Neutral Citation: 1992 ONICDRG 23
File No. P-000626
ONTARIO INSURANCE COMMISSION
OFFICE OF THE DIRECTOR OF ARBITRATIONS
BETWEEN:
CANADIAN HOME ASSURANCE COMPANY
Insurer (Appellant)
and
VINCENZO SCAVUZZO
Applicant (Respondent)
Before:
M. Smith Director’s Delegate
Counsel:
H.B. Brown (for Appellant; Insurer)
L. Bisgould (for Respondent; Applicant)
APPEAL DECISION
I. NATURE OF PROCEEDING
By Notice of Appeal filed March 31st, 1992, Canadian Home Insurance Company (the appellant) appeals from the order of Susan Naylor, Arbitrator, dated March 18, 1992, awarding the respondent the maximum amount of $600.00 in weekly income benefits pursuant to Section 12 of Ontario Regulation 273/90 under the No-Fault Benefits Schedule, under the Insurance Act, R.S.O. 1990, c.1.8.
The award was based on the arbitrator’s interpretation of Section 12 which held that the respondent’s gross weekly income from his occupation or employment as deemed by Section 12(7)1, should be calculated by averaging his gross weekly income over the weeks he was in fact employed in the fifty- two weeks before the accident, disregarding the weeks he was unemployed.
The appellant seeks an order setting aside the award of $600.00 per week, and ordering that weekly income benefits be awarded in a lesser sum, based on a calculation of his income from employment averaged over the full four weeks (S.12(7) 1.i) or fifty-two weeks (S.12(7) 1.ii), even though the respondent was unemployed for part of that time.
The appellant also submits that any payments for Unemployment Insurance benefits, Workers Compensation, Canada Pension Plan and Disability benefits also should be included in the calculation of income from employment.
II. THE FACTS
The facts are not in dispute.
The respondent, after a period of unemployment, had started a new job two days before a motor vehicle accident rendered him incapable of returning to his new job. In the year prior, he had worked periodically for two other employers, and for some of the time he was off work, he received Unemployment Insurance benefits.
The history of his employment in the year prior to the accident is set out at page 6 of the arbitral decision as follows:
“On June 25, 1991 - two days before the accident - he had started at a new job with Nicola’s Choice Meats Ltd. This was a full-time job, paid at an hourly rate of $19.00 based on a 44- hour week. During the two days the Applicant worked for this employer, he earned $380.00. No further details about his employment were provided at the hearing.
From June 27, 1990 to September 12, 1990 (a total of 11 weeks), he worked for Ontario Paving Company Limited and earned a total of $9,260.85.
From September 12, 1990 to December 18, 1990 he was employed by Hard-Co Excavating Ltd. At the end of this period, he was laid off due to shortage of work. During these 14 weeks, he earned a total of $10,153.37.
From December 13, 1990 to June 23, 1991, the Applicant was unemployed and in receipt of unemployment insurance benefits. The exact amount of these benefits was not available at the hearing.”
Although the appellant submits that any payments for Unemployment Insurance benefits, Workers Compensation, Canada Pension Plan and Disability benefits should be included in the calculation of income from employment, there is no evidence or suggestion that such benefits, apart from the unstated amount of unemployment benefits, have been received or were available to the respondent.
III. THE ISSUES
The issue in this appeal is the proper interpretation of the provisions of Section 12(7) 1. of the No Fault Benefits Schedule, which sets out the rules applicable to the calculation of an insured’s deemed gross weekly income, and specifically:
Should the weeks during which the insured is not engaged in occupation or employment be included in calculating his gross weekly income from employment under s. 12(7) 1.?
If the answer to issue #1 is yes, should payments of Unemployment Insurance benefits, Worker’s Compensation, Disability benefits and Canada Pension Plan benefits be included in the calculation of average gross weekly income under s. 12(7) 1.?
IV. APPELLANT’S SUBMISSIONS
The section in issue reads as follows:
S.12(7) 1. The following rules apply to the calculation of gross weekly income:
- A person’s gross weekly income shall be deemed to be the greatest of,
i. his or her average gross weekly income from his or her occupation or employment for the four weeks preceding the accident,
ii. his or her average gross weekly income from his or her occupation or employment for the fifty-two weeks preceding the accident,
iii. $232.
The appellant submitted that the principle of “contra proferentem” does not apply to the statutory interpretation of the No-Fault Benefits Schedule. It was submitted that the natural and ordinary meaning of the words in their context in the Statute must be determined. It was contended that the approach of the arbitrator, instead of determining the natural and ordinary meaning of the words, was to look for any ambiguity in the words which might lead to a more favourable result for the insured.
It was argued that even though the entitlement of insureds to sue for damages has been narrowly restricted by this legislation, the No-Fault Benefits Schedule provides a generous system of compensation to all insureds, whether at fault or not at fault. The predecessor legislation, it was argued, was simply to provide a very modest $140.00 per week income benefit and was not intended to be calculated solely upon the insured person’s loss of income.
The appellant contrasts the predecessor legislation with the No-Fault Benefits Schedule, which provides up to $600.00 per week, and argues that it is evident from Section 12(7) that there was some effort on the part of the legislature to ensure that the new income benefit is based either upon a history of the insured person’s earnings, or in the case of future employment based upon the monies to be received upon a contract to begin some time in the future.
It was argued that the legislature could have specifically added words such as “during which the person was employed” to s. 12(7) 1.i and s. 12(7) 1.ii, and the absence of such words indicated the legislature’s intention to the contrary.
If the interpretation of the arbitrator is upheld, it was submitted that self-employed persons such as real estate agents, who may be working but earn no or little income during the 4 or 52 weeks, would not be treated as generously under the legislation as employed persons such as the respondent.
It was also submitted that rather than have the insurer bear the cost to ameliorate the case where the insured is unable to work because of injury or unemployment, the better interpretation, and one which would also ameliorate the case, would be to include in gross weekly income from employment under s. 12(7) 1. Unemployment Insurance payments, Disability benefits, Worker’s Compensation benefits, and Canada Pension Plan payments. It was submitted that the arbitral decision in McCormick and Economical Mutual Insurance Company (October 19, 1991, File No. A-000139) was wrong in failing to include Worker’s Compensation payments in the calculation of income under Section 12(7) 1.
V. RESPONDENT’S SUBMISSIONS
The respondent agrees that the ordinary principles of statutory interpretation apply, but states that the wording of the section is ambiguous, and there are a number of possible interpretations of Section 12(7). It is submitted that the interpretation proposed by the appellant would lead to absurdity and this could not have been the intention of the legislature.
A broad and liberal interpretation ought to be given to the legislation, it was argued, in the interest of the objectives of fairness and adequacy of compensation. In removing a person’s right to sue for damages for injuries, the legislature must have intended to create a means by which the person is compensated as well as is reasonably possible for the losses suffered.
It was also argued that unemployment insurance is not income from employment, and had the legislature intended otherwise it could have done so. Because Section 12(4)(b) provides that unemployment insurance benefits are not to be deducted from a person’s gross weekly income for the purpose of calculating the weekly income benefit, the legislature clearly indicated it’s intent that unemployment insurance benefits not reduce a person’s gross weekly income under Section 12(7) 1.
VI. FINDINGS
The ordinary principles of statutory interpretation apply to the interpretation of the provisions of the No-Fault Benefits Schedule. The principle of contra proferentem does not apply, because the No- Fault Benefits Schedule is included by statutory enactment in every motor vehicle liability policy and the insurer is not to be held responsible for the manner in which it is expressed: see Madill v. Chu (1976), 1976 CanLII 32 (SCC), 71 D.L.R. (3d) 295 (S.C.C.).
The three canons of interpretation are cited in CROSS:STATUTORY INTERPRETATION, second edition, pp. 36-37, as follows:
“(i) ‘In determining the meaning of any word or phrase in a statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context in the statute? It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intention of the legislature that it is proper to look for some other possible meaning of the word or phrase.’ (Pinner v. Everett [1969] 3 All ER 257 at 258-9).
(ii) ‘Then [in case of doubt] rules of construction are relied on. They are not rules in the ordinary sense of having some binding force. They are our servants, not our masters. They are aids to construction, presumptions or pointers. Not infrequently one “rule” points in one direction, another in a different direction. In each case we must look at of all relevant circumstances and decide as a matter of judgment what weight to attach any particular “rule”.’ (Maunsell v. Olins [1975] AC 373 at 382).
(iii) ’It is cardinal principle applicable to all kinds of statutes that you may not for any reason attach to a statutory provision a meaning which the words of that provision cannot reasonably bear. If they are capable of more than one meaning, then you can choose between those meanings, but beyond that you must not go.’ (Jones v. Director of Public Prosecutions [1962] AC 635 at 662).”
It is necessary to ask what is the natural and ordinary meaning of the words and apply it to the facts of this case unless the result is something which could not reasonably have been the intention of the legislature. However, where there is more than one ordinary meaning to the words in their context, it is appropriate to apply the second above-mentioned principle and look at all relevant circumstances. Cross puts it as follows, at p. 37 (supra):
“ - the judge must ask himself what is the natural or ordinary meaning of the word or phrase in question and apply it to the facts of the case unless the result is something which cannot reasonably be supposed to have been intended by the legislature; but the rule is one which leaves a lot to the choice of the particular judge. In a great many cases it can plausibly be contended that there is more than one ordinary meaning in the context. In that event the judge may consider that there is sufficient doubt to bring the principles mentioned in the second quotation into play; but he may also conclude that there is no doubt that one of the meanings is the ordinary one.”
The relevant section of the No-Fault Benefits Schedule, is as follows:
- (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3).
(2) The following qualifications apply to an insured person who claims a weekly benefit under subsection (1):
- He or she must have been at the time of the accident,
i. employed or self-employed,
ii. on a temporary lay-off, or
iii. entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
- He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks of his or her occupation or employment.
(3) A person who was unemployed and who was not self-employed at the time of the accident is qualified to receive a weekly benefit under subsection (1) if he or she was employed or self-employed for any 180 days in the twelve-month period before the accident, and if he or she as a result of and within two years of the accident has suffered a substantial inability to perform the essential tasks of the occupation or employment in which he or she spent the most time during the twelve-month period before the accident.
(4) Subject to subsection (5), the weekly benefit under subsection (1) will be the lesser of,
(a) $600 plus, if Optional Benefit 2 has been purchased, the amount of the benefit chosen; and
(b) 80 per cent of the insured person’s gross weekly income from his or her occupation or employment, less any payments for loss of income, except Unemployment Insurance benefits,
(i) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan, or
(ii) received under any sick leave plan.
(5) The insurer is not required to pay a weekly benefit under subsection (1),
(a) for the first week of the disability;
(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.
(6) The insurer is not required to pay a weekly benefit under subsection (1) to a person described in subparagraph iii of paragraph 1 of subsection (2) until the day the person would have been entitled under the contract to begin employment unless before that day the person is qualified for a benefit under another paragraph of that subsection.
(7) The following rules apply to the calculation of gross weekly income:
- A person’s gross weekly income shall be deemed to be the greatest of,
i. his or her average gross weekly income from his or her occupation or employment for the four weeks preceding the accident,
ii. his or her average gross weekly income from his or her occupation or employment for the fifty-two weeks preceding the accident,
iii. $232.
- When a person becomes qualified to receive an income benefit under subparagraph iii of paragraph 1 of subsection (2), the person’s gross weekly income shall be deemed to be the greatest of,
i. if the person was qualified under either subparagraph i or ii of paragraph 1 of omission File No.subsection (2), his or her gross weekly income as determined under paragraph 1,
ii. the gross weekly income payable under the contract of employment,
iii. $232.
- Business expenses which cease as a result of the accident shall be deducted from a person’s income from self-employment before calculating his or her gross weekly income. O. Reg. 273/90, s. 12.
The amount of weekly income benefits to which the insured is entitled is directed by Section 12(4) to be the lesser of $600.00 and (b) 80 per cent of his “gross weekly income from his occupation or employment”, less certain payments for loss of income, except Unemployment Insurance benefits.
The only such payments Mr. Scavuzzo received are an unspecified amount of Unemployment Insurance benefits. While certain payments specified in 12(4)(b)(i) and (ii) are deducted from gross weekly income, Unemployment Insurance payments are expressly not deducted from gross weekly income in s. 12(4)(b).
The insured’s gross weekly income is pursuant to Section 12(7) 1. deemed to be the greatest of:
i. his average gross weekly income from his occupation or employment for the four weeks preceding the accident,
ii. his average gross weekly income from his occupation or employment for the fifty-two weeks preceding the accident,
iii. $232.00
In my view the wording of Section 12(7) 1.i and ii is ambiguous and capable of two interpretations.
In order to determine the deemed gross weekly income under s. 12(7) 1., one has to do the calculations under subsections i and ii, which yield different results based on the two possible interpretations of the subsections.
The first interpretation is that the insured’s deemed gross weekly income includes, in the calculation under s. 12(7) 1.i of the average of the gross weekly income from his occupation or employment, only those weeks during the preceding 4 weeks that he was actually occupied or employed.
The calculation based on this first interpretation looks like this:
Under Section 12(7) 1.i:
Week 1
Week 2
Week 3
Week 4
$0
$0
$0
$380
(not engaged in occupation or employment during weeks 1, 2, 3)
AVERAGE: $380.00 divided by 1 week = $380.00
Similarly, according to the first interpretation, the insured’s deemed gross weekly income includes, in the calculation of the average of the gross weekly income from his occupation or employment under s. 12(7) 1.ii, only those weeks during the preceding 52 weeks that he was actually occupied or employed, as follows:
Under Section 12(7) 1.ii:
AVERAGE: $19,794.22 divided by 26 (weeks) = $761.32
(not engaged in occupation or employment for 26 of the 52 weeks).
DEEMED GROSS WEEKLY INCOME: Greatest of $ 380.00,
$761.00, or $232.00 = $761.00
WEEKLY INCOME BENEFITS: Lesser of $600.00 or = $600.00
80% of $761.00 ($609.05) per week
The second interpretation, and that which is urged upon me by counsel for the appellant, would include in the calculation of the average gross weekly income from occupation or employment each of those weeks during the previous 4 (s. 12(7) 1.i) or 52 (s.12(7) 1.ii) weeks that he was not engaged in occupation or employment. Whatever his actual gross income from occupation or employment was over the preceding 4 or 52 weeks, those sums would be divided by 4 or 52 to determine the deemed average gross weekly income.
The calculations based on the second interpretation look like this:
Under Section 12(7) 1. i:
Week 1
Week 2
Week 3
Week 4
$0.00
$0.00
$0.00
$380.00
(not engaged in occupation or employment during weeks 1, 2, 3)
AVERAGE: $380.00 divided by 4 (weeks) = $95.00
Under Section 12(7) 1.ii:
AVERAGE: $19,894.22 divided by 52 (weeks) = $380.00
(Not engaged in occupation or employment for 26 of these 52 weeks).
DEEMED GROSS WEEKLY INCOME: Greatest of $95.00,
$380.00 or $232.00 = $380.00
WEEKLY INCOME BENEFITS: Lesser of $600.00 or
80% of $380.00 ($304.53) = $304.53
Where the words admit of two interpretations the approach to their interpretation should be to consider the words “in their ordinary and grammatical sense, in context and in the light of the scheme and intent of the legislation”, as stated by arbitrator Naylor.
The legislation restricted an insured’s right to sue for damages. The No-Fault Benefits Schedule in turn provides a more generous scheme of weekly income benefits than was provided under prior legislation, regardless of fault. The legislation provides an insured with a weekly benefit to replace, up to a certain amount and in accordance with the specific provisions of the statute, the employment income he or she would likely have earned but for the accident.
The provisions of Section 12 take into consideration the pre-accident employment of the insured.
Mr. Scavuzzo was employed at the time of the accident. It is interesting to note that had Mr. Scavuzzo been unemployed at the time of the accident but under a contract of employment to start at a later date, the legislation would allow him weekly income benefits based upon the amount payable under the contract of employment (subject to the qualifications and limits provided in s. 12(2) 1.iii and s. 12(7) 2.).
I am of the view that the legislation should be given a broad interpretation.
Taken in the context of the legislation, I am of the opinion that the natural and ordinary meaning of the words of s. 12(7) 1. is that the average gross weekly income from employment should include only those weeks during the 4 or 52 weeks that he was employed, i.e. the interpretation previously referred to above as the “first” interpretation. Thus the question posed as “Issue #1”, above, is answered in the negative.
Accordingly, the Order of arbitrator Naylor is upheld.
In light of this decision, it is unnecessary to determine the second issue raised by the appellant, i.e. whether “income from occupation or employment”, as used in the calculation of average gross weekly income in Section 12(7) 1.i and ii, includes Disability payments, Unemployment Insurance benefits, Canada Pension Plan payments and Worker’s Compensation payments. In any event, the issue is purely hypothetical with respect to Disability benefits, Canada Pension Plan payments and Worker’s Compensation payments, on the facts of this case.
VII. ORDER
The appeal is dismissed.
The Respondent is entitled to his expenses.
June 19, 1992
Michele Smith
Director’s Delegate
Date