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The License Appeal Tribunal has held that a person who tripped over stone blocks and fell into a parked Honda vehicle was involved in an “accident”, making him entitled to receive accident benefit under the Statutory Accident Benefits Schedule.
In D.S. v. TD Insurance, the applicant was running down a street in the early hours of September 28, 2015. He entered onto private property towards a low wall of stone edging blocks, which separated two private properties. As he was running, he tripped over the stone blocks, lost his balance, and fell head first towards a Honda sedan parked on the driveway. As a result of crashing into the parked car, he sustained catastrophic injuries.
DS applied to his insurer for accident benefits. The insurer denied the claim on the basis that DS was not involved in an automobile “accident”, which the policy defines as:
“…an incident in which the use or operation of an automobile directly causes an impairment …”
The LAT Adjudicator disagreed with the insurer and found that the claimant was involved in an “accident”.
One of the issues in the case was whether the claimant actually made contact with the parked vehicle. After considering the expert and other available evidence, the adjudicator found that the injuries occurred as a result of the claimant’s “contact” with the parked vehicle.
What is an “Accident”?
The meaning of the phrase “use or operation” and “(directly) causes” has been discussed at length in many cases across Canada, in all levels of tribunals and courts. It can safely be said that each case must be decided on its own facts, although some overriding principles apply.
In Ontario, the “test” for determining whether someone was involved in an “accident” for the purpose of coverage under the SABS is:
Did the accident result from the ordinary and well-known activities to which automobiles are put? (purpose test)
Was the use or operation of the vehicle a cause of the injuries? (causation test)
If the use or operation of a vehicle was a cause of the injuries, was there an intervening act or intervening acts that resulted in the injuries that cannot be said to be part of the "ordinary course of things"? In that sense, can it be said that the use or operation of the vehicle was a "direct cause" of the injuries? (direct causation test)
The Purpose Test
The adjudicator relied on the Court of Appeal’s decision in Economical Mutual Insurance Co. v. Caughy (2016) to find that parking a vehicle is an ordinary and well known activity to which automobiles are put. Accordingly, the claimant met the “Purpose Test”.
Of note, the adjudicator found in the context of the “Purpose Test” that falling into the car vs. over the car was irrelevant:
Further, does it matter that the applicant in this case collided with a parked vehicle as opposed to tripping over a parked vehicle as in Caughy? I find it does not for the purposes of the purpose test. The Court in Caughy noted that there was no ‘active use component’ to the purpose test. But I examine this in more detail in the causation aspect of the test.
The Causation Test
The adjudicator found that the injuries were caused by contact with the vehicle. The adjudicator found that the impact with the vehicle was not an intervening event that would break the chain of causation, finding that the impact with the car was part of the same chain of events. Further, the adjudicator found that the parked vehicle was a dominant feature of the accident, seeing that the impact with the vehicle caused all the injuries. The adjudicator concluded, “ I find that on a balance of probabilities that his injuries were caused by contact with the vehicle.”
The Court of Appeal decided in Caughy that parking a vehicle is part of the ordinary and well well-known activities to which automobiles are put. Therefore, it was open for the adjudicator to find that the act of parking the Honda met the Purpose Test.
However, and with the greatest of respect, I could not disagree more with the adjudicator’s findings on the Causation Test.
Firstly, the “Causation Test” asks whether “use or operation of the vehicle was a cause of the injuries”. The use or operation of the vehicle must be a cause of the injuries. Not just the vehicle itself.
It appears that the adjudicator in DS found causation because the vehicle itself caused the injuries – not its use. The adjudicator made the following finding:
This part of the causation test is met. As stated earlier, based on the evidence, the injuries could not have been caused by contact with the ground, and given that there is no other explanation before me, I find that on a balance of probabilities that his injuries were caused by contact with the vehicle. [emphasis added]
There was no finding that the parking of the vehicle (its use) was a direct cause of the injuries. There was no evidence that the vehicle was parked in a way that caused the injuries. It was the vehicle itself that caused the injuries (I assume because the vehicle was harder and more solid than DS) and not its use.
Secondly, as noted above the adjudicator found in the context of the Purpose Test that it made no difference whether the claimant feel over or fell into a parked vehicle. However, the distinction is very important under the Causation Test because tripping over a parked vehicle might have something to do with how the vehicle was parked.
For example, in Caughy, the Superior Court found that the use of the motorcycle (i.e., parking it so that it obstructed a path) was a direct cause of the fall. In other words, if whoever parked the motorcycle on the path hadn’t have done so, the fall likely would not have occurred. It was the (negligent) “use” of the parked vehicle that ultimately caused the claimant to trip over it, which caused his injuries.
This finding was not challenged on appeal.
Put another way, in Caughy the “dominant feature” of the incident was that the claimant tripped over a parked motorcycle that was obstructing his path. In DS, my opinion is that the dominant feature of the incident was that the claimant tripped over a stone block and happened to crash into a car. The car was ancillary, at best.
Following Caughy, I opined that the decision dilutes the Purpose Test to some degree. If the Purpose Test is designed only to rule out any aberrant uses of vehicles, one wonders whether there is any real purpose for the Purpose Test, especially if a parked vehicle that is not being used at all is found to be “use”.
Caughy might have been decided differently under the Causation Test if the motorcycle was not parked in a way that obstructed a pedestrian’s path.
But DS takes the cake.
If DS stands, insurers might consider charging much higher premiums if their insureds park their vehicles anywhere other than inside maximum security garages.
The Court of Appeal has determined that an Insurer is not required to provide a justification for its request that a claimant attend an examination under oath under section 33 of the SABS.
In Aviva Insurance Company of Canada v. McKeown et. al., Aviva requested that six claimants attend EUOs. The claimants denied Aviva’s request and demanded that Aviva provide a “reason” in the sense of a “justification” for its request that they attend EUOs. Aviva brought an application in the Superior Court for a declaration that a justification was not required to compel a claimant to attend an EUO.
The application judge dismissed the application and found that an Insurer must provide a “justification” to compel a claimant to attend an EUO. Aviva appealed.
Ultimately, the Ontario Court of Appeal found that a “justification” is not necessary. Justice Juriansz found that the object of the Act and the intention of the legislature leads to the conclusion that section 33(4)3 does not require an Insurer to include in its notice to a claimant a justification for its request to attend an EUO. Justice Juriansz endorsed that the legislative objectives in creating the EUO were to reduce insurance costs, address fraud and increase accountability within the system, and rejected the application judge’s reasoning that the use of EUOs might result in an increase in the overall costs of the system. Furthermore, requiring Insurers to provide justification for EUOs was noted to be not in keeping with the non-adversarial process intended by the legislature.
Reviewing section 33(4)3 in the context of the scheme of the Act and the regulations, the Court also noted the following in favour of a “no justification” approach to EUOs:
Requiring an Insurer to provide a “justification” in its request for an EUO is not in keeping with the cooperative approach to information sharing throughout the SABS;
Other provisions (including section 44, which allows Insurers to require a claimant be examined by a health professional) require requests by insurers to be “reasonably necessary, which is in contrast to section 33;
The requirement to provide notice of the “reason or reasons for the examination” is included in section 33(4) and is not included as one of the qualifications in section 33(2);
There is no redundancy between the requirement for reasons under section 33(4)3 and the scope of examination under section 33(4)4;
Reading an additional requirement to provide notice of justification is not necessary to promote fairness in the scheme which already addresses potential abuse of EUOs by Insurers; and
FSCO has not interpreted the provision to require notice of a “justification” for an EUO.
In Parker Pad & Printing Ltd. v. Gore Mutual Insurance Company, the plaintiff’s premises in Haliburton, Ontario were flooded during a severe rainfall. The rainfall resulted in large pools of water collecting outside of the north-west wall of the premises. Water entered the building and covered an extensive area of the interior floor. The flood caused damages to the flooring, walls, printed products, and equipment.
At the time of the loss, Parker Pad was insured under an All Risks Policy with Gore. The insurer denied the plaintiff’s claim on the basis that the loss did not fall within the scope of coverage. More specifically, Gore denied coverage on the basis that the loss was captured by the “flood” exclusions in the policy.
The policy defined “flood”, as follows:
(j) “Flood” means: The rising of, the breaking out or the overflow of any body of water whether natural or man-made and includes waves, tides, tidal waves and tsunami. [emphasis added]
The exclusions also excluded damage caused:
(c)(i) by seepage, leakage or influx of water derived from natural sources through basement walls, doors, windows or other openings therein, foundations, basement floors, sidewalks, sidewalk lights, or by the backing up of sewers, sumps, septic tanks or drains, unless concurrently and directly caused by a peril not otherwise excluded in PERILS EXCLUDED, hereof.
Finally, Parker Pad also had a “Flood Endorsement” attached to the policy. The Flood Endorsement provided coverage for loss or damage to the property “caused by wind, hail, rain or snow entering the building through an opening in the roof or walls directly resulting from a flood.” The endorsement defined “flood”, as follows:
“Flood” means for the purpose of this endorsement, flood shall mean the rising of, the breaking out or the overflow of any body of water whether natural or man-made and includes waves, tides, tidal waves, and tsunami. [emphasis added]
Gore denied coverage under the Flood Endorsement, claiming that the loss was not caused by a “flood”.
Parker Pad sued Gore for coverage and the broker (presumably for negligence). In a motion for summary judgment, the judge had to determine whether the flood exclusions applied and, if so, whether there was coverage under the Flood Endorsement.
The judge found that the flood exclusions in the policy did apply because the loss occurred “by seepage, leakage or influx of water derived from natural sources through … foundations”. Accordingly, the policy did not cover the loss.
With respect to Flood Endorsement, the judge found that the loss was not a “flood”. The definition of flood in the Endorsement referred to a “body of water”, which the judge found meant a pre-existing pool of water and not a body of water that was created by the rainfall. He held:
In my opinion the ordinary meaning of the phrase “the rising of, the breaking out or the overflow of any body of water whether natural or man—made and includes waves, tides, tidal waves, and tsunami” is limited to pre-existing bodies of water and does not include pooling of rain water in a location where no body of water previously existed. I come to this conclusion by considering all of the words in context. A pre-existing body of water such as a lake, river or reservoir can rise, breakout or overflow. In this case the pool of water did not exist before the rain, and cannot be said to rise, break out or overflow because it has no pre-determined boundary or level from which it can rise, break out or overflow.
While the term “body of water” might be ambiguous when considered in isolation, it is not ambiguous when considered in the context of the complete clause. In my view the context clearly shows that the intention was to include the rising, breaking out or overflow of an existing and identifiable body of water.
Accordingly, the loss was not covered under the Flood Endorsement and the action against the insurer was dismissed.
An interesting component of this case is that the insured also sued the broker, who was not a party to this motion. The judge made the following comment in passing:
There is no evidence in this case whether the Parker premises was anywhere near a “body of water” such that this Flood Endorsement was the appropriate coverage for that building. It may be that what Parker needed was coverage to override the exclusions in clause 6B(c) of the policy, rather then the Flood Endorsement to cover what was excluded by clause 6B(b).
No doubt the broker should be concerned with those statements as the action proceeds against it.