FASTEN YOUR SEATBELTS: WHEN IS A MOTOR VEHICLE ACCIDENT REALLY AN ACCIDENT AND WHAT CONSITUTES A MOTOR VEHICLE FOR INSURANCE PURPOSES?

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1 FASTEN YOUR SEATBELTS: WHEN IS A MOTOR VEHICLE ACCIDENT REALLY AN ACCIDENT AND WHAT CONSITUTES A MOTOR VEHICLE FOR INSURANCE PURPOSES? Presented By: NIGEL G. GILBY WILLIAM A. G. SIMPSON

2 WHAT IS AN AUTOMOBILE?

3 WHAT IS AN AUTOMOBILE? The test for determining when an automobile is really an automobile is set out in Grummet v. Federation Insurance Co. of Canada (1999), 46 O.R. (3d) 340: 1. Is the vehicle an automobile in ordinary parlance? If not, then, 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?

4 WHAT IS AN AUTOMOBILE? Section 224(1) of the Insurance Act defines "automobile as follows: "automobile" includes, (a) (b) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and a vehicle prescribed by regulation to be an automobile.

5 WHAT IS AN AUTOMOBILE? Section 2 of the Compulsory Automobile Insurance Act prohibits the operation of a motor vehicle "on a highway unless the motor vehicle is insured under a contract of automobile insurance". Section 1 of the Compulsory Automobile Insurance Act defines "motor vehicles" as having the same meaning as in the Highway Traffic Act and includes trailers, accessories and equipment of the motor vehicle.

6 WHAT IS AN AUTOMOBILE? Section 1 of the Highway Traffic Act defines motor vehicle as follows: motor vehicle includes an automobile, motorcycle, motor assisted bicycle and any other vehicle propelled or driven otherwise than by muscular power, but does not include a street car, or other motor vehicles running upon rails, or a motorized snow vehicle, traction engine, farm tractor, selfpropelled implement of husbandry or road-building machine

7 WHAT IS AN AUTOMOBILE? The following are obvious examples of automobiles where insurance is required by law: passenger cars; pick-up trucks (including any trailers); motorcycles; transport trucks; school buses; coach buses;

8 WHAT IS AN AUTOMOBILE? The following are examples of motor vehicles that are not automobiles and may not require insurance: farm tractors (including trailers); street cars; motorized wheelchairs/scooters; road-building machinery; go-karts

9 WHAT IS AN AUTOMOBILE? What about snowmobiles? The Motorized Snow Vehicles Act states: 12. (1) No person shall drive a motorized snow vehicle unless the vehicle is insured under a motor vehicle liability policy in accordance with the Insurance Act, and the owner of a motorized snow vehicle shall not permit any person to drive the vehicle unless the vehicle is so insured. Note that there is an exception for requiring insurance when a snowmobile is only being operated on land owned by a snowmobile s owner.

10 WHAT IS AN AUTOMOBILE? The Motorized Snow Vehicles Act contains an age prohibition: 11. (1) Unless otherwise prescribed by the regulations, a person under the age of 16 years shall not drive a vehicle unless accompanied by a person who (a) (b) is 16 years of age or older; and if, under the age of 19 years, is properly insured, or on whose behalf there is proper insurance for the operation of that vehicle in accordance with the regulations. This means that no person under the age of 19 years may operate a snowmobile unless proper insurance is put into place

11 WHAT IS AN AUTOMOBILE? What about All-Terrain Vehicles? The Off-Road Vehicles Act states: 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. Note that there is an exception for requiring insurance when an ATV is being operated on land owned by an ATV s owner.

12 WHAT IS AN AUTOMOBILE? The Off-Road Vehicles Act contains an age prohibition: 4. (1) No owner of an off-road vehicle shall permit a child under the age of twelve to drive the vehicle. Exception 4. (2) Subsection (1) does not apply where the child is driving the vehicle, (a) on land occupied by the vehicle owner; or (b) under the close supervision of an adult.

13 WHAT IS AN AUTOMOBILE? The Off-Road Vehicles Act defines an off-road vehicle as follows: off-road vehicle means a vehicle propelled or driven otherwise than by muscular power or wind and designed to travel, (a) (b) on not more than three wheels, or on more than three wheels and being of a prescribed class of vehicle;

14 WHAT IS AN AUTOMOBILE? A person operating a snowmobile or ATV that is properly insured will always be able to recover nofault accident benefits because of section 268 of the Insurance Act, which states: 268. (1) Every contract evidenced by a motor vehicle liability policy shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule

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16 WHAT IS A MOTOR VEHICLE ACCIDENT: THE TEST IN TORT (i.e. SUING SOMEONE ELSE) vs. NO-FAULT BENEFITS A tort is a civil wrong for which a remedy may be obtained (e.g. monetary compensation). A tort is a lawsuit. A claim against a wrongdoer is also a lawsuit. The terms are used interchangeably. In motor vehicle accident cases, a lawsuit may be started in tort against an at-fault party in certain circumstances.

17 THE STARTING POINT: SECTION 239 OF THE INSURANCE ACT 239. (1) Subject to section 240, every contract evidenced by an owner s policy insures the person named therein, and every other person who with the named person s consent drives, or is an occupant of, an automobile owned by the insured named in the contract and within the description or definition thereof in the contract, against liability imposed by law upon the insured named in the contract or that other person for loss or damage, (a) (b) arising from the ownership or directly or indirectly from the use or operation of any such automobile; and resulting from bodily injury to or the death of any person and damage to property.

18 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN TORT LAW? In its simplest form, causation means the causing or producing of an effect. In motor vehicle accident cases, causation requires a connection to exist between an injury suffered by an individual and the direct or indirect use of a motor vehicle. The concept of causation is complicated by the idea that the connection between a motor vehicle and an injury can be interrupted, or broken, by an intervening act.

19 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN TORT LAW? Causation is also referred to as causal connection ; the two phrases mean the same thing. The Supreme Court of Canada has instructed that, in motor vehicle accident cases, the causal connection must be more than incidental, fortuitous, or but for. It is simply not enough to find that the use or operation of a motor vehicle in some manner contributes to or adds to the injury.

20 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES As a member of a yearly deer-hunting party, Fred Wolfe drove to his designated hunting stand when he thought he saw a deer. It was before sunrise. He stopped and got out of his truck. He removed his rifle, loaded it and, seeing a flash of white in the headlights (which he concluded was the tail of a deer about to take flight), he shot. Unfortunately, he hit another member of the hunting party, George Herbison, seriously injuring him.

21 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES George Herbison sued Fred Wolfe. The trial court, and appeal court, concluded that Herbison s injuries arose from the direct or indirect use of Wolfe s pickup truck and awarded damages of $850, The Supreme Court of Canada disagreed. It concluded that, when Wolfe stepped out of the vehicle, the act of firing a rifle was an intervening act that broke the causal connection and that Herbison s injuries were not caused directly or indirectly by Wolfe s motor vehicle.

22 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES The Vytlingam family, who are Ontario residents, were motoring northwards along Interstate 95 near Fayetteville, North Carolina, when their vehicle was struck by a large boulder dropped from an overpass by two local thrill seekers, Todd Farmer and Anthony Raynor, who were high on alcohol and drugs. Michael Vytlingam received catastrophic injuries as a result of the crime. His mother Chandra and his sister Suzana Vytlingam suffered serious psychological harm.

23 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES Michael Vytlingam received no-fault accident benefits from his insurer; The Vytlingam family brought a lawsuit against their own insurance company (i.e. an underinsured claim) alleging that Todd Farmer and Anthony Raynor were negligent in throwing rocks and that it arose directly or indirectly from the use of Todd Farmer s motor vehicle; The trial court awarded damages of $961, and the appeal court upheld this decision. The insurance company, however, appealed to the Supreme Court of Canada;

24 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES The Supreme Court of Canada overturned the prior decisions; It held that: if the vehicle s involvement is held to be no more than incidental or fortuitous or but for, and is ruled severable from the real cause of the loss, then the necessary causal link is not established; In this case, while the use of Todd Farmer s car in some manner contributed to his ability to commit the act that caused the injury, rock throwing was an activity entirely severable from the use or operation of the Farmer vehicle;

25 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES In Greenhalgh v. ING Halifax Insurance Co. (2004), 72 O.R. (3d) 338 (C.A.), a driver whose car was stranded in the country during winter left the vehicle and tried to walk back to the main road. She became lost, fell into a river and suffered exposure and extreme frostbite. The court held that the chain of causation had been broken and that the injuries suffered did not result from the use or operation of a motor vehicle.

26 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES In Chisholm v. Liberty Mutual Group (2002), 60 O.R. (3d) 776 (C.A.), an insured person was injured when gunshots were fired into his car by an unknown assailant. The Ontario Court of Appeal held the shooting to be severable. There was no causal connection between the claimant s injuries and the operation of his car.

27 APPLYING CAUSATION IN TORT LAW: REAL EXAMPLES FROM DECIDED CASES In Axa Insurance v. Dominion of Canada General Insurance Co. (2004), 73 O.R. (3d) 391 (C.A.), the claimant was injured when struck in the eye by a bungee cord used to secure a friend s boat to a trailer. The motor vehicle insurer was required to indemnify the friend because the injury to the claimant occurred, indirectly at least (per s. 239(1)(b) of the [Insurance] Act) from the ownership use and operation of the motor vehicle and attached boat trailer.

28 DISTINGUISHING BETWEEN CLAIMS IN TORT AND IN APPLICATIONS FOR NO-FAULT BENEFITS A claim for no-fault benefits has a different test for causation because it is a different kind of insurance A claim for no-fault benefits does not require proof of an at-fault motorist Coverage for no-fault benefits is interpreted broadly and liberally

29 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN A CLAIM FOR NO-FAULT BENEFITS? Statutory Accident Benefits Schedule Accidents On or After November 1, 1996 ( SABS ) 2. (1) In this Regulation, accident means an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device

30 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN A CLAIM FOR NO-FAULT BENEFITS? The Supreme Court of Canada established the test for determining causation in claims for no-fault benefits in Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R The Supreme Court of Canada stated that the statutory language must not be stretched beyond its plain and ordinary meaning, nevertheless, it ought not to be given a technical construction that defeats the object and insuring intent of the legislation providing coverage.

31 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN A CLAIM FOR NO-FAULT BENEFITS? In Amos, the insurer contested its responsibility to pay no-fault benefits to its own insured for accident benefits payable in respect of death or injury caused by an accident that arises out of the ownership, use or operation of a vehicle. In Amos, the insured had been attacked by a gang of strangers while he was motoring along an urban street in California. He was shot and seriously injured as he fled in his van away from the assailants, who were on foot. The claim for no-fault benefits was denied by Amos insurance company.

32 UNDERSTANDING CAUSATION: WHAT DOES IT MEAN IN A CLAIM FOR NO-FAULT BENEFITS? In deciding that Amos was entitled to receive no-fault benefits, the Supreme Court of Canada formulated a two-part relaxed causation test to be applied to the regulation setting out the insurer s statutory obligation to provide no-fault benefits to its own insured, as follows: 1. Did the accident result from the ordinary and well-known activities to which automobiles are put? (This has become known as the purpose test.) 2. Is there some nexus or causal relationship (not necessarily a direct 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? (This has become known as the causation test.)

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35 CONCLUSION When an injury is caused by the direct or indirect use or operation of a motor vehicle there may be coverage available for no-fault benefits, a tort action, or both Motor vehicle and automobile mean different things under different pieces of legislation Even where an injury is caused by a motor vehicle that is not insured, compensation may still be sought from the Motor Vehicle Accident Claims Fund in certain circumstances Uninsured coverage, and the right to sue, may also be available to an injured person provided that he or she qualifies to receive nofault benefits: McArdle v. Bugler, (2007) 87 O.R. (3d) 433 (Ont. C.A.)