ATV mishap was not an Accident JT v Aviva Canada – LAT 16-003674

October 02, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

JT  v Aviva Canada – LAT 16-003674

Date of Decision: July 14, 2017
Heard Before: Adjudicator Rebecca Hines

WAS IT AN ACCIDENT: is the ATV a vehicle; who owned the ATV; did it require insurance; applicant fails to meet Adam's test; crash not an accident under the Act; no benefits payable

This dispute involves an off-road vehicle operated on private property.  JT was injured in an ATV incident on July 11, 2015, while he was a guest at a property in rural Ontario.  He was on the property with his friend and his friend’s parents “Family A”, who had recently purchased the property from “Family B”.  He suffered significant injuries and applied for accident benefits, under his father’s insurance policy to Aviva.  Aviva paid accident benefits for a period of 11 months before terminating the benefits on the basis that JT’s claim did not meet the definition of accident because the ATV is not an “automobile” under the Schedule due to the circumstances of the incident.

The Arbitrator noted the Schedule does not define the word automobile.  The courts and adjudicators must go through the complicated exercise of interpreting the Insurance Act, the Compulsory Automobile Insurance Act, the Highway Traffic Act, and the Off-Road Vehicles Act to determine whether a particular vehicle is an “automobile,” giving rise to a claim.

The analysis relevant to this case focussed on the ownership of the ATV at the time of the incident.  The ownership of the ATV plays an important part in determining whether or not the ATV qualifies as an automobile as per the Schedule, as section 15(9) of the Off-Road Vehicles Act (ORVA) provides that insurance is not required for an ATV if it is driven on private property of the owner of the ATV.  In this case, the question of ownership turns on whether there had been a verbal agreement for Family A to purchase the ATV from the Family B prior to the incident.

JT applied to the License Appeal Tribunal – Automobile Accident Benefit Services (the “Tribunal”).  The parties were unable to resolve this dispute at a case conference held on January 30, 2017, and the matter proceeded to this written preliminary issue hearing.

PRELIMINARY ISSUES:

The Arbitrator was asked to decide on the following issues:

1. Was this incident an accident within the meaning of the Schedule?
2. Who owned the ATV on the date of the incident?
3. Is Aviva precluded (“estopped”) from denying coverage to JT under the Schedule?
4. Is JT entitled to an award under Ontario Regulation 664, R.R.O. 1990?

RESULT:

1. The incident was not an accident as per section 3 of the Schedule.
2. The ATV was owned by Family B (R.H. and S.H.) on the date of the incident.
3. Aviva is not precluded (“estopped”) from denying coverage to JT under the Schedule?
4. JT is not entitled to an award under Ontario Regulation 664, R.R.O. 1990.

Was this incident an accident within the meaning of the Schedule? The Arbitrator reviewed the definition within the Schedule:

                     “…an incident in which the use of the 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.”

Aviva argues that the ATV involved in the incident was not an “automobile” under the Schedule.  Therefore, JT is precluded from making a claim for accident benefits. 

Both parties agreed that the leading authority for determining whether a vehicle is an “automobile” is set out in Grummet v. Federation Insurance.  Grummet was upheld by the Court of Appeal and is the basis for what is now commonly referred to as the Adams test.  To qualify as an automobile under the Adams test 1 of the following 3 components must be met:

1. The Ordinary Parlance Test: Is the vehicle an automobile within the ordinary sense of the word?  If not, the court should proceed to parts 2 and 3 of the test;
2. Insurance Policy:  Is the vehicle defined as an “automobile” in the wording of the insurance policy?
3. Does the vehicle fall within any enlarged definition of “automobile” in any relevant statue?

The parties agree that the ATV does not meet the ordinary parlance test.  The parties disagree on part 2 and part 3 of the test.

JT argues that the ATV meets part 2 of the test as the ATV was insured as a newly acquired vehicle under section 2.2.1 of Family A’s Ontario Automobile Policy (“OAP”).  Section 2.2.1 of the OAP defines a newly acquired vehicle as “an automobile or trailer that you acquire as owner and that is not covered under any other policy.”  In order to qualify as a newly acquired vehicle two conditions must be met:  1) The insurer must insure all automobiles owned by the individual; and 2) Any claim made for additional automobiles is made against coverage provided for all other automobiles.

JT cited the Court of Appeal which confirmed that a newly acquired vehicle can be added to a policy 14 day retroactively after acquiring ownership.  Family A attempted to add the ATV to their automobile policy nine days following the incident. Because Family A was not the owner of the ATV, part 2 of the Adams test is not satisfied.

The real issue is part 3 of the test, whether the ATV falls within a definition of “automobile” in any relevant statute. The parties provided a different perspective with respect to the facts of the case and how the relevant legislation applies.  The relevant legislation is the Insurance Act and the Off-Road Vehicles Act (“ORVA”) which sets out the framework which applies to this case.  In particular the facts pertaining to the ownership of the ATV and whether it required insurance.  If the ATV is exempt from being insured it does not qualify as an automobile under the Schedule. 

On review of the facts both parties agree that the ATV meets the definition of an off-road vehicle.   Subsection 15(1) of the ORVA requires that off-road vehicles be insured when operated.  Subsection 15(2) prohibits an owner of an off-road vehicle from permitting the vehicle to be driven unless it is insured.  However, there is one exception to the rule and that is in subsection 15(9) which exempts an ATV from being insured where it is driven on land occupied by the owner of the off-road vehicle.

To determine whether the ATV qualifies as an automobile under part 3 of the Adams test a determination must be made about who owned the ATV on the date of loss.  To resolve the ownership question, the parties made submissions regarding the Sale of Goods Act as it applies to this case.

Aviva argues that the Family B owned the ATV at the time of the incident.  Since Family B were the owners and occupiers of the property when the incident occurred, the ATV was neither insured, nor was it required to be insured and therefore, the ATV would not meet the definition of automobile under the Schedule and JT will not have recourse to accident benefits.

JT argues that his friend’s parents, Family A owned the ATV on the date of the collision.  JT submits that if Family A owned the ATV it would have required insurance as the accident did not take place on their property but on the property of Family B.  Hence, the exemption under section 15(9) of the ORVA would not apply and the incident would qualify as an accident under the Schedule. 

The complicating factors in this case are that prior to the incident, Family A purchased the property from Family B with a closing date of August 19, 2015, about a month after the accident.  Significantly, the parties agree that on July 11, 2015 (the date of the incident) Family B were the sole owners of the property and that the trail where the incident took place was within the boundaries of that property.  However, the parties disagreed on the ownership of the ATV at the time of the incident.  JT submitted that Family A had a verbal agreement with Family B to purchase the ATV along with some other chattels on the property.

The Arbitrator found the evidence submitted by JT with respect to ownership insufficient.  For that reason, the Arbitrator did not find that JT has met the burden of proof based on a balance of probabilities that Family A owned the ATV on the date of the incident. He has failed to meet all three criteria of the Adam’s test.

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