Amos v. Insurance Corp. of British Columbia

Major J. -- This appeal involves the interpretation of s. 79(1) (in Part VII) of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, as amended.

Section 79(1) entitles insured motorists to no-fault death and disability benefits under the administration of the respondent, the Insurance Corporation of British Columbia ("ICBC"). The appellant seeks first-party disability benefits from ICBC under Part VII of the Revised Regulation. The British Columbia trial and appellate courts ruled that the appellant is not entitled to these statutory benefits because his injuries did not arise out of the ownership, use or operation of his vehicle, as provided for in s. 79(1). I respectfully disagree.

On August 21, 1991, the appellant, a Canadian citizen who resided in Vancouver, British Columbia, was attacked by a gang of six people while driving his van in East Palo Alto, California.

Prior to the attack, as the appellant pulled away from the intersection where he was stopped, he noticed three men crossing from the median into the path of his van. He slowed down and steered to the right in an attempt to avoid them. As he did so, a fourth man jumped from behind a bush at the right side of the street and moved in front of the van. The appellant braked to avoid hitting him but did not bring the van to a stop. Two more men then emerged from the right side of the street and moved toward the passenger side of the van. With his van surrounded by six men, the appellant locked the doors on both sides of the van and kept it moving slowly ahead. The assailants commenced pounding on the door windows on both sides of the van. The glass on the driver's door shattered but was held in place by its frame. Another man then walked out in front of the van and pointed a gun at the appellant. As the appellant tried to duck from the line of fire, that person returned to the driver's side of the van, where he used the gun to clear away the shattered glass in the window. As the man with the gun was clearing the glass from the window, the appellant felt a sudden change come over his body. He no longer had any control of his legs and he was having difficulty breathing. He saw blood on his hand and realized he had been wounded although he had not heard shots being fired.

The appellant was able to keep the van moving by using both hands to push down on his right leg and depress the accelerator. Somehow he was able to manipulate himself to control the direction of the van. When he had distanced himself from the assailants by several blocks he brought the van to a stop by using the van's emergency hand brake. He obtained assistance and was transported to a hospital.

In the course of the attack, there were at least two shots fired. One bullet was found lodged in the glove compartment of the van. The second bullet, fired through the broken window of the driver's door, struck the appellant's spinal cord at the T8-T9 level. The assailants escaped.

The appellant, while escaping, sustained serious, disabling and permanent injuries, both physical and mental. His capacity to earn his livelihood has been substantially destroyed, and he will be permanently dependent upon others for his subsistence, care and maintenance.

The appellant was insured by the respondent under a standard automobile insurance policy. He applied to the respondent for medical and other benefits under Part VII of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act. The respondent denied liability, and the appellant commenced an action for a declaration that he was entitled to the benefits claimed. On February 5, 1993, the Supreme Court of British Columbia dismissed the appellant's action. On March 28, 1994, the Court of Appeal for British Columbia dismissed the appellant's appeal.

Part VII of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, as am. by B.C. Reg. 335/84, Schedule, item 19, and B.C. Reg. 379/85, Schedule, item 31:

79. (1) Subject to subsection (2) and sections 80 to 88, 90, 92, 100, 101 and 104, the corporation shall pay benefits to an insured in respect of death or injury caused by an accident that arises out of the ownership, use or operation of a vehicle and that occurs in Canada or the United States of America or on a vessel travelling between Canada and the United States of America. . . .

The trial judge stated, at p. 278, that the issue was whether the appellant's accident "(arose) out of the ownership, use or operation of a vehicle" (the respondent had conceded that the injuries were caused by an "accident"). He noted that the phrase "arising out of the ownership, use or operation of a vehicle" had been judicially considered. The two leading Canadian cases are Stevenson v. Reliance Petroleum Ltd., [1956] S.C.R. 936, and Law, Union & Rock Insurance Co. v. Moore's Taxi Ltd., [1960] S.C.R. 80. The first established the "purpose test"; the second, the "chain of causation" test. The court concluded that the purpose and causal connection tests were complementary, meaning that both tests had to be satisfied before a plaintiff could claim Part VII benefits. The court stated at p. 281:

If an accident resulting in injuries or damage does not result from some "ordinary and well known activit(y) to which automobiles are put" that will be the end of the matter. However, if a plaintiff is able to satisfy the purpose test, he or she will also have to establish that the chain of causation between the ownership, use or operation of the vehicle and the injuries or damage sustained was not broken by some intervening act.

The trial judge held that mere presence in a vehicle when injuries are sustained is not, of itself, sufficient to found a causal link between the injuries and the ownership, use or operation of a vehicle and concluded at pp. 283-84:

In the present case I am unable to find that the injuries sustained by [the appellant] resulted in any way from an accident, "which the common judgment in ordinary language would attribute to the utilization of an automobile." He was the innocent victim of an act of wanton criminal violence. There is, however, no evidence that his assailants were attempting to hijack his van or that the van itself in any way contributed to or aggravated his injuries.

. . .

. . . the injuries were caused not by anything [the appellant] did as owner of his van but by his attackers. The van was merely the situs of the attack.

The Court of Appeal concluded that the trial judge was correct in his interpretation of s. 79(1) and the application of s. 79(1) to the facts before him. It was emphasized that the words "arising out of" required a causal or consequential relationship between the accident and the ownership, use or operation of the vehicle, although a direct or proximate causal relationship was not required. The question then became one of determining the extent of the causal link required by the use of the words "arising out of". The Court of Appeal dismissed the appellant's appeal as follows, at pp. 191-92:

In my view, it is not sufficient that the accident happens while the injured party is using or operating the vehicle. Nor is it sufficient that the injured party simply happens to be in the vehicle at the time the accident occurs if the accident bears no reasonable relationship to the ownership, use or operation of the vehicle. . . . [T]he accident must be one "which the common judgment in ordinary language would attribute to the utilization of an automobile".

. . .

I am not persuaded that [the appellant's] ownership of the van had anything to do with the injuries he suffered in this apparently random attack upon him. Rather, as stated by the [trial] judge, [the appellant's] vehicle was simply the situs of the attack.

In the result, I agree . . . that s. 79(1) does not provide coverage to [the appellant] in these circumstances. [Emphasis in original.]

1. Did the Court of Appeal err in adopting a "causal connection" test in interpreting s. 79(1) of the Revised Regulation?

2. In any event, did a causal connection exist between the accident and the ownership, use or operation of the appellant's van within the meaning of s. 79(1)?

3. Did the Court of Appeal err in holding that the appellant's van was merely the situs of a shooting and not causally connected to his injuries?

This appeal as previously noted turns on the interpretation of s. 79(1) of the Regulation. The appellant submitted that the nature of the no-fault benefits scheme created by the legislation means that s. 79(1) must be construed in a broad and liberal manner and that its interpretation should not be affected by previous jurisprudence dealing with private policies of insurance.

To understand the scope of s. 79(1), it is useful to consider its legislative evolution. Pigeon J. in Gravel v. City of St-Léonard, [1978] 1 S.C.R. 660, stated at p. 667:

. . . prior enactments may throw some light on the intention of the legislature in repealing, amending, replacing or adding to [a statute].

Originally, s. 7.01 in Part VII of Regulation No. 1 Pursuant to the Automobile Insurance Act, B.C. Reg. 428/73, provided benefits for death and disability where the injuries were caused by an accident "arising from the use or operation of a motor-vehicle". Subsequently, B.C. Reg. 447/83, s. 79(a) stated that benefits would be paid in respect of death or injury caused by an accident that "arises from the operation of a vehicle". The final version of s. 79 (amended by B.C. Reg. 379/85) broadened the wording, providing benefits in respect of death or injury caused by an accident that "arises out of the ownership, use or operation of a vehicle". The most recent amendment shows a legislative intent to establish broader coverage, by the addition of "ownership" and "use", which mirrors the wording found in many private policies of insurance.

Driedger on the Construction of Statutes (3rd ed. 1994), at p. 301, states: "[w]hen used in legislation, common law terms and concepts are presumed to retain their common law meaning, subject to any definition supplied by the legislature" (see R. v. Holmes, [1988] 1 S.C.R. 914, and Woelk v. Halvorson, [1980] 2 S.C.R. 430). There is no indication that the legislature has provided an alternative definition for the phrase in question, or has intended to modify the judicial interpretation given to that phrase in the case law. Consequently, prior jurisprudence concerning whether an injury arises out of the ownership, use or operation of a vehicle is useful in interpreting the provisions of s. 79(1). This approach is supported by Brown and Menezes, Insurance Law in Canada (2nd ed. 1991), at p. 158:

Automobile insurance has evolved to a point where statutory and contractual insurance doctrines converge in both private/competitive and public/monopoly systems. While legislators do intend to get the cost and other efficiencies when a monopoly is introduced, it does not follow that they also intend to re-invent the language. Where identical or similar concepts to private insurance are made a part of public plans it ought to be assumed that legislators intend identical or similar results.

The no-fault character of the benefits in question does not change the interpretation of s. 79(1). No-fault means that the respondent's liability to pay benefits occurs when injury arises out of the ownership, use or operation of a vehicle, regardless of the presence or absence of fault. The injury must still arise out of the ownership, use or operation. However, this does not mean that a narrow, technical interpretation is dictated. Traditionally, the provisions providing coverage in private policies of insurance have been interpreted broadly in favour of the insured, and exclusions interpreted strictly and narrowly against the insurer (Brown and Menezes, at p. 131). In Indemnity Insurance Co. v. Excel Cleaning Service, [1954] S.C.R. 169, it was held that the construction given to a policy of insurance must not nullify the purpose for which the insurance was sold.

In the same way, while s. 79(1) must not be stretched beyond its plain and ordinary meaning, it ought not to be given a technical construction that defeats the object and insuring intent of the legislation providing coverage. The two-part test to be applied to interpreting this section is:

1. Did the accident result from the ordinary and well-known activities to which automobiles are put?

2. Is there some nexus or causal relationship (not necessarily a 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 or fortuitous?

This two-part test summarizes the case law interpreting the phrase "arising out of the ownership, use or operation of a vehicle", and encompasses both the "purpose" and "causation" tests posited in the jurisprudence.

The "purpose" test, as it is now known, can be traced back to Stevenson v. Reliance Petroleum Ltd., supra. That case involved the negligence of the driver of the insured, a company engaged in the distribution of oil and gas, which led to gasoline overflowing, igniting and destroying the premises. A majority of this Court held that the accident arose out of the use or operation of a motor vehicle, per Rand J. at p. 941:

An analogous "use", as distinguished from "operation", is exemplified in the case of a bus. The undertaking in such a case includes the entrance and exit to and from the bus of passengers. If the steps are defective and a passenger is injured, could it be said that injury did not arise out of the "use"? The expression "use or operation" would or should, in my opinion, convey to one reading it all accidents resulting from the ordinary and well-known activities to which automobiles are put, all accidents which the common judgment in ordinary language would attribute to the utilization of an automobile as a means of different forms of accommodation or service.

The appellant here was driving his van down a street; the accident clearly resulted "from the ordinary and well-known activities to which automobiles are put". The first part of the two-part test is satisfied.

In Canada, the "causation test" had its genesis in Law, Union & Rock Insurance Co. v. Moore's Taxi Ltd., supra. In that case, the insured taxi company held a contract to transport mentally handicapped children to and from school. The drivers were to take the children directly to their homes from school, and not let any child out on the side of the street opposite his or her home. One of the drivers, in breach of that arrangement, stopped on the opposite side of the street. The child, while crossing the street alone, was hit by a truck and severely injured. The issue was whether the insured's liability arose out of the use or operation of a motor vehicle. The general liability insurer disputed liability, claiming the accident arose out of the use or operation of the taxi, and thus was covered by the automobile insurance. It was held that the insured's liability arose from a breach of duty that occurred after the vehicle was stopped, when the child crossed the street unescorted. This duty was a contractual duty, and had nothing to do with the use or operation of the insured's vehicle, per Ritchie J. at pp. 84-85:

. . . the words "claims arising out of . . . the ownership, use or operation . . . of any motor vehicle" as used in this exclusion can only be construed as referring to claims based upon circumstances in which it is possible to trace a continuous chain of causation unbroken by the interposition of a new act of negligence and stretching between the negligent use and operation of a motor vehicle on the one hand and the injuries sustained by the claimant on the other. In the present case the motor vehicle was stationary at the time of the accident and the chain of causation originating with its use was severed by the intervening negligence of the taxi driver whose failure to escort the boy across the street was the factor giving rise to the [insured]'s liability.

Subsequent cases which illustrate the application of the "causation" principle include Johnstone v. Lee and Insurance Corp. of British Columbia (1979), 17 B.C.L.R. 324 (S.C.), Yurkowski v. Federated Mutual Implement and Hardware Insurance Co., [1975] 4 W.W.R. 689 (B.C.S.C.), and Fraser Valley Taxi Cabs Ltd. v. Insurance Corp. of British Columbia (1993), 75 B.C.L.R. (2d) 94 (C.A.).