The Dominion of Canada General Insurance Company v. Aviva Canada Inc. et al.

[Indexed as: Dominion of Canada General Insurance Co. v. Aviva Canada Inc.]

Ontario Reports

Ontario Superior Court of Justice,

C.J. Brown J.

October 13, 2015

127 O.R. (3d) 450 | 2015 ONSC 6195

Case Summary

Insurance — Automobile insurance — Loss transfer — Interpretation — Arbitrator not erring in finding that snow plow was "commercial vehicle" within meaning of Reg. 664 and subject to loss transfer provisions — List of vehicles which follows "and includes" in definition of "commercial vehicle" broadening definition to include vehicles which would not ordinarily be caught by definition — Automobile Insurance, R.R.O. 1990, Reg. 664.

On a loss transfer arbitration, the arbitrator found that a snow plow was a "commercial vehicle" as defined in Reg. 664 and subject to the loss transfer provisions. "Commercial vehicle" is defined as meaning "an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation, and includes a police department vehicle, a fire department vehicle, a driver training vehicle, a vehicle designated specifically for construction or maintenance purposes, a vehicle rented for 30 days or less, or a trailer intended for use with the commercial vehicle". The respondent appealed, arguing that the [page451] definition of "commercial vehicle" is inclusive, so that the vehicle must be found to be "an automobile used primarily to transport goods, tools or equipment in connection with the insured's occupation" for purposes of the loss transfer provisions.

Held, the appeal should be dismissed.

The arbitrator's interpretation of the definition of "commercial vehicle" was correct. The addition of the list of vehicles after "and includes" broadened the meaning of the provision to include vehicles which were not covered under the former definition contained in the Insurance Act, R.S.O. 1990, c. I.8 regulations.

Lloyd's of London v. Guarantee Co. of North America (1995), 1995 7222 (ON SC), 26 O.R. (3d) 204, [1995] O.J. No. 2896, 18 M.V.R. (3d) 112, 58 A.C.W.S. (3d) 485 (Gen. Div.), apld

Other cases referred to

ING Insurance Co. of Canada v. Chubb Insurance Co. of Canada, 2007 CarswellOnt 11196 (Arbitrator: Stanley C. Tessis); Lloyd's of London v. Lombard Canada Ltd. (2005) (Arbitrator: Guy Jones); Morton v. Rabito (1998), 1998 5865 (ON CA), 42 O.R. (3d) 161, [1998] O.J. No. 5129, 169 D.L.R. (4th) 151, 120 O.A.C. 169, 9 C.C.L.I. (3d) 267, 42 M.V.R. (3d) 36, 84 A.C.W.S. (3d) 560 (C.A.); Regele v. Slusarczyk (1997), 1997 3648 (ON CA), 33 O.R. (3d) 556, [1997] O.J. No. 1849, 147 D.L.R. (4th) 294, 100 O.A.C. 39, 43 C.C.L.I. (2d) 90, 70 A.C.W.S. (3d) 1068 (C.A.); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006, D.T.E. 98T-154, 76 A.C.W.S. (3d) 894; Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, [2014] S.C.J. No. 53, 2014 SCC 53, 2014EXP-2369, J.E. 2014-1345, 373 D.L.R. (4th) 393, [2014] 9 W.W.R. 427, 59 B.C.L.R. (5th) 1, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, 242 A.C.W.S. (3d) 266; Wawanesa Mutual Insurance Co. v. Lombard Canada Ltd. (2005) (Arbitrator: Guy Jones)

Statutes referred to

Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, ss. 1 [as am.], 2 [as am.]

Highway Traffic Act, R.S.O. 1990, c. H.8, s. 1 [as am.]

Insurance Act, R.S.O. 1990, c. I.8, ss. 1 [as am.], 224(1) [as am.], 275 [as am.], (1)

Motorized Snow Vehicles Act, R.S.O. 1990, c. M.44, s. 1 [as am.]

Rules and regulations referred to

Automobile Insurance, R.R.O. 1990, Reg. 664 [as am.], ss. 1 [as am.], 9 [as am.]

APPEAL from a decision of an arbitrator.

Michael H. O'Brien, for respondents in appeal Dominion of Canada.

Thomas R. Hughes, for applicant in appeal Zurich Insurance Company Ltd.

Cara Boddy, for respondent Aviva Canada Inc.

[1] C.J. BROWN J.: — The appellant Zurich Insurance Company Limited ("Zurich") appeals from the decision of Arbitrator Phillipa Samworth dated February 23, 2015 concerning the provisions of the Insurance Act, R.S.O. 1990, c. I.8 (the "Act"), s. 275 [page452] and Automobile Insurance, R.R.O. 1990, Reg. 664 ("Regulation 644"), as amended, regarding loss transfers. The arbitrator was appointed on consent by the parties pursuant to an arbitration agreement signed by the parties. The arbitration was heard during the course of one day on December 17, 2014.

[2] The respondent Aviva Canada Inc. ("Aviva") has not appealed the decision and did not appear at the appeal, but I am advised that Aviva will be bound by any decision rendered.

[3] The matter arises from a motor vehicle accident that occurred on March 7, 2008, when a vehicle driven by Gregory McKnight was struck from the overpass above him by ice and snow, as a result of which the moonroof in his vehicle shattered and Mr. McKnight was injured.

[4] While an independent witness was able to indicate that the vehicle passing at that time was a snow plow, that witness was unable to identify the snow plow company. There were two companies responsible for snow plowing the subject area, one insured pursuant to a standard motor vehicle liability policy by Aviva and the other insured by Zurich.

[5] The arbitrator, following the hearing of the arbitration on December 17, 2014, found that both vehicles were commercial vehicles within the meaning of Regulation 664 and subject to the loss transfer provisions.

[6] The provisions to be interpreted are as follows. Section 275(1) of the Act provides:

275(1) The insurer responsible under subsection 268(2) for the payment of statutory accident benefits to such classes of persons as may be named in the regulations is entitled, subject to such terms, conditions, provisions, exclusions and limits as may be prescribed, to indemnification in relationship to such benefits paid by it from the insurers of such class or classes of automobiles as may be named in the regulations involved in the incident from which the responsibility to pay the statutory accident benefits arose.

[7] Regulation 664 provides as follows:

1. In this Regulation,

"commercial vehicle" means an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation, and includes a police department vehicle, a fire department vehicle, a driver training vehicle, a vehicle designated specifically for construction or maintenance purposes, a vehicle rented for 30 days or less, or a trailer intended for use with the commercial vehicle[.]

9(1) In this section,

"heavy commercial vehicle" means a commercial vehicle with a

gross vehicle weight greater than 4,500 kilograms[.][page453]

[8] There is no issue that the snow plows in question weighed greater than 4,500 kg. Based on the photograph before me, the snow plows are large dump trucks with a plow attached to the front of the truck.

[9] The arbitrator found, first, that the snow plows in question fall within the definition of "automobile" as defined in Regulation 664, and this is not in issue on appeal. As also noted by the arbitrator, the snow plows were insured under a standard automobile liability policy, such that "it does not lie with Aviva and Zurich to argue that they are not automobiles". This finding is not in issue on the appeal.

[10] In issue on the appeal is the arbitrator's finding that the snow plows are heavy commercial vehicles that fall within the provisions of Regulation 664 and are therefore subject to loss transfer. In this regard, the arbitrator held as follows:

Not only do I accept that snow plows are automobiles, I also find that they fall within the definition of commercial vehicle and therefore the two snow plows are heavy commercial vehicles for the purposes of loss transfer. I do this on the basis not that the snow plow would be found to be an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation but rather it is a "vehicle designed specifically for construction or maintenance purposes."

Dominion urged upon me that I should conclude that irrespective of whether or not the snow plows were used primarily for transporting materials, goods, tools or equipment in connection with its occupation that if I found that the snow plow was a vehicle designed for maintenance purposes that that would be sufficient. I agree with Dominion's approach.

Counsel for Aviva and Zurich conceded that the snow plow was used for maintenance purposes but argued that it was not sufficient. Rather, to meet the definition of "commercial vehicle" I must find that not only is the snow plow a maintenance vehicle but that it is also an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation. I do not agree with Zurich's submissions. I find such an interpretation would not be purposeful and in harmony with the scheme and object of Section 275 of the Insurance Act and the purpose of loss transfer.

In my view, in order to qualify as a commercial vehicle there are two separate parts to the test to be met under the definition pursuant to Regulation 644. The commercial vehicle firstly will be one that meets the test of whether it is an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation. If the vehicle in question however does not meet that definition, you must then go on to see if it falls within the "and included" provisions. I note that the use of the word "automobile" is not used in the second part of this definition. Rather, the legislature has used the word "vehicle". The commercial vehicle now no longer needs to be an automobile but now needs to be a vehicle that meets certain [page454] criteria. This seems to suggest that we have a broader definition of commercial vehicle in the second part of the test than in the first part of the test.

The purpose of loss transfer is to require that vehicles of a certain weight that are on the road for commercial purposes and that are at fault for an accident repay a non-commercial vehicle insurer for accident benefits paid out. This policy recognizes that commercial vehicles that carry greater weight give rise to greater potential of injury, both with respect to their size and as a result of the frequency that they are on the road. The definition of commercial vehicle should be interpreted in keeping with the broader purpose of loss transfer.

If I accept Aviva's submissions that in order to be a commercial [vehicle] you must meet both parts of the test, there would therefore never or rarely be any circumstances in which vehicles such as a fire department vehicle, a police department vehicle or a driver training vehicle would ever meet the requirements of loss transfer.

[11] In arriving at her conclusions, the arbitrator applied a contextual, purposive approach to statutory interpretation consistent with the approach set forth by the Supreme Court of Canada in Rizzo v. Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2.

Standard of Review

[12] On a question of law, the standard of review is one of correctness. On a question of fact, the decision can only be set aside on the basis of an overriding and palpable error. On a question of mixed fact and law, the standard is one of reasonableness.

[13] The parties are in agreement that the standard of correctness applies to this case.

The Issue

[14] The issue on appeal is whether the arbitrator correctly determined that the snow plows in question were "commercial vehicles" pursuant to Regulation 664.

The Positions of the Parties

[15] Zurich's position is that the definition of "commercial vehicle" is inclusive, such that the vehicle must be found to be "an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation" for purposes of the loss transfer provisions. Zurich maintains that the list of vehicles found following the words "and includes" must all first be found to be "an automobile used primarily to transport materials, goods, tools or equipment in connection with the insured's occupation". As the arbitrator did not find the subject snow plows to be "used primarily to transport materials, [page455] goods, tools or equipment", they cannot be considered "commercial vehicles" for purposes of Regulation 664.

[16] Dominion argues that the provisions are not exhaustive, but rather expand or broaden the definition of commercial vehicles to include the list of vehicles following the words "and includes". This was also the interpretation that the arbitrator used in her determination of the issues. In this regard, Dominion refers the court to the case of Lloyd's of London v. Guarantee Co. of North America (1995), 1995 7222 (ON SC), 26 O.R. (3d) 204, [1995] O.J. No. 2896 (Gen. Div.), upon which Zurich also relies, but for a different proposition. In that case, in noting that the subject Regulation was amended on January 1, 1994 as regards the definition of "commercial vehicle" to add "and includes" and the entire list of the vehicles listed thereafter, Mandel J. commented, at p. 209 O.R., as follows:

What the legislature has done is to extend the vehicles covered by the regulation to include such vehicles as a fire department vehicle which was a commercial vehicle as defined by the Highway Traffic Act which was not covered under the former definition contained in the Insurance Act Regulations.

[17] Counsel for Dominion, Mr. O'Brien, further noted that the case of Morton v. Rabito (1998), 1998 5865 (ON CA), 42 O.R. (3d) 161, [1998] O.J. No. 5129 (C.A.), which was relied upon by Zurich, dealt with the definition of commercial vehicle prior to the amendments and, therefore, ended prior to "and includes" in the list that follows thereafter.

Analysis

[18] Dominion maintained that deference was owed to the arbitrator as an expert chosen by the parties. Zurich argued that, while she may be an expert in insurance law, she was not an expert in statutory interpretation, which was required as regards the legal correctness of the definition under appeal. I am satisfied that Arbitrator Samworth is an expert with expertise in the interpretation of insurance law statutes. I note that the parties chose their own decision maker/arbitrator on consent, and it must be presumed that the choice was made based on her expertise in the area, which is the subject of dispute, and that she is qualified to make that decision in a manner acceptable to the parties: see Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, at para. 105.

[19] In arriving at her decision, the arbitrator considered the cases of Regele v. Slusarczyk (1997), 1997 3648 (ON CA), 33 O.R. (3d) 556, [1997] O.J. No. 1849 (C.A.); Morton v. Rabito, supra; ING Insurance Co. of Canada v. Chubb Insurance Co. of Canada, 2007 CarswellOnt 11196 (Arbitrator: Stanley C. Tessis) and others in the [page456] determination of whether a snow plow is an automobile. She further considered Lloyd's of London and Wawanesa Mutual Insurance Co. v. Lombard Canada Ltd. (2005) (Arbitrator: Guy Jones) in her determination of the definition of "commercial vehicle". The above cases were also relied upon by the parties on appeal.

[20] The issue on appeal is whether the arbitrator erred in concluding that the snow plows in question were "commercial vehicles" pursuant to Regulation 664. The arbitrator's decision as regards statutory interpretation of the subject provision applied a contextual, purposive approach. The arbitrator, in arriving at her decision, took into account the scheme of the Act, the object of the Act and the intention of Parliament: Rizzo v. Rizzo Shoes, supra. The definition of the snow plow as a commercial vehicle is consistent with the relevant statutory definitions set forth in the legislation and case law referenced by Dominion in its factum, at paras. 28 through 40, including definitions of "automobile", "vehicle", "motor vehicle" and "road-building machine" set forth in the Act, ss. 1 and 224(1); the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, ss. 1, 2; the Highway Traffic Act, R.S.O. 1990, c. H.8, s. 1; and the Motorized Snow Vehicles Act, R.S.O. 1990, c. M.44, s. 1. It is further consistent with case law relied upon by Dominion, at paras. 36 through 40, including Regele v. Slusarczyk, supra; Morton v. Rabito, supra; and ING Insurance Co. of Canada v. Chubb Insurance Co. of Canada, supra.

[21] I am satisfied that the arbitrator considered the relevant legislation in a contextual and purposive manner in harmony with the scheme and object of the Act and the intention of the legislature. I am further satisfied that she properly considered the purpose of the loss transfer scheme. I do not find her interpretation of the statute to be incorrect or subject to intervention by this court.

[22] In considering the definition, the arbitrator found that the snow plow, insured under the standard motor vehicle policy, was an automobile but was not "used primarily to transport materials, goods, tools or equipment". She then proceeded to consider whether it fell within the list of the vehicles that follows "and includes". She found the said list to broaden the meaning of the provision to include vehicles which would not otherwise have been caught by the definition. These include a police department vehicle, a fire department vehicle, a driver training vehicle, a vehicle designed specifically for construction or maintenance purposes, a vehicle rented for 30 days or less, or a trailer intended for use with a commercial vehicle, all of which, of course, must be over 4,500 kg in weight to be considered a heavy commercial vehicle for the loss transfer provisions. [page457]

[23] I am of the same view as the arbitrator and the court in the case of Lloyd's of London that, in adding the list after "and includes", the legislature extended the vehicle coverage to include vehicles not covered under the former definition contained in the Insurance Act regulations.

[24] I do not accept Zurich's submissions that vehicles such as a police department vehicle or a driver training vehicle must, prior to being subject to the loss transfer provisions, be found to meet both parts of the test, including being "primarily for the purpose of transporting materials, goods, tools or equipment". I do not accept the submissions provided by counsel for Zurich when this court inquired about his interpretation of the above-mentioned vehicles.

[25] I agree with the arbitrator's finding in this regard that such a restrictive definition would result in vehicles in the said list such as a police department vehicle or a driver training vehicle rarely being subject to the loss transfer provisions. I find, rather, that the list serves to expand the vehicles covered by Regulation 664, as did the arbitrator.

[26] I do not find the arbitrator's decision as regards the definition to result in absurdities as argued by Zurich.

[27] I do not find there to be any error as regards the arbitrator's definition of "commercial vehicle" for purposes of the loss transfer provisions which would permit me to overturn her award. Accordingly, I dismiss this appeal.

Costs

[28] The parties have agreed that costs should be paid to the successful party in the amount of $5,000. Accordingly, I award costs to Dominion in the amount of $5,000, all inclusive.

Appeal dismissed.

End of Document