There is a new Superior Court decision answering the question of whether a particular uninsured all-terrain vehicle was required to be insured at the time of a motor vehicle accident. Although much of the decision is based on the facts of this case, the analysis could have an impact on other cases where insurers try to deny coverage to occupants of uninsured vehicles.

In Matheson v. Lewis, the plaintiff farmer used his Honda ATV on October 11, 2008 to travel from one part of his farm to another. The evidence was that he intended to travel for approximately thirty seconds, or less, on a public road in the course of his farming operation, in order to check on his flock of sheep, who are pastured on his property.

While he was on the public road, the defendant Lewis rear-ended Matheson’s ATV with a truck. As a result of the accident, Matheson suffered catastrophic injuries. He sued Lewis et al. in tort. He also sued his insurer, Lanark Mutual, for accident benefits.

The defendants brought a Rule 21 motion for the determination of a question of law raised by a pleading in an action. All the defendants took the position that the plaintiff was driving an uninsured automobile on a public road at the time of the accident. Accordingly, the tort defendants argued that his claim was barred pursuant to section 267.6(1) of theInsurance Act (in a nutshell, that section says that you cannot sue for damages arising from a motor vehicle accident if you were driving an uninsured vehicle at the time of the accident). Meanwhile, the accident benefits carrier Lanark argued that the claimant was not entitled to various specified accident benefits because he was driving an uninsured vehicle at the time of the accident, contrary to section 30 of the Statutory Accident Benefits Schedule(accidents before September 1, 2010).

The judge framed the issue as a question of mixed fact and law: Whether Arthur Matheson’s ATV on October 18th, 2008, was a“self-propelled implement of husbandry”. If so, it would be specifically excluded from Ontario’s compulsory insurance regime. If not, he would be in breach of such regime.

The judge set out the analysis well:

The Compulsory Automobile Insurance Actprovides in section 2(1) that no owner or lessee of a motor vehicle shall operate the motor vehicle on a highway unless the motor vehicle is insured under a contract of automobile insurance. That Act gives motor vehicles the same meaning as under the Highway Traffic Act of Ontario.

The Highway Traffic Act, R.S.O., 1990, c.H.8, s.1, defines “motor vehicles” to include an automobile, a motorcycle, a motor-assisted bicycle unless otherwise indicated in this Act, and any other vehicle propelled or driven otherwise than by muscular power, but does not include a street car or other motor vehicle running only upon rails, a power-assisted bicycle, a motorized snow vehicle, a traction engine, a farm tractor, a self-propelled implement of husbandry or a road-building machine. [emphasis added]

A “self-propelled implement of husbandry” is defined in subsection 1 of the Highway Traffic Act as “a self-propelled vehicle manufactured, designed, redesigned, converted or reconstructed for a specific use in farming”.

In short, if the ATV in question was a “self-propelled implement of husbandry”, it would not have been a “motor vehicle” for the purpose of section 2 of the CAIA and, accordingly, would not have required to be insured under a motor vehicle liability policy.

The plaintiffs filed a wealth of evidence to support their position that the ATV was a “self-propelled implement of husbandry”:Several farmers including the plaintiff prepared affidavits attesting to how this type of ATV was used in farming. There was information from Honda Canada’s Web site describing the history of their ATV and how it had become “an essential part of the great American toolbox”.

The judge concluded at paragraph 51 that the ATV was a “self-propelled implement of husbandry”:

I find that any reasonably informed person about farming in Ontario, particularly beef and sheep husbandry, would readily discern the character and function of the vehicle driven by the Plaintiff, Arthur Matheson, on October 11, 2008, as being an implement manufactured and designed for a specific use in farming and animal husbandry. This is not a question of a specific use intended by this Plaintiff only. Based on the evidence provided in support of the Plaintiff, as referred to above, these machines are marketed and sold widely to farmers, as confirmed by the affidavits of people in the business of actually selling these machines, along with other farm implements.

I agree with the judge’s conclusions that the ATV in question in that case was a “self-propelled implement of husbandry”,which would not have been required to be insured under an automobile policy. It was a “self-propelled implement of husbandry” because it fit the definition.

However, the judge went on to comment on the remedial purpose of the CAIA, noting that if the defendants were successful the innocent claimant would be left without damages or various accident benefits:

The object of the Compulsory Automobile Insurance Act, according to its true intent, meaning and spirit is to protect the public, and specifically innocent people who are injured in motor vehicle accidents. The means implemented to attempt to achieve that end include this extremely harsh civil sanction. It is, of course, essential to have people on a broad base paying premiums into a fund that can be used towards that same purpose. In this particular case, if the Defendants succeed in their position, the injured party who was not at fault in the accident would be denied significant benefits including the right to claim any damages from the negligent party. The Plaintiff, Arthur Matheson, made a calculated decision not to pay what would have been modest insurance premiums on this particular piece of machinery, in view of its character and use. The primary purpose of insuring that vehicle would be to protect himself from liability if he were negligent and protect the innocent victim of his negligence. The secondary purpose would be for him to make a modest contribution towards the funds available in support of the entire insurance scheme. [emphasis added]

This is exactly the point of the “extremely harsh sanction” the statutory scheme: To punish those people who drive without insurance. The sanction in section 2 of the CAIA and section 267.7 is absolute: There is no need to establish that the person knew or ought to have known that they were driving an uninsured vehicle. If the motor vehicle was uninsured when it was supposed to be insured, the sanction applies. Whether Mr. Matheson made a calculated decision not to insure the vehicle has nothing to do with whether the ATV must be insured under a motor vehicle liability policy.

In short, in this case the judge was obviously faced with difficult facts: A sympathetic farmer who used an ATV on a public road for less than 30 seconds was catastrophically injured as a result of a negligent driver who was charged with careless driving, breach of probation, and obstruction of justice. That said, the analysis could have ended with the finding that the ATV was a “self-propelled implement of husbandry” and not whether the CAIA should be interpreted as being remedial to find for the plaintiff.

To borrow from the Divisional Court in Aviva v. Pastore:

“Remedial” means intended as a remedy. In this situation, the problem being remedied is not just to provide benefits, but to do so in a manner that accounts for the impact the provision of those benefits will have on the cost of insurance to the general public. This is not the interpretation of an insurance contract where ambiguity is resolved in favour of the insured (contra proferentem). It is identification of the purpose of the legislation and the interpretation of the legislation in a manner that bears that purpose in mind.

In Matheson, the problem being remedied is not just to allow the plaintiff to pursue a tort action and claim all accident benefits, but to do so in a manner that preserves the object of the CAIA, namely, to ensure people drive only motor vehicles that are insured. There was no need to interpret the CAIA liberally or as remedial to find for the plaintiff, having already found that he was driving a vehicle that did not need to be inusured.

I guess as an insurance lawyer, I get nervous whenever I read a decision where the tribunal interprets a statutory provision as being remedial.

See Matheson, et al, v. Lanark Mutual Insurance Company, et al, 2013 ONSC 2441 (CanLII).