The courts have paved a rocky road for Ontario's motor vehicle insurers over recent years.
In separate decisions last week, however, the Supreme Court of Canada found in favour of insurance companies to clarify and limit the circumstances in which car insurance coverage will be available to injured persons.
The Court rolled back two leading Judgments of the Court of Appeal for Ontario, and thereby put the brakes on two claims for accident insurance coverage in situations that only peripherally had involved use of motor vehicles by the at-fault parties.
By way of background, car insurance has always been intended to provide coverage only for collisions and injuries arising in connection with the use and operation of motor vehicles.
In 1990, this coverage was apparently broadened by an amendment to section 239 (1) of the Ontario Insurance Act, which added the word "indirectly" to the following provision:
239. Subject to section 240, every contract evidenced by an owner's policy insures the person named therein...for loss or damage,
(a) arising from the ownership or directly or indirectly from the use or operation of any such automobile; and
(b) resulting from bodily injury to or the death of any person and damage to property.
Since that time, Courts have offered differing opinions on how broadly this provision was to be interpreted - what exactly is meant by indirect use of a motor vehicle?
Until recently, Amos v. Insurance Corp of British Columbia was the leading authority in the matter.
Decided by the Supreme Court of Canada in 1995, it established the following test to assist in the interpretation of this insurance legislation:
- Did the accident result from the ordinary and well known activities to which automobiles are put; (purpose test) and
- Is there some nexus or causal relationship (not necessarily direct or proximate 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 and fortuitous. (causation test)
In Amos, the Plaintiff was driving his van and came to a stop at an intersection where six people attacked him. He suffered a gun shot wound to the spine from one of the attackers while he attempted to steer the van away from the unfortunate situation.
In analyzing his no fault benefits claim, the Supreme Court applied the above two-part test and concluded that this set of facts satisfied both the purpose and causation test and accordingly found in favour of the Plaintiff.
The Supreme Court summarized its decision by stating:
Generally speaking, where the use or operation of a motor vehicle in some manner contributes to or adds to the injury, the Plaintiff is entitled to coverage.
Arguably, rather eccentric case law arose thereafter based on the Amos test, including the Court of Appeal for Ontario decisions in Herbison v. Lumbermens Mutual Casualty Co. and Vytlingam v. Farmer.
In each case, the Plaintiff sought insurance coverage for injuries suffered. The question to be determined in both matters was whether the injuries that were suffered arose indirectly from the use or operation of a motor vehicle.
As you will see, the facts of each case are highly unusual, and arguably, required considerable stretch by the Court to establish any duty to provide insurance coverage.
In Herbison, a member of a yearly deer hunting party was driving to a hunting stand when he believed he spotted a deer. Because it was night time, the hunter used the headlights of his car to spot and shoot what he believed was a deer. In fact, he shot the Plaintiff, who was another member of the hunting party, causing serious injury.
Based on the Amos holding, the Court of Appeal ruled in favour of the Plaintiff, and found that he was entitled to indemnity and compensation from motor vehicle insurance for his injuries.
A similar determination was made in Vytlingam wherein the Plaintiffs were catastrophically injured while driving when their vehicle was hit by rocks that had intentionally been dropped onto the road from an overpass above.
The insurers appealed both decisions to the Supreme Court of Canada.
On October 19, 2007 the Supreme Court released its decisions, denying insurance coverage and overruling the Court of Appeal in both Herbison and Vytlingam.
The Court distinguished each case from Amos in two, significant ways:
- The Amos case was concerned with a no- fault benefits scheme while Lumbermens and Vytlingam each related to third-party indemnity claims; and,
- In Amos the acts that caused the injury were committed within the Plaintiff's vehicle while in Lumbermens and Vytlingam, they were not.
The Supreme Court of Canada then established the following two part test to determine whether there was a causal connection between the injury and the ownership, use and operation of a vehicle:
- Whether the claim is in respect of a tort committed by an at-fault party while using a motor vehicle as a motor vehicle and not for some other purpose; and
- Whether there is an unbroken chain of causation linking the injuries to the use and operation of the vehicle.
Applying this new analysis, the Supreme Court allowed both appeals, finding that each scenario lacked adequate causal connection to the use of a motor vehicle, with the injuries in each arising as a result of an unrelated, intervening event.
Specifically, the Court held that the shooting of the rifle in Lumbermens and the criminal act of dropping rocks off a bridge in Vytlingam were inadequately connected to the ordinary operation of motor vehicles to bring them within the ambit of motor vehicle insurance coverage in Ontario.
The Court's holding in Vitlingham is summarized in its headnote:
The claim did not arise from the ownership or directly or indirectly from the use or operation of a motor vehicle. Although the use of F’s vehicle (e.g. transporting rocks) fell within the scope of the ordinary activities to which automobiles are put, the word “indirectly” is not sufficient to overcome the requirement for an unbroken chain of causation linking the conduct of the tortfeasor as a motorist to the injuries in respect of which the claim is made. In this case, the relevant tort consisted of dropping the rocks from a highway overpass, not transporting rocks across the countryside. F was not at fault as a motorist. The tort was an independent act which broke the chain of causation. It was an intervening event severable from the use and operation of F’s vehicle.
Similarly, in Herbison:
The insurance in this case is automobile insurance, and s. 239(1) of the Insurance Act requires that the victim demonstrate that the liability imposed by law upon the insured is for loss or damage arising from the ownership or directly or indirectly from the use or operation of the automobile.
The questions are, firstly, whether the claim is in respect of a tort committed while using a motor vehicle as a motor vehicle and not for some other purpose, and secondly, whether there is an unbroken chain of causation linking the injuries to the use and operation of the vehicle. While the addition of “directly or indirectly” to s. 239(1) relaxed the causation requirement, it did not eliminate the requirement of an unbroken chain of causation. An intervening act may not necessarily break the chain of causation if it arises “in the ordinary course of things” but, even under the relaxed rule, merely fortuitous or “but for” causation is not sufficient. [10] [12-14]
In this case, W was using his vehicle for transportation, which is its ordinary use. However, in an act independent of the ownership, use or operation of his truck, W interrupted his motoring to start hunting thereby breaking the chain of causation. The injury cannot be said to have arisen “directly or indirectly from the use or operation” of the insured truck within the meaning of s. 239(1). W’s truck merely created an opportunity in time and space for the damage to be inflicted, without any causal connection, direct or indirect, to the legal basis of W’s tortious liability. The “but for” approach taken by the majority of the Court of Appeal did not give adequate weight to W’s separate, distinct and intervening act of negligence.
As a result of these two judgments, a narrower approach has been established to determine whether insurance coverage will be available, based on whether there is adequate causal connection between an injury and the ownership and use of a motor vehicle by the at-fault party.
Some might argue that with these decisions, common sense has ultimately prevailed.
For full text of the two Supreme Court of Canada decisions see:
Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46 (CanLII)
Lumbermens Mutual Casualty Co. v. Herbison, 2007 SCC 47 (CanLII)
For press coverage of the decisions see:
Toronto Star: Top court slams brakes on auto insurance claim
Globe and Mail: Top court rejects two claims against insurers
- Annie Noa Kenet and Garry J. Wise, Toronto
Visit our Toronto Law Firm website: www.wiselaw.net
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