Economical Mutual Insurance Company v. Caughy, 2016 ONCA 226 (CanLII)

Released March 24, 2016 | Full Decision [CanLII]

Patrick Caughy suffered a serious spinal cord injury while at a country music jamboree in Bothwell, Ontario in August 2012. Mr. Caughy had parked his camping trailer and truck on a campsite. On August 3, 2012 a motorcyclist parked his motorcycle on a walkway near the area where Mr. Caughy’s truck was parked. Later that night, Mr. Caughy was intoxicated and was playing tag with his daughter and her friend around his parked truck. As he proceeded into the walkway between his truck and the adjacent trailer, Mr. Caughy tripped over the motorcycle. He then fell into his parked truck before falling to the ground and suffering spinal cord injuries.

Mr. Caughy applied for statutory accident benefits from Economical Mutual Insurance Company (“Economical”). Economical refused to accept that the August 3, 2012 incident constituted an “accident”, as that term is defined in s. 3(1) of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “SABS”).

An application in the Superior Court of Justice was required to resolve this dispute. The application judge found that that the temporary parking of the motorcycle that evening on the walkway constituted an ordinary or well-known use of the vehicle. He further found that “the temporary parking of the motorcycle in the circumstances that evening was the dominant feature in the incident and not simply ancillary to it.”

Based on these findings, the application judge concluded that the incident satisfied the test for an accident under the SABS as articulated by the Supreme Court of Canada in Amos v. Insurance Corp. of British Columbia, 1995 CanLII 66 (SCC) and modified by the 1996 SABS amendments and the Court of Appeal’s decisions in Greenhalgh v. ING Halifax Insurance Company (2004), 2004 CanLII 21045 (ON CA, leave to appeal refused (2004), 338 N.R. 398 and Martin v. 2064324 Ontario Inc. (Freeze Night Club), 2013 ONCA 19 (CanLII), leave to appeal refused (2013), 466 N.R. 386

Economical appealed the application judge’s decision. There are two parts to this test: a purpose test and a causation test. Economical did not appeal the application judge’s finding that the causation test was satisfied. The appeal was limited to Economical’s submission that the application judge erred in concluding that the purpose test was met in the circumstances.

The term “accident” is defined in s. 3(1) of the SABS as follows:

an  incident in  which  the  use  or operation  of  an  automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device;

In Amos the Supreme Court articulated a two-part test in interpreting the section in issue:

  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?

As a consequence of amendments to the SABS, the causation test was modified by the Court of Appeal in Greenhalgh and Martin. Pursuant to this modified causation test, the insured must first establish that the use or operation of an automobile was the cause of the injuries. If that is established, the insured must then satisfy the court there was no intervening act(s) that resulted in the injuries that cannot be said to be part of the course of the “ordinary course of things”.

Hourigan J.A., writing for a unanimous panel, dismissed the appeal. Hourigan J.A. held that parking a vehicle is an ordinary and well-known activity to which vehicles are put.

He also held that there is no active use component in the purpose test. The sole question for determination under that test is whether the incident in issue resulted “from the ordinary and well-known activities to which automobiles are put”. While the active use of an automobile (e.g. driving) would qualify under this test, there is no requirement that the vehicle be in active use.

Appeal dismissed. Mr. Caughy was entitled to his costs of the appeal, which were fixed at $15,000 all-inclusive.

Respondent/Applicant’s counsel: Nigel Gilby, Jasmine Akbarali, and Christopher Dawson.

Read the full case on CanLII

Ryan Murray
Written by

A partner at Oatley Vigmond, Ryan joined the firm in 2006 shortly after he was called to the bar in 2005. Ryan holds an Honours B.A. from York University, as well as a Bachelor of Laws (LL.B.) and a Master of Laws (LL.M.) (Civil Litigation and Dispute Resolution) from Osgoode Hall Law School.

When Ryan is not practicing law, he enjoys golfing and spending quality time with his wife and two young children.