Court File and Parties

COURT FILE NO.: 12-55295 DATE: July 8th, 2016

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOANNE PULCINE, et. al., Plaintiffs AND BOT CONSTRUCTION (ONTARIO) LIMITED, et. al., Defendants

BEFORE: MR. JUSTICE CALUM MACLEOD

COUNSEL: Tracy Lyle, for the Plaintiffs, responding parties Pasquale Santini, for the Defendants, moving parties

HEARD: June 24th, 2016

Endorsement

[1] This is a summary judgment motion. The parties seek a ruling on whether or not this action is barred by section 267.6 of the Insurance Act. The plaintiffs are alleging liability against the Ontario Ministry of Transportation and its principal contractor for a fatal motor vehicle accident. Because the deceased driver did not have motor vehicle insurance at the time of the accident, the moving parties assert that the action is barred while the responding parties assert that it is not.

[2] Since both parties agree that this issue should be determined by way of summary judgment, the motion proceeds under Rule 20.04 (2) (b). For the reasons that follow, I am satisfied that it is appropriate to grant summary judgment. I have determined that section 267.6 does not apply and the action may proceed.

Background

[3] The action concerns a fatal motor vehicle accident which took place in December of 2008 near Upper Dwyer Hill Road and Highway 7. Prior to the accident, that part of Highway 7 was being widened and converted to a four lane divided highway. Part of that project involved relocating the intersection and installing traffic lights. The new intersection and the new traffic lights were in operation when the accident occurred.

[4] The accident took place when a vehicle driven by John Pulcine apparently entered the intersection on a red light and collided with a tractor trailer driven by Derek Millar. Mr. Pulcine was killed. It is conceded that he was driving without insurance contrary to the Compulsory Automobile Insurance Act.

[5] This action was commenced in Pembroke in 2010 on behalf of the wife and children of the deceased. It is alleged that the province and its contractor were negligent in a number of ways. The allegations include failing to install signage, failing to warn users of the highway of the changed configuration of the intersection, blocking sight lines by piling dirt near the intersection, creating a situation of danger, use of incompetent trades and employees, failure to take steps to ensure that motorists lawfully using the roadway were safe, failure to inspect, and maintaining a highway in an unsafe condition. Of course these are unproven allegations which will be in dispute if the action continues. For purposes of the motion however, the important point is that they are all allegations relating to control, construction, operation and repair of a public highway. The defendants do not dispute that if they can be proven these are allegations that could trigger liability for breach of statutory and common law duties imposed upon the province in relation to public highways.

[6] Section 267.6 of the Insurance Act bars any claim “to recover damages arising from bodily injury or death arising directly or indirectly from the use or operation of an automobile” if the person suffering injury or death was in breach of the Compulsory Automobile Insurance Act at the time of the accident. If applicable, this also has the effect of barring claims by dependents under the Family Law Act, s. 61 (1).

The test for summary judgment

[7] Both parties agree that this is an appropriate issue to be determined on a summary judgment motion. Accordingly the motion proceeds under Rule 20.04 (2) (b). Under that subsection, the test is not whether there is a “genuine issue requiring a trial” but simply whether the “court is satisfied that it is appropriate to grant summary judgment.” For purposes of this motion, I need not determine whether there is a significant difference in these tests because I am satisfied that summary judgment is appropriate and there is no need for the forensic machinery of a trial to decide the question in issue.

[8] The precise question of whether section 267.6 applies to bar an action for negligent design or non-repair of a highway has not been previously determined. I agree with counsel that a summary judgment motion is the appropriate procedure. If the section applies, it is a complete bar to this claim and it appears reasonable to determine that question before the parties run up further costs in the litigation. Additionally there are no facts in dispute that need to be determined before answering the question. For purposes of the motion, the question is a narrow one. Are the claims as pleaded claims “arising directly or indirectly from the use or operation of an automobile” within the meaning of the statute?

Analysis

[9] There is no question that the deceased (through whom the plaintiffs advance their derivative claims) was operating a motor vehicle when he entered the intersection and collided with another vehicle. The plaintiffs are obviously seeking to recover damages for death sustained in the operation of an automobile and if the section is interpreted literally it would appear to apply. But a literal reading of a statutory provision out of context is not appropriate. In interpreting legislation, Canadian courts must apply the “modern principle of statutory interpretation” (See for example Re Rizzo v. Rizzo Shoes Ltd., [1998] 1 S.C.R. 27 and Amaratunga v. Northwest Atlantic Fisheries Organization, 2013 SCC 66, [2013] 3 S.C.R. 866) which requires that the words of a statute be read in context and interpreted in accordance with legislative intention.

[10] The leading case in Ontario concerning the application of section 267.6 is Hernandez v. 1206625 Ontario Inc., 61 O.R. (3d) 584 (C.A.), a 2002 decision of the Court of Appeal. In that case the plaintiff was involved in a motor vehicle accident after being over served alcohol in the defendant’s bar. As in the present case, there was no doubt that the plaintiff suffered injury while operating a motor vehicle and at the time he was not insured. The Court of Appeal determined that a tavern could not rely upon s. 267.6 because the liability of the tavern was not dependent on the plaintiff operating a motor vehicle. In the view of the court, the bar is to recovery of “loss or damage arising” from the operation of a motor vehicle and not injury sustained in an automobile accident. According to the court, the question is whether the use of an automobile is central to liability or merely incidental to it.

[11] In effect the Court of Appeal has interpreted s. 267.6 to mean that the driver operating a vehicle in breach of the Compulsory Automobile Insurance Act cannot recover against a tortfeasor whose liability arises directly or indirectly from the operation of an automobile. The claim will not be barred against a tortfeasor whose liability is not for vehicular negligence but for another form of negligence that happens to include circumstances in which a motorist is injured or killed. Thus in Hernandez, it was foreseeable that patrons of a bar who become intoxicated and are served more alcohol could be killed or injured in a number of ways. The fact that it happened to involve a motor vehicle was not important to determining liability because the tavern would have been liable for any bodily injury resulting from intoxication no matter what the mechanism of the accident actually turned out to be.

[12] It is of course possible to distinguish the case at bar from Hernandez. Arguably highways are constructed and maintained primarily for use by motor vehicles and it is to drivers and passengers of automobiles that a duty of care is primarily owed. Not every patron of a tavern arrives and leaves by automobile. Highways by contrast, at least the King’s Highway, are primarily designed for automobile use. But this distinction cannot be pushed too far. In the first place, with the exception of controlled access highways, highways are also used by pedestrians, bicycles and horse drawn vehicles. Moreover the cause of action itself is a historical cause of action that was developed before automobiles came to be the dominant mode of travel. There remain many provisions in legislation, including quite recent enactments, regulating the use of highways by horses and riders. (See for example the Horse Riding Safety Act, 2001, S.O. 2001, c.4 which inter alia amended the Highway Traffic Act). The duty to keep highways in good repair and to adhere to appropriate standards of design may currently be primarily for the benefit of motorists but the duty extends to all users of the highway. In any event liability for failing to meet the standard of care does not arise from the operation of a motor vehicle and is thus in the same category as “taverner’s liability”.

[13] In reaching the conclusion that “taverner’s liability” was not affected by s. 267.6, the Court of Appeal examined the primary purpose of the statutory scheme giving rise to that section. While no doubt one purpose of the enactment of s. 267.6 was to encourage drivers to comply with the requirement that all drivers carry automobile insurance, the court observed that the section was part of a package of amendments contained in the Automobile Insurance Rate Stability Act, S.O. 1996, c. 21. The intention of the amendment was found by the court to be limiting claims against automobile insurance. Thus in the view of the court, the section was to be interpreted as limiting the class which can recover from the automobile insurance pool to those who have paid premiums into that pool. (Hernandez, supra @ para. 38). In Hernandez the conclusion was that the section did not bar a claim for “taverner’s negligence” because the portion of the damages allocated to the fault of the tavern owner would not be paid by automobile insurance. This logic applies equally to liability for non-repair of a highway.

[14] The Insurance Act is a long and complicated piece of legislation which has been amended many times. Different provisions of the Act contain similar wording but are interpreted differently because their objectives are different. For example in Hernandez the Court of Appeal was alert to the fact that previous rulings in connection with the deduction of collateral benefits and dealing with very similar language had been given a different interpretation. In Rutherford v. Niekrawietz, [1998] O.J. NO. 5001; (1998) 8 C.C.L.I. (3d) 246 (C.A.) on facts somewhat similar to the case at bar the court imposed liability on the Ministry for failure to post signage at a dangerous intersection. The court rejected the argument that s. 267 did not apply to a loss arising from breach of a statutory duty of repair and found that collateral benefits were deductible from the tort award because the plaintiff’s loss arose from operation of her automobile. The Hernandez court distinguished the purpose of s. 267 from the purpose of s. 267.6. In addition, though it did not find it necessary to overrule its earlier decision, the court did suggest that the continued authority of Rutherford and other older cases should be re-examined in light of more recent decisions of the Supreme Court of Canada. (Hernandez, supra @ para. 34 - 36).

[15] On the basis of the reasoning in Hernandez I must conclude that s. 267.6 does not limit the right of the plaintiffs in the case at bar to sue for damages arising from breach of the Ministry’s obligations in respect of the highway. As set out above, the duty of the province does not arise from operation of an automobile nor is its duty of care limited to motorists. More importantly, any damages flowing from fault on the part of the province will not be paid out of the pool of automobile insurance protected by the section. BOT Construction is in the same position as it was the contractor carrying out work on behalf of the Ministry.

Judgment

[16] For the reasons outlined above, summary judgment is granted declaring that s. 267.6 of the Insurance Act does not operate to bar the plaintiffs’ claims notwithstanding that the deceased was in breach of the Compulsory Automobile Insurance Act. The action may therefore continue.

Costs

[17] The point raised was a novel point that had not been previously decided. It was important to the parties to have this resolved before the litigation continued. This is not a case for substantial indemnity costs but it is not appropriate to deny costs to the successful party because the principles established in Hernandez are authoritative. The plaintiff will therefore be entitled to modest costs on a partial indemnity scale. I fix those costs at $2,500.00.

[18] I would like to commend counsel for the succinct and focused manner in which this motion was argued. In my view this is an excellent example of effective use of Rule 20. It was a distinct pleasure to hear these submissions.

Mr. Justice Calum MacLeod Released: July 8, 2016