Neutral Citation: 1993 ONICDRG 57
File No. A-003727
ONTARIO INSURANCE COMMISSION
BETWEEN:
ANH (ANNIE) VUONG Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer
DECISION
Issue:
The Applicant, Anh (Annie) Vuong, was injured in a motor vehicle accident on October 4, 1992. She applied for and received accident benefits from the Insurer (State Farm), payable under Ontario Regulation 672 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8.
Ms. Vuong was paid a weekly income benefit by State Farm. The Insurer deducted Ms. Vuong's post-accident earnings from her weekly income benefit. Ms. Vuong did not agree with the Insurer's calculation of her weekly benefit.
The parties were unable to resolve their differences at mediation, and Ms. Vuong applied for arbitration of the issue under the Insurance Act.
The issue in this hearing is:
Are the Applicant's post-accident earnings deductible from her weekly income benefits?
Result:
Post-accident earnings are deducted from the weekly benefit.
Hearing:
The hearing was held in North York, Ontario, on August 9, 1993, before me, Fred B. Sampliner, arbitrator.
Present at the Hearing:
Applicant: Anh (Annie) Vuong
Insurer's Representative: Gina S. Brannan Barrister & Solicitor
Insurer: Terrence O'Brien Claims Supervisor
The proceedings were transcribed by Ms. Joanne McConnell of Paul W. Rosenberger, Official Examiner.
Translation services were provided to Ms. Vuong by Mr. Joseph Lau of Global Translation Services.
This evidence was presented by the parties through an agreed statement of facts. Both parties made submissions and the Insurer presented a Brief of Authorities.
Evidence and Findings:
This dispute concerns a single legal issue; the method of deducting post-accident earnings from weekly income benefits under sections 12 and 15 of the No-Fault Benefits Schedule. Section 12 provides for payment of a weekly benefit to an insured person who was employed at the time of the accident or has a recent record of employment. If the insured person is substantially disabled from performing his or her essential job tasks as a result of the accident, then he or she is entitled to a weekly benefit from one week after the disability commences until her or she is fit to return to work.
The method for calculating this benefit is set forth in section 12(4) of the No-Fault Benefits Schedule. The benefit is the lesser of $600 or 80 per cent of the insured person's gross earnings for either the four or fifty-two weeks before the accident.
Ahn (Annie) Vuong, the Applicant, had two jobs at the time of the October 4, 1992 motor vehicle accident. She was employed full-time at Pure Data Ltd., and also worked part-time at a Ramada Inn hotel. Her average gross weekly earnings during the four-week period immediately prior to the motor vehicle accident were $1,395.84, eighty percent of which is $1,116.67 per week. Based on the figures provided to me, I find that Ms. Vuong's section 12 weekly benefit is $600 until she returned to her part-time work, as discussed below.
After the accident, Ms. Vuong did not return to full-time work. However, she did work part-time for Pure Data Ltd. from January 5, 1993 until June 13, 1993. The earnings from her part-time work were also agreed upon.
Section 15 of the No-Fault Benefits Schedule provides for the treatment of post-accident earnings:
The insurer may deduct from any benefit payable under this Part 80 per cent of any income received by or available from any occupation or employment subsequent to the accident.
State Farm takes the position that this section 15 allows it to deduct 80 per cent of Ms. Vuong's part-time earnings from her weekly benefit.
Ms. Vuong disagrees. She argues that any post-accident earnings should be subtracted from her average gross weekly earnings in the four weeks before the accident, or the $1,116.67 figure.
According to Ms. Vuong's calculation method, she is entitled to receive the $600 maximum benefit during the entire period after the accident, regardless of her part-time work. In her view, to hold otherwise would be to unduly penalize a motivated person by economically discouraging his or her return to work.
I sympathize with Ms. Vuong's frustration, but I cannot ignore the legislation and purpose of the scheme. Unlike the tort system, the No-Fault Benefits Schedule does not tailor recovery to actual economic losses. The nature of the system has been succinctly defined by Arbitrator Palmer in Lily Steele v. Zurich Insurance Company (O.I.C. File No.A-001024, December 3, 1992), "It is a restrictive code of limited benefits payable in particular circumstances to a carefully defined set of individuals." This system may in some circumstances undercompensate or overcompensate individuals, as pointed out in Michael Morin v. The Personal Insurance Company of Canada (O.I.C. File No. A-000468, June 16, 1992). Essentially, the legislation recognizes income loss, but provides only limited compensation.
To interpret the No-Fault Benefits Schedule, I have reviewed the rules of statutory construction, and previous arbitration decisions. The rules of statutory construction provide for a plain reading of the words contained in the legislation, taken in their ordinary grammatical sense (see E.A. Driedger, Construction of Statutes (Butterworths, 1983) pgs. 1-45; Ralph McCormick v. Economical Mutual Insurance Company (O.I.C. File No. A-000139, October 2, 1991) at p. 17). I am also guided by the words of Mr. Justice McMahon in Paese v. United States Fidelity and Guarantee Company 1985 CanLII 1984 (ON HCJ), 17 C.C.L.I. 1 at page 8, "When a statute admits of but one interpretation, effect must be given to it regardless of the result."
My plain reading of section 15 allows the deduction of Ms. Vuong's post-accident earnings from her $600 weekly benefit. I find that there is no ambiguity, absurdity, or inconsistency in any of the language of that section. It clearly and unequivocally provides that 80 per cent of post-accident income may be deducted from the benefit. In this case, the benefit is $600, and 80 per cent of Ms. Vuong's post-accident earnings may be deducted from that benefit.
Furthermore, I cannot say that the effect of a plain interpretation of section 15 is repugnant to the purpose of the no-fault benefits scheme. This legislation was intended to provide limited accident benefits (as noted above). Although the deduction of Ms. Vuong's post-accident earnings from her benefit may not be what she anticipated, I find that the result is consistent with the legislature's intent.
Ms. Vuong maintains that section 16(1) of the No-Fault Benefits Schedule precludes the deduction of post-accident earnings. Section 16(1) says:
TEMPORARY RETURN TO SCHOOL OR WORK":
(1) Subject to section 15 and subsection (3), a person receiving a benefit under this Part may attend school or accept, or return to, work at any time during the first two years following the accident for any period of time without affecting his or her benefits under this Part if, as a result of the accident, he or she is unable to continue at school or in the occupation or employment.
Although Ms. Vuong is correct in reading the section to allow temporary work returns without affecting entitlement, she has ignored the key words "subject to section 15". That phrase means that, while the insured person may be entitled to continue receiving weekly benefits, the insurer may still deduct the income earned from the benefit. This is entirely consistent with the idea of limited benefits.
Ms. Vuong further submitted that State Farm failed to offer her optional coverage which would have provided her greater weekly benefits. Section 19 of the No-Fault Benefits Schedule provides that an insured person may purchase optional coverage to increase the limit of basic weekly benefits. Every motor vehicle policy sold in Ontario contains the standard provision for weekly benefits, and a statement of the available optional coverages. Ms. Vuong argued that, because the policy options had not been adequately explained, State Farm should be precluded from making the section 15 deduction of her post-accident earnings.
I have no evidence which would bear upon Ms. Vuong's argument, and I make no findings on the insurer's obligation to educate its customers, or the effect of its failure to do so.
Order:
State Farm may deduct 80 per cent of the Ms. Vuong's post-accident earnings from her weekly benefit.
The Applicant is entitled to her expenses incurred in respect to the arbitration.
October 4, 1993
Fred B. Sampliner Arbitrator
Date