Neutral Citation: 1993 ONICDRG 32

File No. A-001525

ONTARIO INSURANCE COMMISSION

BETWEEN:

MANINDER SINGH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

File No. A-001526

AND BETWEEN:

MANINDER SINGH

Applicant

and

PILOT INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Maninder Singh, was injured in a motor vehicle accident on August 5, 1991. He is receiving no-fault benefits as a result of his injuries from the accident.

The issue in this arbitration is which insurance company, State Farm Mutual Automobile Insurance Company (State Farm) or Pilot Insurance Company (Pilot), is liable to pay these benefits.

Resolution of this issue turns on whether the Applicant is a dependant of either his father or his mother as defined in section 3(2) of the No-Fault Benefits Schedule, R.R.O. 1990, Regulation 672.

A claim for interest and a special award raised in the Applicant's application for appointment of an arbitrator was not pursued before me.

Decision:

1. The Applicant is not principally dependent on his father or his mother for financial support and so is not an insured person under his father's automobile policy issued by State Farm.

2. The Applicant is entitled to his expenses incurred in respect to this hearing.

Hearing:

A hearing in this matter took place in North York on September 3, 1992. Present were:

Mr. Raminder Singh, the Applicant's father

Rupinder Kaur Singh, the Applicant's mother

Herschel Gold, Counsel for the Applicant

Harry Brown, Counsel for State Farm Insurance

Rudolph Lobl, Counsel for Pilot Insurance

The proceedings were transcribed by Elisabeth Monteiro of Professional Court Reporters Inc., and interpreted by Jaj Thaper of Dominic Translations.

The Applicant's father and mother testified at the hearing. Three exhibits were filed at the hearing. In addition, State Farm filed written submissions, and Pilot filed a brief of authorities. The authorities cited to me are listed at Appendix A.

Evidence and Findings:

The Applicant was seriously injured in an automobile accident on August 5, 1991. He was travelling in a vehicle insured by Pilot. He lived at home and did not own his own car. His father owned a vehicle that was insured by State Farm.

The priority rules governing liability to pay no-fault benefits between respective insurers are set out in section 268(2) of the Insurance Act, R.S.O. 1990, c. I.8. It is not disputed that, if the Applicant is found to be a dependant of either of his parents, State Farm is liable to pay his benefits. In the event that he is not an insured person under the State Farm policy, he has recourse against Pilot as the insurer of the vehicle in which he was an occupant. Pending this determination, payment of the Applicant's no-fault benefits has been administered jointly by both State Farm and Pilot.

Evidence of the Applicant's family background and living arrangements was given by his father, Raminder Singh, and his mother, Rupinder Kaur Singh. I rely on this evidence in making the following findings of fact. The facts essentially were not in dispute.

The Applicant was born on February 3, 1971 and was 20 years old when the accident occurred. He has always lived at home with his family: his parents and younger sister, who was 16 years old. The Applicant's parents came to Canada in the early 1980s from India, first his mother in 1981 and then his father in 1983. The children joined them in Canada in 1987. The family has lived in Brampton since 1988.

The Applicant's father was employed as a security guard. His mother is a machine operator. The income tax returns filed by the parents show that their joint income, gross of tax, was approximately $25,000 in 1990 and 1991.

After he came to Canada, the Applicant went to school on a full-time basis to complete his grade 12 education. He also worked part-time while he was at school. In 1988, he was employed as a cleaner, making $150 per week. In 1989, he worked for a pizza company, Pizza Nova, and made $350 per week. He left school after completing grade 12, in the spring of 1989.

After leaving school, the Applicant worked full-time for Patons & Baldwins Canada Inc. between February 14, 1990 and August 16, 1990. He earned an hourly rate of $9.18 + 35 cent shift premium for a 40 hour week. In August 1990, he was laid off by the company.

In the fall of 1990, the Applicant enrolled in a number of courses at Sheridan College, but withdrew from college in November 1990.

In 1991 until the accident, the Applicant worked in customer service at Pizza Nova. Exhibit 1, Tab 7 is a statutory declaration from Mr. Jaswant Gill, the franchise owner. It indicates that the Applicant was employed full-time for the period from January 10 to August 3, 1991 and earned approximately $380 (gross) a week. The Applicant also received unemployment insurance benefits during the year.

A summary of the Applicant's income and expenses was filed by State Farm at Exhibit 1, Tab 10. The information contained therein was not disputed by the Applicant or Pilot.

The Applicant did not file tax returns for 1989 or 1990. He filed a tax return in 1991, declaring $6,600 unemployment insurance benefits received. He did not declare his earnings at Pizza Nova. Although the Applicant did not declare his employment income, I accept that he earned the income set out in the evidence. I find that the Applicant's income was approximately $11,780 for 31 weeks' employment, plus his unemployment benefits, for a total gross income in 1991 for the period before the accident of $18,380. His monthly income (net of tax on his unemployment insurance benefits) was approximately $2,500.

At the time of the accident, the Applicant had applied to attend Humber College as a full-time student in law enforcement starting in the fall, 1991. He intended to continue working part-time while a student. His educational plans were interrupted by the accident.

The Applicant's living arrangements reflected his family's cultural background and traditions. He lived at home. His father was head of the household, and the Applicant was expected to comply with his wishes and rules. His father was solely in charge of the family finances. Each week, the Applicant handed his pay cheque to his mother. He retained nothing for himself. The earnings of family members who worked - his father, mother and the Applicant - were deposited into a bank account in his father's name at the Toronto-Dominion Bank. The money was pooled to pay the family's expenses.

The living expenses of all the family members - the mortgage, utilities, food, clothing, car expenses, entertainment and other household expenses - were paid by the Applicant's father from this account. Although this account was used to pay most of the family expenses, Mr. and Mrs. Singh jointly also had a Visa card and another account with a running balance of $100 or $200 dollars, so that Mrs. Singh could purchase small sundry items, such as gas, as the need arose. The Applicant had no right to draw on either account, and did not own a Visa card. He had a bank account in his own name, which held only a few dollars. All of the Applicant's needs were met from the family account.

If he needed money, the Applicant would ask his father for it. His father gave him money for clothes, for going out and for other miscellaneous expenses. Mr. Singh stated that, had the Applicant gone to college as planned, his tuition fees would have been paid from the family account. Mr. Singh owned two cars, one of which was driven by his son. The automobile expenses were paid for out of the family account.

The evidence indicates that the Applicant's father was a benevolent family head, who tried to be reasonable in meeting the Applicant's requests for money. He regarded all the money earned by family members as family money. Ultimately, the father had the final say on how family funds should be spent. His son accepted the father's authority in this matter. Mr. Singh stated that he had refused his son's request for money "a few times", when he felt that his son had been given enough money for his social needs.

It is clear from Mr. Singh's testimony that it was inconceivable to him that his son would withhold his pay cheque, or challenge the father's authority to determine how best the family money should be spent.

Title to the family home was in the joint names of the Applicant and his parents. The parents testified that their son had not contributed to the downpayment on the house, and title had nothing to do with any financial contribution on his part. Mr. Singh explained that title was placed jointly in the son's name in accordance with Sikh custom. Under Sikh traditions, the son inherited all property on the death of his father.

I find that the Applicant's joint ownership of the house is not relevant in determining whether he is a dependant of his father.

Tab 8 of Exhibit 1 is a list of monthly household expenses, paid for out of the family bank account. Tab 10, prepared by the Insurer, summarizes the family's monthly income and expenses. They show the following:

Monthly Expenses:

Mortgage – First

$1,300

Second

200

Groceries

600

Consumer's Gas

80

Hydro

45

Water

43

Property Taxes

268

Car Loan

300

Gas for two Cars

470

Miscellaneous

600

Total

$3,906

Applicant's monthly income

Pizza Nova $380 per week times 31 weeks

$11,780

Unemployment Insurance benefits

$ 6,600

Total income January to August 1991

$18,380

Approximate total monthly income (net of tax on the unemployment benefits)

$ 2,500

Counsel for State Farm submitted that the Applicant's pro-rated share of expenses as one of four occupants of the household was $976.50 per month, while he contributed $2,500. He asked Mrs. Singh whether this did not mean that the Applicant had contributed more than his share of the expenses. Mrs. Singh's response indicated that this type of accounting and analysis was alien to the family. She explained that the Applicant was a young boy and was expected to be able to work harder than his aging parents. He contributed his earnings to the family account, in accordance with the family's traditions. He did not get the balance of his contributions back, after expenses had been paid. When his father died, he would inherit the family property, in accordance with tradition.

Submissions:

Counsel for the Applicant submitted that provisions regarding coverage under the Schedule should be interpreted liberally. He submitted that, on the facts, the Applicant was dependent on his father for financial support.

Counsel for State Farm submitted that the Applicant was contributing two and a half times more than his share of the expenses, and was essentially supporting himself and contributing to the support of the family. He submitted that the criteria for coverage was limited to economic dependence and did not extend to social dependence. He submitted that the dependent status of the Applicant must be determined as of the time of the accident.

Counsel for Pilot submitted that the concept of dependence must take into account the culture and tradition of the insured. He submitted that the Applicant had no control over expenditures of money in the family account, which were in the sole discretion of the Applicant's father. He submitted that the Applicant would have attended school, but for the accident.

Reasons:

The governing provisions of the No-Fault Benefits Schedule state:

Section 2

In this Schedule, ...

"insured person", in respect of a particular motor vehicle liability policy, means,

(c) the named insured, his or her spouse and any dependant of either of them while the occupant of any other automobile, ...

(emphasis added)

Section 3

(2) For the purposes of this Schedule, a person is a dependant of another person if the person is principally dependent for financial support on the other person or the other person's spouse.

Accordingly, the Applicant can only be found to be an "insured person" under his father's policy if he is principally dependent on either of his parents for financial support.

In Miller v. Safeco Insurance Co. of America (1985), 1985 CanLII 2022 (ON CA), 50 O.R. (2d) 797 (C.A.); affirming (1984), 1984 CanLII 2019 (ON HCJ), 48 O.R. (2d) 451, Mr. Justice O'Brien approached the issue of interpretation of coverage:

...on the basis the legislation was of a remedial nature, intended to broaden insurance coverage to include members of family units as persons insured under the policy.

This principle of interpretation is applicable to the present Schedule. The language of the present Schedule is different from that used under the schedule to the former Insurance Act, R.S.O. 1980. Many of the authorities brought to my attention by counsel were concerned with interpretation of the term, "dependent relative". I also note in contrast with the earlier legislation, that there are no qualifications in section 3(2) in respect of age, residence or relationship.

The current definition of a dependant as "principally dependent for financial support" is narrower than the older term of "dependent relative". It specifies that an individual must be dependent for financial support, and does not refer to other forms of dependence, such as social dependence, except to the extent that such factors pertain to financial dependence. It also requires principal dependence - some dependence is not sufficient to meet the statutory test. For this reason, the applicability of prior case-law must be viewed with some caution.

Furthermore, determination of dependence is essentially a factual issue. Every case must be approached on the basis of its own particular facts as applied to the relevant statutory standard. Those facts, necessarily, include the cultural context and social structures within which the family arrange their affairs.

Miller v. Safeco concerned the interpretation of "dependent relative". Mr. Justice O'Brien suggested a number of criteria to apply in determining whether an applicant was a "dependent relative" under a policy. He stated:

Obviously, cases of this kind will be approached on their own particular facts. In my view, however, in considering who is an "insured person", the legislative intent should be kept in mind and, in addition, matters such as the amount and duration of the financial or other dependency, the financial or other needs of the claimant, the ability of the claimant to be self-supporting, and the general standard of living within the family unit should be considered.

These standards were approved on appeal, with the exception of the general standard of living within the family unit, which was disapproved.

The applicant in Miller was a 23 year old, who lived at home with his parents. At the time of the accident, he had been employed for three months on a full-time basis, but had been largely unemployed for the prior eleven months. He did not contribute to room or board or to the family expenses. Applying these above standards, he was held to be a "dependent relative".

Mr. Justice O'Brien also decided the case of Pagliarella et al. v. Di Biase Brothers Inc. et al. (1989), 1989 CanLII 4388 (ON HCJ), 71 O.R. (2d) 193 (H.C.). The applicant was a 27 woman of Italian background, who had been working full-time as a pharmacy assistant for a number of years. She had lived at home with her parents all her life and did not contribute to the family expenses or pay for room and board. The judge found that she was, to some extent, financially dependent and also socially dependent because of the family living arrangements and social structure.

A number of cases have directly considered the meaning of the words "principally dependent" under subsection 2, Part I, Section B(3) of the former standard automobile insurance policy. They have applied a strictly monetary calculation. To show such dependency, they require that an applicant be more dependent on the other person's contributions than on other sources of income, such as social benefits. They have accepted dictionary definitions of the word "principally" to mean "for the most part" or "chiefly".

In Barnard et al. v. Safeco Insurance Co. of America (1986), 57 O.R. (2d) 559 (H.C.), Mr. Justice O'Driscoll held that the insured's mother who lived in a nursing home was not principally dependent upon the insured, because her chief source of financial support was her pension entitlement.

In Chevrier et al. v. Zurich Insurance Company (1985), [1985] I.L.R. 1-1920 (C.A.); affirming (1984), [1985] I.L.R. 1-1919, the applicant was held not to be principally dependent on her mother, where she and her mother both received the same amount of welfare, although the mother managed the funds.

I find that an individual must chiefly or for the most part derive his or her financial support from another person in order to be principally dependent for financial support on that person.

Two recent arbitration decisions have considered the meaning of the present language "principally dependent for financial support". They are Adolf and Maria Crnkovic v. Simcoe & Erie General Insurance Company, O.I.C. File No. A-002228, K. Julaine Palmer, arbitrator, dated April 8, 1993, and Bruce and Eleanor McDonald v. State Farm Insurance Companies, O.I.C. File No. A-001347, David Draper, arbitrator, dated March 11, 1993. Both these decisions turn on their own facts.

In the present case, to qualify as an insured person under his father's policy, the Applicant must establish that he was principally dependent on either of his parents for financial support. The Applicant had worked on a part-time basis since 1988 and in full-time work until the accident in 1991. He contributed his earnings to the family account which was controlled by his father. On a strictly monetary basis, his monthly contribution in 1991 was sufficient to meet almost two-thirds of the expenses for the entire household. He was not dependent for support more on his parents' income than on his own earnings. He was essentially self-supporting.

In contrast, the applicants in both Miller v. Safeco and in Pagliarella v. Di Biase Brothers Inc. made no financial contribution to the household expenses.

The Applicant's status must be determined as of the date of accident. However, it is legitimate to consider an applicant's future educational or other plans in order to get a complete picture of the applicant's living arrangements. At the time of the accident, the Applicant was working at a full-time job, but intended to attend college the following month for full-time studies, although his application had not yet been accepted. He also intended to continue to work part-time, as he had done while at high school. In any event, I cannot assume that, as a student, the Applicant would have had to rely more on his parents' income than on his own earnings from part-time employment in meeting his share of living expenses. The statutory test is not that he establish some financial dependence on his parents, but that he be principally dependent on his parents for financial support.

As a dutiful son, who respected his family's traditions, the Applicant accepted, without question, his father's authority over his earnings. I accept that, given his background and traditions, the Applicant depended a great deal on his parents in a social sense. However, the statutory standard of dependency set out in the present regulations is relatively strict and limited to financial dependence.

The Applicant's voluntary compliance with his father's authority does not render him principally dependent on his father for financial support. He was not chiefly reliant on his parents' income to support himself.

While I accept that the analysis adopted above is alien to the Applicant's family's cultural background, in my view it is required in order to determine dependence under section 3(2). I find that the Applicant is not principally dependent on his father or his mother for financial support and so is not an insured person under his father's automobile policy issued by State Farm.

The Applicant must therefore seek recourse from Pilot Insurance for payment of his no-fault benefits.

Expenses:

In the discretion of the arbitrator, an applicant may be awarded his or her expenses incurred in respect to the arbitration, under section 282(11) of the Insurance Act. This hearing concerned the respective liability of two insurers to pay no-fault benefits to the Applicant. There was no issue as to the Applicant's entitlement to such benefits from one of these insurers. The Applicant is entitled to his expenses in participating in the arbitration, as prescribed in Ontario Regulation 664, R.R.O. 1990 and Schedule 1 to the Dispute Resolution Practice Code.

Order:

1. The Applicant is not principally dependent on his father or his mother for financial support and so is not an insured person under his father's automobile policy issued by State Farm.

2. The Applicant is entitled to his expenses incurred in respect to this hearing.

June 4, 1993

Susan Naylor Senior Arbitrator

Date

APPENDIX "A"

Barnard et al. v. Safeco Insurance Co. of America (1986), 57 O.R. (2d) 559 (H.C.)

Chevrier et al. v. Zurich Insurance Company (1985), [1985] I.L.R. 1-1920 (C.A.); affirming (1984), [1985] I.L.R. 1-1919

Grimbly et al. v. Liberty Mutual Insurance Company (1988), [1988] I.L.R. 1-2389 (Dist.Ct.)

Ireland v. Royal Insurance Canada et al. (1982), [1992] I.L.R. 1-1837 (Gen.Div.)

Johnson v. Federated Mutual Insurance Company (1989), [1989] I.L.R. 1-2514 (Alta.C.A.)

Lutz v. Wawanesa Mutual Insurance Company (1977), [1978] I.L.R. 1-956 (S.C.)

Martins v. Gibraltar General Insurance Co. (1984), 1984 CanLII 5962 (ON HCJ), 6 C.C.L.I. 226 (Co.Ct.)

McNeilly et al. v. Allstate Insurance Company (1972), [1973] I.L.R. 1-505 (B.C.S.C.)

Miller v. Safeco Insurance Co. of America (1985), 1985 CanLII 2022 (ON CA), 50 O.R. (2d) 797 (C.A.); affirming (1984), 1984 CanLII 2019 (ON HCJ), 48 O.R. (2d) 451

Morrone v. Wawanesa Mutual Insurance Company (1990), [1990] I.L.R. 1-2592 (S.C.)

Pagharefla et al. v. Di Biase Brothers Inc. et al. (1989), 1989 CanLII 4388 (ON HCJ), 71 O.R. (2d) 193 (H.C.)

Revega v. Western Union Insurance Company (1974), [1975] I.L.R. 1-665 (Alta.S.C.)

Taylor v. Motor Vehicle Accident Fund [1989] W.J. 1684 (Dist.Ct.)

Legal dictionary definitions of dependence and dependant.