ATVs, Accident Benefits and Lawsuits: Timing Is Everything!

The use of off-road recreational vehicles such as ATVs for fun and recreation has increased dramatically over the years.  It is also not unusual to see such vehicles on public roadways, and for these vehicles to be driven by young people including minors.   Over the years, recreational culture has given rise to an increasing number of rollovers, crashes, and alcohol-related incidents involving ATVs and other off-road vehicles.

Access to accident benefits and tort compensation is tricky where an ATV is involved.  The question of accessibility is informed by the complex potpourri of Insurance Act, the Highway Traffic Act, the SABS, and the Compulsory Automobile Insurance Act.  An ATV accident throws the Off-Roads Vehicle Act into this mix.  Two recent appellate decisions have attempted to provide further clarity.

Recently, the Ontario Court of Appeal had occasion to determine whether a farmer’s use of an uninsured ATV on a public highway barred him from commencing tort proceedings and claiming statutory accident benefits.  In Matheson v. Lanark Mutual Insurance Company [2014] O.J. No. 3304 (C.A.), an Ontario farmer used his ATV for farm purposes only, on his own farm.  In the course of doing so one evening, he briefly crossed a highway to check on his sheep, which were located on the other side of his farm.  He had an accident while crossing the highway.  The ATV was uninsured.

The Compulsory Automobile Insurance Act, s.2, requires all motor vehicles on a highway to be insured under an automobile policy. Similarly, the SABS precludes certain accident benefits including income replacement benefits where at the time of the accident the injured person operated an uninsured “automobile”.  The SABS does not contain a definition of “automobile”.

The Compulsory Automobile Insurance Act defines “motor vehicle” by referencing the definition of same in section 1 of the Highway Traffic Act.  The Highway Traffic Act excludes a “self-propelled implement of husbandry” from its definition of motor vehicle.

The farmer attempted to argue that the ATV was a “self-propelled implement of husbandry” rather than a motor vehicle, and, as such, was exempted from Ontario’s compulsory insurance regime, including the Compulsory Automobile Insurance Act, the Highway Traffic Act, and the SABS.  However, ATVs are governed by the Off-Road Vehicles Act and its regulations.   Pursuant to s.15 of the Off-Road Vehicles Act, an ATV that is not operated on the land of the ATV owner must be insured under a motor vehicle liability policy.  Furthermore, the regulations under the Highway Traffic Act provide that an off-road vehicle shall not be operated on a highway unless it is insured in accordance with s.2 of the Compulsory Automobile Insurance Act and s.15  of the Off-Road Vehicles Act.

The Ontario Court of Appeal ruled that Mr. Matheson’s ATV was not a self-propelled implement of husbandry even though it was primarily used for farm purposes. As such Mr. Matheson’s ATV was subject to the insurance rules set out in the Off-Road Vehicles Act and the Compulsory Automobile Insurance Act.  As Mr. Matheson’s ATV was crossing a public highway at the time of his injury, it was a motor vehicle; as it was uninsured at the time he crossed the highway, he was barred from a tort claim.

Mr. Matheson was similarly barred from claiming income replacement benefits. Accident benefits are available under the SABS if a person was injured in an accident resulting from the use or operation of an “automobile.”  The SABS does not define “automobile.”  As the Court of Appeal noted in Matheson, section 224 of the Insurance Act defines “automobile” for the purposes of Part VI, entitled “Automobile Insurance”, to include “a motor vehicle required under any Act to be insured under a motor vehicle liability policy” and any vehicle prescribed by regulation to be an automobile.

As Mr. Matheson’s ATV was accessing a public highway at the time of his accident, it was required to have motor vehicle liability insurance at that time – hence, the ATV was an automobile at that time.  As the ATV was uninsured, he was barred from claiming income replacement benefits:

Section 30(1)(a) disqualifies a driver of an “automobile” from claiming income replacement benefits if, at the time of the accident, he or she was knowingly operating an “automobile” without motor vehicle liability insurance. This provision would apply to Mr. Matheson if the ATV he was driving at the time of the accident was an ‘automobile’ within the meaning of s.30(1)(a).

Surprisingly, the Court of Appeal in Matheson did not consider or refer to Bouchard v. Motors Insurance Corp [2013] O.J. No. 1960 (Div.Ct).  The two decisions are not at odds. Bouchard stands for the principle that if a vehicle is required to be insured, then it will be considered an automobile and accident benefits will be available to the injured person. In Bouchard, the off-road vehicle in question, a pocket-bike, was being driven on the owner’s private property and the Court ruled that at the time of injury it did not need to be insured under s.15 of the Off-Road Vehicles Act.  As such, it did meet the definition of “automobile” in s.224 of the Insurance Act, and, therefore, the SABS would not apply.

The Court in Bouchard applied a 3-part test to determine whether a vehicle is an automobile:

• Is the vehicle an automobile in ordinary parlance?
• If not, then, is the vehicle defined as an automobile in the wording of the insurance policy?
• If not, then, does the vehicle fall within any enlarged definition of automobile in any relevant statute?

The Court in Bouchard answered the first two questions in the negative and analyzed the third question. The only “enlarged definition” of automobile is s.224(1) of the Insurance Act, namely a vehicle that is either required to be insured or prescribed as an automobile. If the vehicle (1) is not an automobile in ordinary parlance; (2) is not defined as an automobile in the insurance policy; (3) is not prescribed as an automobile; and, (4) does not need to be insured, then the vehicle will not be considered an automobile. The Court specifically stated that the determination of whether a pocket bike is considered an automobile under the Insurance Act depends on whether insurance was required at the time of the injury. If, at the time of the injury, the vehicle did not need to be insured then it is not an automobile.

The regulation of off-road vehicles like ATVs and pocket-bikes has given rise to a great deal of confusion as to whether they are subject to the same insurance scheme as cars.  Hopefully the “timing of the accident” test suggested by these two decisions provides some further clarity.