In Unifund Assurance Company v ACE INA Insurance Company, 2017 ONSC 3677 Justice Carole Brown conducted a review of the application of the “transmission of force” doctrine in the context of priority disputes, emphasizing the distinction between scenarios in which stationary objects are propelled into a pedestrian by a third moving vehicle, and those in which two moving vehicles collide.
The parties to the appeal agreed, as per the arbitration agreement executed, that the standard of review in the appeal was one of reasonableness. The appeal was from a decision of Arbitrator Shari Novick with respect to a priority dispute between Unifund Assurance Company (“Unifund”), The Personal Insurance Company (“The Personal”), and ACE INA Insurance (“ACE”). The accident benefit claim in question arose from an accident in which a moving vehicle insured by ACE collided with a left-turning vehicle insured by Unifund, causing each of the vehicles to be propelled in different directions. The ACE vehicle struck the pedestrian claimant. The Unifund vehicle struck a stopped vehicle insured by The Personal. Neither the Unifund vehicle nor The Personal vehicle made contact with the pedestrian claimant, yet the claimant submitted his claim for Statutory Accident Benefits (SABs) to The Personal, and The Personal disputed its liability to pay.
Arbitrator Novick determined that The Personal vehicle was not involved in the incident from which the entitlement to statutory benefits arose, and that instead pursuant to section 268(2)(2)(ii) of the Insurance Act the claimant had recourse for his SABs against the insurer of the automobile that “struck” him, ultimately concluding that this was the Unifund vehicle. In doing so she applied the transmission of force doctrine developed in various priority decisions over the years, and concluded that a person was “struck by” a motor vehicle when that vehicle provided the transmitting force that caused an injury to occur, even when the actual contact was with another vehicle. While the ACE vehicle had actual contact with the claimant, Arbitrator Novick found that it was propelled in the claimant’s direction by virtue of its collision with the Unifund vehicle. As the Unifund vehicle’s left turn brought about the accident, it was the vehicle that “struck” the claimant and therefore had priority to pay the claimant’s SABs.
On appeal, Justice Carole Brown relied on a 1981 decision called Trahan v. Royal Insurance where a distinction was to be made between a transfer of force onto a then stationary object, or a moving object. Where a stationary object, including a vehicle, is propelled into a pedestrian by a moving vehicle, the moving vehicle is considered the “striking” vehicle per section 268(2)(2)(ii) of the Insurance Act further to the transmission of force doctrine. However, as in this case, where two moving vehicles collide, causing one to strike a pedestrian, the vehicle propelled into the pedestrian has its own independent force. As a result it is the “striking” vehicle, regardless of whether it would have hit the plaintiff but for the collision, or whether it was the cause of the collision. As a result, Justice Brown concluded that the decision below was unreasoanble, set aside the decision of Arbitrator Novick, and held that ACE was responsible for payment of the claimant’s SABs.
It was clear that of the three insurers, the one that got the claim, the Personal, was clearly not a striking vehicle and for the purposes of priority could not have been the correct insurer to respond to the claim. However, as between the insurer of the vehicle that actually hit the pedestrian, and the one that caused the collision, both are potentially striking vehicles, and involved in the collision.
Overall, this decision is in keeping with case law that developed the transmission of force doctrine from the 1970s onwards, and acts as a reminder that insurers must be mindful of the distinction between moving and stationary vehicles when assessing how the transfer of force will have an impact on liability to pay benefits in the context of section 268(2)(2)(ii) of the Insurance Act.