Neutral Citation: 1994 ONICDRG 28
File No. A-002187
ONTARIO INSURANCE COMMISSION
BETWEEN:
PETER JOLIN
Applicant
and
JEVCO INSURANCE COMPANY
Insurer
SUPPLEMENTARY DECISION
Issue:
The Applicant, Peter Jolin, was injured in a motorcycle accident on August 20, 1991. He received care benefits and weekly income benefits from Jevco Insurance Company (Jevco"), payable under Ontario Regulation 6721, enacted under the Insurance Act, R.S.O. 1990, c. I.8, as amended.
On October 27, 1993, I issued a decision with respect to the care benefits to which the Applicant was entitled, and about the amount of weekly income benefits payable to the Applicant under section 12 of the Schedule. Jevco claimed repayment of an alleged overpayment. I remained seized of this issue and deferred my ruling pending a decision of the Ontario Divisional Court on the issue of the deductibility of certain collateral benefits. That decision has since been issued.
The outstanding issue for decision is:
Is Jevco Insurance Company entitled to repayment of an alleged overpayment?
Result:
Jevco Insurance Company is entitled to repayment of the overpayment of weekly income benefits it has paid to the Applicant.
Evidence and Findings:
In my earlier decision, I found that Mr. Jolin was entitled to be paid weekly income benefits at the rate of $185.60 based on his deemed earnings of $232.00 per week, as set out in section 12 of the Schedule.
The regulation specifies, at section 12(4)(b), that any payments for loss of income must be deducted from the weekly income benefit. Mr. Jolin has been receiving, during most of the benefit period, benefits which can be described as payments for loss of income. Jevco claims that it has overpaid Mr. Jolin, as no amount has been deducted from the weekly income benefits in respect of these payments.
Jevco has paid Mr. Jolin weekly income benefits of $185.60 since his accident. However, Mr. Jolin has also received other income replacement payments, as follows:
When the accident occurred, on August 20, 1991, Mr. Jolin was receiving total temporary disability benefits from the Workers' Compensation Board at the rate of $449.46 per week, due to a work-related injury. He was also receiving $126.00 per week in no-fault benefits (under the previous legislation) from Pilot Insurance Company, in respect of an automobile accident that occurred on June 30, 1989.
On November 22, 1991, the Workers' Compensation Board reduced Mr. Jolin's benefits by 50 per cent, to $224.73 weekly.
On May 6, 1992, Pilot Insurance Company terminated its payment of benefits in respect of the accident of June 30, 1989. Mr. Jolin continued to receive $224.73 in benefits from the Workers' Compensation Board until December 21, 1992.
On February 14, 1993, Mr. Jolin was awarded a permanent partial disability pension of $142.43 per month from the Workers' Compensation Board, based on his residual disability as a result of his accident at work. This amounts to $32.89 per week. The parties agree that this amount is not deductible, as this permanent partial disability pension is payable without regard to an individual's employment status, and is therefore not considered a payment for loss of income (see Antonio Pallotta and Alpina Insurance Co. Ltd. (Zurich Insurance Company), April 22, 1992, OIC No. A-000808).
On March 25, 1993, Mr. Jolin settled, for $10,000, his outstanding claim with Pilot Insurance Company respecting the motor vehicle accident of June 30, 1989. The release document (Exhibit 27) indicates that this amount is meant to discharge Pilot Insurance Company from further or ongoing claims by Mr. Jolin for weekly income benefits in respect of this accident.
The parties disagreed about how these funds should be treated. Counsel for the Applicant submitted that Mr. Jolin only actually received $8,000 of this amount from Pilot Insurance Company, as $2,000 was required to cover costs. Counsel for Jevco referred to the release document which specifies an amount of $10,000 in respect of Mr. Jolin's claims for weekly income benefits, and makes no reference to costs. He therefore submitted that the entire $10,000 must be considered as a payment for loss of income received by or available to Mr. Jolin.
I agree that in this case the entire amount of $10,000 must be considered as received by or available to Mr. Jolin. The fact that part of this amount is earmarked for a particular debt or obligation cannot affect how these funds should be characterized, as has been pointed out in previous arbitral decisions, Sion Dray and Royal Insurance Company of Canada, January 31, 1992, OIC No. A-000025 and Francis Nand and State Farm Mutual Automobile Insurance Company, May 28, 1993, OIC No. A-001893. In Dray, Senior Arbitrator Naylor commented:
... a person may be said to have money at his or her disposal, notwithstanding that the money has been earmarked for a specific purpose. Regardless of whether the uses to which the money is put are determined by choice, financial necessity or legal requirements, it is nonetheless "available" to the person for those uses. (at page 10)
Therefore, I find that $10,000 amounts to roughly 79.3 additional weeks of weekly benefits to Mr. Jolin at the rate of $126 per week. I find that in effect Mr. Jolin received payments from Pilot Insurance Company up to November 12, 1993.
On March 15, 1993, the Canada Pension Plan awarded Mr. Jolin a disability pension. He was awarded monthly benefits of $818.44 ($189.00 per week) paid retroactively, effective January 1, 1992.
My decision concerning the overpayment of Mr. Jolin's benefits was deferred pending a decision of the Ontario Divisional Court in Michael Morin v. The Personal Insurance Company of Canada (Court File 498/93, November 18, 1993) about whether Canada Pension Plan benefits should be deducted from weekly income benefits as payments for loss of income.
In Michael Morin and The Personal Insurance Company of Canada, February 26, 1993, OIC No. P-00468, the Director held that Canada Pension Plan payments received by Mr. Morin, in respect of a previously subsisting condition, were deductible as payments for loss of income, according to the plain meaning of the words in the statute.
On November 18, 1993, the Divisional Court dismissed an appeal from the decision of the Director in Morin (supra). The Director's decision was upheld. Accordingly, I find that it is now settled law that all payments for loss of income, regardless of their source or origin, be deducted from weekly income benefits payable under the Insurance Act.
The parties in this case did not argue that the payments received by Mr. Jolin were not properly described as "payments for loss of income". The parties agreed that the total temporary disability payments from the Workers' Compensation Board are characterized as payments for loss of income, as set out in the arbitral decisions of Ralph McCormick and Economical Mutual Insurance Company, October 2, 1991, OIC No. A-000139 and Pallotta (supra). They similarly did not dispute that the Canada Pension Plan benefits received by Mr. Jolin are payments for loss of income. I find that the no-fault benefits paid by Pilot Insurance Company in respect of the June 30, 1989, accident are also payments for loss of income, as set out in my reasons in Nand (supra).
Therefore, I conclude that all weekly income benefits paid by Jevco to Mr. Jolin from the date of the accident up to December 21, 1992, were paid in error. During this period he was receiving payments for loss of income which amounted to more than the $185.60 weekly to which he is entitled under the Schedule.
Since the amount of the Canada Pension Plan benefits paid to Mr. Jolin ($189.00 weekly) exceeds the amount of his weekly income benefits under the schedule ($185.60), it follows that Mr. Jolin was not eligible for any weekly income benefits from Jevco from January 1, 1992 (when he effectively started receiving his Canada Pension Plan pension) onwards.
I conclude that Mr. Jolin was entitled to benefits from Jevco only from December 22 to December 31, 1992, during which period he was effectively receiving benefits from Pilot Insurance Company at $126.00 per week. Jevco was obliged to pay him the difference between $126.00 and $185.60, or $59.60 weekly, for that period.
The balance of the weekly income benefit payments paid by Jevco to Mr. Jolin constitute an overpayment and must be repaid to Jevco by Mr. Jolin. Unfortunately for Mr. Jolin, this leaves him in the position of being obliged to repay virtually all the weekly benefits he has received from Jevco thus far, and condemns him and his young family to great financial hardship.
As I indicated in my earlier decision in this matter, I realize that this outcome may well appear harsh or inequitable. However, as has been pointed out previously in arbitration decisions, arbitrators have no residual equitable jurisdiction, and no power or authority to ignore or override the provisions of the Schedule, properly construed. I have concluded that the regulation provides that Mr. Jolin is entitled to weekly income benefits from Jevco of $185.60. The regulation further provides that the motor vehicle insurer is the payer of last resort, and is entitled to deduct from the weekly benefit payment any amounts received by Mr. Jolin as payments for loss of income. I have no discretion or jurisdiction to alter this result, much as I sympathize with Mr. Jolin in his difficult predicament.
Order:
Jevco Insurance Company is entitled to repayment of the overpayment of weekly income benefits it has paid to the Applicant, in accordance with my reasons herein.
March 31, 1994
Frederika M. Rotter
Senior Arbitrator
Date
Cases Referred To:
Sion Dray and Royal Insurance Company of Canada, January 31, 1992, OIC No. A-000025
Ralph McCormick and Economical Mutual Insurance Company, October 2, 1991, OIC No. A-000139
Michael Morin and The Personal Insurance Company of Canada, February 26, 1993, OIC No. P-000468
Michael Morin v. The Personal Insurance Company of Canada (Court File 498/93, November 18, 1993
Francis Nand and State Farm Mutual Automobile Insurance Company, May 28, 1993, OIC No. A-001893
Antonio Pallotta and Alpina Insurance Co. Ltd. (Zurich Insurance Company), April 22, 1992, OIC No. A-000808