Did the accident described in the facts below result from the use or operation of a motor vehicle such that the threshold and deductible are applicable, or was the chain of causation sufficiently broken?

[16] In Amos, the parties agreed that what had happened to the insured constituted an "accident". The question was whether or not the accident could be said to have arisen "out of the ownership, use or operation" of the vehicle. In fashioning the test to determine this question, Major J., speaking for the court, held at pp. 414-15 S.C.R., that "while s. 79(1) must not be stretched beyond its plain and ordinary meaning, it ought not to be given a technical construction that defeats the object and insuring intent of the legislation providing coverage". Major J. then stated the test as follows (p. 415 S.C.R.):

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

(2) 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?

(Emphasis in original)

The court referred to the two parts as the "purpose" and "causation" branches of the test.

[17] With regard to the purpose test, Major J. held that the insured met this branch. Noting that the insured was driving his van down the street, Major J. held at pp. 415-16 S.C.R. that "the accident clearly resulted 'from the ordinary and well-known activities to which automobiles are put'". In using this language, Major J. was not speaking of causation. He addressed causation in the second branch of the test. Rather, the phrase intended to indicate whether the accident flowed out of or arose out of the ordinary and well-known activities to which automobiles are put. It cannot be said that the insured's injuries in the Amos case "resulted from" the regular activity to which his automobile was being put, in the causal sense of these words. Rather, it meant that the insured's injuries flowed out of the regular activity to which his automobile was being put.

[18] With regard to the causation branch of the test, Major J. stated at p. 417 S.C.R.:

The question is whether the requisite nexus or causal link exists between the shooting and the appellant's ownership, use or operation of the van. With respect to causation, it is clear that a direct or proximate causal connection is not required between the injuries suffered and the ownership, use of operation of a vehicle. The phrase "arising out of" is broader than "caused by", and must be interpreted in a more liberal manner.

(Emphasis added)

[19] On the meaning of the phrase "arising out of", Major J. noted [at p. 417 S.C.R.] that:

[T]he words "arising out of" have been viewed as words of much broader significance than "caused by", and have been said to mean "originating from", "having its origin in", "growing out of" or "flowing from", or, in short, "incident to" or "having connection with" the use of the automobile.

[20] Major J. found that there was the requisite connection and concluded at p. 419 S.C.R. that:

The shooting appears to have been the direct result of the assailants' failed attempt to gain entry to the appellant's van . . . . It is important that the shooting was not random but a shooting that arose out of the appellant's ownership, use and operation of his vehicle.

The insured was therefore held to be entitled to coverage.

[...]

[25] Third, while the case law following Chisholm does not explicitly clarify whether the Amos purpose test has been rejected, in the majority of cases it seems as though the Amos purpose test continues to be applied. See Unger (Litigation Guardian of) v. Unger (2003), 2003 CanLII 57446 (ON CA), 234 D.L.R. (4th) 119, [2003] O.J. No. 4587 (C.A.); Hernandez v. 1206625 Ontario Inc. (2002), 2002 CanLII 45089 (ON CA), 61 O.R. (3d) 584, 218 D.L.R. (4th) 456 (C.A.); Scanes v. Datillo (2003), 2003 CanLII 38664 (ON SC), 65 O.R. (3d) 768, [2003] O.J. No. 2863 (S.C.J.); Redmond v. West Wawanosh Mutual Insurance Co. (2004), 2004 CanLII 14175 (ON SCDC), 180 O.A.C. 280, [2004] O.J. No. 110 (C.A.); and Herbison v. Lumbermens Mutual Casualty Co., [2003] O.J. No. 3024, [2003] O.T.C. 685 (S.C.J.).

[...]

[36] While I will look at each of these in turn, in my opinion, the Chisholm test, as it applies to this case, can best be set out in the form of two questions:

1. Was the use or operation of the vehicle a cause of the injuries?

2. If the use or operation of a vehicle was a cause of the injuries, was there an intervening act or intervening acts that resulted in the injuries that cannot be said to be part of the "ordinary course of things"? In that sense, can it be said that the use or operation of the vehicle was a "direct cause" of the injuries?

(a) The "But For" Consideration

[37] It can be argued, in this case, that the use or operation of the insured's car was a cause of her injury. In Chisholm, Laskin J.A. appears to have accepted that it could be said that the use of Mr. Chisholm's car was "a cause" of his impairment, inasmuch as but for driving his car he would not have been shot. By analogy, I think it is fair to say that but for the fact that the insured's car having become stuck on a rock, she would not have been wandering through the woods at night, fallen into the river and suffered severe frostbite. However, as Laskin J.A. explained, the "but for" test only serves to eliminate from consideration factually irrelevant causes, but does not conclusively establish legal causation. The next part of the test must therefore be considered.

(b) The "Intervening Act" Consideration

[38] The next question is whether it can be said that the use or operation of the motor vehicle was "a direct cause" of the injuries. I say "a direct cause" rather than the direct cause because in Chisholm, Laskin J.A. seems to accept that in certain cases, there could be more than one direct cause. As Laskin J.A. held, an intervening act will absolve the insurer of liability if it cannot fairly be considered a normal incident of the risk created by the use or operation of the car.

[...]

(c) The "Dominant Feature" Consideration

[47] As stated earlier, in some cases it may be useful to ask if the use or operation of the automobile was the dominant feature of the accident; if not, the link between the use and operation and the impairment may be too remote to be called "direct". In Heredi, the Supreme Court was asked to interpret the phrase "damages occasioned by a motor vehicle" in legislation from Saskatchewan. Ms. Heredi had been injured while riding on a paratransit bus designed to accommodate persons with physical disabilities. Mr. Fensom was driving the bus. Mr. Fensom helped Ms. Heredi place her crutches under her right shoulder, and then proceeded to drive the bus "in such a manner as to cause the plaintiff's crutches to jar her right shoulder, thereby causing injury". The Supreme Court held at para. 34, that if "the dominant feature of the damages is their relation to a motor vehicle accident," then the legislation would apply. The Supreme Court held at para. 41 that "it [was] clear that the direct cause of the injury was the operation of a motor vehicle".

[1] Can it be said that when a hunter steps away from his pick-up truck under cover of darkness, leaving the engine running, and negligently shoots at a target he cannot see 1,000 feet away, and hits a companion in the leg thinking him to be a deer, that the injury arose “directly or indirectly from the use or operation” of the insured truck within the meaning of s. 239(1) of the Insurance Act, R.S.O. 1990, c. I.8? A majority of the Ontario Court of Appeal gave an affirmative answer to this question: (2005), 2005 CanLII 19665 (ON CA), 76 O.R. (3d) 81. It reasoned that the addition in 1990 of the phrase “indirectly or indirectly” to s. 239(1)(b) of the Insurance Act “effectively removed the requirement of an unbroken chain of causation” (para. 102). It was sufficient, in its view, if the use or operation of a motor vehicle “in some manner contributes to or adds to the injury” (para. 105 (emphasis added by Borins J.A.)). The dissent, on the contrary, concluded that not every “circumstance or activity associated with the use or operation of a motor vehicle will . . . engage s. 239(1) of the Act and the corresponding coverage condition of a motor vehicle liability insurance policy” (para. 38), and that the negligent shooting “was an act independent of the ownership, use or operation of” the hunter’s truck (para. 62). I agree respectfully with the dissent. In my view, the appeal should be allowed.

[...]

[10] In a tragic case like the present, it is tempting to look to an insurer’s deep pockets as the only available source of compensation for a seriously injured and innocent victim. However, the insurance in this case is automobile insurance, and s. 239 requires the victim to demonstrate that the “liability imposed by law upon the insured [Wolfe]” is for “loss or damage . . . arising from the ownership or directly or indirectly from the use or operation of [the insured Wolfe’s] automobile”. Can it be said that Wolfe’s negligent shooting was fairly within the risk created by his use or operation of the insured truck, or did the use of the truck merely create an opportunity in time and space for the damage to be inflicted, without any causal connection direct or indirect to the legal basis of Wolfe’s tortious liability? Clearly, I think, the latter is the case. As Estey J. observed in Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 S.C.R. 888, “the courts should be loath to support a construction which would either enable the insurer to pocket the premium without risk or the insured to achieve a recovery which could neither be sensibly sought nor anticipated at the time of the contract” (pp. 901-2).

[...]

[12] In this appeal, of course, we are not concerned with no-fault statutory accident benefits payable to an insured. In Amos, the focus was necessarily on the use of the claimant’s car; the focus here is on the use of the tortfeasor’s vehicle. The questions are, firstly, whether the Herbison claim is in respect of a tort committed by Wolfe in using his motor vehicle as a motor vehicle and not for some other purpose and, secondly, whether there is an unbroken chain of causation linking the Herbison injuries to the use and operation of the Wolfe vehicle which is shown to be more than simply fortuitous or “but for”. The first question is easily disposed of. Wolfe was using his vehicle for transportation, which is its usual and ordinary use. It is the second question (causation) that is the claimant’s difficulty. Wolfe interrupted his motoring to start hunting. Herbison does not complain about Wolfe’s use and operation of the insured truck. He complains about the gunshot that put the bullet in his knee.

[13] In reaching the opposite conclusion, i.e. that the addition of the words “directly or indirectly” eliminated the requirement “of an unbroken chain of causation” (para. 102), Borins J.A. relied on Lefor. In that case, the driver of a car, a mother hurrying to a concert, intended to drop her two young children at their grandmother’s house for the evening. On arrival, she parked her car on the opposite side of the street, left the engine of her car running, and got out of the car with both of her children. Her daughter, while crossing the street, was struck and injured by an approaching vehicle. The insurer was held liable to indemnify the mother from the daughter’s claim because, as I read the decision of Sharpe J.A., the mother’s negligence in crossing the street did not break the chain of causation. He writes:

Ms. Lefor’s decision to park her car on the opposite side of the road from her mother’s house and leave it running while she and her children darted across the street placed Netasha in a situation of danger and triggered the sequence of events that resulted in Netasha’s injuries. The alleged negligence of Karen Lefor after she left her vehicle does not preclude coverage . . . . [para. 8]

It is in the ordinary course of things for a child dropped on the wrong side of the street to “dart” to the other side to get to her grandmother’s house, with all the foreseeable risks that such a crossing entails. Lefor, in my view, is a very different case from the present case. In Derksen v. 539938 Ontario Ltd., [2001] 3 S.C.R. 398, 2001 SCC 72, the Court accepted that an intervening act may not necessarily break the chain of causation if the intervention can be considered “a not abnormal incident of the risk” created by use of the vehicle or is likely to arise in “the ordinary course of things” (para. 33). The same point is made by Laskin J.A. in Chisholm v. Liberty Mutual Group (2002), 2002 CanLII 45020 (ON CA), 60 O.R. (3d) 776 (C.A.), at para. 29. This reasoning applies to Lefor. The mother’s post-vehicle conduct was so closely intertwined with her negligent parking that from the perspective of causation, direct or indirect, the two were not “severable”; see Stevenson v. Reliance Petroleum Ltd., 1956 CanLII 27 (SCC), [1956] S.C.R. 936, at p. 940.

[14] All the judges in the Ontario Court of Appeal considered that in the interpretation of s. 239, they were bound to apply the “no-fault” test set out in Amos.  However, for the reasons set out in Citadel General Assurance Co. v. Vytlingam, [2007] 3 S.C.R. 373, 2007 SCC 46, released concurrently, I believe their interpretation of Amos goes too far. Amos was a no-fault benefit case. Although the language of the “injuries arising” term in Amos is similar to the language of s. 239(1), that phrase does not exhaust the requirements of indemnity insurance. It is simply not enough to find that the use or operation of the tortfeasor’s motor vehicle “in some manner contributes to or adds to the injury” (Amos, at para. 26, cited by Borins J.A., at para. 105). While I agree with the Ontario Court of Appeal that the addition of the “directly or indirectly” language to s. 239 relaxed the causation requirement, nevertheless, some causation link must be found and it must constitute a link in an unbroken chain. I agree with the dissenting judgment of Cronk J.A. that here the source of Wolfe’s liability to the Herbisons was a tort quite independent of the use and operation of his truck.

[14] Nonetheless, in my view, Amos and Vijeyekumar are not determinative of this appeal. Both those cases concerned a plaintiff's entitlement to no-fault benefits. As a matter of statutory interpretation, the courts give entitlement provisions a broad interpretation in favour of the insured: See Amos, supra, at pp. 414-15 S.C.R. Further, the language being interpreted in Amos and Vijeyekumar differs significantly from the provision in issue in the present appeal. In Amos, the question was whether an accident arose out of the ownership, use or operation of a vehicle. Vijeyekumar turned on whether the use or operation of an automobile directly or indirectly caused injury. Unlike the provisions in those two cases, s. 267.6 of the Insurance Act introduces the additional concepts of loss and damage. It is a bar to recovery of "loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile".

[15] There are different ways to interpret this phrase, depending on whether the bar to recovery is linked to the words "loss or damage" on the one hand, or "injury or death" on the other. First, s. 267.6(1) may be interpreted to mean that no recovery is possible where a car is involved in causing personal injury. On this interpretation, the question is whether the injuries arise from the use of a car. Applying the Amos test, the plaintiff is barred from recovering damages.

[16] A second interpretation is that s. 267.6(1) creates a bar to recovery of "loss or damage" arising from the use of a car. I think it is this interpretation that underlies the plaintiff's damage apportionment argument. Applying the test in Amos, the question becomes whether the plaintiff's "loss or damage", as opposed to his injuries, were caused by the use of his car, or whether the "connection between the [loss or damage] and the ownership, use or operation of the vehicle [was] merely incidental or fortuitous".

[17] The recent Supreme Court of Canada decisions in Heredi v. Fensom, 2002 SCC 50, 213 D.L.R. (4th) 1 and Derksen v. 539938 Ontario Ltd., 2001 SCC 72, 205 D.L.R. (4th) 1 provide support for the second interpretation. In Heredi, the court interpreted the words "damages occasioned by a motor vehicle". This case involved a plaintiff who was injured while riding on a paratransit bus, and the issue was whether her action was statute barred by the limitation period in s. 88 of the Saskatchewan Highway Traffic Act, S.S. 1986, c. H-3.1. Section 88 barred bringing an action for any "damages occasioned by a motor vehicle" after the expiration of 12 months from the time the damages were sustained.

[18] Writing for the court, Iacobucci J. concluded at para. 27 that the legislature could not have intended that:

all claims in tort, regardless of the true substance of the claim, should be within the purview of this limitation period merely because of the presence of a motor vehicle somewhere within the chain of causation leading to damage sustained. Conversely, I am not persuaded that the legislature would have regarded all claims in contract, however tendentiously framed, as beyond the limitation period's reach.

[19] In order to distinguish between those cases that will be caught by the limitation period, and those that will not, Iacobucci J. adopted a substantive approach, looking to the essence of the claim being made and determining whether a motor vehicle played a merely ancillary role. Iacobucci J. stated at paras. 34-35:

Thus, in order to determine whether an action is for "damages occasioned by a motor vehicle", and thus subject to the Highway Traffic Act limitation period, a substantive approach ought to be taken. The nature of the facts and the nature of the action ought to be considered together in order to make a determination as to the fundamental nature of the action. Are the damages sought to be recovered in the action, in their essence, damages that were occasioned by a motor vehicle? In light of the way in which the action is framed, and the facts giving rise to the damages claimed, is the action one that could be primarily classified as an action for damages occasioned by a motor vehicle? If the role of the motor vehicle in the causal chain is too insignificant, as in Argue, or if the causal chain is itself not the most illuminative way to characterize the claim, as in Bruell or as in Clost, the action ought not be regarded as subject to the limitation. If, on the other hand, the dominant feature of the damages is their relation to a motor vehicle accident, the limitation period ought to be applied.

In other words, the true intent of the statute is that "damages occasioned by a motor vehicle" requires that the presence of a motor vehicle be the dominant feature, or constitute the true nature, of the claim. Conversely, claims, whether framed in contract or in tort, where the presence of the motor vehicle is a fact ancillary to the essence of the action, ought not be regarded as within the scope of that phrase.

[20] The Clost and Clark cases, cited with approval by Iacobucci J. in Heredi, offer concrete examples of how this substantive distinction can be made.

[21] In Clost v. Colautti Construction Ltd. (1985), 1985 CanLII 2021 (ON SC), 52 O.R. (2d) 339, 36 M.V.R. 38 (H.C.J.), Osborne J. considered whether an action against a toy manufacturer for product liability was barred by the limitation period under the Highway Act, R.S.O. 1980, c. 198. In this case, a child rode his toy truck into the street and was hit by a car, and the issue was whether his action was for "damages occasioned by a motor vehicle". Osborne J. set out the test at p. 345 O.R.:

In my view, the intellectual exercise required must focus on the claim being made against the defendant seeking the protection of the Highway Traffic Act limitation period. What claim is being made against that defendant? That is a far different exercise than asking the simplistic question, how was the plaintiff injured? or, did a motor vehicle occasion the physical injury referred to as the basis for the plaintiff's damage claims?

[22] Applying this test to the facts in Clost, Osborne J. found at p. 345 O.R. that the fact that the toy manufacturer's alleged negligence resulted in a car-pedestrian accident was incidental to the essence of a claim for product liability where the product involved is not a motor vehicle: "Here the claim of the plaintiff is that the manufacturer's negligence is what caused or occasioned the damages claimed."

[23] In Clark v. 449136 Ontario Inc. (1996), 1996 CanLII 7958 (ON SC), 27 O.R. (3d) 658, 20 M.V.R. (3d) 274 (Gen. Div.), affd (1997), 1997 CanLII 14543 (ON CA), 34 O.R. (3d) 742, 30 M.V.R. (3d) 167 (C.A.), leave to appeal denied [1997] S.C.C.A. 570, 227 N.R. 194n, J. Macdonald J. applied similar reasoning in a case of Taverner's negligence. As in Clost, this case involved the application of the limitation period under the Highway Traffic Act. The plaintiff was in a car accident after an evening drinking at the defendant's tavern, and brought an action for Taverner's negligence five years [page591] later. J. Macdonald J. adopted a three-step approach to determining whether a given action is subject to the statutory limitation period at p. 669 O.R. This test can be paraphrased as follows:

1. Characterize the facts, by examining the substance of the claim and determining its legal character.

2. Interpret the statutory language to determine its intended scope or ambit.

3. Determine whether the legal character of the claim falls within the intended scope or ambit of the limitation provision.

[24] Applying this test, J. Macdonald J. distinguished between damages caused or contributed to by the alleged negligence of the plaintiff in the operation or use of the motor vehicle, and those caused by Taverner's negligence at p. 678 O.R.:

I therefore conclude that prevailing theories of multiple causality indicate that I should regard the plaintiff's damages as divisible into portions which are capable in law of attribution to the competing characterizations herein. It is helpful to note again at this point that it is only the damages occasioned by a motor vehicle which are subject to the H.T.A. limitation provisions.

. . . . .

[A]ny damages occasioned by taverners' negligence are not properly characterized as occasioned by a motor vehicle, even if a motor vehicle was the instrument through which such negligence caused the damages.

[25] Thus, in Heredi, Clost and Clark, the analysis begins by examining the nature of the claim being made, and then determining whether some or all of the damages can be attributed to a cause of action that is substantively distinct from the use or operation of a vehicle.

[26] In Derksen, supra, the Supreme Court of Canada reached a similar conclusion with respect to s. 267.1 of the Insurance Act, which closely resembles the language of s. 267.6(1). In this case, a child was killed and three others injured when a steel base plate flew off a supply truck and into the windshield of a school bus. The motions judge found that there were two concurrent causes of the accident, negligent clean up of the work site ("non-auto-related negligence") and operation of the truck ("auto-related negligence"). Section 267.1 prevents plaintiffs from recovering damages for pecuniary loss from "the owner of an automobile", for "loss or damage from bodily injury or death arising directly or indirectly from the use or operation of the automobile". However, the motions judge found that under s. 267.1 the contractor wore two hats. For the purpose of auto-related negligence, the [page592] contractor was "the owner of an automobile". For the purpose of non-auto- related negligence, the contractor could not rely on s. 267.1. In the words of the motions judge, quoted by Major J. at para. 15, "the statutory immunity merely dictates the different forms of relief which may arise against the various defendants."

[27] The finding that the contractor was not protected by s. 267.1 from liability for pecuniary damages with respect to liability arising from non-auto-related negligence was not challenged in Derksen at the Supreme Court of Canada. Thus, Major J. did not provide a detailed interpretation of the provision. Nonetheless, it follows that the court must have accepted that the loss or damage attributable to non-auto- related negligence did not arise "directly or indirectly from the use or operation of the automobile".

[28] The appellants cite Rutherford v. Niekrawietz, [1996] O.J. No. 1924 (Quicklaw) (Gen. Div.), affd 1998 CanLII 939 (ON CA), [1998] O.J. No. 5001 (Quicklaw) (C.A.) and Durant v. Blandford, [1999] O.J. No. 3128 (Quicklaw) (S.C.), affd [2000] O.J. No. 1710 (Quicklaw) (C.A.) for the principle that the phrase "loss or damage arising directly or indirectly from the use or operation of an automobile" has been interpreted to be clear and unambiguous and to mean that the loss or damage can arise from a negligent party's use or operation of a car even where another concurrent cause not related to use or operation has been alleged to be the source of damage or injuries suffered.

[29] In Rutherford, this court considered s. 267 of the Insurance Act, and whether a plaintiff who had recovered insurance benefits following an accident could also recover damages from the Ministry of Transportation as a result of its negligence in failing to erect a larger stop sign at a dangerous intersection. The applicable portion of s. 267 provided:

(1) The damages awarded to a person in a proceeding for loss or damage arising directly or indirectly from the use or operation of an automobile shall be reduced by,

. . . . .

[No fault benefits, past and future, medical and hospitalization benefits, benefits for loss of income and sick leave benefits related to employment are excluded]

(6) This section applies to damages awarded for loss or damage arising directly or indirectly from the use or operation . . . of an automobile.

[30] Weiler J.A. rejected the appellant's submission that her action was not for damages arising from the use of an automobile, but rather from the defendant's breach of its statutory duty of repair. Instead, Weiler J.A. found at para. 16 that, "[t]he damages awarded to Mrs. Rutherford were for her loss. That loss arose when she was operating her automobile." On this reasoning, the phrase "loss or damage arising from the use or operation of an automobile" applies to any situation where an individual is injured while driving a car.

[...]

[45] I conclude that s. 267.6(1) of the Insurance Act applies only to damages for vehicular negligence. While the facts and legislative provisions in Heredi, Clost and Clark differ from the present appeal, these cases endorse a substantive approach to limitation and exclusion provisions in an automobile insurance context that is of general application. Essentially, these cases hold that courts should not rigidly apply past interpretations of a given legislative phrase, but rather should look to the nature of the cause of action and the purpose of the legislative provision, and determine whether the provision should be applied on the facts of the case. This approach is perfectly in keeping with the principles of statutory interpretation.

[46] In the present appeal, Mr. Hernandez has claimed damages in Taverner's negligence. While an automobile was clearly the instrument of his injuries, this fact is incidental to his cause of action. The broad purpose of the Automobile Insurance Rate Stability Act is to stabilize insurance costs. The specific purpose of s. 267.6(1) is to address the problem of uninsured drivers. An interpretation of s. 267.6(1) that precludes recovery of damages for vehicular negligence but permits a cause of action in Taverner's negligence promotes both the general and specific purposes of the statute and provision. A contrary interpretation leads [page597] to the absurd result that Taverners have a reduced responsibility toward patrons who happen not to have automobile insurance.

[13] Amos v. Insurance Corp. of British Columbia (1995), 31 C.C.L.I. (2d) 1 (S.C.C.) dealt with the issue of whether the plaintiff's injuries arose out of the ownership, use or operation of an automobile in order to entitle him to no-fault benefits under the defendant's insurance policy. Major J. held that there is a two part test to determine whether the plaintiff qualified for benefits.

[14] The two-part test is whether the accident resulted from the ordinary and well-known activities to which automobiles are put and whether there is some nexus or causal relationship between the appellant's injuries and the ownership, use or operation of his automobile or conversely whether the connection between the injuries, and the ownership, use or operation of the automobile is merely incidental or fortuitous. This test is known as the "purpose and causation test".

[15] At p.30 Major J. said:

The appellant's injuries arose out of the ownership, use and operation of his van. They originated from, flowed from, or were causally connected with its ownership, use and operation. Neither can it be said that there was an intervening act, independent of the ownership, use or operation of the vehicle, which broke the chain of causation. The appellant is therefore entitled to Pt. VII no-fault benefits to compensate him for the injuries suffered as a result of the accident.

16 Both parties agree that the grader in this case is a motor vehicle and that it was being used to remove snow from the concession road and the hogsback bridge at the time of the accident. Applying the two-part test to the accident in which Steven John Kochis was killed, it is clear that the action is based in part on the allegation that his death arose from the ownership, use or operation of the defendant's grader. As a result the plaintiffs' claim for pecuniary damages would ordinarily be barred by s. 267.1(1) of the Insurance Act.

[17] The plaintiffs, however, allege that their claim for pecuniary damages is not barred by s.267.1(1) of the Insurance Act as they have an independent cause of action against the Township for failure to repair the concession road. The issue is whether there was an intervening act independent of the use or operation of automobile which broke the chain of causation. The plaintiffs contend that the chain of causation was broken by the Township's failure to keep the concession road in a proper state of repair by failing to adequately clear the ice and snow.

[...]

[19] In that regard, the Ontario Court of Appeal in Jeffery v. Sawyer appears to suggest that the chain of causation test can be applied in actions for damages against third parties. If the plaintiffs can show a break in the chain of causation, the Court of Appeal suggests that the plaintiffs can avoid the limitation imposed by s.267.1(1) of the Insurance Act on their right to damages. As a result, the plaintiffs contend that if they can show a break in the chain of causation, they can maintain an action against the defendant Township under s.284(1) of the Municipal Act for both pecuniary and non-pecuniary damages.

[20] While I have serious reservations about the application of the chain of causation test to third party actions covered by s.267.1(1) of the Insurance Act, I acknowledge that there is some support for its application in the case law. In this case the question of whether the Township failed to repair concession 8/9 road is a matter for the trial judge to decide as is the question of whether there was an intervening act which broke the chain of causation. It is clear that unless the plaintiffs can establish a break in the chain of causation, they cannot maintain an action against the defendants for pecuniary damages due to the operation of s.267.1(1) of the Insurance Act.

[21] Since there is some support in law for the plaintiff's position, I am unable to grant the defendant's request for a declaration that s. 267.1(1) of the Insurance Act protects the defendants against all claims for damages except for non-pecuniary general damages. As a result, the defendants' motion is dismissed. If necessary, the parties may make written submissions concerning costs within 15 days of the date of these reasons.

[12] Western Assurance says that its insurance policy does not respond to this claim. It says that the Kopas vehicle was not involved in the accident that claimed Jordan's life. And it says that the accident did not involve the "use or ownership" of the Kopas vehicle.

Overview of the Law — "Use and Ownership" Requires More than "But For" Involvement of the Insured Vehicle

[13] This calls upon the court to interpret and apply two recent cases from the Supreme Court of Canada [See Note 2 below] in the context of numerous prior cases concerning the scope of coverage of automobile insurance policies. Both cases turn on the connection between use and ownership of a motor vehicle and the wrongful conduct giving rise to the plaintiff's claim. In simple terms, for an insurer to be liable, the claim must be "sufficiently connected to the use and operation of [the motor vehicle] for it to be concluded that the claim is based on a tort committed by a 'motorist'". [See Note 3 below] [page692] Where the use or ownership of the vehicle is merely incidental to the claim, then there will not be a duty to indemnify.

[...]

[18] The nexus between vehicle use and ownership, on the one hand, and wrongful conduct, on the other, presents along a spectrum. Driving a car to a bank to rob it does not implicate car use and ownership; running over a pedestrian while speeding away from the bank does. The case at bar raises two questions in this regard. The first is whether "use and ownership" of the vehicle is established because the plaintiffs were unloading their car at the time of the incident. The second is whether the use and ownership of the vehicle is established because young Jordan had been transported to the parking lot in the car. Loading and unloading a vehicle is part of the ordinary use and operation of the vehicle. So, too, is transporting, loading and unloading people. 

[...]

[26] The plaintiffs' claim does not satisfy either branch of the Amos test. Unloading a vehicle is a "well-known activity to which automobiles are put". However, the accident did not result from the unloading of the vehicle. The failure to do something (in this case, to supervise Jordan) does not implicate the activity that was being done at the time of the failure. And, in this case, the use of the Kopas vehicle is merely incidental to the accident: it was the means of transportation that brought the Kopas family to the scene, but it was not otherwise involved. [See Note 10 below]

[27] The "purpose test" can be traced back to the Supreme Court of Canada decision in Stevenson v. Reliance Petroleum Ltd. [See Note 11 below] In this case, Justice Rand uses embarkation as an example to show that "use" of a motor vehicle goes beyond navigation of roads:

An analogous "use". . . is exemplified in the case of a bus. The undertaking in such a case includes the entrance and exit to and from the bus of passengers. If the steps are defective and a passenger is injured, could it be said that the injury did not arise out of the "use"? The expression "use or operation". . . should . . . convey . . . all accidents resulting from the ordinary and well-known activities to which automobiles are put . . . . [See Note 12 below] [page696]

[28] The "causation test" can be traced back to Law, Union & Rock Insurance Co. v. Moore's Taxi Ltd. [See Note 13 below] In this case, Moore's Taxi had a contract to transport developmentally delayed children to and from school. The drivers were supposed to drop children off on the same side of the street as their homes, so that the children would not have to cross a street after getting out of the taxi. A driver let a child out on the wrong side of the street, and the child was struck by a truck while trying to cross the street to his home. The child was injured seriously. The Supreme Court of Canada found that this incident did not arise from the use or operation of the taxi. Justice Ritchie, speaking for the court, held that:

. . . it is possible to trace a continuous chain of causation unbroken by the interposition of a new act of negligence and stretching between the use and operation of a motor vehicle . . . and the injuries sustained by the claimant . . . . In the present case the motor vehicle was stationary at the time of the accident and the chain of causation originating from its use was severed by the intervening negligence of the taxi driver whose failure to escort the boy across the street was the factor giving rise to the [insured's] liability. [See Note 14 below]

[29] The "break" in the chain of causation was described by Ritchie J. in the following terms:

It was after the boy had left the stationary vehicle and was standing unharmed on the sidewalk facing the potential peril of crossing the street alone that the taxi driver became seized with an entirely different kind of duty which had nothing to do with the use or operation of the motor vehicle but rather involved his getting out of it and conducting the boy in safety to his home, and it is by reason of the breach of this duty that the law imposes liability on the respondent. [See Note 15 below]

[...]

[44] The case before me is closer to Greenhalgh than to Wu, Legault or Lefor. Jordan Kopas was safely out of the car. He had left the vicinity of the car and was at the fence, watching the train. By the time Jordan was returning from the fence, the duties owed to him by his father and grandfather were owed as guardians of children, and not as "motorists".

[2] The GTTA now brings this motion for an order that the non-pecuniary damages sustained by Nelson arrive directly or indirectly from the use or operation of an automobile as defined by section 1 of the Insurance Act R.S.O. 1990, c. I.8. The GTTA also seeks an order that it is a “protected defendant” within the meaning of section 267.3 of the Insurance Act and therefore entitled to the benefit of the threshold under section 267.5(5) and the $30,000 deductible under section 5.1 of the Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, O. Reg. 461/96.

[3] Nelson opposes this motion on the basis that the particular circumstances of his accident fall outside the scope of the said sections of the Insurance Act and therefore entitle him to proceed with his action without regard to the threshold issue and without regard to the $30,000 deductible. The facts of Mr. Nelson’s accident are generally not in dispute. He was a paying passenger travelling on a GTTA bus, travelling from Pickering. During the course of the bus ride his seat broke, he fell backward and sustained injuries. The bus was not involved in a collision or involved in any unusual manoeuvres. It is acknowledged that the seat forms an integral part of the bus.

[...]

[6] The issue of whether or not injuries are the result of the use or operation of a motor vehicle have been the subject of much litigation. Perhaps the leading case is Amos v. Insurance Corporation of British Columbia 1995 CanLII 66 (SCC), [1995] 3 S.C.R. 405. In dealing with such issues Major J. established a two part test at para. 17:

The two-part test to be applied to interpreting this section is:

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

2. 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? [Emphasis in original]

[7] In Amos the plaintiff was shot while operating his vehicle by someone outside the vehicle. In those circumstances the court found that his injuries were the result of operation of a motor vehicle.

[8] The Supreme Court of Canada specifically dealt with an accident on a bus in Heredi v. Fensom, 2002 SCC 50 (CanLII), [2002] 2 S.C.R. 741. In the circumstances of that case a passenger on crutches was jarred by the movement of the bus causing her injuries. The court determined that the damage was caused by a motor vehicle.

[9] The Ontario Court of Appeal has applied the Amos test in a number of situations where a motor vehicle was involved. See Vijeyekumar v. State Farm Mutual Automobile Insurance Company (1999), 1999 CanLII 1640 (ON CA), 175 D.L.R. (4th) 154 (Ont. C.A.), Saharkhiz v. Underwriters, Members of Lloyd's, London, England (2000), 2000 CanLII 5719 (ON CA), 49 O.R. (3d) 255 (Ont. C.A.), Axa Insurance v. Dominion of Canada General Insurance Co. (2004), 2004 CanLII 34995 (ON CA), 73 O.R. (3d) 391 (Ont. C.A.).

[...]

[13] It is ordered that the plaintiffs injuries arise directly or indirectly from the use or operation of the automobile as defined by section 1 of the Insurance Act R.S.O. 1990, c. I.8.

[14] It is further ordered that the defendant is a “protected defendant” within the meaning of section 267.5(7) of the Insurance Act and entitled to the benefit of the threshold under section 267.3(5) and the applicable deductible under section 5.1 of Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996.

This definition, in turn, raises two questions — whether the use or operation of an automobile was involved in the incident, and if so, whether that directly caused the Applicant's injuries.

On the basis of the evidence before me, I find that the fluid that caused the Applicant's bicycle to slide and him to fall to the ground originated from a motor vehicle. While there is no direct evidence of where that fluid came from, in my view it is reasonable to conclude that it was emitted from a motor vehicle that drove southbound on Warden Avenue in the curb lane and then proceeded westward at the intersection. In arriving at this conclusion I have considered the fact that the substance in question lay exclusively on the roadway and not on the curb, that it was approximately the width of one lane and that it continued in a westward direction for some 200 feet beyond the intersection before fading away. Although it would have been preferable to have more conclusive evidence on this point, I am persuaded by the factors set out above that, on a balance of probabilities, the liquid in question did emanate from a truck.

The issue then becomes whether the injuries suffered by Mr. Petrosoniak were directly caused by the use or operation of an automobile. Prior to November 1, 1996, an applicant had only to prove that any injuries sustained were "indirectly or directly" caused by the use or operation of an automobile. The parties referred to various cases decided by both the courts, and arbitrators under the Insurance Act, involving a consideration of whether injuries suffered in a variety of circumstances can be said to have resulted from an "accident."

[...]

As I understand that definition, a series of events can be the direct cause of an incident, as long as there is no intervening agency or act. Consequently, if an unbroken chain of events involving the use or operation of an automobile leads to an injury, the injury can be said to have been directly "caused by" the incident. In the instant case, the Applicant was injured as a direct result of coming into contact with a wet patch of pavement. I have found that the fluid on the pavement was released by a motor vehicle. While the fact that the fluid fell onto the roadway, as opposed to falling directly onto Mr. Petrosoniak, may constitute an intermediate step in the process which ultimately led to his injuries, it does not, in my view, constitute an intervening act or a force "working actively from a new and independent source" as referred to in the definition cited above.

The Insurer conceded that the amended definition does not go as far as to require an applicant to come into direct contact with a vehicle. Counsel submitted, however, that the deletion of the word "indirectly" from the definition requires that there be a direct link between the circumstance that causes the injury and the incident. I agree with that statement. As the sole cause of the Applicant's injuries in this case was the existence of the oily substance on the pavement, in my view, the direct causal requirement or link has been met and the incident described therefore falls within the definition of "accident" set out in section 2.