In Beaudin v. Travelers Insurance Company of Canada, 2022 ONCA 806 (CanLII), Justice Coroza for Court of Appeal upheld the Divisional Court’s decision that the respondent, who was catastrophically injured in a dirt bike accident in a closed course competition, was eligible for statutory accident benefits under the Statutory Accident Benefits Schedule (the “SABs”) of the Insurance Act. Justice Coroza held that the Divisional Court’s decision was consistent with the case law and the modern approach to statutory interpretation (as set out in Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC),  1 S.C.R. 27) in deciding that the respondent’s injury occurred as a result of an “accident” through the use of an automobile” as defined in the Insurance Act.
In 2017 the respondent was rendered paraplegic as a result of his participation in a closed course dirt bike competition, on a track, in a sanctioned event. The respondent’s automobile insurance policy was with the appellant insurer (the “insurer”), but his dirt bike was not listed as an insured vehicle on the policy. The respondent applied to his auto insurer for statutory accident benefits and was denied coverage on the basis that the incident was not an “accident” as defined in section 3 the SABs because the respondent’s dirt bike was not an “automobile” within the meaning of s. 224(1) of the Insurance Act, and s. 3(1) of the SABs which states that an “accident” must involve “the use or operation of an automobile”.[emphasis mine]
The respondent unsuccessfully applied to the LAT for entitlement to accident benefits. The LAT found that a dirt bike driven in any closed course competition was exempt from the Off-Road Vehicles Act (“ORVA”) and was therefore not an “automobile” as defined in the Insurance Act. It followed that Mr. Beaudin’s injuries and impairments were not directly caused by the use or operation of an “automobile” and thus he was not involved in an “accident” that satisfies the SABS definition.
On a reconsideration hearing, the LAT’s decision was set aside by the Associate Chair Batty of the LAT. The respondent was found eligible for accident benefits as Associate Chair Batty found that the exemption under the ORVA only applied to closed course competitions that were sponsored by a motorcycle association. The Associate Chair held that the first adjudicator erred in holding that the purpose of the ORVA was to protect the public when off-road vehicles are driven in public areas because a narrow interpretation of the exemption was consistent with the legislative intent behind Ontario’s automobile insurance scheme requiring universal insurance coverage, subject to limited exceptions.
The Divisional Court dismissed the insurer’s appeal of the reconsideration decision, finding that the Associate Chair was correct in applying a contextual interpretative approach in interpreting s. 2(1)5 of Regulation 863.
Issues before the Court of Appeal:
1. Did the Divisional Court err by concluding that the Court in Benson v. Belair Insurance Company Inc.(“Benson”) had already ruled that only sponsored closed course competitions are exempt from the ORVA?
2. Did the Divisional Court err in its application of Matheson v. Lewis (“Matheson”) and subsequently in accepting the Associate Chair’s conclusion that the purpose of the ORVA is to promote universal insurance coverage for all drivers of off-road vehicles?
3. Did the Divisional Court err in failing to properly interpret the ORVA within the entire legislative scheme of auto insurance?
Issue 1: Did the Divisional Court err by concluding that the Court in Benson had already ruled that only sponsored closed course competitions are exempt from the ORVA?
Justice Coroza, for the unanimous Court of Appeal, held that the Divisional Court erred by concluding that the Court in Benson had previously ruled that only sponsored closed course competitions are exempt from the ORVA. However, Justice Coroza found that this error was inconsequential, as the Divisional Court’s interpretation of the obiter in Benson was consistent with the purposes of the overall scheme of automobile insurance.
Issue 2: Did the Divisional Court err in its application of Matheson and subsequently in accepting the Associate Chair’s conclusion that the purpose of the ORVA is to promote universal insurance coverage for all drivers of off-road vehicles?
Justice Coroza held that the Divisional Court did not err in its application of Matheson or in accepting the Associate Chair’s conclusion that the purpose of the ORVA is to promote universal insurance coverage for all drivers of off-road vehicles. Justice Coroza stated that any interpretation of the ORVA must keep in mind that it is just one piece of a comprehensive scheme of automobile insurance that must be read harmoniously with other legislation that makes up that scheme. The goal of the statutory automobile insurance scheme is to protect victims of automobile accidents by promoting universal coverage. Justice Coroza concluded that one of the ORVA’s purposes is to promote the safe operation of off-road vehicles, while another is to protect innocent victims of automobile accidents through the imposition of mandatory insurance.
Justice Coroza noted that although Matheson was decided in the context of driving on a highway, the facts underlying Matheson do not detract from the fact that if drivers without insurance are in an accident, they are faced with a serious risk of not being able to obtain accident benefits.
Justice Coroza held that the conclusion that sponsorship is required for closed course competitions to be exempt from the ORVA aligns with Matheson and the principle of statutory interpretation that harmony should be achieved between the various statutes that relate to the same subject matter.
Issue 3: Did the Divisional Court err in failing to properly interpret the ORVA within the entire legislative scheme of auto insurance?
Justice Coroza held that the Divisional Court’s conclusion that only sponsored closed course competitions and rallies are exempt from the provisions of the ORVA is correct in light of the context and purpose of the entire legislative scheme.
Further, an interpretation of s. 2(1)5 that exempts participants in all closed course competitions regardless of sponsorship is inconsistent with the remedial purposes of the ORVA. Justice Coroza stated that this interpretation is supported by s. 1 of Regulation 863 which defines a “motorcycle association” as a motorcycle club or association that has (or is affiliated with a motorcycle club or association that has): first, a published constitution and, second, a membership roster of more than twenty-four persons. The organizations must have a public constitution, are organized, and contain several members. Justice Coroza found that permitting an exemption only for sponsored events aligns with the public safety focus of the ORVA. Finally, Justice Corozaheld that the Divisional Court’s interpretation makes sense when one considers the protections that these types of sponsored events provide to participants and the general public.
It should be noted that the private for profit organizers of the sanctioned event were found at first instance by the LAT to have not been a “motorcycle association”, with that fact not being subject to further review on appeal.
The Court of Appeal’s decision interprets the ORVA in the context of promoting the protection of victims of automobile accidents and the exemption is to be read narrowly – this is consistent with the purpose of the ORVA. The result that someone involved in a closed course dirt bike competition, on a track, in a sanctioned event, that has been rendered paraplegic as a result, is entitled to SABs extends the reach of statutory accident benefits.
The facts of this case are unique, but the implications of the decision are far reaching. As raised during the oral argument by the insurer, the practical effect of the Court of Appeal’s decision is that insurers would be required to provide a liability policy to participants and risks in uninsurable situations.