leads [page597] to the absurd result that Taverners have a reduced responsibility toward patrons who happen not to have automobile insurance.

[47] Rogin J. refused to apply s. 267.6 "beyond the confines of the Insurance Act and the Compulsory Automobile Insurance Act". He concluded that "[s]ection 267.6(1) does not entitle the defendant to use the defalcations of the plaintiff to absolve itself of responsibility for the damage suffered by him for which it is alleged, that it is in part responsible . . .". I agree with his analysis and conclusion.

[48] I would dismiss the appeal. I would award the respondent his costs of the appeal, which I would fix at $25,000.

Appeal dismissed.