CITATION : Beaudin v. Travelers Insurance Company of Canada , 2021 ONSC 1389

DIVISIONAL COURT FILE NO.: DC- 19-572

DATE: 20210226

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

PATTILLO, PENNY and DOYLE JJ.

B E T W E E N:

MICHAEL BEAUDIN

Peter Cho and Vameesha Patel for the Respondent

Respondent/Applicant

• and -

TRAVELERS INSURANCE COMPANY OF CANADA

Daniel Strigberger and Devan Marr for the Appellant

Appellant/Respondent

Heard: October 20, 2020 by Video Conference

REASONS FOR DECISION

BY THE COURT:

Introduction

[ 1 ] The appellant, the Travelers Insurance Company of Canada (“Travelers”), appeals from the reconsideration decision of the License Appeal Tribunal (“LAT”) dated September 27, 2019 holding that the respondent Michael Beaudin’s dirt bike was an “automobile” under s. 224(1) of the Insurance Act , R.S.O. 1990, c. I.8, thereby entitling Beaudin to statutory accident benefits under his automobile insurance policy with Travelers.

[ 2 ] For the reasons that follow, we dismiss the appeal. The Vice-Chair made no error of law in the reconsideration decision.

Background

[ 3 ] On July 9, 2017, Beaudin was driving his dirt bike in the Rockstar Energy Motocross Nationals, a motocross competition on a closed course at Gopher Dunes in Courtland, Ontario. The competition was organized by Stallybrass Promotions Inc. and sanctioned or sponsored by the Canadian Motorsport Racing Competition (“CMRC”), a for-profit corporation, registered in Ontario.

[ 4 ] During the race, Beaudin was involved in an incident in which he was catastrophically injured and is now a paraplegic.

[ 5 ] The dirt bike was not listed as an insured vehicle under Beaudin’s automobile insurance policy with Travelers (the “Policy”).

a) Beaudin’s initial request of Travelers

[ 6 ] Beaudin applied to Travelers for accident benefits under the Policy pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 , O. Reg. 34/10, s. 3(1) (“ SABS ”), a regulation under the Act. Travelers denied the application on the basis that the incident did not qualify as an “accident” as defined in the SABS because it involved a vehicle that did not satisfy the definition of an “automobile” in s. 224 (1) of the Insurance Act .

[ 7 ] Section 224(1) of the Insurance Act provides:

224 (1) In this Part,

“automobile” includes,

(a) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and

(b) a vehicle prescribed by Regulation to be an automobile; (“automobile”).

b) Beaudin’s Appeal to the LAT

[ 8 ] Beaudin brought an application to the LAT to overturn Travelers’ denial of benefits. Prior to the hearing, the parties participated in a LAT Case Conference where it was decided that a preliminary issue hearing would be held to decide whether Beaudin’s dirt bike was exempt from the Off-Road Vehicles Act , R.S.O. 1990, c. O.4 (“ ORVA ”) and specifically s. 15(1) of the ORVA by virtue of s. 2(1) 5 of Ontario Regulation 863 (“O. Reg. 863”) . The Case Conference Order dated January 11, 2018, provided, among other things, that the only documents and evidence at the hearing would be Beaudin’s application and Travelers’ response (without attached documents) and what the parties presented at the hearing. Further, as Travelers relied on the exemption, it was directed to file its submissions first with Beaudin to respond.

[ 9 ] The ORVA is part of Ontario’s comprehensive legislative scheme for automobile insurance designed to protect innocent victims of automobile accidents. In that regard, its purpose is to encourage safe driving of off-road vehicles and to provide a method of control and identification of such vehicles: Haliburton (County) v. Gillespie , 2013 ONCA 40 , 114 O.R. (3d) 116; Matheson v. Lewis , 2014 ONCA 542 .

[ 10 ] Section 15 of the ORVA provides in part:

15 (1) No person shall drive an off-road vehicle unless it is insured under a motor vehicle liability policy in accordance with the Insurance Act .

Exemption

(9) Subsections (1), (2) and (3) do not apply where the vehicle is driven on land occupied by the owner of the vehicle.

[ 11 ] In addition to the exemption in s. 15(9) of the ORVA , s. 2(1) of O. Reg. 863 made pursuant to the ORVA , sets out the following further exemptions from the ORVA :

2. (1) The following are designated as classes of vehicles that are exempt from the provisions of the Act and this regulation:

3. Golf Carts.

4. Road-building machines.

5. Self-propelled implements of husbandry.

6. Wheelchairs.

7. Off-road vehicles driven or exhibited at a closed course competition or rally sponsored by a motorcycle association. [Emphasis added]

[ 12 ] Section 1 of O. Reg 863 defines “motorcycle association” as follows:

“motorcycle association” means a motorcycle club or association that has or is affiliated with a motorcycle club or association that has a published constitution and a membership roster of more than twenty-four persons.

c) The Initial Decision

[ 13 ] The preliminary issue hearing took place over two days. The parties filed an agreed statement of facts which dealt only with the ORVA issues. In addition to written submissions, the Adjudicator heard evidence from a director of CMRC.

[ 14 ] The issue before the Adjudicator was whether the dirt bike was required to be insured under the ORVA (in which case Beaudin was entitled to SABS) or whether it was exempt from the requirements of the ORVA pursuant to s, 2(1) 5 of O. Reg 863 (in which case he was not entitled to SABS).

[ 15 ] In a decision dated October 17, 2018, Adjudicator Kowal found that Beaudin was not driving a vehicle during the incident that met the definition of “automobile” under the Act and accordingly he was not entitled to SABS under his policy (the “Initial Decision”).

[ 16 ] In reaching her decision, the Adjudicator interpreted s. 2(1) 5 of O. Reg. 863 to exempt off-road vehicles engaged in a closed course competition from the ORVA whether the competition is sponsored by a motorcycle association or not. In the alternative, the Adjudicator found that if closed course competitions need to be sponsored by a motorcycle association to be exempt, then CMRC with its affiliation with the Alberta Motorcycle Sport Association (“AMSA”) qualified as a sponsoring motorcycle association

[ 17 ] Beaudin sought reconsideration of the Initial Decision.

d) The Reconsideration Decision

[ 18 ] In a written decision dated September 27, 2019 (“Reconsideration Decision”), LAT Associate Chair Batty held, contrary to the Initial Decision, that Beaudin’s vehicle was not an exempt vehicle under the ORVA and O. Reg. 863 and, accordingly, was required under s. 15 (1) of the ORVA to obtain insurance. Thus, Beaudin’s dirt bike met the definition of “automobile” in s.224(1) of the Insurance Act entitling Beaudin to SABS coverage under the Policy.

[ 19 ] In allowing reconsideration and overturning the Initial Decision, the Associate Chair held, among other things, the Adjudicator erred both in her interpretation of s. 2(1) 5 of O. Reg. 863 and in finding, based on the evidence, that CMRC was a sponsoring motorcycle association within the meaning of the definition in s. 1 of O. Reg. 863 based on its affiliation with the AMSA.

The Issues

[ 20 ] Travelers submits that the Associate Chair erred in his Reconsideration Decision by:

1. Wrongly placing the coverage onus on Travelers rather than Beaudin;

2. Failing to follow the test in Adams v. Pineland Amusements Ltd ., 2007 ONCA 844 , 88 O.R. (3d) 321, in finding that the dirt bike was an “automobile” under the Act;

3. Wrongly interpreting s. 2(1) 5 of O. Reg. 863 to exempt Beaudin from the ORVA ;

4. Failing to defer to the Adjudicator’s finding that CMRC’s affiliation with AMSA was sufficient to bring CMRC within the definition of motorcycle association in O. Reg. 863; and

5. Engaging in a fundamentally flawed and procedurally unfair process by dealing with an issue not before him.

[ 21 ] Further, Travelers has brought a motion to admit fresh evidence to address what it submits was the procedural unfairness issue.

[ 22 ] Beaudin submits that there is nothing improper, unreasonable or incorrect with the Reconsideration Decision. In overturning the Initial Decision, the Associate Chair acted within the jurisdiction afforded to him under the License Appeal Tribunal Act , 1999, S.O. 1999, c. 12, Sched. G , (the “LAT Act”) and LAT’s Common Rules of Practice & Procedure .

[ 23 ] Further, Beaudin denies that the Reconsideration Decision involved any breach of the duty of procedural fairness and says that Travelers’ motion for fresh evidence should be denied.

Jurisdiction

[ 24 ] Pursuant to s.11(2) of the LAT Act , a party to a proceeding before the LAT dealing with, among other matters, insurance, may appeal its decision to this court.

[ 25 ] Section. 11(6) of the LAT Act provides that appeals relating to a matter under the Insurance Act may be made on a question of law only.

Standard of Review

[ 26 ] As Travelers’ appeal is pursuant to s. 11(2) of the LAT Act , the appellate standard of review applies: Canada (Minister of Citizenship and Immigration) v. Vavilov , 2019 SCC 65 at para. 37 .

[ 27 ] Further, as s. 11(6) of the LAT Act restricts the appeal to a question of law, the standard of review is correctness: Housen v. Nikolaisen , 2002 SCC 33

[ 28 ] With respect to procedural fairness, there is no standard of review. The role of the reviewing court is to determine whether the appropriate level of procedural fairness was accorded having regard to the factors in Baker v. Canada (Minister of Citizenship and Immigration) , [1999] 2 S.C.R. 817 (SCC).

Discussion

[ 29 ] The narrow issue before both the Adjudicator and the Associate Chair was whether, based on Beaudin’s participation in the motocross competition, his dirt bike was subject to the provisions of the ORVA , in which case he was entitled to SABS or was exempt therefrom pursuant to s. 2(1) 5 of O. Reg. 863, in which case he was not.

I. Onus

[ 30 ] Travelers submits that in reaching his decision, the Associate Chair erred in placing the onus on it to establish the exemption contrary to the order of interpretation set out by the Supreme Court of Canada in Ledcor Construction Ltd. V. Northbridge Indemnity Insurance Co. , 2016 SCC 37 , [2016] 2 S.C.R. 23.

[ 31 ] Ledcor at para. 52, sets out the order of interpretation in analyzing an insurance policy and an exclusion clause as follows: the insured has the initial onus of establishing that the damage or loss claimed comes within the policy. Once that is established, the onus shifts to the insurer to establish that one of the exclusions to coverage applies. If the insurer is successful, the onus shifts back to the insured to prove that an exception to the exclusion applies.

[ 32 ] Ledcor concerns onus in analyzing an insurance policy. While the analysis in issue concerned provisions of a statute, both the Adjudicator and the Associate Chair were correct in our view, in following its direction. They both acknowledged the first step in Ledcor . At para. 40 of the Reconsideration Decision, the Associate Chair identified the real dispute between the parties:

While his insurer disputes Mr. Beaudin is afforded coverage, that argument is based on the fact the insurer says that dirt bike was being driven at a particular type of event.… To my mind, this is an argument about exclusion from the policy rather than about coverage.

[ 33 ] Travelers seeks to categorize the issue before the LAT as a coverage issue. That is not, however, how the parties or the LAT dealt with it from the outset. From the Case Conference forward, the issue to be determined was one of statutory interpretation – whether the dirt bike was exempt from the provisions of the ORVA pursuant to s.2(1) 5 of O. Reg. 863.

[ 34 ] Given the narrow issue being considered, the Associate Chair was correct in moving directly to the second part of the Ledcor test as to whether an exclusion exists and properly viewed the onus to be on Travelers in that respect.

[ 35 ] We would not give effect to this ground of appeal.

II. The Adams Test

[ 36 ] Adams affirmed the three-part test in Grummett v. Federation Insurance Co. of Canada , 2007 ONCA 844 , 88 O.R. (3d) 321 to be applied when determining whether a vehicle is an automobile: 1) Is the vehicle an “automobile” in ordinary parlance? If not, 2) Is the vehicle defined as an “automobile” in the wording of the insurance policy? If not, then, 3) Does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?

[ 37 ] Travelers submits based on what it submits was the Associate Chair’s “erroneous assumption” that the dirt bike was defined in Beaudin’s automobile Policy, he erred in dealing with the third prong of the Adams test if he believed the second question was unanswered.

[ 38 ] As we will discuss in greater detail shortly concerning procedural fairness, while the Associate Chair’s discussion concerning whether the dirt bike was, at some point, specified in the Policy, was inappropriate given the parties agreement that it was not, it is clear from reading the Reconsideration Decision as a whole that this discussion did not factor into his ultimate decision. Importantly, the Associate Chair made no finding of fact that the dirt bike was ever included in the Policy. Rather, he proceeded, correctly in our view, to consider the third test in Adams .

[ 39 ] We would also not give effect to this ground of appeal.

III. Statutory Interpretation

[ 40 ] Travelers submits that the Associate Chair erred in overturning the Adjudicator’s interpretation of s. 2(1) 5 of O. Reg. 863 which, it submits, was correct.

[ 41 ] To repeat, s. 2(1) 5 of O. Reg. 863 provides:

5. Off-road vehicles driven or exhibited at a closed course competition or rally sponsored by a motorcycle association.

[ 42 ] The Adjudicator interpreted s. 2(1) 5 on the basis that the “or” after “closed course competition” and before “rally” was disjunctive. In other words, all closed course competitions are not required to be insured nor are rallies sponsored by a motorcycle association.

[ 43 ] In reaching her interpretation, the Adjudicator applied the last antecedent rule of statutory interpretation and found that her interpretation was consistent with the legislative intent of the ORVA .

[ 44 ] In the Reconsideration Decision, the Associate Chair found that the Adjudicator erred in her interpretation, both in her consideration of the legislative intent of the ORVA and in her use of the last antecedent rule.

[ 45 ] The Adjudicator concluded, based on para. 28 of Matheson v. Lewis , 2014 ONCA 542 , that the legislative intent of the ORVA is to protect the public when off-road vehicles are driven on land that the owner does not occupy and to allow the vehicles to remain uninsured if they are driven on the owner’s land which would not pose any risk to the public.

[ 46 ] The Associate Chair concluded, contrary to the Adjudicator, that the intent of the ORVA as addressed by the Court in paras. 20 and 36 to 39 of Matheson is not protection of the public but rather protection of innocent victims of automobile accidents.

[ 47 ] Further, while the Associate Chair acknowledged that the “last antecedent rule” is a doctrine of statutory interpretation, he found it was not appropriate to apply it to interpret the provision in question which is short and contains no comas. Rather, he concluded the preferred approach to statutory interpretation is set out in Rizzo & Rizzo Shoes Ltd. (Re) , [1998] 1 S.C.R. 27, at para. 21 , and followed in Bell ExpressVu Limited Partnership v. Rex , 2002 SCC 42 , [2002] 2 S.C.R. 559, at para. 26 to the effect that: “….the words of an act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”

[ 48 ] Based on the above analysis together with the broad definition of motorcycle association in s. 1 of O. Reg. 863, the Associate Chair interpreted s. 2(1) 5 of O. Reg. 863 to require the motorcycle association sponsorship to apply to both closed course competitions and rallies. He stated at para. 67 of the Reconsideration Decision:

Reading the sponsorship requirement as applying to both closed course competitions and rallies is the narrower reading of the phrase, which is consistent with the second part of the Ledcor test. It is also consistent with the legislative intent behind Ontario’s automobile insurance legislation of requiring universal insurance coverage, which is subject to very few exceptions, and gives drivers a strong incentive to purchase insurance. This is also consistent with the interpretive approach advanced by the respondent that words within a statute must be interpreted purposively and within the context of the entire statute.

[ 49 ] We agree with the Associate Chair’s approach to the statutory interpretation exercise in this case. It must always be remembered that the “rules” of statutory interpretation are not rules in the ordinary sense of having some binding force. They are aids to construction, presumptions or pointers. Not infrequently, one “rule” points in one direction, while another in a different direction. In each case one must look at all relevant circumstances. Different contexts may require different meanings: Bapoo v. Co-Operators General Insurance Company , (1997) , 154 D.L.R. (4th) 385 (Ont. C.A.) at 396; Maunsell v. Olins , [1975] A.C. 373 (H.L. (Eng.)) at 382, per Lord Reid

[ 50 ] The Associate Chair’s interpretation of s. 2(1) 5 of O. Reg. 863 also accords with the Court of Appeal’s view of the exemption in Benson v. Belair Insurance Company Inc. , 2019 ONCA 840 , 148 O.R. (3d) 589.

[ 51 ] Although the issue in Benson was whether the SABS Regulations and the definition of “automobile” in s. 224 of the Insurance Act applied differently if the accident occurs in Ontario or outside Ontario, the Court referred to the ORVA and s. 2(1) 5 of O. Reg. 863 as one of the accidents involved a dirt bike in a closed course competition.

[ 52 ] At para. 42 of Benson , the Court noted:

On a plain reading of ss. 15(1) and (9) of the Off-Road Vehicles Act , and s. 2(1) 5. of the ORVA Regulation, insurance is required to drive an off-road vehicle except on the owner’s own property or where the off-road vehicle is designated by regulation as an exempt class of vehicles. Those sections therefore have the effect of defining an off-road vehicle as an “automobile” for the purpose of s. 224(1) and s. 3(1) of the SABS Regulation 34/10 (formerly s. 2(1) of the SABS Regulation 403/96), except when it is driven on the owner’s own property or in a sponsored closed course competition or rally. There is no language that limits that definition to off-road vehicles driven in Ontario.

See also Benson , para. 14 .

[ 53 ] In our view, the Associate Chair made no error of law in the interpretation of s. 2(1) 5 of O. Reg. 863.

IV. Deference

[ 54 ] As noted, in the Initial Decision, the Adjudicator found in the alternative that if sponsorship was required then the closed course competition Beaudin competed in was sponsored via CMRC’s affiliation with AMSA. That affiliation satisfied the definition of a motorcycle association.

[ 55 ] In the Reconsideration Decision, the Associate Chair found the Adjudicator erred in fact and law in making that finding. The Associate Chair concluded on the evidence that CMRC’s affiliation with AMSA did not constitute the sort of affiliation intended in the definition of motorcycle association in s. 1 of O. Reg. 863.

[ 56 ] Travelers submits that the Associate Chair owed deference to the Adjudicator’s finding of facts.

[ 57 ] On a reconsideration, the LAT is not required to show deference to the original decision: Taylor v. Aviva Canada Inc ., 2018 ONSC 4472 (Div. Ct.), at paras. 67-68 .

[ 58 ] Further, the Associate Chair’s decision is one of mixed fact and law and is therefore not appealable.

V. Procedural Fairness

[ 59 ] Travelers submits that the Associate Chair breached the duty of procedural fairness by reling upon evidence not in the record which denied it a reasonable opportunity to present its case.

[ 60 ] In discussing onus and whether the Adjudicator had correctly applied the Ledcor test, the Associate Chair stated at para. 41 of the Reconsideration Decision that she did not complete the required analytical steps. He then stated:

… From my review of the record and submissions, it appears the Tribunal proceeded on the basis the parties were content to argue the preliminary motion on the assumption the dirt bike was covered by the policy, which I note because the initial denial of the insurer after the accident does suggest that Mr. Beaudin removed his dirt bike from being covered by his policy, which is subsequently not relied upon in the ultimate denial or in the preliminary motion.

[ 61 ] The Associate Chair then went on to conclude that the Adjudicator erred in failing to apply and decide the first part of the Ledcor test “because of the way in which the preliminary motion was heard.”

[ 62 ] Travelers submits the “initial denial of the insurer” referred to in para. 41 by the Associate Chair refers to a letter Travelers wrote to Beaudin which was not part of the record before the Adjudicator and the Associate Chair drew a “significant inference” that, at least at some point, the dirt bike was defined as an automobile in the Policy and that tainted the Associate Chair’s decision.

[ 63 ] Travelers further submits that as a result of the Associate Chair’s error, it was prejudiced in not being able to file copies of the Policy documents and other material to establish that the dirt bike was never defined as an automobile in the Policy and the denial letter referred to had nothing to do with whether the dirt bike was defined as an automobile in the Policy.

[ 64 ] In response to its allegation of procedural unfairness, Travelers has brought a fresh evidence motion seeking to admit the Policy documents including the “denial letter”, to counter the Associate Chair’s error.

[ 65 ] Beaudin submits that the “denial letter”, which was attached to Travelers’ response to Beaudin’s application, was part of the record and in any event, the Associate Chair’s reference to it did not taint his analysis of the issue before him. Further, Beaudin opposes the fresh evidence motion.

[ 66 ] As the Case Conference order excluded documents attached to Beaudin’s application and Traveler’s response, the “denial letter” was not part of the record and should not have been referred to by the Associate Chair. Reconsideration is conducted on the record in the initial hearing together with any materials provided on the reconsideration. Accordingly, the Associate Chair was in error in referring to it.

[ 67 ] Nevertheless, when the Reconsideration Decision is considered as a whole, it is clear that the Associate Chair drew no inference that the dirt bike was ever referred to in the Policy. While he raised the issue, he did not rely on it and made no finding that the dirt bike was ever referred to in the Policy. Rather, he left the issue for another day and proceeded to consider the third prong of the Adams test.

[ 68 ] Given that the parties had agreed from the outset that the dirt bike was not listed in the Policy, the Associate Chair’s discussion concerning the Adjudicator’s “error” in not addressing the first part of the Ledcor test was both unnecessary and inappropriate. Given the Adjudicator was addressing the issue as prescribed by the Case Conference Order, on facts agreed by the parties, the Adjudicator made no error. However, because the Associate Chair’s comments concerning the “denial letter” did not factor into his decision, we do not consider that it resulted in a breach of the duty of procedural fairness.

[ 69 ] As a result, Travelers’ motion for fresh evidence, which seeks to admit evidence concerning the “denial letter”, is dismissed. For the above reasons, it is not necessary to consider either the Policy or the “denial letter” in responding to the Associate Chair’s comments.

Conclusion

[ 70 ] For the above reasons, the appeal is dismissed.

Costs

[ 71 ] As agreed between the parties, costs are awarded to Beaudin in the amount of $15,000 inclusive of fees, disbursements and all applicable taxes.

L.A. Pattillo J.

Penny J.

A. Doyle J.

Released: February 26, 2021

CITATION : Beaudin v. Travelers Insurance Company of Canada , 2021 ONSC 1389

DIVISIONAL COURT FILE NO.: DC- 19-572

DATE: 20210226

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT L. PATTILLO, PENNY and DOYLE JJ. BETWEEN: MICHAEL BEAUDIN Applicant (Respondent) - and- TRAVELERS INSURANCE COMPANY OF CANADA Respondent (Applicant) REASONS FOR decision

Released: February 26, 2021