



COURT OF APPEAL FOR ONTARIO

CITATION: Matheson v.
    Lewis, 2014 ONCA 542

DATE: 20140711

DOCKET: C57170 & C58490

Juriansz, Tulloch and Strathy JJ.A.

BETWEEN

Arthur
    Matheson, Diane Matheson, Derek Matheson, Travis

Matheson, Justin Matheson
    and John Matheson

Plaintiffs (Respondents)

and

Gary
    Wayne Lewis, GMAC Leasco Limited,

Lanark Mutual Insurance
    Company

Defendants (Appellants)

Stephen S. Appotive and Meghan E. W. OHalloran, for Lanark
    Mutual Insurance Company

Paul Muirhead for Gary Wayne Lewis and GMAC Leasco
    Limited

Robert E. Houston, Q.C., for the respondents

Heard: April 29, 2014

On appeal from the order of Justice Kenneth E. Pedlar of
    the Superior Court of Justice, dated April 24, 2013.

Juriansz J.A.:

[1]

The question on appeal is whether an unmodified all-terrain vehicle
    (ATV) owned by a farmer and used in farm operations was a self-propelled
    implement of husbandry and therefore not subject to the provinces compulsory
    motor vehicle liability insurance regime.

[2]

The question arises in the context of a motor vehicle accident. A
    farmer, the respondent Mr. Arthur Matheson, was injured while driving an
    uninsured ATV on a public road when he was struck from behind by a truck. The farmer
    and his family members brought an action against the driver of the truck, the
    owner of the truck, and the insurer of Mr. Mathesons own automobiles.

[3]

The plaintiffs, respondents on appeal, brought a motion before trial to
    determine whether their action was statute barred by s. 267.6(1) of the
Insurance
    Act,
R.S.O. 1990, c. I.8. Section 267.6(1) provides that a person is not
    entitled to recover damages for bodily injury or death arising from the use or
    operation of an automobile if, at the time of the incident, the person was
    operating an uninsured motor vehicle on a highway contrary to section 2(1) of
    the
Compulsory Automobile Insurance Act
, R.S.O. 1990, c. C.25.

[4]

The plaintiffs also sought a declaration that their claims against Mr. Mathesons
    insurer, the appellant Lanark Mutual Insurance Company (Lanark Mutual), were
    not foreclosed by operation s. 30(1)(a) of the
Statutory Accident Benefits
    Schedule
, O. Reg. 403/96. Section 30(1)(a) provides that an insurer is not
    required to pay various benefits in respect of an injured driver who knew or
    ought reasonably to have known that he or she was operating an automobile
    without motor vehicle liability insurance.

[5]

The motion judge found that the ATV was a self-propelled implement of
    husbandry and was therefore excluded from Ontarios compulsory insurance
    regime. Consequently, neither s. 267.6(1) of the
Insurance Act
nor s.
    30(1)(a) of the
Statutory Accident Benefits Schedule
applied to bar
    the respondents claims. I would allow the appeal based on my conclusion that
    the ATV was not a self-propelled implement of husbandry but an off-road vehicle
    that had to be insured when operated by a farmer on a public road.

Facts

[6]

The respondent Mr. Matheson is a full-time farmer. His farm of about 900
    acres includes three parts that front onto a public roadway. He raises beef
    cattle and sheep. During the day, he kept the sheep in a gated field on the
    most westerly of the three parts of the farm. To check on the sheep, he could
    walk or drive his ATV to the gated field. He could walk there without leaving
    his farm property but it was faster for him to travel on the public road on
    which the farm fronted.

[7]

On October 11, 2008, Mr. Matheson used his ATV to check on the sheep.
    While he was driving the ATV on the public road, a truck driven by the
    appellant Lewis and owned by the appellant GMAC Leasco Limited struck him from
    behind, leaving him with serious and permanent physical and cognitive
    disabilities. Lewis left the scene of the accident and was subsequently
    convicted of careless driving, obstruction of justice and breach of probation.
    The investigating police officer concluded that Mr. Mathesons ATV was a
    self-propelled implement of husbandry that did not require insurance under a
    motor vehicle liability policy and so did not charge Mr. Matheson with an
    offence under s. 2(3) of the
Compulsory Automobile Insurance Act
.

[8]

The ATV was an unmodified 1986 Honda model TRX 200 SX. Its first owner
    was not a farmer but a small engine mechanic who operated a supply store in the
    Village of Lanark. It came equipped with four wheels that had contact with the
    ground; a steering handlebar; and a straddle seat that was designed for a
    driver only. The first owner also purchased front and rear carriers which were
    standard optional equipment available from Honda. These carriers could be
    simply bolted onto the ATV and did not require any modification to the ATV
    itself. The ATV was also equipped with a trailer hitch.

[9]

Mr. Matheson purchased the ATV from the first owner in 1997. Upon the
    transfer of ownership, Mr. Matheson received a license plate for the ATV. Both
    the ownership and the plate permits for the ATV were issued under Ontarios
    off-road vehicle registration system. Mr. Matheson affixed the license plate to
    the rear of the ATV but removed it while carrying out routine maintenance and
    did not reinstall it before the accident. At the time of purchase, Mr. Matheson
    completed a sales tax exemption declaration stating that the ATV was for farm
    use only. During the next 11 years, Mr. Matheson used the ATV exclusively for
    farming-related purposes. He used it to get to different places, to carry tools
    and equipment and to take supplies where they were needed. Mr. Matheson made no
    changes to the ATV.

[10]

At
    the time of the accident, Mr. Matheson was insured by Lanark Mutual under a
    standard automobile policy and a farm insurance policy. The standard automobile
    insurance policy provided coverage for two automobiles but not for the ATV. The
    farm policy, in addition to providing coverage for buildings, livestock,
    produce and equipment, specifically described and provided coverage for
    self-propelled equipment as described. Only a John Deere combine was
    specified.

[11]

Mr.
    Mathesons insurance agent advised him that the ATV was not a self-propelled
    implement of husbandry and that it would have to be insured under an automobile
    policy if he took it off his property. He advised Mr. Matheson that if he did
    not insure the ATV he could be denied accident benefits if involved in an
    accident while riding it off of farm property. The agent testified that Mr.
    Matheson told him that the ATV hardly ever left the farm and that he would
    take his chances.

The motion judges decision

[12]

The
    specific questions before the motion judge were:

1.

Whether the Matheson action was statute-barred
    by operation of s. 267.6(1) of the
Insurance Act
; and

2.

Whether Mr. Mathesons claims against Lanark
    Mutual Insurance Co. for statutory accident benefits, and specifically income
    replacement benefits, were foreclosed by operation of s. 30(1)(a) of the
Statutory
    Accident Benefits Schedule
.

[13]

The
    motion judge proceeded on the basis that the answers to these questions
    depended on whether Mr. Mathesons ATV was, on the date of the accident, a
    self-propelled implement of husbandry. That is because the
Compulsory
    Automobile Insurance Act
, while prohibiting the operation of a motor
    vehicle on a highway unless it is insured under a contract of automobile
    insurance, gives motor vehicle the same meaning it has under s. 1 of the
Highway
    Traffic Act
, R.S.O. 1990, c. H.8. Section 1 of the
Highway Traffic Act
excludes a self-propelled implement of husbandry from its broad definition of
    motor vehicle. The
Highway Traffic Act
defines a self-propelled
    implement of husbandry as a self-propelled vehicle manufactured, designed,
    redesigned, converted or reconstructed for a specific use in farming.

[14]

The
    motion judge evidently concluded that s. 30(1)(a) of the
Statutory Accident
    Benefits Schedule
would also not apply to Mr. Matheson if his ATV was a
    self-propelled implement of husbandry. Section 30(1)(a) refers to the use of an
    uninsured automobile, rather than a motor vehicle. The motion judge noted
    that the
Insurance Act
provides two different definitions of
    automobile in ss. 1 and 224(1). He observed at para. 34 that the extended
    definition of automobile in the
Compulsory Automobile Insurance Act
refers
    to the
Highway Traffic Act
, so the exception for a self-propelled
    implement of husbandry would still need to be addressed.

[15]

The
    motion judge noted that, to determine whether the ATV was a self-propelled
    implement of husbandry, he only had to consider whether Mr. Mathesons ATV was
    designed or manufactured for a specific use in farming and used for farming
    purposes. That was because the ATV was in the same state as when it came off
    the assembly line. It had not been redesigned, converted or reconstructed.

[16]

In
    considering that issue, the motion judge noted this courts statement in
R.
    v. Van Berlo
, 2010 ONCA 242 that a vehicle that is manufactured or
    designed for specific use in farming has an objectively discernable character
    or function that does not depend at all on the particular use intended by the
    user. The motion judge remarked that it was a matter of common sense that the
    person making the objective assessment of the character of the vehicle in question
    should be reasonably well-informed about agricultural life, specifically animal
    husbandry. He said that [t]hat objective discernment may not accurately exist
    in the person of a Bay Street lawyer living in Rosedale, or in a downtown high
    rise condominium, in Toronto: para. 47. Rather he found that such objectively
    accurate discernment did exist in Mr. Matheson and his witnesses who were
    well-versed in the agricultural community of Eastern Ontario.

[17]

The
    motion judge accepted. at para. 12, evidence introduced by Mr. Matheson about
    the evolving nature of the use of ATVs in the practice of farming over the
    years. He took judicial notice of the fact that farming, like other
    industries, businesses, and professions, had undergone significant changes and
    advances in the use of equipment and technology. Based on Mr. Mathesons
    affidavit, which set out his own knowledge and experience of the use of ATVs in
    farming and referred to a document obtained from Honda Canadas website, the
    motion judge accepted that ATVs have become a part of everyday life in
    virtually all farming operations in Ontario and are designed to perform a
    multitude of specific farm tasks. He remarked that the ATV is ideally suited
    for the task of rounding up cattle and sheep. He accepted the evidence that
    farmers are beginning to use ATVs instead of tractors for many tasks.

[18]

Given
    the changing nature of farming, the motion judge expressed his opinion at para.
    49 that the statutory and regulatory definitions have not kept pace. While
    many people purchase and use ATVs as recreational vehicles, ATVs are now an
    integral part of virtually all full-time farming operations and need to be
    recognized as such and responded to appropriately by our laws.

[19]

The
    motion judge found at para. 51 that any reasonably informed person about
    farming in Ontario, particularly beef and sheep husbandry, would readily
    discern the character and function of the vehicle driven by Matheson as being
    an implement manufactured and designed for a specific use in farming and animal
    husbandry. This was not a question of the specific use intended by Mr.
    Matheson only.

[20]

Invoking
    the principle of purposive interpretation, the motion judge reasoned that the
Compulsory
    Automobile Insurance Act
of Ontario is intended to protect innocent
    victims of automobile accidents. He noted that taking away an injured partys
    rights to sue a tortfeasor and to claim no-fault benefits is a harsh civil
    penalty intended to ensure that innocent victims of accidents are protected. He
    commented that if the defendants position were correct, the result would be
    that an injured person not at fault in the accident would be denied significant
    benefits including the right to claim damages from the negligent party. He also
    considered that the primary purpose of compelling Mr. Matheson to insure the
    ATV would be to protect himself from liability if he were negligent and protect
    the innocent victims of his negligence. It would also result in him making a
    modest contribution towards the funds available in support of the entire
    insurance scheme: para. 55.

[21]

After
    weighing these considerations, the motion judge concluded that a fair, large
    and liberal interpretation of the
Compulsory Automobile Insurance Act
and a finding in favor of Mr. Matheson would best achieve the object of the
    Act. The motion judge found that Mr. Matheson and his family members were not
    statute-barred from bringing the action against GMAC Leasco and Lewis, and that
    Mr. Matheson could claim statutory accident benefits from Lanark.

Analysis

[22]

The
    motion judge correctly identified the purpose of the legislation before him but
    then adopted an interpretation that failed to give effect to that purpose. He
    considered matters that were not pertinent to the exercise of statutory
    interpretation: whether the regulatory definitions were out of date, the views
    of the farming community, and the fact that Mr. Matheson was not at fault in
    the accident. Consequently, he lost sight of the goal of determining the intent
    of the legislature.

The statutory and regulatory
    scheme

[23]

The
    motion judge strayed outside the role of the court, which is to interpret and
    apply the laws enacted by the legislature. No technique of statutory
    construction allows a court to decline to apply legislation that in its opinion
    has not kept pace with changes in society.

[24]

In
    this case, a regulation under the
Off Road Vehicles Act
, R.R.O. 1990,
    c. O.4,

explicitly classifies the Honda ATV model TRX 200 as an
    off-road vehicle: R.R.O. 1990, Reg. 863, s. 3, para. 3. Mr. Matheson has not
    argued that his Honda TRX 200 SX does not come within this provision. In any
    case, s. 3 of Reg. 863 also classifies all-terrain vehicles generally as
    off-road vehicles, so long as they have steering handlebars and a seat designed
    to be straddled by the driver: para. 1.1. The
Off-Road Vehicles Act
,
    s. 15,

prohibits a person from driving an off-road vehicle on land not
    occupied by the owner of the vehicle unless it is insured under a motor vehicle
    liability policy in accordance with the
Insurance Act
. As well, a
    regulation under the
Highway Traffic Act
, O. Reg. 316/03, provides
    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
.

[25]

The
Highway Traffic Act
, the
Off-Road Vehicles Act
, the parts of
    the
Insurance Act
dealing with motor vehicle insurance, and the
Compulsory
    Automobile Insurance Act
are all components of one comprehensive scheme.
    As a principle of statutory interpretation, there is a presumption of harmony,
    coherence and consistency between statutes dealing with the same subject
    matter:
R. v. Ulybel Enterprises Ltd.
, 2001 SCC 56, [2001] 2 S.C.R.
    867, at para. 52; Ruth Sullivan,
Statutory Interpretation
, 2nd ed.
    (Toronto: Irwin, 2007), at pp. 149-151. Within the legislative scheme governing
    automobile insurance, Mr. Mathesons ATV cannot have been both an off-road
    vehicle that required insurance when operated on land not occupied by the owner
    and at the same time a self-propelled implement of husbandry that was excluded
    from Ontarios compulsory insurance regime. That the regulatory scheme
    classifies the Honda ATV model TRX 200 and other ATVs with steering handlebars
    and straddle seats as off-road vehicles leads to the immediate conclusion that
    they are not self-propelled implements of husbandry.

[26]

It
    was beyond the competence of the motion judge to conclude that Mr. Mathesons
    ATV was a self-propelled implement of husbandry based on his opinion that the
    regulatory regime has not kept pace with changes in society, that ATVs need to
    be responded to appropriately by our laws, and that they need to be recognized
    as self-propelled implements of husbandry.

[27]

Reg.
    863 could not make clearer the legislative intent that a Honda ATV model TRX
    200 is an off-road vehicle and not a self-propelled implement of husbandry. The
    motion judges failure to give effect to Reg. 863 is a sufficient basis for
    allowing the appeal.

[28]

I
    would add that I see no basis for the motion judges conclusion that the
    regulatory definitions have not kept pace with changes in society. He seems to
    have taken the view that the regulatory scheme was designed so that all
    vehicles used extensively in farming would be exempt from Ontarios compulsory
    insurance regime. That is not so. The legislature has carefully stuck a balance
    between the needs of farmers and the protection of the public. The legislature,
    in the
Off-Road Vehicles Act
, recognizes and specially accommodates
    the use of off-road vehicles by farmers. Section 2(2)(b)(i) of the Act allows a
    farmer who is a licensed driver to operate an off-road vehicle on a highway if
    the vehicle is designed to travel on more than two wheels and the vehicle bears
    a slow moving vehicle sign. An ordinary member of the public is not allowed to
    operate an off-road vehicle on a highway, except when crossing it. However, to
    protect the public, the Act requires that off-road vehicles be insured when
    they are operated off the property of the owner. A farmer driving an off-road vehicle
    on a highway as permitted by s. 2(2)(b)(i) must still comply with the
    requirement in s. 15 that the vehicle be insured.

[29]

The
    legislature has gone further with self-propelled implements of husbandry that
    are manufactured, designed, redesigned, converted or reconstructed for specific
    use in farming by exempting them from its compulsory insurance regime.

[30]

I
    see no basis for concluding that the legislatures decision to accord different
    treatment to off-road vehicles used in farming and self-propelled implements of
    husbandry is out of date.

[31]

The
    same may be said of the classification of the Honda ATV model TRX 200 and other
    ATVs with steering handlebars and straddle seats as off-road vehicles. The
    regulations under the
Off-Road Vehicles Act
have been amended from
    time to time, as recently as this year. Despite amending the regulatory
    framework, the legislature has left intact the classification of the Honda ATV
    model TRX 200 as an off-road vehicle. In 2003, the legislature amended s. 3 of
    Reg. 863 by adding paragraphs 1.1 and 1.2: O. Reg. 317/03. Rather than
    referring to specific model numbers, these paragraphs bring whole categories of
    ATVs within the definition of off-road vehicles. This must be seen as a
    regulatory choice. It seems to me the legislature is well aware of the use of
    ATVs by farmers and has provided for that use by allowing farmers to operate
    ATVs on a highway
with insurance
. The issue is not
    whether farmers can operate ATVs used in agriculture on highways, but whether
    they can do so without insurance.

The ordinary meaning of the
    definition

[32]

The
    motion judge did not give effect to the grammatical and ordinary sense of the
    definition of a self-propelled implement of husbandry.

[33]

The
    question before the motion judge was whether the ATV had been manufactured or
    designed for a specific use in farming. The evidence in the record would
    establish, at the highest, that the Honda ATV model TRX 200 SX was designed and
    manufactured to be a multipurpose vehicle and that it is now widely used in
    farming. It was open to the motion judge to conclude, as he did, that the ATV
    is ideally suited for and widely used to carry out many farming tasks. This,
    however, does not establish that it was manufactured or designed for a specific
    use in farming. The evidence establishes that it was manufactured and designed
    to serve both recreation and utility purposes. Though the ATV may be ideally
    suited for use by farmers, it may be equally ideally suited for use by hunters
    and trappers, and for recreation.

[34]

Justice
    Goudge stated in
R. v. Van Berlo
, at para. 17, that a vehicle that is
    manufactured or designed for a specific use in farming has an objectively
    discernable character or function that does not depend at all on the particular
    use intended by the end user. Although he added that he did not agree that
    the [definition of a self-propelled implement of husbandry] requires that the
    vehicle be capable only of the specific use in farming for which it was
    manufactured or converted, this comment simply recognizes that though
    self-propelled implements of husbandry must be manufactured or designed for a
    specific use in farming, they may still be capable of being put to some other
    use. In this case the first step was not satisfied Mr. Mathesons ATV lacked
    the objectively discernable character or function necessary to establish it was
    manufactured or designed for a specific purpose in farming.

[35]

Even
    if the farmers views were relevant in determining legislative intent, they
    only spoke to the widespread use of ATVs by farmers and not to their design or
    manufacture. The motion judge erred in giving controlling weight to this
    evidence. Mr. Mathesons ATV may have been a vehicle used in farming but it was
    not a vehicle manufactured or designed for a specific use in farming. Not all vehicles
    used in farming are excluded from Ontarios compulsory insurance regime.

Purposive interpretation

[36]

The
    starting point for a purposive analysis of Ontarios compulsory insurance
    regime is s. 2 (1) of the
Compulsory Automobile Insurance Act
which
    prohibits an owner of a motor vehicle from operating it on a highway unless
    the motor vehicle is insured under a contract of automobile insurance. As the
    motion judge noted at para. 55, Ontarios compulsory automobile insurance
    regime is clearly intended to protect innocent victims of automobile accidents
    from having no means of seeking damages from persons who might have caused
    those damages without having the protection of automobile insurance.

[37]

To
    foster its goal of universal insurance coverage, the legislature has given all
    owners of vehicles strong incentives to purchase the required insurance.
    Section 2(3) of the
Compulsory Automobile Insurance Act
makes the
    failure to purchase insurance an offence. In addition, the legislature has
    provided that those who fail to purchase insurance cannot recover loss or
    damage arising from the use or operation of an automobile or claim significant
    benefits under the
Statutory Accident Benefits Schedule
.

[38]

The
    motion judge recognized that the purpose of removing of these rights, which he
    characterized as a very harsh civil [penalty], was to give all vehicle owners
    strong reason to purchase the required insurance. On my reading, he did not
    apply this penalty to Mr. Matheson in large part because Mr. Matheson was not
    at fault in the accident. He reasoned that the broader legislative goal would
    be achieved by allowing Mr. Matheson, as the innocent victim of a motor vehicle
    accident, to seek damages from the insured person who caused his damages.

[39]

The
    motion judge erred by not giving effect to the means the legislature chose to
    further its broad goal of protecting innocent victims of motor vehicle
    accidents. The legislative means of ensuring universal insurance would be
    rendered nugatory if they were made applicable only to those who cause
    accidents. Such persons would not be successful in recovering damages in an
    action in any event. The clear legislative intent is that the prospect of not
    being able to recover damages or statutory accident benefits gives vehicle owners
    good reason to purchase insurance before any accident has taken place. The
    motion judge failed to give effect to the legislative purpose of the specific
    provisions he had to interpret and apply. The legal maxim dura lex sed lex
[1]
applies. The provisions, even if considered very harsh, must be enforced.

[40]

The
    motion judge erred by finding Mr. Mathesons ATV was a self-propelled implement
    of husbandry, and by failing to find that his action was statute-barred by
    operation of s. 267.6(1) of the
Insurance Act
and his claim for statutory
    accident benefits was foreclosed by operation of s. 30(1)(a) of the
Statutory
    Accident Benefits Schedule
.

The meaning of automobile in the SABS

[41]

An
    additional comment is necessary regarding the motion judges reasoning about Mr.
    Mathesons claim for statutory 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). The
Schedule
does not contain a definition of
    automobile.

[42]

As
    the motion judge noted, the
Schedule
is a regulation under the
Insurance
    Act
, and the Act provides two different definitions of an automobile.

[43]

Section
    224 of the
Insurance Act
defines automobile for the purposes of Part
    VI, entitled Automobile Insurance. It defines an automobile 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.
    The definition does not include a self-propelled implement of husbandry.

[44]

Section
    1 of the Act defines an automobile to include a trolley bus and a
    self-propelled vehicle, and the trailers, accessories and equipment of
    automobiles, but not railway rolling stock that runs on rails, watercraft or
    aircraft.

[45]

These
    inclusive definitions are broad enough to encompass Mr. Mathesons ATV. The
    motion judge reasoned the exception for a self-propelled implement of
    husbandry in the general definition of motor vehicle in the
Highway
    Traffic Act
would still have to be considered because the extended
    definition of "automobile" under the
Compulsory Automobile
    Insurance Act
refers to the
Highway Traffic Act
. It appears he
    misspoke. The
Compulsory Automobile Insurance Act
contains no
    definition of automobile.

[46]

I
    need not attempt to deduce what provision the motion judge had in mind. I have
    concluded Mr. Mathesons ATV was not a self-propelled implement of husbandry.
    If there were an exception such as the motion judge had in mind, it would not
    apply.

Conclusion

[47]

I
    would allow the appeal, set aside the motion judges order and replace it with
    an order that Mr. Mathesons action is statute-barred by operation of s.
    267.6(1) of the
Insurance Act
and that Mr. Mathesons claims against
    Lanark Mutual for statutory accident benefits are foreclosed by operation of s.
    30(1)(a) of the
Statutory Accident Benefits Schedule
. I would fix the
    costs of the appeal in the amount of $20,000 for Lanark and $12,500 for GMAC
    Leasco and Lewis, and the costs of the motion in the amount of $15,000 for
    Lanark and $7,500 for GMAC Leasco and Lewis, all amounts inclusive of
    disbursements and applicable taxes.

Released: July 11, 2014

RGJ                                                                          
    R.G. Juriansz J.A.

I
    agree M. Tulloch J.A.

I agree G.R. Strathy J.A.





[1]
The law is harsh but it is the law.


