Neutral Citation: 1991 ONICDRG 7

File No. A-000235

ONTARIO INSURANCE COMMISSION

BETWEEN:

STEPHEN SALMON

Applicant

and

TORONTO TRANSIT COMMISSION (MARKEL INSURANCE)

Insurer

DECISION

Issue:

The Applicant, Stephen Salmon, was injured in a motor vehicle accident on October 18, 1990, while operating a bus in the course of his employment with the Toronto Transit Commission (the "T.T.C."). The accident was caused by the negligence of a third party.

Under the Workers' Compensation Act, if this Applicant is injured by a third party in a work-related accident, he may elect either to receive workers' compensation benefits or to claim damages for negligence against the third party.

The Applicant elected to claim damages against the third party. He then applied for no-fault benefits under the T.T.C.'s motor vehicle liability policy, which provides for the no-fault benefits specified in Ontario Regulation 273/90 ("the No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O 1990, Chapter I.8. The Applicant claimed interim no-fault benefits pursuant to Section 21 of the No-Fault Benefits Schedule, pending the resolution of his claim against the third party.

The Insurer denied the application for no-fault benefits, pursuant to Section 20 of the No-Fault Benefits Schedule, on the basis that the Applicant is entitled to receive workers' compensation benefits.

The Applicant applied for mediation. The mediation was unsuccessful and the Applicant subsequently applied for the appointment of an arbitrator under Section 242d of the Insurance Act.

The issue to be determined by the arbitrator is:

Is the Applicant entitled to no-fault benefits under Section 21 of the No-Fault Benefits Schedule?

Result:

The decision of the arbitrator is:

The Applicant is not entitled to no-fault benefits.

Documents before the Arbitrator:

An Application for the Appointment of an Arbitrator in Form 4 dated May 7, 1991 and received May 9, 1991

A response in Form 5 dated June 10, 1991

A reply in Form 6 dated June 19, 1991

Exhibit 1:

Copy of assignment made between the Applicant and the Toronto Transit Commission and consent signed on behalf of the Workers' Compensation Board, dated January 30, 1991.

Exhibit 2:

Copy of Statement of Claim filed in Ontario Court - General Division by the Applicant, dated April 4, 1991.

Authorities & Texts:

(a) Cases:

Andrews v. Law Society of British Columbia, (1989) 1989 CanLII 2 (SCC), 1 S.C.R. 143

Blondin v. Minister of Employment and Immigration, 1988 CanLII 5716 (FCA), 50 D.L.R. (4th) 764

Cassidy v. McGovern, 330 N.W.2d 22 (Mich. 1982)

Re Corporation of the Canadian Civil Liberties Association and Minister of Education, 1988 CanLII 4784 (ON HCJ), 50 D.L.R. (4th) 193

Cuddy Chicks Limited v. Ontario Labour Relations Board and United Food and Commercial Workers International Union, Local 175 (Ont. Court of Appeal) 1989 CanLII 4139 (ON LRB), 70 O.R. 2d 179

Corporation of City of Greenwood v. Board of Trustees School District No. 13, 54 W.W.R. 432

Re Geisha Gardens Ltd. (1960) 1960 CanLII 468 (BC SC), 30 W.W.R. 617

Haddock v. Ontario (Attorney General), 1990 CanLII 6728 (ON HCJ), 73 O.R. (2d) 545

Hydro-Electric Power Commission of Ontario v. County of Grey (1924) 55 O.L.R. 339

Jardine v. Royal Insurance Canada, 1986 CanLII 3932 (NB QB), 26 D.L.R. (4th) 634

Lister v. Ontario (Attorney General), 1990 CanLII 6753 (ON HCJ), 72 O.R. (2d) 354

Madill v. Chu, 1976 CanLII 32 (SCC), [1977] 2 S.C.R. 400

Metropolitan Toronto School Board v. Metropolitan Separate School Board, 20 O.A.C. 400

Re Workers' Compensation Act, 1983 (Newfoundland), (1989) 1989 CanLII 86 (SCC), 1 S.C.R. 922

R. v. Slater Steel Industries Ltd. 1970 CanLII 353 (ON HCJ), [1971] 1 O.R. 760

R. v. Turpin, (1989) 1989 CanLII 98 (SCC), 1 S.C.R. 1296

Rex v. Pascal, (1949) 1949 CanLII 452 (BC CA), 2 W.W.R. 849

(b) Texts

Canadian Encyclopedic Digest, Part III - Interpretation of Statutes Paragraphs 81 & 82 Paragraphs 179 through 182

Statutes Referred to:

Canadian Charter of Rights and Freedoms

Insurance Act, R.S.O. 1990, Chapter I.8

Interpretation Act, R.S.O. 1990, Chapter I.11

Workers' Compensation Act, R.S.O. 1990, Chapter W.11

Hearing:

An arbitration hearing was held at North York, Ontario on July 24, 1991, before me, Frederika M. Rotter, Senior Arbitrator.

Present at the hearing were:

Insured:

Stephen Salmon

Insured's

G. James Fyshe

Representative:

Barrister & Solicitor

Insurer's

Brian Leck

Representative:

Barrister & Solicitor

The Facts:

The facts in this case are not in dispute. The Applicant was injured in a motor vehicle accident on October 8, 1990, in the course of his employment as a bus driver with the T.T.C. The Applicant suffered a soft tissue "whiplash" type injury to his neck and back. He has been unable to resume his duties as a driver since the date of the accident, and is still receiving medical treatment.

Although the Applicant's injuries are serious, his doctor expects him to make a full recovery within a "reasonable period", perhaps twenty-four months. His doctor does not expect the Applicant's injuries to lead to a permanent, serious disability or impairment of any function. It was agreed by both sides that the Applicant's injuries, at this point, are probably not sufficient to meet the threshold criteria that would allow him to recover damages for bodily injury, under Section 231a of the Insurance Act. However, the Applicant pointed out that it is still too early to fully evaluate the ultimate effects of his injuries.

Section 231a of the Insurance Act establishes the no-fault principle. The section bars recovery for damages for bodily injury as a result of an automobile accident, unless threshold criteria have been met. A judge must determine whether or not the threshold criteria have been met. The section is reproduced as follows:

(1) In respect of loss or damage arising directly or indirectly from the use or operation, after this section comes into force, of an automobile and despite any other Act, none of the owner of an automobile, the occupants of an automobile or any person present at the incident are liable in an action in Ontario for loss or damage from bodily injury arising from such use or operation in Canada, the United States of America or any other juris-diction designated in the No Fault Benefits Schedule involving the automobile unless, as a result of such use or operation, the injured person had died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important bodily function caused by continuing injury which is physical in nature.

(3) Judicial determination. In an action for loss or damage from bodily injury arising directly or indirectly from the use or operation of an automobile, a judge shall, on motion made before or at trial, determine if the injured person has, as a result of the accident, died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important bodily function caused by continuing injury which is physical in nature.

(4) Idem. Even though a defence motion under subsection (3) is denied, the defendant may, at trial in the absence of the jury, and following the hearing of evidence, raise the defence provided in subsection (1).

Because the Applicant was injured in the course of his employment, he is entitled to receive workers' compensation benefits. However, Section 8(1) of the Workers' Compensation Act, R.S.O. 1990, Ch. W.11, also gives this Applicant the right to elect to sue for damages for his injuries, in this case, in lieu of accepting workers' compensation benefits, because he is not employed by a Schedule 1 employer, as listed in the regulations to the Workers' Compensation Act. The Workers' Compensation Act specifies the procedure for making such an election. In spite of some initial confusion about the procedure, the parties agree that the Applicant did properly elect to sue for damages, and complied with the procedural requirements specified in the legislation. He commenced an action to recover damages from the other motorist involved in the accident. He then applied for interim no-fault benefits, pursuant to Section 21 of the No-Fault Benefits Schedule.

The Applicant conceded that his major reason for starting the court action was to collect no-fault benefits. His payments under the No-Fault Benefits Schedule would be considerably higher (approximately $100.00 a week more) than his workers' compensation benefits. He would also be entitled to additional benefits, such as rehabilitation benefits, under the No-Fault Benefits Schedule. He felt that the right to an election under the Workers' Compensation Act provides implicit authorization for the proposition that he is entitled to choose the course of action and mode of recovery that would be most favourable to him, in the circumstances.

The applicable sections of the legislation in this case are Sections 20 and 21 of the No-Fault Benefits Schedule, which provide as follows:

Section 20

The insurer will not pay benefits under this Schedule in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any workers' compensation law or plan.

Section 21

(1) Despite section 20, the insurer will pay full benefits under this Schedule to a person described in that section until the resolution of any action brought by the person in any court to recover for personal injuries resulting from the accident under which the workers' compensation claim arose or until the person receives payments under a workers' compensation law or plan if, (a) the person makes an assignment to the insurer of any benefits under any workers' compensation law or plan to which he or she is or may become entitled as a result of the accident, and (b) the administrator or board responsible for the administration of the workers' compensation law or plan approves the assignment.

(2) the amount of no-fault benefits recoverable by the insurer under the assignment in subsection (1) shall be determined in accordance with the following formula:

A = T – C

Where,

A = amount recoverable

T = total compensation for personal injury received by the insured person under all contracts of automobile insurance excluding any amount received as a special award under subsection 242d(10) or 242e(7) of the Insurance Act and any amount received as interest;

C = compensation for personal injury the insured person would have recovered under all contracts of automobile insurance had the no-fault benefits not been paid.

The Applicant's position is that he is entitled to benefits under Section 21, pending the resolution of his court case. The parties agree that, for the purposes of Section 21, an assignment of benefits was properly made and approved.

In a nutshell, the Insurer's position is that it is not obliged to pay benefits, pursuant to Section 20. The Applicant is precluded from receiving no-fault benefits under Section 20, since he is entitled to receive Workers' Compensation benefits. The Insurer argued that Section 21 is not applicable in this case, since that section was meant to deal only with "threshold" cases, where damages are in fact recoverable or likely to be recovered. The evidence indicates that this is not such a "threshold" case. Therefore, the Applicant's technical compliance with the requirements of the section cannot operate to entitle him to a no-fault benefit for which he would otherwise be ineligible.

Argument of the Applicant

The Applicant raised three arguments in support of his contention that he is entitled to interim no-fault benefits under Section 21 of the No-Fault Benefits Schedule. For the sake of simplicity, I will refer to these arguments as:

(1) plain meaning argument

(2) purposive (remedial) argument

(3) charter argument

The Applicant's arguments are summarized as follows:

1. "Plain Meaning" Argument

This is a basic cannon of statutory interpretation, namely, that words in a statute are to be given their plain and ordinary meaning where possible. The Applicant also relied on the cannon of interpretation, which states that a specific provision overrides a general provision. The Applicant argued that because Section 21 is a specific provision, it can be interpreted to override Section 20. Therefore, according to the plain meaning of the statute, no-fault benefits under Section 21 are payable to the Applicant until one of the two following events occur:

1. The resolution of any action brought, or

2. The Applicant receives payment under workers' compensation.

Since the Applicant has made an election to sue and to attempt to recover damages, he is not entitled to receive workers' compensation benefits. Therefore, he should be entitled to receive interim no-fault benefits until the resolution of his action for damages.

The Applicant argued that it is neither inconsistent nor incorrect to allow persons with the right to an election to claim no-fault benefits. No-fault benefits are payable until the resolution of the action for damages. The Applicant argued that all that is required under the plain meaning of the section is the commencement of an action for damages. This can be any action brought in any court to recover damages for personal injury. The Applicant argued that nothing in the language of the legislation limits the meaning of the words in Section 21, or indicates that an action must be a bona fide threshold action. The legislation merely states that an applicant is entitled to receive interim no-fault benefits until the action is resolved.

The Applicant argued that no one, at this point, can determine whether he is suffering from a threshold injury as the full effect of his injuries is not yet known. Therefore if the plain meaning of the words is not given effect, he would be left in a position where he gets no benefits either from the Workers' Compensation Board or under the No-Fault Benefits Schedule. Since he has elected to sue, he has made his election not to receive workers' compensation benefits. He has been prematurely obliged to start an action to recover damages in this case.

Furthermore, the Applicant argued that it would be incorrect for the arbitrator to read into the statute the requirement that the action be a bona fide action to recover damages for a threshold injury. This is because, under Section 232 of the Insurance Act, cited above, a judge is required to determine whether or not the threshold has been passed.

The Applicant argued that if I determine that an action for the purposes of Section 21 must have a reasonable prospect of meeting the threshold, I would be in violation of Section 232 of the Act, since I am not a judge. In support of this argument, the Applicant cited the American case Cassidy v. McGovern, 330 N.W.2d 22, determined in the Supreme Court of Michigan. The Applicant referred to this case as a seminal case on the meaning of "threshold". In that case, it was held that the question of whether the threshold was met could only be decided by a judge, and not by a jury. It was held that "threshold" is not a common term - it is a legal term, which non-judges should not be defining. The term is one that should be properly defined and uniformally interpreted by judges, as a matter of precedent. In applying Cassidy v. McGovern (supra) to the present case, the Applicant argued that insurers and arbitrators should not be deciding whether a case has a reasonable prospect of meeting the threshold before allowing benefits under Section 21. To do so would be inconsistent with the express provisions of the Insurance Act, which states that only a judge can make that determination.

The Applicant also referred to Re Geisha Gardens Limited, 30 W.W.R. 617, which, he argued, stands for the doctrine that the intent of the legislation is to be found in the statute itself and not in the regulations. In Geisha Gardens, it was held that it is inappropriate to interpret regulations in a way that is inconsistent with the general scheme set out in an Act. That point was also confirmed in R. v. Slater Steel Industries Ltd., 1 O.R. 760. The Applicant's submission was therefore that the No-Fault Benefits Schedule should not be interpreted in such a way as to give the responsibility for deciding threshold issues to an arbitrator, contrary to the express provision in the Insurance Act that a judge is to make that determination.

2. "Purposive" Argument

The Applicant's next argument was that the interpretation of Section 21 should be generally consistent with the aim of the legislation. Counsel argued that the amendment of the Insurance Act was designed to rationalize the compensation system for persons who sustain injuries as a result of motor vehicle accidents. The legislators have decided that it is in the best interests of accident victims to remove the right to sue in court to recover damages for minor to moderate injuries. The right to recover damages is replaced with a clear and generous compensation system.

The Applicant referred again to the case of Cassidy v. McGovern (supra) which explains the rationale for substituting no-fault insurance benefits for the traditional common-law tort remedy in the case of automobile accidents. The Applicant argued that the scheme of the Ontario Insurance Act is analogous to the Michigan legislation where accident victims are parties to a "give and take" exchange. Accident victims give up their common-law right to sue in exchange for no-fault benefits.

The Applicant submitted that the Insurance Act does not state specifically that it applies only to individuals who are not covered by workers' compensation. He submitted that if Section 21 were given a limited interpretation, it would take away the existing right to sue of certain individuals while giving them back nothing in exchange. This, it was submitted, is inconsistent with the general purpose of the Insurance Act. Individuals in the Applicant's position would lose something quite significant - that is, their right to recover damages in tort - without receiving anything in return if they are not eligible for no-fault benefits. They are denied rights to rehabilitation and life skills training under the No-Fault Benefits Schedule, as well as the additional financial protection that would be available.

The Applicant argued that the Insurer's position, that individuals are not entitled to no-fault benefits unless they can show that they have a threshold injury, is not correct because it unreasonably interferes with the Applicant's existing common law rights to sue. The Applicant referred to an excerpt from the Canadian Encyclopedic Digest on the subject of Statutory Interpretation, which indicates that legislation should not be interpreted to support an alteration in a common law right, in the absence of express and clear language that declares that the right is being taken away. In this case, the Applicant had a common law right of action in tort. The Applicant argued that no language in the Insurance Act removed his right to sue without giving back a no-fault benefit. The Applicant argued that the purpose of the legislation was to substitute no-fault benefits for the right to sue, and that therefore he was entitled to no-fault benefits in return for losing his right to sue. The Applicant referred to Hydro Electric Power Commission, 55 O.L.R. 339, which supports the proposition that statutes taking away common law rights should be strictly interpreted.

Charter Argument:

The Applicant's final argument was based on the Canadian Charter of Rights and Freedoms. The Applicant submitted that the recently decided Cuddy Chicks Ltd. v. O.L.R.B., 1989 CanLII 4139 (ON LRB), 70 O.R. 2d 179, gives me, as arbitrator, the authority to consider charter issues.

The Applicant argued that his rights to equal treatment under the law as guaranteed by Section 15 of the Charter would be violated in this case if he is not allowed to obtain equal benefit under the No-Fault Benefits Schedule of the Insurance Act. This would amount to unjustifiable discrimination contrary to Section 15 of the Canadian Charter of Rights and Freedoms.

The Applicant referred to Andrews v. the Law Society of British Columbia, 1 S.C.R. 143. He argued that this case stands for the proposition that the law does not anticipate that everyone be treated exactly the same, but that certain kinds of inequality are not acceptable. Counsel referred to the discussion of discrimination at page 174 of Andrews, which indicates that one prohibited ground of discrimination is an individual's "personal characteristics". He argued that a violation of Section 15 of the Charter can be shown if two groups are treated differently, based on their personal characteristics.

In this case, the Applicant argued that it would be contrary to the Charter to treat individuals who are injured a motor vehicle accident in the course of their employment differently than others injured in motor vehicle accidents. It is discriminatory not to allow them to collect benefits under the No-Fault Benefits Schedule. Such discrimination is not demonstrably justifiable under Section 1 of the Charter. The Applicant argued that an interpretation of Section 21 that is contrary to the Charter should not be adopted.

Argument of the Insurer

The Insurer also based its argument on the traditional cannons of statutory interpretation. Counsel referred to the normal regard for reasonableness, which is a hallmark of statutory interpretation, and to the need to give words in legislation a reasonable meaning within the context of the legislative scheme. He cited a number of cases (Metro School Board v. Metro Separate School Board, 20 O.A.C. 400. The City of Greenwood v. Board of Trustees School District No. 13, 54 W.W.R. 432, and Rex v. Pascal, 1912 CanLII 1283 (AB SC), 2 W.W.R. 849) as authorities for the proposition that a section of legislation must be interpreted in light of the general purpose of the legislation. Interpretation requires ascertaining the intention of the legislation, and reading the words of the section in the context of that overall intention.

The Insurer argued that persons eligible for workers' compensation benefits have traditionally been excluded from no-fault benefits under standard auto insurance policies. This exclusion predates the current No-Fault Benefits Schedule but has been continued in Section 20 of the present legislation. The wording of Section 20 is unchanged from the wording of previous enactments.

The leading case in this regard is Madill v. Chu, 1976 CanLII 32 (SCC), [1977] 2 S.C.R. 400, where an injured worker had elected to proceed with a court action. In that case, the Supreme Court of Canada found that the worker was not entitled to no-fault benefits if he was entitled to workers' compensation benefits. The Insurer argued that this case has represented the status quo for over fifteen years, and that the situation of the parties has not changed under the present legislation, which expands no-fault benefits. The Insurer argued that the Section 21 exception was enacted for interim purposes only. Structurally, Section 21 is an exception to the general rule set out in Section 20, that persons entitled to workers' compensation benefits are not entitled to no-fault benefits. The Insurer argued that the intent of the legislation is to provide, as before, that if you are entitled to workers' compensation benefits, you are not entitled to no-fault benefits. The Insurer argued that an exception was created in the No-Fault Benefits Schedule at Section 21, in response to the creation of the threshold. This exception was created so that a person who sues for damages in a threshold case (and has accordingly elected not to receive workers' compensation benefits) may receive interim no-fault benefits.

The Insurer pointed out that Section 21 explicitly refers to interim payments. These payments are meant to be made pending the resolution of an action for damages, and therefore, logically are only payable in cases where persons have elected to pursue threshold damage claims. The section explicitly contemplates a pending or proceeding action. Interim no-fault benefits are payable pending the litigation because a seriously injured individual who is pursuing a threshold claim is not eligible for workers' compensation benefits.

Counsel argued that the intent of the legislation is that in non-threshold cases, a worker entitled to compensation benefits should collect such workers' compensation benefits and nothing else. Otherwise anyone eligible for compensation benefits, even an individual with a relatively minor injury, could claim interim no-fault benefits without proceeding with a law suit, so long as the law suit was initiated. Counsel submitted that such an interpretation would turn Section 21 upside down and subvert its clear meaning.

The Insurer argued that the correct reading of both Sections 20 and 21 is consistent with the interpretation that for minor cases, individuals are barred from suing and must rely on workers' compensation benefits. The right to elect to commence an action for damages should not be exercised simply to substitute no-fault benefits for workers' compensation benefits - this would have the result of rendering Section 20 meaningless.

The Insurer also argued that in this case the Applicant has launched a law suit that he has no intention of pursuing since he has no realistic prospect of recovering damages. This constitutes an abuse of process. The Insurer argued that the legislation was surely not to intended encourage and sanction such an abuse of process, simply in order to allow an individual to qualify for no-fault benefits. The Insurer argued that, on the contrary, Section 21 was intended to deal with cases of serious injury, and makes an exception to the rule that persons otherwise entitled to workers' compensation benefits are precluded from receiving no-fault benefits.

The Insurer argued that in this case, if I determined that the Applicant's court action was not bona fide, I would not necessarily be making a threshold determination under Section 231a. The Insurer argued that Section 231a deals with a tort action, that subsections 5 and 6 refer to concepts and terms related to tort claims, and that the entire section simply refers a judge's jurisdiction, in court, to determine whether an action meets the threshold. The Insurer submitted that there was nothing wrong with an arbitrator making a finding, outside the court context, that a case has a reasonable prospect of meeting the threshold. This does not amount to a threshold determination per se. The Insurer submitted that unless such a determination were made, the words of Section 21 would have no clear meaning at all.

The Insurer also submitted that in the majority of cases the distinction between threshold and non-threshold injuries is clear. In this case, in particular, the best evidence suggests that the Applicant's injuries will resolve within a period of approximately 24 months and therefore the Applicant has no reasonable prospect of meeting the threshold. The Insurer submitted that in this case, the Applicant should either elect workers' compensation benefits, or actually pursue his law suit.

With respect to the Applicant's constitutional argument, the Insurer referred to Lister v. Ontario (Attorney General), 1990 CanLII 6753 (ON HCJ), 72 O.R. (2d) 354, which outlines the two-step approach required to deal with arguments of discrimination under the Constitution. The first step is to assess whether the legislation creates a differential impact. The second step is to assess whether the differential impact is discriminatory based on "personal characteristics". Personal characteristics are defined as qualities or characteristics (such as race, nationality or handicap) that an individual was born with, or acquired without freely choosing, and over which that individual has no control. The Insurer argued that in this case, the differentiation is based on occupation, which is not a personal characteristic. Therefore the differential effect of the legislation does not amount to discrimination, contrary to Section 15 of the Charter of Rights and Freedoms, as it is not based on a personal characteristic of the Applicant.

Counsel also referred to Re Workers' Compensation Act, 1983 (Newfoundland), 1989 CanLII 86 (SCC), [1989] 1 S.C.R. 922, where the Supreme Court of Canada held that the situation of a worker under compensation legislation is not analogous to Section 15 discrimination cases.

The Insurer's final argument was based on his reading of Section 21 (2) of the No-Fault Benefits Schedule. He argued that Section 21 (2) flies in the face of the Applicant's interpretation, because it contains a formula that allows the no-fault insurer to be reimbursed by the Workers' Compensation Board for interim no-fault benefits paid to the injured worker. The formula provides that if the injured worker recovers against the third party, workers' compensation is not obliged to reimburse the initial no-fault insurer. However, where the plaintiff is not successful in recovering from the third party, the Workers' Compensation Board is obliged to reimburse no-fault benefits paid by the no-fault insurer.

This provision implies that at some stage, an action against the third party will be resolved, either in favour of or against the claimant. Section 21 therefore at least contemplates a case where the claimant at some point proceeds with an action.

Furthermore, under Section 21(2), the Workers' Compensation Board ultimately funds the benefits paid to the unsuccessful tort claimant. Therefore, the result of the applicant's action is to compel the Workers' Compensation Board to pay higher benefits to an injured worker than it would otherwise be obliged to pay, simply because that worker has launched a law suit that he does not intend to pursue, and that clearly may have no merit.

Moreover, the no-fault insurer would be obliged to keep records for a substantial time, monitor the progress of the tort claim advanced by the applicant, and at some point attempt to recover from the Workers' Compensation Board the no-fault benefits paid out. The Insurer argued that this surely was not the intention of the legislation. The Insurer argued that the legislation instead intended a simple and easily managed scheme, where workers' compensation benefits are payable in minor injury cases, and no-fault benefits are payable as interim benefits in threshold cases where the injuries are more serious. This interpretation gives reasonable and cogent meaning to both Sections 20 and 21 of the legislation, without calling for complicated bookkeeping procedures and non-bona fide court actions, simply for the sake of recovering an additional $100.00 a week for a minor injury.

Reply:

In reply argument, the Applicant submitted that Madill v. Chu (supra) should be distinguished, because that case was decided under old provisions. The new regulations have updated and augmented the language of the legislation and those changes should be interpreted to rectify the former situation. The old language did prevent injured workers from claiming no-fault benefits, but the new language actually allows it. Section 21 is relevant to individuals in the Applicant's position, because they still have an option to sue. The section is designed to cover situations where entitlement to workers' compensation benefits is not clear. Therefore, interim benefits can be claimed in many situations and not just in threshold cases.

The Applicant argued that under the old tort regime, a person in his situation could have received full compensation for his income loss. The Applicant was injured through no fault of his own.

He is not doing anything wrong by trying to maximize his benefits. The Applicant argued that the threshold has not yet been defined, and it is possible that he may yet meet the threshold. He does not wish to bring a frivolous action, and should not be forced to proceed with an action at a point when he is not prepared to deal with the threshold question.

The Applicant argued that professional drivers need the protection of the no-fault legislation, because they are at great risk. Finally, he argued that any administrative difficulty attributed to an interpretation of the legislation should not therefore alter the interpretation. The interpretation should not be governed by concepts of administrative efficiency, but rather by what is fair and correct.

Findings:

This case involves two contradictory interpretations of Sections 20 and 21 of the No-Fault Benefits Schedule. The Applicant argues that anyone who is in technical compliance with Section 21(1) is entitled to no-fault benefits under the legislation.

The Insurer argues that benefits under Section 21, which the legislation states are payable "until the resolution of any action brought ... in any court to recover for personal injuries resulting from the accident under which the workers' compensation claim arose" are only payable in a bona fide threshold claim.

I am aware of the competing schools of interpretation in this case. I have concluded that while, at first blush, the language of Section 21 may seem clear and unambiguous, I cannot accept the Applicant's literal reading of that section, because to do so would lead to a result which I do not believe the legislature reasonably intended. The Canadian Encyclopedic Digest, in its section on statutory interpretation, refers to the necessity of having regard for reasonableness, as follows: (at paragraphs 81 and 82)

Where the apparent logical construction of the language leads to results which it is impossible to believe the legislature intended and which are unreasonable, that construction should not be held to constitute the true construction of the statute.

The words of a statute are not restricted to what are sometimes called their "ordinary" or "literal" meanings, but are extended flexibly to include the most reasonable meaning which can be extracted from the purpose and object of what is sought to be accomplished by the statute. The very concept of interpretation connotes the introduction of elements extrinsic to the words themselves.

Therefore I feel that I am obliged, in construing Sections 20 and 21, to have regard not only to the literal wording of those sections, but also to their meaning and sense within the entire no-fault scheme.

Sections 20 and 21 together constitute Part VII of the No-Fault Benefits Schedule, which Part is headed "WORKERS' COMPENSATION".

The heading of Section 20 is "EFFECT OF WORKERS' COMPENSATION BENEFITS". The heading of Section 21 is "INTERIM PAYMENTS". I believe that in this case the headings offer guidance in interpreting the sections in question, although I am aware that Section 9 of the Interpretation Act, R.S.O. 1990, c.I.8, indicates that headings do not form part of the Act, but are inserted for convenience of reference only.

Section 20 of the No-fault Benefits Schedule is the section which deals, as the heading indicates, with the general effect of workers' compensation benefits. Section 20 states that the insurer will not pay no-fault benefits to any injured person who, as a result of an accident, is entitled to receive workers' compensation benefits.

As the Insurer has argued, the wording of this section has not been changed by the amendments to the Insurance Act. Therefore, it is logical to conclude that the meaning of the section also remains unchanged. That wording was construed by the Supreme Court of Canada in the case of Madill v. Chu (supra) as meaning that anyone who is entitled to apply for and receive workers' compensation benefits is barred from receiving no-fault benefits, regardless of whether he or she actually applied for and received a compensation award. I believe that this construction of Section 20 is still valid and operative.

My understanding of the logic of Section 21 - a new section which was introduced as part of the package of no-fault amendments - is that it is meant to operate, in certain circumstances, as an exception to the general principle enunciated in Section 20. Under Section 21, individuals may receive "interim" no-fault benefits until the resolution of their court action to recover damages for personal injury resulting from the accident, or until they receive workers' compensation payments. The wording of the section implies that the court action will be resolved by a judgement in the case - and the inference must be that in order to be resolved, the court action must be prosecuted.

If Section 21 were read literally, in the manner proposed by the Applicant, everyone contemplated in Section 20 would be eligible to receive "interim" no-fault benefits by virtue of commencing a court action and completing and obtaining approval for the required assignment of benefits. Under a literal reading, a court action need not be prosecuted -- it only needs to be initiated. Anyone injured in an automobile accident during the course of their employment could commence a court action regardless of the merits of that action -- that is without regard either to the threshold issue or even to the fault issue. The court action and assignment simply become the prerequisite steps for electing to receive no-fault benefits in lieu of workers' compensation benefits.

I cannot accept that this is the result contemplated or intended by the legislation. Surely this section was not meant to encourage the filing of numbers of lawsuits that had no merit, as a condition precedent to plaintiffs receiving no-fault benefits. If the law-makers had intended to allow injured individuals in the position of the Applicant the right to elect to receive either no-fault benefits or compensation benefits, that election would have been framed in a straightforward manner, and Section 20 of the regulation would not remain in its present form.

Furthermore, the effect of the formula for recovery set out in Section 21(2) means that the no-fault insurer can eventually recover from the Workers' Compensation Board or authorize the full amount of the "interim" no-fault benefits paid out, in a situation where the court action is not prosecuted. In effect, the Workers' Compensation Board will be obliged to pay out, on behalf of the Applicant, no-fault benefits rather than workers' compensation benefits. Again, I do not believe that this outcome was reasonably contemplated or intended by the framers of the legislation.

Therefore I find that Section 21, correctly construed, must refer to the resolution of "any action brought by the person in any court to recover for personal injuries resulting from the accident" when that action bona fide pertains to a threshold-type injury. This is a logical reading because, although individuals are not barred from bringing actions in non-threshold cases, they are statutorily barred from recovering damages. Normally, one would not expect an individual to initiate a court suit against another (an expensive and complicated process) without some realistic expectation of recovery or settlement.

I do not accept that, by so interpreting Section 21, I am usurping the jurisdiction reserved for a judge and making a threshold determination in a particular case, contrary to Section 231a. I am not determining whether this Applicant has sustained a threshold-type injury which leaves him permanently or seriously impaired or disfigured. At most, I am determining that in the Applicant's case, a bona fide action "to recover for personal injuries resulting from the accident" has not been brought.

I am deciding whether the Applicant has launched a court action that raises a justiciable threshold issue with respect to loss or damage for personal injury under Section 231a. By so doing, I am exercising the statutory authority conferred on me to determine whether this Applicant is entitled to no-fault benefits under Section 21 of the No-Fault Benefits Schedule.

The Applicant has conceded that he launched the court action in question not for the purpose of actually attempting to recover damages, but for the purpose of qualifying for no-fault benefits. Therefore, I find that it cannot be considered an action "brought ... to recover for personal injuries" pursuant to Section 21, since the action does not pertain to bona fide threshold-type injuries.

Furthermore, I do not accept the Applicant's position that a determination that he is precluded from receiving no-fault benefits would be discriminatory or in violation of the Canadian Charter Rights and Freedoms. The discriminatory impact of the legislation, such as it is, arises as a result of an occupational choice that the Applicant has freely made, and not because of an immutable "personal characteristic" as discussed in the Andrews (supra) case. Lister v. Ontario (A.G.) (supra) affirms that distinctions based on occupation or professional qualifications do not amount to discrimination contrary to the Charter.

Moreover, this Applicant is treated differently from others as a result of the combined effect of two pieces of legislation, both of which have altered his common-law rights.

The Workers' Compensation Act ultimately defines and restricts this Applicant's right to sue for injuries sustained during the course of his employment. He has an election to sue for damages (as others who are injured in the course of their employment may not) by virtue of the operation of a particular schedule of the Workers' Compensation Act. Were he not an employee who falls within that schedule, he might have no election or option to sue at all, depending on the circumstances of the accident.

The Supreme Court of Canada declared in the Newfoundland Workers' Compensation Act Reference (supra) that the effect of the enactment of compensation legislation, which precludes all other rights and actions to which a worker or his dependents might otherwise be entitled, is not discriminatory or otherwise inconsistent with the equality provisions of the Charter.

Finally, I address the Applicant's argument that the legislature intended that the quid pro quo for losing the right to sue in non-threshold cases is access to no-fault benefits. While this may be correct as a general proposition, I have been provided with no evidence that it was intended in a workers' compensation situation. On the contrary, my reading of Sections 20 and 21 suggests that the legislature meant to make no specific provisions to enhance the benefits otherwise available to injured workers in a non-threshold case. It is my view that the legislature intended that persons in the position of the Applicant henceforth have sole recourse to workers' compensation benefits, pursuant to the statutory scheme enacted specifically to deal with cases of individuals injured in the course of their employment.

I agree that this is an inequitable outcome, from the point of view of this Applicant, since his compensation benefits are less than his no-fault benefits would have been. It is unfortunate that the legislature did not make an effort to avert this inequitable outcome by harmonizing the benefits available under the No-fault Benefits Schedule with workers' compensation benefits. Nevertheless, for the reasons outlined above, I believe that this outcome is neither illogical, illegal, nor incorrect. Probably either set of benefits are less than the Applicant's potential tort recovery would have been, had the option to sue been available. However, the legislature, in its wisdom, has acted to bar tort recovery in certain cases, for reasons having to do with the greater public good.

The Applicant has not acted either improperly or illegally by initiating a court action and otherwise attempting to obtain access to no-fault benefits in this case. He has acted within his rights in attempting to maximize his accident benefits by testing the no-fault benefits schedule. Therefore, as a matter of course, the Applicant is entitled to an award for his expenses, as prescribed by Ontario Regulation 275/90 and Schedule 1 of the Dispute Resolution Practice Code.

Order:

1. The Applicant is not entitled to no-fault benefits under Section 21 of No-Fault Benefits Schedule.

2. The Applicant is entitled to his expenses incurred in the arbitration proceeding under Ontario Regulation 275/90, and Schedule of the Dispute Resolution Practice Code.

December 20, 1991

Frederika M. Rotter

Senior Arbitrator

Date