Neutral Citation: 1993 ONICDRG 7

P-000468

BETWEEN:

MICHAEL MORIN

Applicant (Respondent)

and

THE PERSONAL INSURANCE COMPANY OF CANADA

Insurer (Appellant)

Before:

Elisabeth Sachs, Director of Arbitrations

Counsel:

Kevin L. LaRoche (for Appellant, Insurer)

Stewart M. McMahon (for Respondent, Applicant)

By Notice of Appeal filed July 16, 1992, the insurer, The Personal Insurance Company of Canada (the appellant) appeals from an Order of Senior Arbitrator Frederika Rotter, dated June 16, 1992 which provided that Canada Pension Plan disability payments received by the applicant, Michael Morin (the respondent) are not deductible from weekly income benefits which may be payable to him pursuant to ss.13(3) of the No-fault Benefits Schedule (Ont. Reg. 273/90).

The order sought by the appellant is a determination that weekly income benefits found to be payable to the respondent under ss.13(3) of the Schedule be reduced by an amount equal to the Canada Pension Plan disability payments received by the respondent as "any payments for loss of income" within the meaning of the section.

The facts are not in dispute. The respondent was injured in a motor vehicle accident on September 1, 1990 and insured under a standard automobile owner's policy issued by the appellant. Since 1986, the respondent has received a monthly Canada Pension Plan (C.P.P.) disability payment. It is important to note, for the purpose of this decision, the parties agree the C.P.P. payments are for "loss of income".

As the respondent was not employed, self-employed or had a contract of employment at the time of the accident, the weekly income benefit amount falls to be determined under s.13 of the Schedule.

At issue is ss.13(3) which reads as follows:

(3) The weekly benefit under ss.(1) will be $185.00 less any payments for loss of income, except unemployment insurance benefits,

(a) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan; or

(b) received under any sick leave plan.

In dispute is the meaning of the words "any payments for loss of income", the amount of which may reduce the respondent's entitlement as determined. Put another way, are C.P.P. payments to be deducted from benefits otherwise available pursuant to s.13?

(a) Appellant's Position

The essential submission of the appellant is that the arbitrator erred in law when she found, looking at both s.12 and s.13, the term "any payments for loss of income" to be ambiguous. In her view, "a genuine question exists as to whether the Legislature meant to exclude individuals injured in automobile accidents from receiving weekly benefits, because they happen to be receiving payments for loss of income in relation to a previously existing disability or injury.". The arbitrator compounded the error, it is said, when she then interpreted the words in the context of the general scheme of the Schedule and concluded s.13 payments were meant to compensate persons for "loss of function".

The appellant states there is nothing ambiguous in the wording of ss.13(3). The weekly income benefit conferred is to have deducted from it any payment which is in fact a payment for loss of income, except unemployment insurance benefits, and as qualified by ss.(a) and (b). The appellant urges the word "any" is to be given its ordinary meaning, as in a payment for income loss from whatever source or for whatever reason. To read in a qualification that such payment must be received as a result of the accident for which the income benefit is claimed is to read into the Schedule limiting words which are not justified. The Legislature meant to exclude unemployment insurance benefits and said so. If there were to be other exclusions, they could easily have been spelled out.

The appellant states the various rules, or canons, of statutory interpretation do not come into play unless an ambiguity is first found to exist, even though a plain reading of the section might result in a hardship. It is conceded that if an absurd result was obtained by applying the literal meaning of the words, and a more reasonable interpretation also possible, then one must conclude the Legislature meant the more reasonable to prevail. However, if the meaning of the words used is obvious there is but one interpretation, and an adjudicator must give effect to it. One cannot read into, or out of, a clear statement meanings and words which are not there.

The appellant submits there is only one interpretation of the words "any payment for loss of income" and given their ordinary, everyday meaning, do not lead to either an ambiguity or an absurdity but rather are meant to be applied as read.

In support of this position, the appellant relies principally on the findings in Paese v. United States Fidelty and Guarantee Company (1985), 1985 CanLII 1984 (ON HCJ), 17 C.C.L.I. 1 (D.C.O.) and the arbitral decision McCormick and Economical Mutual Insurance Company (OIC File No. A-000139).

(b) Respondent's Position

The respondent points out that an appeal is not a rehearing on the merits and the Director is not entitled to reverse a finding of the arbitrator unless there is a clear error in law as opposed to a mere disagreement on the interpretation of the section. The respondent submits the arbitrator's interpretation of s.13 is reasonable and supported by use of the rules of statutory construction.

The respondent also states one must look at both s.12 and s.13 of the Schedule in coming to the meaning of each even though they provide for different situations in accident victims' workforce status.

Section 13 refers to those who have neither deemed nor actual employment at the time of the accident. There is no benefit payable under s.13 if a person is entitled under s. 12. The respondent urges, given the context in which s.13 benefits are payable, it is absurd to include payments for loss of income for situations arising before the motor vehicle accident happened. In other words, the payments for loss of income referred to must relate to the accident giving rise to the entitlement because persons receiving under this section have no loss of income as understood in s. 12. Looked at in this way, the words "any payments" are unclear, since logic demands some reason for a benefit where a loss of non-existent income is apparently compensated for.

The respondent submits the purpose of s.13 is to provide a sum of money acknowledging an insured might be subject to additional economic hardship by reason of the inability to perform certain essential tasks, and has nothing to do with any income or lack thereof at the time of the accident. The respondent takes the position that receiving payments for loss of income in respect of previous disabilities is irrelevant. It is submitted that s.13 benefits are unrelated to income, as such, and this is reflected in the title of the section. Thus the section cannot have the same intent as s.12, and is meant to compensate for further limitations the insured may experience as a result of the accident.

The respondent distinguishes the findings in McCormick on the basis that since s.12 benefits are to compensate for loss of income from employment, if the applicant in that case had not been required to deduct workers' compensation receipts, the result is double recovery for the same loss, i.e., of income generally regardless when incurred. In any event, s.20 of the Schedule addresses the point specifically, and s.13 does not. Hence there is a gap in s.13 to be filled, and leaves open the question of what the drafters intended.

Further, s.13 does not result in "double recovery" in this context. The respondent states only a loss of income payment payable as a result of the same automobile accident, in addition to a payment under s.13, would be a double recovery which explains the wording used in the most reasonable way. The omission of the phrase "as a result of the accident" is unintentional, and must be added in to make the section coherent.

The respondent supports the application of the reasoning in Pineda v. The Co-operators (1985), 1985 CanLII 2094 (ON HCJ), 51 O.R. (2d) 787 (H.C.J.) in particular the operative part of the exclusion clause under consideration in that case (at page 790). The respondent submits s.13 is not a damage clause nor meant to address pain and suffering but is to compensate for injury which will result in economic loss. Although s.13 provides nominal recovery, recognizing the person is not receiving employment income, it does ensure compensation for what may be other economic loss as a result of an inability to perform essential tasks. The ambiguity, it is alleged, is not the plain reading of the words "any payment for loss of income" but whether the deduction of the respondent's C.P.P. disability payments is because of this latest or some other accident. Obviously if this accident triggers the payment, it should be deductible but if another did, it should not.

In response, the appellant states the words are to be interpreted in an all inclusive manner and whether the payment relates to this or another accident is immaterial. Further, the arbitrator is wrong in describing the intent of s.13 as relating to "loss of function" because one does not get income for such a loss. Double compensation is a subsidiary issue and it is a matter of degree whether that occurs, depending on the facts of the case.

Finally, the appellant submits, the Director should not be concerned with the policy intent of s.12 as opposed to s.13. The sections are mirror images of one another and to that extent, the appellant supports the arbitrator's finding they must be interpreted in the same manner.

3. ANALYSIS AND FINDINGS

I agree with Arbitrator Rotter's statement, at page 12 of the decision "that the term "any payments for loss of income" must be construed according to its meaning and context in both sections 12 and 13, and that the words in neither section should be interpreted in isolation of the other.". The words are identical in both and cannot have a different meaning. The issue is not however whether they have a different meaning but rather whether the Legislature omitted, by slip or design, to add limiting words to s.13 as urged by the respondent.

The rules of statutory construction are not rules of law but meant to assist adjudicators where the context and scheme of legislation suggest that words used were meant to have an interpretation other than the merely literal.

The proposition of the appellant is that where language is unambiguous, the plain meaning must be adhered to subject to correcting of absurdities which may result. If there is no absurd result by a literal application of the words outlining the deduction it should be given effect to.

I am not persuaded the issue is that simple. Statutory construction has evolved over the years to the point where most commentators, as set out by E.A. Driedger in Construction of Statutes (2d) (Butterworths, 1983), support one main principle or approach being "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament." (pg. 87).

I can do no better than refer to the analysis found in the decision Salmon and The T.T.C. (Markel Insurance), (OIC File No. P-000235, June 29, 1992) a decision of the Director's delegate, M.P. Richardson. In that case, starting at pg. 14 the various rules, cases which develop them, and the modern approach are set out in full. The analysis concludes with a reference to Driedger's text at pg. 89:

To say that a statute must be read as a whole means not merely that the meaning of the words contained in a particular provision is to be gathered from reading them in their verbal and grammatical context; it means that the substance of the particular provision must be seen in the context of the ideas expounded in the whole Act, 'because', as Lord Reid said in Inland Revenue Commissioners v. Inchy [1960] A.C. 748, at 766 'one assumes that in drafting one clause of a Bill the draftsman had in mind the language and substance of the other clauses, and attributes to Parliament a comprehension of the whole Act'.

It is this approach which will be applied to the disputed section.

Reviewing the cases cited by the parties, the Paese decision is not particularly helpful. The plaintiff was injured in an automobile accident on April 14, 1980. She subsequently received a salary continuation payment through her employer and in August 1980, a Canada Pension Plan disability pension. Both payments arose as a result of the accident. The then legislation provided the automobile insurer pay the lesser of $140.00 per week or "80% of...the insured person's gross weekly income from employment, less any payment for loss of income from employment received by or available to such person...". The issue was whether the C.P.P. payment was for loss of income. That is not disputed here - the parties concede it is. Whether the payment must have been received as a result of the accident was not addressed.

Without further analysis, the court concluded the C.P.P. payment, having been found to be for "loss of income" was deductible. Of limited assistance is the court's review of the current state of statutory construction and the importing of limiting words in an otherwise straightforward provision.

More to the point is the McCormick decision. At issue was the contention that the sister provision to ss.12(4) be interpreted to include in the category "any payments for loss of income" only those which were received or available because of the accident. Senior Arbitrator Naylor found there was no requirement, in the context or intent of the legislation, to read in such a limitation. The meaning of the words was obvious and clear. The applicant's workers' compensation benefit, received by him for a condition wholly unrelated to the accident, was a payment for loss of income. It therefore followed the amount of the payment was deductible.

However the senior arbitrator was not called upon to address the issue of whether it makes any difference that the claimant under s.13 presumably has no employment and therefore no income to lose as a result of the accident. Is there some other reason to limit the extent of the deduction the insurer is now claiming from the base entitlement?

The appellant also cites Frezludeen v. Safeco Insurance Company of Canada (1984), 1984 CanLII 2130 (ON HCJ), 47 O.R. (2d) 258 (C.C.O.). The court considered the predecessor of ss.12(1) and (2) which required a person, seeking payment for loss of income from employment, to have suffered a substantial inability to perform the essential tasks of same subject to certain criteria. The plaintiff, at the time of the accident, had been totally disabled in another incident approximately two months earlier. The automobile accidents giving rise to the claim for benefits, it was found, extended the effect of the former injuries. It was also found that injuries from the accident would have caused disability. The issue was characterized by the court as being the effect, if any, of the plaintiffs pre-existing condition on her entitlement to the payment of benefits. The court's view was the section was enacted to assist injured persons in obtaining insurance benefits immediately without having to establish fault. However, to do so, they must bring themselves within the criteria for entitlement. In this case, the court found the plaintiff had not done so. There was no question whether a deduction should be made had the plaintiff been able to establish the disability arising out of the motor vehicle accident rendered her substantially unable to perform the essential duties of her employment within 30 days of the accident, as required.

I prefer the reasoning of Judge Cusinato in the case Levata v. Simcoe and Erie General Insurance Company, [1992] O.J.N.O. 1778. In construing the intent of the legislation in using the words "less any payments for loss of income" the court found the compensation was for an insured person's inability to continue as a wage earner, whether employed or not, at the time of the disability. Essentially, the compensation was for the loss of opportunity to become employed as opposed to the loss of actual employment income, and it does not matter the individual was unemployed at the time.

The context is no-fault insurance. There are no "damages". The legislation provides for a deduction from a benefit otherwise payable. The benefits themselves may not be earning related. There is a benefit conferred on persons involved in automobile accidents from which any earnings related payment is to be deducted. Other payments are not, unless they fall within the exclusion sections including unemployment insurance payments. One is drawn to the conclusion that automobile insurers were not meant to be general insurers for all persons who might find themselves involved in automobile accidents. Accordingly, certain payments are deductible. If these payments were to be only 'same-accident' ones, the Legislature could have provided for this by a simple use of words as found in other sections of the Schedule.

I do not believe that the fact that the respondent in this case may never become employed or never intended to seek any form of remunerative employment makes any difference. The legislation was not intended to provide loss of income benefits over and above an actual loss where the income payments being received matched or were more than benefits otherwise payable under s.13. What, indeed, would these benefits provide? If the payment already received by the injured person was less than the benefit under s.13, the section will place him or her on an equal footing with other claimants. The automobile insurer, it seems to me, is not to provide additional recovery for a loss which is already being covered from another source.

The No-Fault Benefits Schedule is not designed to compensate every person through automobile insurance in every situation which may arise as a result of an automobile accident. Where specific instances were meant to be included, as in the receipt of workers' compensation benefits under s.20, the drafters were careful to include limitations on the deduction. Similarly, other sections of the Act limit recovery where there is any other insurance plan or law which might pay the benefit or expense sought.

Placing the disputed words of s.13 in their context, and looking to the scheme and object of the Schedule, coupled with reading it as a whole, I find the words are not ambiguous or unclear in their intent. The deduction from benefits otherwise payable under the section is unqualified and not subject to a secondary meaning which would strain the plain language. I reiterate, in this case, the parties do not dispute the nature of the payment sought to be deducted - the dispute is whether it should be deducted at all, payment having arisen before the accident in a situation where the insured person has no connection with the workforce. I do not consider the application of the plain meaning of the words to produce a result contrary to the intent of the legislation.

I agree with the proposition that an arbitrator's finding should not be disturbed on appeal if it is a matter of divergent viewpoints only. The result on appeal is a finding on a matter of law, and not mere disagreement about the meaning of the section. The outcome is fundamental to the computation of benefits for persons who, by reason of their particular circumstances, must claim under s.13 of the Schedule.

4. EXPENSES

Neither party made submissions on whether the respondent, who is the only party entitled to expenses under the Insurance Act, should be granted them no matter whose argument prevails.

The issue raised is new, an important principle is involved, and there are conflicting decisions of arbitrators of the Commission. The resulting application of the section affects not only this case but others with similar facts.

While it was reasonable for the appellant to launch an appeal, the respondent had to vigorously defend it and incur expenses in so doing. Although the defence was unsuccessful, it was appropriate for the respondent to argue as he did to enhance his potential recovery of benefits. The respondent is entitled to his expenses of the appeal as set out in the Regulation.

5. ORDER

The appeal from the decision of Senior Arbitrator Rotter is hereby allowed and any weekly income benefits to which the respondent may be entitled by ss.13(3) of the No-Fault Benefits Schedule will be reduced by an amount equal to the Canada Pension Plan disability payments received by him.
The respondent is entitled to his expenses of this appeal.

February 26, 1993

Elisabeth Sachs

Director of Arbitrations

Date

Michael Morin v. The Personal Insurance Company of Canada, 1993 ONICDRG 7

Case Summary

(a) Appellant's Position

(b) Respondent's Position

3. ANALYSIS AND FINDINGS

4. EXPENSES

5. ORDER