Anyone familiar with contract law likely knows that litigation can often be hyper-focused on the language of a contract. This is true regarding insurance litigation related to personal injury law, including motor vehicle accidents. In many insurance litigation cases, the conflict between the parties (often the insured party and the insurer) revolves around whether or not the insured party has insurance for the accident that led them to file the claim. 

A recent decision from the Court of Appeal of Ontario dealt with the driver of a dirt bike who was injured during a competition. His insurance company claimed the event was not covered under his policy, and the court had to look at the contract’s language to determine whether he was insured. 

Motocross rider is severely injured in time trials for competition

The applicant was a motocross rider driving his dirt bike as part of a competition. At the time of the accident, he was involved in a time trial in which riders raced a track one at a time to see who could get the fastest completion time. Near the end of a lap, the applicant was severely injured when his bike left the track. His injuries resulted in his having paraplegia. 

The applicant had an automobile insurance policy with the respondent insurance company (the “insurer”), but his dirt bike was not listed as an insured vehicle in his policy. The insurer denied his claim for coverage because the incident was not an “accident” as described in the Statutory Accident Benefits Schedule and because his dirt bike was not considered an “automobile” under the Insurance Act.

After moving through an adjudication process as well as a Divisional Court decision that found the applicant was insured, the insurer appealed with the focus of the appeal being whether the dirt bike is exempt from the insurance requirement of the Off-Road-Vehicles Act (“ORVA”), and more specifically whether an exemption within the ORVA is restricted to only certain types of competitions (those that a motorcycle association sponsors).

The nature of the question the court was answering required a closer look at the competition the applicant was participating in. The injury occurred in 2017 at a closed course competition. The parties involved agreed that the event was sanctioned by the Canadian Motorsport Racing Competition (“CMRC”), a for-profit organization that operates similarly to a promotion company.

The court reviewed various pieces of legislation before summarizing how things fit together, stating that all Ontario drivers who drive vehicles on public highways must be insured. Additionally, the ORVA governs the licensing and operation of a variety of off-road vehicles and the rules around the insurance of those vehicles except their use on highways. The ORVA states that all off-road vehicles must be insured.

Was the accident happening in a situation that was exempt from insurance coverage?

During a Tribunal hearing that took place before the matter was appealed to the courts, the Associate Chair found that the exemption for races only applied to competitions and rallies that were sponsored by a motorcycle association, adding that the ORVA is not only intended to protect the public when off-road vehicles are driven in public spaces. Instead, the law was intended to provide universal coverage. 

An appeal heard by the Divisional Court agreed with the Tribunal’s decision

The court began its analysis by stating that the interpretation of “at a closed course competition or rally sponsored by a motorcycle association” must have regard to the text and purpose of the ORVA, which is to ensure public safety and proper identification of off-road vehicles. This is contrary to the insurer’s position that insurance is in place to protect people from harm caused by vehicles in public places. 

The court wrote that the ORVA is just one component of a larger single automobile insurance scheme. For example, insurance would apply to two people who decided to have a race between themselves at a closed location. This same logic could be extended to the time trial event the applicant was racing in, especially since it was not sponsored by an association (instead, it was promoted by a for-profit organization). The court acknowledged that the event in which the applicant hurt himself was “organized” and did not appear impromptu or done without safety precautions. Even if the court did not agree with the divisional court’s ruling that it was not an event that qualified the applicant’s exemption from insurance, the finding was one of fact. It could not be appealed, nor was it something that was listed as grounds for appeal.  

The court also gave no way to the insurer’s argument that there should be a distinction between “rallies” and other closed course competitions because they involve different risks, stating that the latter is less risky because they are isolated from the public (since they are on closed courses). The court wrote that whether a race or competition happened in a public or private venue was irrelevant and that drawing a line between the two would not be easy to follow. 

Because of these reasons, the insurer’s appeal was denied, and the applicant was entitled to receive coverage for his injuries. 

Tierney Stauffer LLP In Ottawa, Cornwall, Kingston And North Bay Can Help You For Your Off-Road Vehicle Insurance Issues

At Tierney Stauffer LLP, we recognize that no two accidents or accident victims are the same, which is why we give each claim the personalized attention needed to bring about the best possible resolution. Call us at 1-888-799-8057 or contact us online to set up a free consultation with one of our experienced personal injury lawyers.


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