Unusual Suspects

The Supreme Court of Canada is currently considering two cases that explore the notion of the “indirect” use of an automobile. One involves an individual who was injured by a gunshot; the second involves an individual injured by a boulder dropped from an overpass. The question before the court is whether the applicable automobile insurance policy would indemnify the individual for the injuries suffered.

BACKGROUND

In Herbison v. Lumbermens Mutual Casualty Co., an insured and his wife drove to a hunting site just before sunrise. The insured saw movement in the woods, illuminated by the headlights of the insured’s automobile. Believing the movement to be that of a deer, the insured shot another hunter. The Ontario Court of Appeal later confirmed a causal relationship existed between the injured hunter’s damages and the insured’s use or operation of his truck, such that the insured’s automobile insurance policy indemnified the injured hunter.

In a second tragic situation, Vytlingam (Litigation Guardian of) v. Farmer, two youths used a vehicle to transport boulders to an overpass. There, they dropped boulders onto the highway beneath them, injuring the insured when a boulder hit his windshield. The insured claimed against his automobile insurance policy under the underinsured motorist endorsement for the damages he was otherwise entitled to from the youths. The Ontario Court of Appeal similarly found a sufficient connection existed between the use of the underinsured automobile and the throwing of the boulder, concluding that the automobile’s operation contributed to the injuries. The Supreme Court of Canada heard appeals from both of these decisions on Dec. 11, 2006. To date, a judgment has not yet been delivered.

‘INDIRECT’ AUTO USE: THE LEGAL TEST

Recent case law and legislative amendments have broadened coverage for injuries arising directly or indirectly from the use or operation of an automobile. What does it mean for an injury to arise out of the use or operation of a vehicle? What does the inclusion of the term “indirectly” mean to the cases pending before our highest court and other matters that turn on this terminology?

The leading decision on the application of the provision “arises out of the ownership, use or operation of a vehicle” is the Supreme Court of Canada’s unanimous decision in Amos v. Insurance Corp. of British Columbia. In that case, Supreme Court of Canada Justice John Major (as he was at the time) set out the following, two-part test:

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

* 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?

In Amos, a gang attacked the insured while the insured was driving his van. The insured was then shot when trying to distance himself from his assailants. Major found the accident clearly resulted from the ordinary use to which automobiles are put; in this case, he was simply driving down the street. Major further confirmed the “… motor vehicle need not be the instrument of the injury to satisfy the causal connection requirement.” There-fore, Major found the two-part test was satisfied.

With regards to the scope of the tests to be applied, Major wrote in Amos: “Invariably, each case must be decided on its own facts, applying the two-part test outlined above. It is not possible to predict every circumstance where an injury can be said to arise out of the ownership, use or operation of a vehicle. A true random shooting not related to the use or operation of a vehicle under the present wording of s. 79(1) (of the Insurance (Motor Vehicle) Act) is not covered, but where a nexus of connection between the injuries and the vehicle exists, the injured plaintiff is entitled to coverage where some connection is found between ownership, use or operation of a vehicle and the injuries sustained as a result of an accident.”

The deciding factor in Amos was that the shooting appeared to be the direct result of the assailants’ failed attempt to gain entry into the van.

APPLICATION OF THE TEST

Decisions that have considered the Amos test are decidedly fact specific. In one case in which a child was pulled off the school bus and beaten, the court found the test was not satisfied. The court ruled the injury was not related to being transported by a bus. In another case in which a diabetic bus passenger suffered injuries during an extended trip (after the bus driver delayed seeking medical assistance), the court found the test was satisfied because the use of the vehicle contributed to the injuries. In a road-rage case, the court found the insured’s use of her vehicle caused another driver to become angry, resulting in an assault and thereby satisfying the test. This test applies not only to personal injuries, but also to property damage. In a pollution case, the court found the test was satisfied because there was a nexus between the damage to the claimant’s house and the use or operation of the fuel truck, which pumped oil into a leaking supply system.

A review of these and other cases that apply the Amos test demonstrates the purpose test is easily satisfied when the accident arises from an activity to which a vehicle might be put. The causation test is likewise easily satisfied as long as there is some causal connection – not necessarily direct or proximate – between the injury and the use or operation of the vehicle. The language of the relevant dispositions in the preceding cases, like Amos, do not include the phrase “arising … directly or indirectly” from the use or operation of a motor vehicle, unlike the two Ontario cases pending before the Supreme Court of Canada.

INDIRECT USE

In Vytlingam, Ontario Court of Appeal Justice Jean MacFarland, writing for the majority, agreed with Ontario Superior Court Justice Sidney Lederman in the matter of Saharkhis v. Non-Marine Underwriters, Lloyd’s London that “the use of the word ‘indirectly’ imports a relaxed causation requirement comparable to the one suggested by Major, J. in Amos.” Although the Ontario Court of Appeal on the one hand, confirmed the relaxed causation requirement proposed by Major J. in Amos, it was nevertheless unwilling to suggest the inclusion of the word “indirectly” further relaxed the causal connection requirement beyond that found in Amos.

However, in Herbison, Ontario, Court of Appeal Justice Stephen Borins, writing for the majority, seemed to suggest the term “indirectly” has further relaxed the causal requirement beyond that found in Amos when he wrote: “… the phrase ‘directly or indirectly’ in s. 239(1)(b) of the Insurance Act has effectively removed the requirement of an unbroken chain of causation from the causation test …” Borins further discussed the effect of the inclusion of the word “indirectly,” saying that: “As this court has recognized, the 1990 amendment providing coverage for damages arising directly or indirectly from the use or operation of an automobile has significantly broadened coverage.” See, for example, the court’s decision in Lefor (Litigation Guardian of) v. McClure.

It is difficult to predict how the Supreme Court of Canada will decide the two Ontario Court of Appeal cases currently pending. But one thing is sure: the courts have consistently broadened and relaxed the coverage test. Now, with the inclusion of the term “indirectly” in certain legislation, the task of convincing a court that there should be coverage for injuries is even simpler.

Jurisdictions that have not amended their legislation to include “indirectly” are likely to follow the Ontario legislature and adjust their more rigid legislation to follow this recent trend toward expanded cove
rage. It makes one wonder how far the courts are willing to go. Will there be a point in the future, for example, when the courts find coverage based on the simple fact that there was an automobile in the vicinity? Depending on who your clients are, this current trend towards expanded coverage could be a welcome advancement or an impossible dilemma.