The Ontario Court of Appeal affirmed that an incident can be both an “accident” and not an “accident” under the SABS at the same time—a legal paradox worthy of Schrödinger’s cat!
Schrödinger’s cat is a thought experiment used to demonstrate the quantum physics principle that tiny particles can be in two states at the same time until they are observed. The thought experiment asks you to imagine a cat in a box with a mechanism that might kill it. Until you look inside, the cat is both alive and dead at the same time. Don’t worry, no cats were harmed in the making of this blog.
Overview
A recent Court of Appeal decision creates an unprecedented situation where an incident was found to be both an “accident” and not an “accident” at the same time. The Licence Appeal Tribunal, who has exclusive jurisdiction over SABS entitlement, decided that an incident involving a GMC truck injuring a claimant, did not satisfy the definition of “accident” within the meaning of the SABS. Meanwhile, Arbitrator Sampliner, a priority arbitrator, concluded that the same incident satisfied the definition of “accident”. On appeal to the Superior Court of Justice, Arbitrator Sampliner’s decision was upheld. Now, the Ontario Court of Appeal affirmed the decision as well.
To understand what happened, we must delve into the facts of this case. Let’s open the box.
What Makes an Incident an Accident?
Lots of ink (pixels?) have been spilt assessing whether an incident satisfies the definition of “accident” pursuant to the SABS. Before getting into the facts of this case, let’s look at the legal framework of the definition of “accident”. In his appeal decision, Justice Perell thoroughly reviewed the applicable caselaw.
In short, a two-part test must be satisfied to find an “accident”. First, it must be established that the use or operation of the vehicle was an ordinary and well-known use to which vehicles are put. This is known as the purpose test and is used to filter out improper (or aberrant) uses of a vehicle, which would not be covered by insurance. For example, using a vehicle as a diving board.
Second, if the incident survives the filter, it must be established that the use/operation of the vehicle directly caused the claimant’s injuries. This is known as the causation test. To assess this, the trier of fact must consider if the incident would have occurred “but for” the use or operation of the automobile. Further, they must determine if there were any separate intervening events that would break the chain of causation between the use/operation of the vehicle and the claimant’s injury. And finally, the trier must consider if the use/operation of the automobile was the dominant feature of the incident.
Justice Perell reviewed many cases where various triers of fact (LAT adjudicators, priority arbitrators, and courts) considered different incidents and assessed if they satisfied the definition of “accident”. The common thread was that each case must be assessed on its own facts.
The Incident
Greg Smith Jr. was a listed principal driver of a GMC truck insured with Northbridge. In late 2018, the car’s front axel broke causing it to be inoperable. After a month of not driving the GMC, on December 20, 2018, Greg invited his friends, Kalob Robinson and Aaron Keer, to help load the GMC onto a trailer to transport it to a place where Greg could work on the car and fix it. Greg affixed his trailer to a Dodge truck owned by Aaron, insured with Jevco.
The three friends winched the GMC truck onto the trailer. Kalob then stepped onto the trailer to secure the GMC to the trailer. Tragically, the GMC began to roll back onto Kalob and he suffered catastrophic injuries.
Kalob did not have a driver’s license, a vehicle, or his own insurance policy. As a result of the incident, Kalob submitted a claim for accident benefits to Northbridge, as the insurer of the GMC that struck him.
The LAT Dispute
Northbridge, to whom Kalob submitted his application for benefits, brought an application before the LAT for a determination of whether this incident satisfied the definition of “accident”. Having reviewed the relevant evidence, the LAT determined that the purpose test was not met because the claimant’s injuries were not the direct result of the ordinary use or operation of the motor vehicle insured by Northbridge (the GMC).
The LAT determined that the “moving of a vehicle incapable of motoring does not constitute in my view the ordinary use or operation of the vehicle”. Put another way, the LAT determined that since the vehicle was inoperable, it could not be used for its ordinary purpose, motoring, because it could not move or be operated under its own power. The vehicle ceased being a motor vehicle – it became an object that used to be a motor vehicle.
The LAT noted that it was restricted to assessing only the relationship between the claimant and the Northbridge-insured vehicle, the GMC, rather than the totality of the circumstances involving the Jevco insured vehicle, which was operational. In that context, the GMC was not being used for its ordinary purpose and the first test was not satisfied.
A reconsideration was requested but denied. No further appeal was made. As far as the LAT was concerned, this incident was not an “accident”.
The Priority Dispute
Simultaneously, Northbridge placed Jevco on notice of a priority dispute arguing that Jevco was in higher priority to handle the accident benefits claim. Jevco denied liability and took the position that the policy had been cancelled the day before the incident. Arbitrator Sampliner was appointed and tasked with determining (1) whether the incident was an “accident” and (2) who was in higher priority to handle the claim.
First, Arbitrator Sampliner decided that the Jevco policy was not properly terminated. As such, the priority dispute was a live issue.
Second, Arbitrator Sampliner decided that the inoperable GMC was in fact an automobile. He further determined that loading an inoperable automobile onto a trailer attached to an operable automobile for the purpose of transporting the inoperable automobile for repairs was an ordinary and well-known activity to which automobiles were put. Having satisfied the purpose test, Arbitrator Sampliner concluded that the GMC truck directly caused Kalob’s injuries. As such, the incident satisfied the definition of “accident” pursuant to the SABS.
Finally, having found that this was an accident, Arbitrator Sampliner concluded that Northbridge was the priority insurer and was required to continue to adjust and pay Kalob’s claim.
The Appeal Decision of the Superior Court of Justice
Northbridge appealed Arbitrator Sampliner’s decision on two grounds. First, the arbitrator made a reviewable error by finding that the incident was an “accident”. Second, Arbitrator Sampliner’s decision made inconsistent findings (with the LAT’s decision) and this represented an abuse of process.
As noted earlier, Justice Perell set out the caselaw surrounding the definition of “accident”. He concluded that Arbitrator Sampliner’s decision was not only reasonable, but also legally correct. It was noted that the GMC truck, although broken down, did not transform it from an automobile to junk – it continued to be an automobile. Justice Perell observed that there was no requirement in the SABS or the Insurance Act for the automobile to be operational; nor was there a requirement for the automobile to have a motorist. Justice Perell found that the GMC, although inoperable at the time, was still an automobile in the ordinary parlance.
Next, Justice Perell considered the purpose test. He concluded that in order for this part of the test to be satisfied, the automobile did not necessarily have to be operational – there was no active component to the purpose test. Rather, having an automobile repaired was well within the ordinary and well-known activities to which automobiles are put.
The Court then considered the direct causation test. He found that the subject incident would not have occurred but for the use being made of the GMC, which was being taken to be repaired. There were no separate intervening events and the GMC was the dominant feature of Kalob’s injuries.
Justice Perell affirmed Arbitrator Sampliner’s finding that the subject incident was an “accident”, despite the finding being in contradiction with the LAT’s decision. In that regard, the Court concluded that there was no abuse of process. Just like the LAT having exclusive jurisdiction over accident benefits entitlement, arbitrators had exclusive jurisdiction over priority disputes. Neither one’s decisions were binding on the other and each may be tasked with assessing the same issue – whether an incident is an “accident”.
The Decision of the Court of Appeal
The case was appealed to the Ontario Court of Appeal who dismissed the appeal by concluding: “we see no error in the reasons for judgement and are in substantial agreement with those reasons.”
Takeaway
Unlike the Schrödinger’s cat experiment, in the case of the subject GMC incident, after opening the box, we see that it was both an “accident” and not an “accident” (pursuant to the SABS) at the same time. This contradictory result can exist in Ontario as each trier of fact has their own exclusive jurisdiction. As a result, on occasion, when tasked with considering the same legal test in different contexts, separate triers of fact can arrive at two different conclusions – with both being correct. The result may be absurd, but I guess that’s quantum physics (or insurance law) for you.
See priority decisions: Northbridge General Insurance Corp. v. Jevco Insurance Co., 2024 ONSC 1520 https://canlii.ca/t/k3gpw; affm’d in Northbridge General Insurance Corporation v. Jevco Insurance Company, 2025 ONCA 74 https://canlii.ca/t/k96cn
See LAT decisions: Northbridge Personal Insurance Corporation. v Robinson, 2021 CanLII 62541 https://canlii.ca/t/jh1bv; affm’d in Northbridge Personal Insurance Corporation v K.B, 2022 CanLII 170 https://canlii.ca/t/jlmm0
