Overview
The Ontario Court of Appeal’s recent decision in Martin v. 2064324 Ontario Inc.1 will be of interest to all Ontario automobile insurers and reflects the judicial trend of interpreting coverage in accordance with the reasonable expectations of both the insured and the insurer. Martin clarifies how to determine whether injuries are covered by Ontario’s Statutory Accident Benefits (SABs) regime or the indemnification provisions of the Insurance Act.
The Facts
In the early hours of April 23, 2005, Paul Martin had just finished work at a Toronto nightclub. As he was loading his car in the parking lot, a man approached and asked him for a cigarette. When Martin replied that he did not have cigarettes, he was pushed against his own vehicle. A second man appeared out of the darkness. The assailants sprayed Martin with pepper-spray, searched him and then forced him into the trunk of the car, injuring his head in the process.
Unfortunately, the assailants were not accomplished motorists. Discovering the car’s manual transmission, they took Martin out of the trunk and forced him to change gears while hitting him about the head. The party proceeded to another parking lot where Martin was taken out of the car and beaten. For good measure, one of the men broke Martin’s fingers with a blunt object.
The assailants then attempted to flee in the car. In doing so, they drove over Martin’s right foot before stalling the vehicle. The assailants gave Martin one last blast of pepper-spray and ran away, leaving Martin bruised and broken.
Martin submitted claims to his auto insurer, Certas (the insurer), for SABs benefits and indemnity under the unidentified, uninsured and underinsured coverage provisions of his liability insurance policy. When the claims were denied, Martin commenced an action against the night club, the assailants and the insurer.
The Summary Judgment Motion
The insurer moved for summary judgment, arguing that (1) Martin was not involved in an “accident” as defined in the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the 1996 Schedule) which would entitle him to SABs and (2) that Martin’s injuries were not caused, directly or indirectly, by the use or operation of an automobile within the meaning of the Insurance Act (the Act) which would trigger the indemnity provisions of the policy.2
The motion judge denied the motion and declared that Martin was entitled to SABs as his injuries flowed from an “accident” as defined in the 1996 Schedule.3 The insurer appealed.
The Appeal
The 1996 Schedule defines an “accident” as “an incident in which the use or operation of an automobile directly causes an impairment”.4 On appeal, the insurer argued that Martin’s injuries were caused by the assailants, not the use or operation of the vehicle, and therefore did not fall within the definition.
In reply, Martin argued that since his vehicle was used during the assaults, including as the venue for some of the assaults, his injuries arose out of the “use or operation” of a motor vehicle and thus fell within the definition.
The Court of Appeal noted that the two part Amos5 test is applicable in determining whether the injuries arise out of the ownership, use or operation of an automobile. The test requires answering:
(2) whether there was a causal relationship between the injuries and the ownership, use or operation of the vehicle or whether the connection between the injuries and the ownership, use or operation of the vehicle was merely incidental (the causation branch)?
The motions judge had held that the purpose branch of the Amos test was satisfied and the insurer did not challenge this finding on appeal. The issue for the Court of Appeal was, therefore, whether the causation branch entitled Martin to coverage.
The court held, with one exception, that because the actions of the assailants directly caused Martin’s injuries (as opposed to the use or operation of the vehicle) Martin was not injured as a result of an “accident” as defined. In particular, the court held, as in its recent decision in Downer,6 that the plaintiff had to do more than simply allege that the automobile was the location of the injury; instead, a plaintiff must show that the use or operation of the automobile directly caused the injury to meet the definition of an “accident”.7
In Martin, the court held that the assaults in the nightclub parking lot were distinct acts independent from the use or operation of the vehicle.8 Similarly, the head injury suffered when Martin was forced into the trunk was not in the “ordinary course” of using the vehicle. Although the injury involved part of the car (i.e., the trunk) the use was “merely ancillary” to the assault (i.e., forcing him into the trunk) which was the direct cause of the injury.9 Likewise, the series of assaults in the second parking lot had nothing to do with the use or operation of the vehicle.
Further, the court held that hitting Martin in the head while forcing him to change gears was not a normal risk of use or operation of a vehicle.10 For this reason, the use or operation of the vehicle was not, as a matter of law, a direct cause of the majority of Martin’s injuries.11
However, the court held that a trial was required to decide whether the injury sustained to Martin’s right foot when the assailants ran him over was an “accident.” Unlike the other injuries, the operation of the car was the direct cause of the injury to Martin’s foot.12
Once through the SABs door…
Martin argued that if his foot injury was captured by the definition of an “accident” then he was entitled to SABs for all of his injuries. The Court of Appeal rejected this argument, finding that on a plain reading of the 1996 Schedule, only those injuries which are directly caused by the use or operation of an automobile are captured in the definition of “accident.”13
Indemnity
Section 239(1) of the Act indemnifies an owner from loss or damage arising from the ownership or “directly or indirectly” from the use or operation of the automobile.
The leading decisions of the Supreme Court14 require an unbroken chain of causation linking the conduct of the motorist, as a motorist, to the injuries before the indemnification provisions are applicable. In Martin, aside from the injury to his right foot, the assaults were not inflicted as a result of the conduct of Martin’s assailants as motorists. The mere fact that the car was nearby when Martin was assaulted or that some assaults took place in the vehicle did not make the vehicle a direct or indirect cause of his injuries and entitle him to indemnification.15
Gowlings’ Analysis
Martin should provide comfort to Ontario automobile insurers that the court is unwilling to stretch to find coverage for injuries that are only tangentially associated with the use of an automobile. Moreover, the decision demonstrates that the court is continuing to interpret insurance policies in a way that gives effect to reasonable expectations of both the insured and the insurer.
The Martin decision follows the trend in Ontario case law towards a narrow interpretation of the Statutory Accident Benefits regulations and the indemnification provisions of the Act. Successive legislatures have narrowed the application of the Statutory Accident Benefits schedule and the Martin decision gives effect to the narrower language.
Further, the court has reaffirmed the requirement that an insured must show a clear and unbroken causal link between the use of the vehicle and the injuries. It is not enough to show that the vehicle was merely the venue of an injury; instead the use or operation of the vehicle must clearly be a direct or indirect cause of the injury.
Finally, the Martin decision clarifies that even if one injury in a sequence of events can be directly attributed to the use or operation of a vehicle and qualify as an “accident,” it does not follow that a claimant is entitled to SABs coverage for all injuries suffered. Interestingly, the decision suggests that the court will analyse the cause of each injury individually in determining whether there is coverage. This approach, again, considerably limits an insurer’s exposure where use of the vehicle may be the cause of some, but not all, of the insured’s injuries. Further, it suggests that each injury should be analysed as an individual transaction when determining if there is coverage under the SABs regulation.
Footnotes
1 2013 ONCA 19 [Martin].
2 Martin, para. 13.
3 Martin, para. 15.
4 Martin, para. 17 (emphasis added).
5 Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405.
6 Martin, para. 48.
7 Martin para 45, citing Downer, at para. 39.
8 Martin, para. 52 – 53.
9 Martin, para. 54.
10 Martin, para. 55 - 57.
11 Martin, para. 57.
12 Martin, para. 59 -61.
13 Martin, para. 63.
14 Citadel General Assurance Co. v. Vytlingam, 2007 SCC 46 and Lumbermens Mutual Casualty Co. v. Herbison, 2007 SCC 47.
15 Martin, para. 71 – 75.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
