Arbitrator:	Bruce R. Robinson
Date:	97-01-06

IN THE MATTER OF AN ARBITRATION PURSUANT TO THE ARBITRATIONS ACT, 1991

BETWEEN:

NATIONAL FRONTIER INSURANCE COMPANY Applicant - and - ROYAL INSURANCE COMPANY Respondent

AWARD

On November 2nd, 1 995, Mr. Keith -Nadon and Ms. Linda -Dumoulin sustained injuries in a motor vehicle accident. Both parties applied for accident benefits pursuant to the provisions of the Insurance Act R.S.O. 1990, c.l.

Both Mr. Nadon and Ms. Dumoulin were standing on the shoulder of Highway 144 in the province of Ontario when Ms. Brunet's 1988 Oldsmobile struck the disabled Suzuki Sidekick motor vehicle pushing it into the two claimants.

The applicant, National Frontier Insurance Company, insured a 1989 Suzuki Sidekick Motor Vehicle owned by Mr. Mervin Anderson. The Respondent, Royal Insurance Company, insured both a 1986 Dodge Caravan owned by Ms. Joyce Anderson and also a 1988 Oldsmobile 88 which was owned and operated by Ms. Angela Brunet.

Royal Insurance Company has been paying the accident benefits.

ISSUES

The following issues were presented for determination:

1. Was Mr. Norton and/or Ms. Dumoulin 'an occupant of an automobile" or in the alternative "non occupants" pursuant to the provisions of s. 268 (2) 1. and 2. of the Insurance Act.
   
   
2. As between the applicant, National Frontier Insurance Company, and the respondent Royal Insurance Company, which insurer is required to pay the benefits under provisions of s. 268 of the Insurance Act and Ontario Regulation 283/95.

RESULT

1. Linda Dumoulin and Keith Nadon were 'non-occupants" of an automobile as
   set forward in s. 268 (2) 2.
   
   
2. As between National Frontier Insurance Company and Royal Insurance
   Company, the Royal Insurance Company is required to pay the statutory accident benefits to the applicants.
   
   
3. Costs of this arbitration proceeding are to be borne equally by the national Frontier Insurance Company and the Royal Insurance Company.

HEARING

This matter was heard in the City of Toronto in the Province of Ontario on December 6, 1997 before me Bruce R. Robinson Arbitrator, pursuant to the provisions of the Arbitration Act, 1991.

PRESENT AT THE HEARING

The applicant's representative: Mr. J. Claude Blouin,
The respondent's representative: Mr. Stanley C. Tessis.

EXHIBITS (Annexed Herein)

1. Agreed statement of facts.
2. Police Report
3. Book of Authorities.

BACKGROUND

On November 21, 1995 Linda Dumoulin was operating a 1986 Dodge Caravan and was accompanied by Mr. Keith Nadon. This vehicle ran out of gas and it was left on the shoulder of Highway 144 until later that day when the claimants returned in the 1989 Suzuki Sidekick. They were successful in starting the Dodge Caravan however, the Suzuki then broke down. They left the scene in the Dodge Caravan, this time leaving the Suzuki on the shoulder of the Highway 144. On November the 2nd, 1995, Linda Dumoulin and Keith Nadon returned to the scene as passengers in the 1986 Dodge Caravan.

At this time, the Dodge Caravan was stopped on the east shoulder facing southbound directly north of the disabled 1989 Suzuki Sidekick vehicle. Mr. Nadon was standing on the shoulder of the roadway between the two vehicles attempting to boost the battery of the Suzuki. Linda Dumoulin was standing at the side of the road watching these activities.

Ms. Angela Brunet was operating her 1988 Oldsmobile north bound on Highway 144. As she approached the accident scene, her vehicle left the roadway striking the rear of the Suzuki vehicle pushing it forward into both Mr. Keith Nadon and Linda Dumoulin.

Both injured parties presented claims for statutory accident benefits to the Royal Insurance Company who have paid those benefits to the present time.

OCCUPANT OR NON-OCCUPANT ISSUE

The word 'occupant' is defined in s. 224 (1) of the Act as follows:

1. the driver,
2. a passenger, whether being carried in or on the automobile,
3. a person getting into or on or getting out of or off the automobile;

On the agreed statement of facts, it is clear the injured parties do not-f all under any of the above categories with regard to the 1989 Suzuki motor vehicle which had been abandoned on the Highway on November 1, 1995.

It is also clear from the agreed statement of facts, that both injured parties were pedestrians standing on the roadway at the time of the accident. At the moment of impact, neither of the injured parties were a driver or a passenger, nor were they getting in or out of the Dodge Caravan. I therefore find as a fact that they do not fit within the definition of 'occupant" and therefore they would be 'non-occupants'. As such, the provisions of s. 268 (2) 2. of the Act come into play.

SECTION 268(2)2.

The priority of payments issue is to be determined pursuant to s. 268 (2) of the Act where the occupants are involved. That provision states as follows:

"in respect of non-occupants,

1. the non-occupant has recourse against the insurer of an automobile in respect of which the non-occupant is an insured,
   
   
2. if recovery is unavailable under subparagraph i, the non-occupant has recourse against the insurer of the automobile that struck the non-occupant,
   
   
3. if recovery is unavailable under subparagraph i or ii, the non-occupant has recourse against the insurer of any automobile involved in the incident from which the entitlement to no-fault benefits arose,
   
   
4. if recovery is unavailable under subparagraph i, ii or iii, the non-occupant has recourse against the Motor Vehicle Accident Claims Fund.

In this case there is a dispute between Royal Insurance Company, the insurer of the Brunet Oldsmobile which was the propelling force in the accident, and the National Frontier Insurance Company which was the insurer of the disabled Suzuki motor vehicle.

The National Frontier Insurance Company takes the position that the use of the words "the automobile that struck the non-occupant" intended to refer to the vehicle that imparted the force giving rise to the accident. The Royal Insurance Company takes a different view of this wording and feel that these word refer to the striking vehicle.

The purpose behind the statutory scheme is to allow accident victims to seek immediate payment of statutory accident benefits regardless of any issues that may involve one or or more insurance companies. Regulation 283/95 deals with Disputes Between Insurers and section 2 states:

The first insurer that receives a completed application for benefits is responsible for paying benefits to an insured person pending the resolution of any dispute as to which insurer is required to pay benefits under section 268 of the Act."

In this matter I was advised by both counsel that neither of the injured parties had recourse to any other insurance policy and therefore section 268(2)2.i. is not relevant. The right of recovery in this case is founded in section 268(2)2ii. "against the insurer the automobile that struck the non-occupant".

LAW

The first in the line of cases to deal with particular issue is Strum and Co-operators Insurance Association [1 9741 2 O.R. (2d) 70 a decision of Mr. Justice Osier. In this case a car collided with a street sign which struck and killed a pedestrian. The wording of the Insurance Act at that time was somewhat different and the provision being interpreted was as follows:

"234a (1) where person entitled to benefits provided by insurance under s. 231 and s. 232 lb) is a pedestrian and is struck by a motor vehicle the insurer and the owner of the motor vehicle shall, in the first instance, be liable for payment of the benefits provided by the Insurance".

His Lordship states as follows at pages 72 and 73:

'The words 'struck by the described automobile', if taken to mean only that there must be direct physical contact between the automobile and the person of the claimant, could make the possibility of recovery depend upon minute differences in circumstances, entirely unpredictable, such as, for example, whether the claimant had been able to interpose between himself and the automobile some article he was carrying such as a suitcase, a box of tools or unusually thick clothing. In such cases, the force of the impact is transmitted directly to the person of the injured party, regardless of the fact that he has not been 'struck by' the automobile in that there is no direct physical contact between himself and it.

Had this been a case of an object dislodged by the automobile or flung from the automobile striking the claimant, the matter might have presented more difficulty. here, however, without dislodging the street sign, the automobile caused it to bend in such a manner as to bring about her death. Here the force of the impact was transmitted directly to the person of the claimant by an object which was and which remained for the critical period on contact with the automobile. the force was thereby transmitted directly from the automobile to the deceased. This, in my view, amounted to a striking within the meaning of the policy.'

The next cases is Re MacGillivray (1 975) I.L.R. [1 -695] where Mr. Justice O'Driscoll dealt with a situation where a moving vehicle came into contact with a parked vehicle which in turn struck a pedestrian. His Lordship states at page 1256 as follows:

"Here the MacGillivray vehicle collided with the Marks vehicle, forcing -the latter into the Gibson vehicle; Eldon Marks was injured when the front of the Marks vehicle hit him. I repeat the words of Osler, J. (supra); 'Here the force of the impact was transmitted directly to the person of the claimant by an object which was and which remained for the critical period in contact with the automobile. The force was thereby transmitted directly from the automobile to the deceased. This, in my view, amounted to the striking within the meaning of the policy.'

In my view, on the facts before me, it makes no difference whether the "object" is a stalled motor vehicle rather than a hydro pole and I say this even though the stalled vehicle may still be a "motor vehicle" for the purposes of the Criminal Code of Canada.'

Justice O'Driscoll agrees and follows the principles set forward by Justice Osler in the Strum decision.

This matter was considered in great detail by the Ontario Court of Appeal in Ezard v. Warwick et al. (1 978) 21 O.R. (2) 658. Mr. Justice Jessup, speaking on behalf of the Court of Appeal considered the situation where a moving vehicle struck a parked car which in turn struck a pedestrian. The words "struck by' were again reviewed by the court at page 579 his Lordship stated as follows:

'We are of the opinion that both Re Strum and Co-operators Ins. Assn (1 973), 2 O.R. (2d) 70, 42 D.L.R. (3d) 52, and Re: MacGiIlivray [1 975] I.L.R. 1254, were correctly decided."

The Ontario Court of Appeal decision was followed by the Albert Court of Queens Bench in Wells v. Metropolitan Insurance Co. et al. [1 9891 C.C.I.L. 291 where Mr. Justice Foster stated on page 296 as follows:

"He is instead a pedestrian and I would adopt the reasoning of and follow the decision of the Ontario Court of Appeal in Ezard v. Warwich, 25 O.R. (2d) 577, [19791 I.L.R. 1-1 141, 104 D.L.R. (3d) 315. The Metropolitan Insurance Company insuring the striking vehicle would therefore provide the s. B accident benefits to the applicant.'

The most recent decision with regard to these issues is that of Arbitrator Lee Samis in Co-operators General Insurance Company and Royal Insurance Company dated the 29th of August 1996. [I am advised that this case is under appeal.] In that case a vehicle insured by the Co-operators Insurance Company was struck by a vehicle insured by the Royal Insurance Company. The impact caused the Co-operators vehicle to struck the applicant who sustained injuries.

Arbitrator Samis considered the above mentioned cases and found himself bound by the decision of the Ontario Court of Appeal in Ezard. He states on page of 5 as follows:

"Thus, as of 1979, the law in Ontario was clear that a person is "struck by" a motor vehicle when that vehicle provides the transmitting force for an injury to occur, even when the actual "contact" is with another vehicle."

He goes on to say at page 6 :

"There was some argument that the term "struck" necessarily implies contact but I do not think that that is correct. Dictionary definitions support the view of the case law that "striking" may or may not imply direct contact. Transmittal of force is consistently required."

I agree ' with Arbitrator Samis' decision and find that the present case must be dealt with in a similar fashion.
I was referred to the decision of State Farm Mutual Insurance Company v. Kentucky Farm Bureau Mutual Insurance Company a decision of the Court of Kentucky [1984] 671 South Western Reporter, 2d Series 258 by counsel for Royal Insurance Company. I did not find this case useful in that there is no similar legislation in Kentucky to deal with the categories of 'occupant' and "non-occupant' nor is there any equivalent of Ontario Regulation 283/95. In the province of Ontario, the first insurer to receive an application is required to commence paying accident benefits pursuant to regulation 283 (95). 1 therefore find that that Kentucky decision is not helpful and is distinguishable from the long line of authorities which are set forward above.

I therefore agree with the lines of decision commencing with Mr. Justice Osier in the Strum matter and continuing through to the recent decision of Mr. Samis. It is my finding that the motor vehicle imparting the force which thereby injures a pedestrian has primary responsibility to pay the statutory accident benefits. There is no uncertainty to an injured person as to whether or not he will be paid and therefore I find that the Royal Insurance Company, the insurers of the Brunet 1988 Oldsmobile 88 are responsible for paying the accident benefits to Mr. Keith Nadon and Ms. Linda Dumoulin.

COSTS

Pursuant to regulation 283 (95) made under the Insurance Act and in particular s. 9 (1) thereof, I have been asked by the parties to consider the issue of the costs. That section states as follows:

" Unless otherwise ordered by the arbitrator or agreed to by all parties before the commencement of the arbitration, the costs of the arbitration for all parties, including the costs of the arbitrator, should be paid by the unsuccessful parties to the arbitration."

This was a novel point of law which was presented in a very competent fashion by both counsel. I therefore exercise my discretion and order the cost of this arbitration be borne equally by both parties and that each of the parties will bear. their own costs.

ORDER

1. The. Royal Insurance Company will pay statutory accident benefits to Linda Dumoulin and Keith Nadon.
   
   
2. The cost of this arbitration will be borne equally between National Frontier Insurance Company and Royal Insurance Company. Each of those parties will individually bear their own costs.

Dated at Toronto this 6th day of January 1997.

Bruce R. Robinson
Arbitrator

AGREED STATEMENT OF FACTS

1. The Applicant is the insurer of a 1989 Suzuki Sidekick two door vehicle which was owned by Mervin Anderson.
   
   
2. The Respondent is the insurer of a 1986 Dodge Caravan owned by Joyce Anderson.
   
   
3. The Respondent is also the insurer of a 1988 Oldsmobile 88 which was owned and operated by Angel Brunet.
   
   
4. On November 2, 1995 at approximately 7:15 p.m., the Suzuki was parked on the east shoulder of Highway 144 facing northbound with no lights on, as a result of becoming disabled. At the time it became disabled (November 1, 1995), Linda Dumoulin was the driver and Keith Nadon was a passenger.
   
   
5. The next day, after a trip to Sudbury, Linda Dumoulin and Keith Nadon had returned to the accident scene in the Dodge Caravan as passengers.
   
   
6. At that time, the Dodge Caravan was stopped on the east shoulder facing southbound directly north of the Suzuki.
   
   
7. The claimant, Keith Nadon (date of birth, January 23, 1976), was standing on the shoulder between the disabled Suzuki and the stopped Dodge Caravan attempting to boost the battery of the Suzuki.
   
   
8. At the same time, the claimant, Linda Dumoulin (date of birth, October 8, 1958), was standing between the Suzuki and the Caravan observing the activities of Keith Nadon.
   
   
9. Angel Brunet was operating her 1988 Oldsmobile northbound on Highway 144 when she left the travelled portion of the road and struck the rear of the Suzuki, pushing it northward and causing it to strike both claimants, Keith Nadon and Linda Dumoulin, causing them injury.
   
   
10. For the purposes of this hearing, a finding should be made that Keith Nadon and Linda Dumoulin were either "occupants" or "non-occupants" and priority should be determined under subparagraph ii of paragraph I of Section 268(2) or subparagraph ii of paragraph 2 of Section 268(2) of the Insurance Act.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

 

J. Claude Blouin
Solicitor for National Frontier Insurance Company

Stanley C. Tessis
Solicitor for Royal Insurance Company

IN D E X

1. Section 268 of the Insurance Act, R.S.O. 1990, c. 1.8
   
   
2. OIC Bulletin A-5/95 re Priority of Payments
   
   
3. Strum and Co-Operators Insurance Corporation (1974), 2 O.R. (2d) 70
   
   
4. Re MacGillivray, [19751 I.L.R. (1-695), Ontario Supreme Court
   
   
5. Ezard v. Warwick et al (1978), 21,0.R. (2d) 658
   
   
6. Ezard v. Warwick et al (1979), 25 O.R. (2d) - Court of Appea
   
   
7. State Farm Mutual Automobile Insurance Company v. Kentucky Farm Bureau Mutual Insurance Company, [19841 671 South Western Reporter, 2nd Series 258 (Court of Appeals of Kentucky)
   
   
8. Wells v. Metropolitan Insurance Company, [19891 39 C.C.L.I. 291
   
   
9. Award - Co-Operators Insurance v. Royal Insurance, August 29,1996
   
   
10. Dictionary Definitions of 'STRIKE', "STRUCK", "STRIKING"
    
    
11. Traham v Royal Insurance Co. [1981] I.L.R. 1-1374