Jevco Insurance Company v. York Fire & Casualty Company

Transcription

1 Jevco Insurance Company v. York Fire & Casualty Company [1995] I.L.R Ontario Ontario Court (General Division), May 11, Insurance (Automobile) Indemnity for no-fault benefits Fault of insured to be determined in accordance with legislation Use of seat belts not a relevant consideration Insurance Act, R.S.O. 1990, c. I.8, ss. 263, 268, 275. This was an appeal from an arbitrator's award. D was injured in a single vehicle accident as a passenger of S. He claimed no-fault benefits from his insurer, Jevco. Jevco sought arbitration under s. 275 of the Insurance Act to determine its right to indemnification from York, the insurer of S. In making the award, the arbitrator concluded that D's failure to wear a seat belt was a relevant consideration. Held: The appeal was allowed. Under s. 275, the fault of the insured was to be determined strictly in accordance with the no-fault determination rules of the Regulation. It was the fault of the insured of the second party insurer, here S, which was at issue. The use of seat belts by Jevco's insured was irrelevant. The arbitrator had therefore reached an incorrect conclusion. Counsel: John S. McNeil, Q.C. for the appellant; Michael Burgar for the respondent; Before: before Gotlib J. Gotlib J.The appellant asks that this Court set aside and reverse the award of the Arbitrator, Joel Wesley, Q.C. dated February 22, 1995, substituting an order and declaration that the entitlement, if any, of the appellant's right to indemnity pursuant to s. 275 of the Insurance Act R.S.O c. I.8 is unaffected by whether or not its insured was wearing a seatbelt and declaring that issue to be irrelevant to the arbitration proceedings. The respondent asks that this Court uphold and affirm the award of the Arbitrator. The facts are agreed upon. The insured of Jevco Insurance Company (Jevco) D'Errico, was a passenger in a vehicle owned and operated by Schmuttermeier who was insured by York Fire & Casualty Company (York). That vehicle was involved in a single car accident in South Carolina on February 28, D'Errico was ejected from the vehicle and suffered serious injuries, and claimed no-fault benefits against his auto insurer Jevco as he was obliged to do pursuant to s. 268(1) of the Insurance Act R.S.O c. I.8. D'Errico was not wearing a seatbelt at the time of the accident. Jevco applied under s. 275

2 of the Insurance Act for arbitration to determine its right to indemnification for benefits paid to the passenger, from York. The issue before the Court then is: was the Arbitrator correct in concluding that the passenger's failure to wear a seatbelt was an issue that was relevant under s. 275 of the Insurance Act? The Arbitrator concluded at page 5 of the award: The failure to properly utilize a seatbelt assembly may have a direct affect on injury or the degree of injury. I find that the Sections have a clear meaning to permit fault considerations with respect to failure to properly utilize a seatbelt assembly. Had the legislators intended to exclude such considerations in determining the degree of fault under Section 5(1) they could simply have used the words 'for an incident' instead of the words 'for loss or damage' in Section 2(1). Failure to properly utilize a seatbelt assembly is clearly relevant to loss or damage relating to personal injuries under the ordinary rule of law. Even though the rules in Regulation 668 relating to 'described incidents' do not include fault considerations with respect to the failure to properly utilize a seatbelt assembly, I do not think including such considerations in Section 5(1) is incongruous or contrary to the intent of the scheme which is a 'fault' scheme.?emphasis The relevant portions of s. 275 of the Insurance Act: 275. (1) The insurer responsible under subsection 268(2) for the payment of no-fault benefits to such classes of persons as may be named in the regulations is entitled, subject to such terms, conditions, provisions, exclusions and limits as may be prescribed, to indemnification in relation to such benefits paid by it from the insurers of such class or classes of automobiles as may be named in the regulations involved in the incident from which the responsibility to pay the no-fault benefits arose. (2) Indemnification under subsection (1) shall be made according to the respective degree of fault of each insurer's insured as determined under the fault determination rules. The fault determination rules are found in Regulation 668. The relevant portions provide: 2. (1) An insurer shall determine the degree of fault of its insured for loss or damage arising directly or indirectly from the use or operation of an automobile in accordance with these rules. 2. (2) The diagrams in this Regulation are merely illustrative of the situations described in these rules. R.R.O. 1990, Reg. 668, s The degree of fault of an insured is determined without reference to, (a) the circumstances in which the incident occurs, including weather conditions, road conditions, visibility or the actions of pedestrians; or (b) the location on the insured's automobile of the point of contact with

3 any other automobile involved in the incident. R.R.O. 1990, Reg. 668, s (1) If more than one rule applies with respect to the insured, the rule that attributes the least degree of fault to the insured shall be deemed to be the only rule that applies in the circumstances. (2) Despite subsection (1), if two rules apply with respect to an incident involving two automobiles and if under one rule the insured is 100 per cent at fault and under the other the insured is not at fault for the incident, the insured shall be deemed to be 50 per cent at fault for the incident. R.R.O. 1990, Reg. 668, s (1) If an incident is not described in any of these rules, the degree of fault of the insured shall be determined in accordance with the ordinary rules of law. (2) If there is insufficient information concerning an incident to determine the degree of fault of the insured, it shall be determined in accordance with the ordinary rules of law unless otherwise required by these rules. R.R.O. 1990, Reg. 668, s. 5. In Jevco Insurance v. Canadian General Insurance Co. (1993), 14 O.R. (3d) 545 (C.A.) while dealing with a different issue under the same legislation, the Court commented at page 547: The scheme of the legislation, under s. 275 of the Insurance Act and companion regulations, is to provide for an expedient and summary method of reimbursing the firstparty insurer for payment of no-fault benefits from the second-party insurer whose insured was fully or partially at fault for the accident. The fault of the insured is to be determined strictly in accordance with the fault determination rules, prescribed by regulation, and any determination of fault in litigation between the injured plaintiff and the alleged tortfeasor is irrelevant. It is clear from that commentary that the fault of the insured is to be determined strictly in accordance with the no-fault determination rules and the Court of Appeal stated specifically that any determination of fault in litigation between the injured plaintiff and the alleged tortfeasor is irrelevant. Accordingly, as in this case, if it is considered that the failure to wear a seatbelt is an issue relevant to a determination of fault in litigation between an injured plaintiff and the alleged tortfeasor, it would be an irrelevant consideration. Further, the Court of Appeal in the excerpt above cited supports the view that the scheme of the legislation sets out a method for reimbursing the first-party insurer (here Jevco) for payment of no-fault benefits from the second-party insurer (here York) whose insured was fully or partially at fault for the accident. Accordingly it appears that the fault of York's insured is in issue, and the failure of Jevco's insured to wear a seatbelt is irrelevant. In Jevco Insurance Company v. Halifax Insurance Company (unreported) November 17, 1994 Matlow J. said at page 3:

4 Those rules are contained in Regulation 668 under the Insurance Act. The set out a series of general types of accidents and, to facilitate indemnification without the necessity of allocating actual fault, they allocate fault according to the type of a particular accident in a manner that, in most cases, would probably but not necessarily correspond with actual fault. The fault determination rules set out a series of accidents which would determine the degree of fault. There is nothing in the regulation to suggest that the failure to wear a seatbelt would be a factor to be considered. Matlow J. accurately sets out the scheme of the legislation. The thrust of the fault determination rules is based on well established rules of the road to determine the probability of fault. Section 3 of Regulation 668 specifically sets out what factors are not [to] be considered when determining fault in accordance with the Regulation. But the factors listed still refer to a series of general types of accidents. The considerations as set out in s. 3 are external factors that may have contributed to the seriousness of the accident but do not describe a particular type of accident. Failure to wear a seatbelt is in the same category as one of the external factors and therefore would not be a relevant consideration under the fault determination rules. Those must be read strictly, as was indicated by the Court of Appeal in Jevco Insurance Co. v. Canadian General Insurance Co. supra. Those fault determination rules apply to several provisions of the Insurance Act. It is important that the application of the rules be consistent. A review of the phrase 'use or operation of an automobile' in s. 2(1) of Regulation 668 was not intended to reach the situation where an automobile occupant failed to wear a seatbelt. Where the liability seems to arise for failure to take care for his or her own safety, to reach the conclusion that failure to wear a seatbelt was a relevant consideration would mean reading into the legislation something which is not there. Accordingly, the Court finds that the Arbitrator reached an incorrect conclusion. Although Regulation 668 is directed at allocating fault, the cases indicate that the scheme of the legislation is to be considered. Also by analyzing the legislation in question it appears that fault is allocated according to the general type of accident set out in Regulation 668. Failure to wear a seatbelt has nothing to do with the happening of an accident notwithstanding that it may have a direct impact on the degree of injury of the occupant. With respect to the particular question before this Court, it is an irrelevant consideration under the fault determination rules which are concerned with different aspects of 'fault'. Such a fact is appropriate when determining the lis between the injured plaintiff and the alleged tortfeasor, but for the purpose of the fault determination rules in Regulation 668, it is irrelevant. In Jevco Insurance Co. v. Canadian General Insurance Co., it was firmly stated by the Court of Appeal that under the legislation the fault of the insured is to be determined strictly in accordance with the fault determination rules. Failure to wear a seatbelt is clearly not within the legislation and would defeat its purpose. Accordingly the appeal is allowed. The Court orders that the interim award of the learned arbitrator dated 22 February, 1995, be set aside. The Court further orders and declares that the failure of the appellant's

5 insured, D'Errico to wear a seatbelt is irrelevant for the purpose of fault allocation pursuant to s. 275(2) of the Insurance Act, R.S.O. 1990, c. I.8.