March 26, 2018, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
JT and Aviva LAT 16-003674 2018 CanLII 8097
Date of Decision: January 22, 2018
Heard Before: Linda P. Lamoureux, Executive Chair
IS IT AN AUTOMOBILE: Tribunal errs in application of 'is it an automobile' three part test; decision overturned
On July 11, 2015, JT was a passenger on an ATV driven by his friend, AE. They were driving on a private rural property (that AE’s parents had recently purchased. Unfortunately, JT and AE collided with a tree, and JT was catastrophically injured.
The central question in this case is whether the collision was an “accident” as defined by the SABs. In order to make the determination, the LAT had to decide whether the ATV was an “automobile” within the meaning of the Schedule, a question that required it to apply the three-part test that the Court of Appeal for Ontario outlined in Adams v. Pineland Amusements Ltd. The Tribunal held that the ATV was not an “automobile” and, thus, that the collision was not an “accident” for the purposes of the Schedule.
JT now asks for a reconsideration of the Tribunal’s decision. For the following reasons Adjudicator Lamoureux found that the Tribunal made significant errors in rendering its decision, and therefor grants his request.
Adjudicator Lamoureux reviewed the law, the Schedule, definitions and evidence and noted that the Schedule clearly defines an accident as “an incident in which the use or operation of an automobile directly causes an impairment” [emphasis added]. The Court of Appeal’s decision in Adams v. Pineland Amusements Ltd. provides that the following 3-part analysis (the “Adams test”) must be used to determine whether a vehicle is properly considered an “automobile”:
- Is the vehicle an “automobile” in the ordinary sense of the word?
- If not, is the vehicle defined as an “automobile” in the wording of the insurance policy?; and
- If not, does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?
An affirmative answer to any of these questions leads to the conclusion that the vehicle is both insured for the purposes of the Insurance Act, and qualifies as an “automobile” within the meaning of the Schedule.
In this case, the Tribunal erred in failing to address the relevant evidence and provide clear findings concerning parts 2 and 3 of this test. Tthe Tribunal’s failure to accept or even discuss certain important evidence, resulted in the Tribunal rendering a fundamentally flawed decision that should not be allowed to stand.
Is the vehicle an “automobile” in the ordinary sense of the word? Case law has established that an ATV is not considered an “automobile” in the ordinary sense of the word. The parties concede that part 1 of the Adams test is not met and is not at issue in this hearing.
Is the vehicle defined as automobile in the wording of the insurance policy? In this case, the Tribunal failed to address whether the subject ATV was defined as an automobile in the wording of an insurance policy.
Shortly before the accident, AE’s parents, G.E. and L.S. bought the Property. As part of this deal, the Purchasers also bought the ATV. The identity of the ATV’s owner at the time of the collision is part of the parties’ dispute. In this case, the Tribunal determined that the Purchasers did not own the ATV at the time of the collision. On that basis, it held, at para. 13, that “part 2 of the Adams test [was] not satisfied.”
Problematically, the Tribunal offered no analysis or determination of whether the ATV was actually insured under a standard Ontario Automobile Policy, let alone whether that policy defined the ATV as an “automobile.” That exercise is what the Adams test required it to perform. In failing to conduct the analysis, the Tribunal erred.
Further, while the Tribunal noted that the Purchasers attempted to add the ATV to their existing policy as a newly acquired vehicle, it failed to address whether that retroactive coverage was effected and, if so, whether the Purchaser’s policy defined the ATV as an “automobile.”
In its response to this request for reconsideration, Aviva highlights the fact that the Purchaser’s insurer, Northbridge, denied coverage for the collision at issue. Aviva argues that this denial is evidence that part 2 of the Adams test does not apply and that this is the end of the analysis for this Tribunal. I disagree. The Tribunal should have conducted the requisite analysis under part 2 of the Adams test.
Does the vehicle fall within any enlarged definition of “automobile? The Tribunal also made significant errors in its assessment of the evidence and its analysis of part 3 of the Adams test.
Section 224 of the Insurance Act, defines an automobile as a motor vehicle that is both required under any Act to be insured under a liability policy and prescribed by regulation to be an automobile. Given this definition, a case will usually turn on where the vehicle is operated and whether it is legally required to be insured.
In the case of ATVs, the relevant statutes are the Off-Road Vehicles Act, R.S.O.1990, c. O.4. (“ORVA”) and the Compulsory Automobile Insurance Act, R.S.O. 1990, c. O.4. Together, those statutes make clear that whether an off-road vehicle requires insurance depends on where the vehicle is operated. Rightly so, the focus of the Tribunal’s decision was on whether the ATV falls within a definition of “automobile” in the ORVA.
The Tribunal correctly recognized that “off-road motor vehicles require insurance under the ORVA when operated off-road and not on their owner’s property.” Significantly, s. 15(9) exempts an off-road vehicle from being insured where it is driven on land occupied by the vehicle’s owner. This is why the issue of ownership of the ATV became significant to the Tribunal’s decision.
The Tribunal had to determine who occupied the Property and owned the ATV on the date of the collision. This was unclear because the Property was purchased before the incident with a closing date scheduled to take place about a month after the incident. But there were also other agreements between the Sellers and the Purchasers regarding the ATV and the rental of the Property prior to the closing date.
The applicant’s position was that ownership of several chattels and the ATV was transferred to the Purchasers before the closing date. Accordingly, the exemption from insurance would not apply because, on the day of the incident, the occupier of the land (the Sellers) and the vehicle’s owner (the Purchasers) were not the same. Therefore, the ATV required insurance in accordance with the ORVA and met the definition of ‘automobile” pursuant to the Adams test. The Tribunal disagreed with the applicant and found the applicant’s evidence with respect to the ATV’s ownership on the date of the incident insufficient. The Tribunal determined that the ATV was still owned by the Sellers on the date of the incident and, therefore, the ATV’s owner and the Property’s occupier were indeed the same.
As a result of its finding, the Tribunal held that the ORVA insurance exemption applied, the ATV was not an “automobile”, and that the collision was not an “accident” under the Schedule.
In Adjudicator Lamoureux’s opinion, the Tribunal failed to provide adequate reasons, make clear findings or properly deal with the relevant evidence regarding the ATV’s ownership as outlined below. The Tribunal also failed to ask and assess ‘Who occupied the Property on the date of the incident?’ Instead, the Tribunal relied on the parties’ agreement and assertions that the Sellers remained the occupiers of the Property. The Tribunal should have assessed all of the evidence and determined the occupier of the Property at the time of the incident, in addition to deciding and providing adequate reasons and findings on who owned the ATV on the day of the incident.
The Tribunal failed to assign appropriate weight to the affidavit evidence provided by the applicant on the issue of the ATV ownership. Instead, it assigned the evidence little or no weight for the wrong reason.
In fact, an affidavit was made in support of the LAT application and was directly relevant to the issues before the Tribunal. It included many relevant exhibits, among them, an affidavit from the purchaser of the Property and the ATV that outlined facts related to the chattels, the Property, and the incident. However, the Tribunal disregarded this evidence without providing any adequate reason for doing so.
The Tribunal was wrong in its assessment of this key evidence because it essentially dismissed sworn unchallenged testimony without evaluating its reliability or probative value. The Tribunal did not make clear findings or properly deal with evidence in respect to the issue of the ATV’s ownership. Additionally, the Tribunal’s reasons are insufficient in that they do not explain the Tribunal’s evidentiary preferences, or, likewise, fail to support its findings.
Overall, the Tribunal neglected to focus on the actual agreement or the “meeting of the minds” from the perspective of the Sellers and Purchasers. It did not deal with the evidence relating to the nature of the contract and did not set out essential findings of fact related to the agreement between the contracting parties. It did not identify or assess relevant evidence, such as the verbal agreement between the parties or the email containing the unsigned rental agreement. It did not explain how evidence of the Sellers granting early access to the Property and the ATV to the Purchasers affected the analysis or findings.
The Tribunal rejected Rule 1 of s.19 by referencing the same set of reasons regarding the $20,000 cheque and evidence that, on the day of the incident, the ATV’s driver, AE, asked one of Sellers, S.H., for permission to ride the ATV. In doing so, it again overlooked or failed to address the multitude of evidence mentioned in para. 26 above concerning the ATV’s ownership. In addition, the Tribunal noted that the Purchasers’ attempt to add the ATV as a newly acquired vehicle to their insurance policy after the incident was contrary to another statement in his affidavit regarding possession of the ATV on the closing date. However, the Tribunal misquoted the Purchaser’s statement in his affidavit and may have confused concepts of ownership and possession. The Tribunal stated that the Affidavit of G.E. indicates, “he did not intend to take ownership of the chattels along with the ATV until the date of closing August 19, 2015, after the incident” (para. 31). But the Affidavit actually states, “I understood that we would take possession of the additional chattels on the closing date” (para. 10).
The Tribunal then assessed Rule 2 under s. 19 of the Sale of Goods Act to determine whether the ATV was in a deliverable state on the day of the incident because according to this rule, the property does not pass to the buyer until the seller puts it in a deliverable state. Again, the Tribunal did not explain its findings. It relied on s. 8 of the ORVA, which sets out the requirements that must be met for the transfer of ownership for an off road vehicle but the Tribunal did not explain how the ORVA’s requirements trigger a ‘deliverable state’ in this case.
One of these requirements related to the plating of an off-road vehicle. The Tribunal found that, since the ATV was not plated at the time of the incident, it was not in a deliverable state. However, the fact that the ATV was not plated merely points to the fact that it was not licensed. I note the Supplementary Occurrence Report by Halton Regional Police Service, which concluded, “the owner of the ATV, G.E., is also the occupier of the land on which it was being operated. This exempts them from most requirements under the Act, such as the requirement to wear a helmet and have a permit and number plates.” The Tribunal did not discuss this evidence.
Significantly, the Tribunal’s reasoning process on the issue of the ATV’s ownership did not set out and reflect consideration of the main and relevant evidence on the agreement or intention of the parties regarding the transfer of ownership in the ATV. Accordingly, the reasons were inadequate, and the result reached by the Tribunal was not properly justified.
The Tribunal did not err in determining the applicant’s estoppel argument
Another issue raised by the applicant as a basis for his reconsideration request was the Tribunal’s decision on the issue of estoppel. The Tribunal found that Aviva, which had paid accident benefits for 11 months, was not estopped from terminating the benefits because estoppel is an equitable remedy that the LAT does not have jurisdiction to grant. In addition, the Tribunal found that the Schedule contemplates an ongoing obligation regarding entitlement and the adjusting of claims. The applicant argued that the Tribunal has jurisdiction to grant equitable relief because s. 280 of the Insurance Act gives the Tribunal exclusive jurisdiction to resolve disputes regarding statutory accident benefits. The Tribunal disagreed. It stated (at para. 41):
If it was the intention of the legislature to include equitable relief such as estoppel as an allowable remedy, it would have expressly conferred it on the Tribunal in the enabling legislation. Therefore, I am unable to grant the applicant this remedy.
Adjudicator Lamoureux agreed with the Tribunal on this point. Section 280(4) of the Insurance Act provides that accident benefits disputes “shall be resolved in accordance with the Statutory Accident Benefits Schedule.” An administrative tribunal does not have the ability to craft remedies that are the exclusive purview of the common law courts. The Statutory Powers and Procedure Act give tribunals some latitude to control process and procedure and the law allows tribunals to inquire into issues of procedural fairness or natural justice and, in limited circumstances, constitutional issues, but there is no jurisdiction to provide equitable remedies.
The Tribunal’s decision of July 14, 2017 is hereby cancelled. I strongly suggest that a case conference be held to determine what is the most appropriate mode and method of hearing for this case and whether, for some witnesses or issues an in person hearing might be more appropriate.