A Tale of Two Cars

“I know a lot about cars, man. I can look at any car’s headlights and tell you exactly which way it’s coming.” – Mitch Hedberg, comedian

The Financial Services Commission of Ontario (FSCO) has decided that 2011 will be the “Year of the Automobile.” Herein is a tale of two incidents involving two very different types of machines on wheels. In both cases, people were injured while riding on such machines. They each applied to different automobile insurers for accident benefits. Their claims were denied, as accident benefits are meant for victims of automobile accidents. Both insurers decided that their respective claimants were not involved in automobile accidents – or so they thought.

How to make an automobile

The Ontario Court of Appeal held in Adams v. Pineland Amusements that the following three-part test must be used to determine whether a vehicle is an automobile:
(i) Is the vehicle an automobile in ordinary parlance?
(ii) If not, is the vehicle defined as an automobile in the wording of the insurance policy?
(iii) If not, does the vehicle fall within any enlarged definition of “automobile” in any relevant statute?
With respect to the third part, section 224(1) of the Insurance Act provides the following definition for the word automobile: “”automobile” includes, (a) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and (b) a vehicle prescribed by regulation to be an automobile.”

Therefore, where a vehicle isn’t an automobile in ordinary parlance and is otherwise not defined as an automobile in the policy, it can become an automobile if it meets the criteria in section 224(1) of the Insurance Act: Either it is prescribed by regulation to be an automobile or it is a “motor vehicle” required under any other Act to be insured under an auto policy. Of course, the Insurance Act does not define motor vehicle, but the Highway Traffic Act does. With some exceptions, the definition of motor vehicle includes any vehicle propelled or driven otherwise than by muscular power.

So a motor vehicle that is required by law to be insured is considered to be an automobile for the purpose of automobile insurance in Ontario. With that in mind, our tale begins:

An automobile by any other name: Buckle v. MVACF

Wilhelmina Margaret Buckle was injured when she fell off a moving golf cart. By all accounts, at the time of the accident the golf cart was being operated on a public highway illegally: It was unlicensed, unregistered and uninsured. The parties agreed that the golf cart was neither an automobile in ordinary parlance nor defined as an automobile in the policy. The arbitrator found that the golf cart was a motor vehicle, as it was self-propelled. Therefore, the arbitrator had to decide whether the golf cart was required to be insured at the time of the accident.

The arbitrator found that because the golf cart was a motor vehicle, under the Compulsory Automobile Insurance Act it was required to be insured at the time of the accident because it was travelling on a highway when the accident occurred. Therefore, pursuant to the definition of automobile under section 224(1) of the Insurance Act, the golf cart was an automobile at the time of the accident.

We can assume that the golf cart returned to being a non-automobile once it left the highway.

Arbitrator pulls automobile from pocket: Bouchard v. Motors  

Cassondra Bouchard had a friend named Kristin Stratton, who owned a couple of pocket bikes (described as gas powered miniature motorcycles). Stratton would ride the bikes on his own property and on a friend’s property.

On Jan. 13, 2008, Bouchard was riding one of the pocket bikes on Kristin’s property, when she collided with one of Kristin’s other pocket bikes and sustained injuries.

Working with an agreed statement of facts, the arbitrator determined that the issue was whether the pocket bike was required to be insured under a motor vehicle liability policy. First, she found that the pocket bike was an off-road vehicle under the Off Road Vehicles Act. Next, she noted that pursuant to section 15 of the Act, the pocket bike was required to be insured under a motor vehicle liability policy unless it was driven on land occupied by the owner (Stratton) of the bike.

Even though the accident happened on Stratton’s land, the arbitrator found that it was nevertheless required to be insured. Her decision apparently turned on the evidence that Stratton would drive his pocket bikes at a friend’s house. She stated, “[c]learly the legislature intended that off-road vehicles be insured unless they were used solely on lands occupied by the owner.” [emphasis added].

In other words, according to this decision it appears that once the owner of an off-road vehicle uses the vehicle on lands not occupied by them, the off-road vehicle transforms into an automobile forever. There’s no turning back.

Would you insure my three-year-old?

At this rate, it seems that the “ordinary parlance” test has gone out the window (of a moving automobile). Suppose my three-year-old drives his Power Wheel Diego Jeep Wrangler on the road. It would likely meet the definition of motor vehicle under the Highway Traffic Act because it is a “vehicle propelled or driven otherwise than by muscular power.” Therefore, while on the road it would also require auto insurance, pursuant to the Compulsory Automobile Insurance Act, and, accordingly, it would be considered to be an automobile under the Insurance Act. Go Diego Go!

Daniel Strigberger is a partner in the insurance litigation group in the Waterloo office of Miller Thomson LLP.