Neutral Citation: 1994 ONICDRG 37
File No. A-004687
ONTARIO INSURANCE COMMISSION
BETWEEN:
JOSEPH N. BUSH
Applicant
and
PILOT INSURANCE COMPANY
Insurer
DECISION
Issues:
The Applicant, Joseph N. Bush, was injured in a motor vehicle accident on October 2, 1991. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721.
The parties disagreed about the amount to be paid to Cecilia Bush, the Applicant's wife, to compensate her for the care she provided to her husband after the accident. They also disagreed about the proper calculation of the Applicant's pre-accident income and about the correct manner in which to deduct collateral benefits from the weekly income benefits paid by the Insurer.
The parties participated in mediation, but their disputes were not resolved. Mr. Bush then applied for arbitration under the Insurance Act, R.S.O. 1990, c. I.8.
The issues in this hearing are:
What amount should be paid to Cecilia Bush for the care she provided to Joseph Bush after the accident?
To what amount of weekly income benefits is Joseph Bush entitled?
(a) How should the Applicant's pre-accident income for the 52 weeks before the accident be calculated?
(b) What is the proper manner in which to deduct collateral benefits - net or gross amounts "received by the insured person"?
The Applicant also claims interest on any outstanding amounts owing and his expenses incurred in the hearing.
Result:
The Insurer should pay Cecilia Bush $17,208.00, plus interest as provided under section 24 of the Schedule.
Joseph Bush is entitled to weekly benefits at the rate of $208.73 per week from October 9, 1991 to August 17, 1992, and at the rate of $271.58 per week from August 18, 1992 to the date of this decision .
The parties' entitlement to interest shall be calculated as set out in section 24(4) and 27(4) of the Schedule.
Hearing:
The Hearing was held in Peterborough on February 1 and 2, 1994, before me, K. Julaine Palmer, Arbitrator.
Present at the Hearing:
Applicant:
Joseph N. Bush
Applicant's
John R. McCarthy
Representative:
Barrister and Solicitor
Insurer's
Harry Brown
Representative:
Barrister and Solicitor
Witnesses:
Joseph Bush, Cecilia Bush, Marcia Hebert
The parties filed 27 exhibits at the hearing.
Evidence and Findings:
1. What amount should be paid to Cecilia Bush for the care she provided to Joseph Bush after the accident?
Joseph Bush, now aged 45, was seriously injured in a motor vehicle accident on October 2, 1991. He sustained a severe plateau fracture of the left knee, for which he underwent a surgical open reduction. His entire left leg remained in a cast for nine weeks, until December 4, 1991. Mr. Bush, who is right-handed, also suffered a serious crushing injury to the nerves of his right arm and shoulder and fractured his right shoulder blade. Slowly, over the six to eight months following the accident, he regained the use of his right arm and hand -- for months he could not grasp objects with his right fingers.
Mr. Bush was discharged from St. Joseph's Hospital in Peterborough on October 12, 1991. He was not able to be transferred, as planned, to Haliburton Hospital, close to his home, because no beds were available there. So, he went home, where his wife, Cecilia Bush, now aged 34, cared for him.
There is no dispute between the parties that the Applicant suffered "fairly severe injuries" and required assistance "over a fair amount of time", in the words of the Insurer's counsel. Similarly, the Insurer did not suggest that the fact Mrs. Bush has not invoiced her husband for her services nor been paid is relevant to the question of what is owing. The only dispute is how much should be paid.
In order to determine this question I must know what services Mrs. Bush provided, how many hours she provided them, and what rates could be appropriate to the different kinds of services provided.
I heard detailed evidence from the Applicant and his wife as to the types of services Mrs. Bush provided for Mr. Bush. The evidence of the hoursshe provided the services was not as complete; for example, Mrs. Bush kept no diary or log of her hours or duties, so it was difficult for her and her husband to estimate, with accuracy, the number of hours of care provided each day. In general, the number of hours declined and the services became less intensive as Mr. Bush's condition improved.
From the evidence of Mrs. Bush and the records of the Haliburton Kawartha Pine Ridge District Health Unit, I learned that the Home Care Program provided the services of a homemaker twice weekly for three hours each visit from October 14 to November 15, 1991. The service was reinstated in mid-December once weekly for four hours, then in January 1992, continued at once weekly for three hours. Mr. Bush was discharged from the Home Care program on January 28, 1992. That week he began attending twice weekly for physiotherapy at Haliburton Hospital.
Only during the time when the Home Care worker was at their house, Mrs. Bush testified, would she leave her husband to do banking, shop for groceries and other items, go to the food bank, and do some photocopying of Mr. Bush's insurance documents. Mrs. Bush estimated she spent three hours per week on these activities and she attributed two of these hours to services performed directly on Joseph Bush's behalf. Later in the winter, Mr. Bush sometimes accompanied his wife on these trips, just to get out of the house. On those occasions he would lie in the back of their Jeep, throughout the duration of the trip.
The only evidence before me of the appropriate rates for Mrs. Bush's services comes from a February 16, 1993, letter from the Applicant's counsel which indicates that the hourly rate of the Red Cross Society in Victoria-Haliburton is $15.56. Mrs. Bush testified that she charged $3.00 per hour or $20.00 overnight on occasions, in early 1991, when she babysat children. The Applicant admitted, on cross-examination, that there was a lot of seasonal unemployment around Haliburton and that many people provided services like housekeeping and babysitting.
Mrs. Bush testified that she had worked as a school bus driver previously, but no bus runs were available in September 1991 when her son started school. She testified that after the accident she was called by an acquaintance who wanted her to babysit three children regularly, about eight hours each time. However, when Mrs. Bush said she could not take the job, the women never discussed salary or any details. This evidence is important because section 7(1)(a) of the Schedule provides that the "amount of gross income reasonably lost by a person....as a result of the accident in caring for the insured person" will be paid by the insurer (to a maximum of $3,000 per month). Because Mrs. Bush did not give up paid employment to care for her husband, the calculation of what should be paid as compensation for her services is more complex. I conclude that I have insufficient evidence of the terms of the possible babysitting job to take that into consideration.
Nevertheless, Mrs. Bush can be reimbursed for her services, in my view, by the operation of section 7 (1)(b) of the Schedule which provides that the Insurer will pay "for the care, if any, required by the insured person....all reasonable expenses resulting from the accident in caring for the insured person after the accident."
Kinds of Services and Hours:
During the 10 days Mr. Bush was a patient at St. Joseph's Hospital, Peterborough, Mrs. Bush visited him six times, staying each time a minimum of two hours. The drive to the hospital from the Bush home in Eagle Lake took one and a half hours each way. When she visited her husband in hospital, Mrs. Bush washed his hair and applied lotion to his back.
Section 6(2) of the Schedule provides that the Insurer will pay "an allowance that is reasonable having regard to all of the circumstances for the expenses actually incurred by a spouse, child,...of the insured person in visiting the insured person during his or her treatment or recovery." I find that the Insurer should pay an allowance of $520.00 for mileage and meal expenses to Mrs. Bush for her visits to her husband in hospital. I make no award of care benefits under section 7 of the Schedule for these visits as it is my view that the small services Mrs. Bush performed for her husband, such as washing his hair and putting lotion on his back, were so nominal as to be incidental.
Once Mr. Bush returned home on October 12, 1991, in the initial stages of his recovery Mrs. Bush performed what might be generically defined as "nursing services". At first, Mr. Bush was confined to bed, then to bed or wheelchair. In the area of self-care, Mr. Bush was capable only of eating food, which had already been cut up, with his left hand and brushing his teeth with his left hand. Mrs. Bush assisted him with all his toiletting, made meals, cut his food, washed, bathed and dressed him. She emptied the toilet commode, cleaned his room, and did the laundry. She helped him in all transfers from bed to wheelchair or commode.
Mrs. Bush testified she spent 14 hours each day on these tasks, not including time during the night when she would change television channels and rotate the aerial for her husband, to entertain him when he could not sleep. She testified that for reasons of privacy, she would generally bathe her husband after the children were in bed. She said she was lucky to get six hours' sleep.
By mid-January 1992, Mr. Bush was able to use crutches, but was not mobile more than two hours daily. He still had problems with his right hand grip. In mid-February the wheelchair was removed. By April 1992, Mr. Bush was walking using a cane, cutting his own food and dressing himself, except for socks and shoes. Until June 1992, Mrs. Bush would put on his socks and tie his shoelaces.
Mrs. Bush testified that throughout this period, she was still available to attend to her husband's needs 24 hours a day. From January through April 1992, she still assisted Mr. Bush to get in and out of the bathtub and to rinse his hair. During this time, she estimated she spent about eight hours per day caring for her husband.
Even as of the hearing date, Mrs. Bush estimated that she provides four hours daily of care for her husband for services that he needs arising out of the accident. However, she did not provide any details of these daily services. She outlined a few, specific incidents where she had performed household chores that, in past years, her husband would have done -- for example, putting up the Christmas lights or installing a new light fixture in the kitchen.
Rate:
The Applicant's counsel submitted that Mrs. Bush should be paid at Red Cross Society rates of $15.56 per hour. The Insurer's counsel submitted that payment should be at the minimum wage rate, because the Bushes live in a rural area of high seasonal unemployment, where Mrs. Bush was willing to babysit for $3.00 per hour and the services provided were not in the nature of "professional" services. It was also submitted by the Insurer that the payment must be for services rendered exclusively in caring for Joseph Bush and not to replace services he formerly provided.
As I wrote in the Carlos Ferreyra and Blanca Ferreyra and Royal Insurance Company of Canada, July 9, 1992, OIC File Nos. A-000301, A-000325 and A-000384 decision, in attempting to quantify the time spent caring for the injured person, it is difficult to separate out time spent preparing the injured person's meals, for example, from the time spent preparing the meals of the rest of the family. However, this is an exercise that must be attempted because the Schedule compensates for only the reasonable expenses resulting from the accident for care, goods, or services. This case, however, unlike the case of the Ferreyra family, involves significantly more intensive, dedicated personal care provided by Mrs. Bush to a single, injured person, who was severely, multiply handicapped for several months.
I am prepared to award the following amounts to Cecilia Bush:
Month and Date
Time
Rate/ Hour
Home Care
Subtotal
October 1991
October 12 - 19
24 hours x 7 days
$6.00
2 x 3 hours
1,008.00
October 20 - 26
24 hours x 7 days
$6.00
2 x 3 hours
1,008.00
October 27 - 31
24 hours x 7 days
$6.00
2 x 3 hours
1,008.00
Deduct 12 home care hours
$6.00
- 72.00
Subtotal
2,952.00
November 1991
November 1 and 2
24 hours x 2 days
$6.00
288.00
November 3 - 9
24 hours x 7 days
$6.00
2 x 3 hours
1,008.00
November 10 - 16
24 hours x 7 days
$6.00
2 x 3 hours
1,008.00
November 17 - 23
24 hours x 7 days
$6.00
1,008.00
November 24 - 30
24 hours x 7 days
$6.00
1,008.00
Deduct 8 home care hours
$6.00
- 48.00
Subtotal
3,000.00
Maximum
December 1991
December 1 - 7
24 hours x 7 days
$6.00
1,008.00
December 8 - 14
24 hours x 7 days
$6.00
1,008.00
December 15 - 21
24 hours x 7 days
$6.00
1 x 4 hours
1,008.00
December 22 - 28
24 hours x 7 days
$6.00
1 x 4 hours
1,008.00
December 29 - 31
24 hours x 3 days
$6.00
1 x 4 hours
432.00
Deduct 6 home care hours
$6.00
- 36.00
Subtotal
3,000.00
Maximum
January 1992
January 1 - 4
24 hours x 4 days
$6.00
576.00
January 5 - 11
24 hours x 7 days
$6.00
1 x 3 hours
1,008.00
January 12 - 18
8 hours x 7 days
$6.00
1 x 3 hours
336.00
January 19 - 25
8 hours x 7 days
$6.00
1 x 3 hours
336.00
January 26 - 31
8 hours x 6 days
$6.00
1 x 3 hours
288.00
Deduct 4 home care hours
$6.00
- 24.00
Subtotal
2,520.00
February 1992
February 1
8 hours x 1 day
$6.00
48.00
February 2 - 8
8 hours x 7 days
$6.00
336.00
February 9 - 15
8 hours x 7 days
$6.00
336.00
February 16 - 22
8 hours x 7 days
$6.00
336.00
February 23 - 29
8 hours x 7 days
$6.00
336.00
Subtotal
1,392.00
March 1992
March 1 - 7
8 hours x 7 days
$6.00
336.00
March 8 - 14
8 hours x 7 days
$6.00
336.00
March 15 - 21
8 hours x 7 days
$6.00
336.00
March 22 - 28
8 hours x 7 days
$6.00
336.00
March 29 - 31
8 hours x 3 days
$6.00
144.00
Subtotal
1,488.00
April 1992
April 1 - 4
8 hours x 7 days
$6.00
336.00
April 5 - 11
8 hours x 7 days
$6.00
336.00
April 12 - 18
8 hours x 7 days
$6.00
336.00
April 19 - 25
8 hours x 7 days
$6.00
336.00
April 26 - 30
4 hours x 5 days
$6.00
120.00
Subtotal
1,464.00
May 1992
May 1, 2 and 31
4 hours x 3 days
$6.00
72.00
May 3 - 9
4 hours x 7 days
$6.00
168.00
May 10 - 16
4 hours x 7 days
$6.00
168.00
May 17 - 23
4 hours x 7 days
$6.00
168.00
May 24 - 30
4 hours x 7 days
$6.00
168.00
Subtotal
744.00
June 1992
June 1 - 6
4 hours x 6 days
$6.00
144.00
June 7 - 13
4 hours x 7 days
$6.00
168.00
June 14 - 20
4 hours x 7 days
$6.00
168.00
June 21 - 27
4 hours x 7 days
$6.00
168.00
Subtotal
648.00
GRAND TOTAL
17,208.00
I have deducted any time over two hours per week that a homemaker was at the Bush house; I find that Mrs. Bush spent approximately two hours per week doing Mr. Bush's banking, shopping, photocopying and other tasks entirely on his behalf.
It is important to emphasize in this case that Joseph Bush was suffering from two serious injuries-one to his left leg and the other to his right arm. For more than three months following the accident he lacked the physical capacity to be self-sufficient in an emergency situation in their home. I find it entirely reasonable that, during this time period, Mrs. Bush refused to leave her husband unattended. Accordingly, I find it is both reasonable and appropriate for the Insurer to pay the expense of Mrs. Bush's attendance, around the clock, until Mr. Bush was reasonably capable of leaving the house on his own. I find that as of the week of January 12, 1992, when Joseph Bush began to adequately ambulate on crutches he no longer required this level of care. I find it is reasonable that the Insurer should pay for Mrs. Bush's services on a 24-hour basis, indeed to pay her while she was asleep, because she was available if her husband required assistance. If Mrs. Bush had not provided this service I would have found it a reasonable expense to have hired someone else to sleep at the Bush house.
As Mr. Bush's condition improved, he began to be more self-sufficient. I find that the reasonable expense for care provided by Mrs. Bush declined to approximately eight hours per day from mid-January 1992 to April 26, 1992, then declined again to approximately four hours per day in May and June 1992. From June 28, 1992 forward, I find that Joseph Bush was reasonably self-reliant and, on the evidence, required no further care from his wife. In so finding, however, I certainly accept that many chores or activities around the Bush household are now performed by Cecilia Bush rather than Joseph Bush. This fact, alone, however, cannot qualify Mr. Bush to receive care benefits.
I have already outlined the lack of evidence on this issue of an appropriate rate of compensation, above. I do not find that the rate charged by the Red Cross Society, $15.56, about which I heard nothing, is appropriate. Presumably, this rate includes administrative charges required by the Red Cross to help support their program and is not reflective of the actual wage paid to the service provider.
The services provided by Mrs. Bush as a caregiver and being "on call" or available to her husband can be reasonably compensated at $6.00 per hour, the minimum wage rate for adults in Ontario from November 1991 for the relevant time period. If the evidence had been more precise as to a number of minutes per week spent in care activities requiring the most skill and responsibility, then I might well have awarded a higher hourly rate for those more onerous responsibilities and specialized skills.
As I indicated above, the Schedule limits care benefits under section 7 to $3,000.00 per month for each insured person. This limit, in cases of severe injury, is clearly inadequate to provide 24 hour care, even by relatives or other persons receiving minimum wage, in a home setting. However, that is what the legislation has provided. As I wrote in the case of Lily Steele and Zurich Insurance Company, December 3, 1992, OIC File No. A-001024:
"It [the Schedule] is a restrictive code of limited benefits payable in particular circumstances to a carefully defined set of individuals."
Counsel for the Applicant submitted that the "catch-all" wording of section 6(1) (f) provides an appropriate rubric or heading under which to allow all the compensation here or, perhaps, in which to "top up" additional necessary and reasonable expenses in appropriate cases. That submission was addressed well, in my view, by Arbitrator Mackintosh in her decision in Anh Le and Wellington Insurance Company, November 25, 1992, OIC File No. A-000920. There, Arbitrator Mackintosh commented on the express provision of section 7 with respect to care benefits:
I do not agree with counsel for the Applicant's submission that section 6, Supplementary Medical and Rehabilitation Benefits, and section 7, Care Benefits, are interchangeable in this manner. To do so renders one of these sections redundant. Sections 6 and 7 of the Schedule read as follows:
Section 6
(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,
(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;
(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;
(c) rehabilitation, life-skills training and occupational counselling and training;
(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;
(e) home renovations to accommodate the needs of the insured person;
(f) other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident;
(2) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident an allowance that is reasonable having regard to all of the circumstances for expenses actually incurred by a spouse, child, grandchild, parent, grandparent, brother or sister of the insured person in visiting the insured person during his or her treatment or recovery.
(3) For the purposes of this section, the benefit period is the longer of the two following periods calculated from the day of the accident and ending on the anniversary of the accident:
Ten years.
Twenty years less the age of the insured person on the day of the accident.
(4) Subject to subsections (5) and (6), the insurer, before making a payment for an expense under subsection (1), may require the insured person to submit a statement signed by the insured person's qualified medical practitioner or psychological advisor stating that the expense is necessary for the insured person's treatment or rehabilitation.
(5) A person qualified to practise as a chiropractor may sign a statement required under subsection (4) in respect of chiropractic services under clause(1)(a).
(6) A person qualified to practise dentistry may sign a statement required under subsection (4) in respect of dental services and dentures under clauses(1)(a) and (b).
(7) In case of a dispute concerning an expense described in clause(1) (a),(b) or (d), the insurer will pay the expense pending resolution of the dispute.
(8) The maximum amount payable under this section if $500,000 with respect to each insured person.
Section 7
(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident, for the care, if any, required by the insured person.
(a) the reasonable cost of a professional care-giver or the amount of gross income reasonably lost by a person other than the insured person as a result of the accident in caring for the insured person; and
(b) all reasonable expenses resulting from the accident in caring for the insured person after the accident.
(2) The maximum amount payable per month under this section is $3,000 a month with respect to each insured person.
(3) The maximum amount payable under this section is $500,000 with respect to each insured person.
It is true that both sections 6 and 7 fall under Part II of the Schedule and deal with expenses that may be recovered "with respect to each insured person who sustains physical, psychological, or mental injury as a result of the accident". However, section 7 Care Benefits specifically carves out of section 6 Supplementary Medical and Rehabilitation Benefits, those expenses related to the personal care of the insured person. Section 7 does not contain reference to medical verification found under section 6(4). Section 7 places a monetary cap on payment of Care Benefits to the maximum of $3,000.00 per month with respect to each insured person, which does not exist for section 6 benefits. To assume, as counsel for the Applicant has, that sections 6 and 7 are overlapping or interchangeable, is to rob each section of the particular requirements and limitations imposed by the legislation, thereby rendering them meaningless.
The arbitration appeal case Richard Mark Plows and Jevco Insurance Company, O.I.C. File Nos. P-000175, P-000588, dated May 22, 1992 (page 10), refers to the case of Williams v. Box (1910), 1910 CanLII 42 (SCC), 44 S.C.R. 1. In the Supreme Court of Canada case, Mr. Justice Anglin writes (at 24):
To treat any part of a statute as ineffectual, or as mere surplusage, is never justifiable if any other construction be possible. The rejection or excision of a word or phrase is permissible only where it is impossible otherwise to reconcile or give effect to the provision of the Act.
If the "nursing" services had been provided to Mr. Bush under section 6(1)(a) of the Schedule, presumably by a qualified registered or practical nurse, the necessity for those professional services could have been subject to the scrutiny and opinion of a qualified medical practitioner or psychological advisor under section 6(4) of the Schedule. Here, however, Mrs. Bush has provided non-professional nursing services and other care to her husband and she will be compensated, in my view, under section 7, but only to a limit of $3,000.00 per month.
In fact, the Insurer in this case sought to establish that if Mrs. Bush provided "nursing" services, those services could have been reimbursed under a collateral policy of extended health insurance issued by Crown Life. Unfortunately, the Insurer tendered only 53 pages of Application Detail Records and group policy change endorsements from Crown Life's Group Long Term Disability Policy 62068, not the actual policy wording itself, nor the definitions contained therein. Accordingly, I had insufficient evidence to determine whether Crown Life could have been liable to pay any such benefits in this case.
- To what amount of weekly income benefit is Mr. Bush entitled?
(a) How should the Applicant's pre-accident income for the 52 weeks before the accident be calculated?
(b) What is the proper manner in which to deduct collateral benefits - net or gross amounts "received by the insured person"?
(a) How should the Applicant's pre-accident income for the 52 weeks before the accident be calculated?
Section 12(7) of the Schedule sets out the rules for calculating a person's gross weekly income. 12(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.
The arbitration cases concerning the calculation of weekly income benefit for insured persons who are claiming section 12 benefits, but who did not work the entire year prior to the accident, are thoroughly analysed in the decision of Arbitrator Draper in Chuong Vo and Maplex General Insurance Company, October 4, 1993, OIC File No. A-002777 (under appeal). I agree with Arbitrator Draper's reasoning. I concur that the ordinary meaning of section 12(7) of the Schedule appears to be that an applicant's average gross weekly income is to be calculated over a four-week and 52-week period before the accident, even if he had no income from his occupation or employment during some of those weeks.
In that case, Mr. Vo was indefinitely laid off from his employment in January 1992, and was receiving unemployment insurance benefits at the time of his accident, the following June. In this case, however, unlike the case of Mr. Vo, at the time of the accident Mr. Bush was receiving temporary total disability benefits from the Workers' Compensation Board.
The evidence in this case suggests that if the accident had not taken place, Mr. Bush would likely have returned to work by the end of October 1991. Dr. T.C. Leung, General Practitioner, last saw Mr. Bush on September 9, 1991, at which time he recorded "greatly improved symptomatology". He also reported that Mr. Bush had been seen in consultation on September 5, 1991, by Dr. G.N. Stanley, a Cambridge orthopaedic surgeon, who recommended the prescribed regime of heat/ice, anti-inflammatory medication, and physiotherapy be continued and noted that improvements were evident. In his letter of August 14, 1992, Dr. Leung reported Mr. Bush's condition at September 9, 1991:
He enjoyed a good range of movement of his shoulders and neck. He was advised to carry on with physiotherapy treatments with a tentative date of return to work after he received a six week course of physiotherapy in Haliburton. This would have brought the projected date to mid to late September, 91. It was understood that this could be extended by two weeks or so should complete resolution of his symptoms not occur at the end of the six week course. This was largely left to the discretion of the treating therapist.
From the report of Bonnie J. Mowat, Registered Physiotherapist, dated May 22, 1992, it is evident Mr. Bush attended physiotherapy on September 5, 12, 17, 19, 24, 26 and October 1, 1991. I conclude that Dr. Leung's estimate of a return to work date after six weeks of treatment would have been mid- to late October [not September] 1991. Physiotherapist Mowat noted in her report of May 22, 1992, that prior to the accident Mr. Bush "was just starting to get some relief from the traction. I could not determine when he would have been released from therapy or might have returned to his employment as a crane operator." Mr. Bush testified at the hearing that he felt his left shoulder was "getting pretty good" just prior to the accident and that he felt after another two weeks, or so, of physiotherapy he would have been able to return to work.
I have calculated the gross weekly income of Joseph Bush for the 52 weeks preceding the accident, according to the terms of section 12(7) of the Schedule, as follows. (I note that on the basis of the evidence provided, I have calculated by averaging yearly earnings, rather than adding actual earnings for pay periods.)
The 52 week period with which we are concerned is October 1, 1990 - October 1, 1991:
T-4 for 1990 Earned Income:
$46,015.00
Weeks worked:
52
Gross weekly income:
$46,015 ÷ 52 = $884.90 per week
October 1 to December 31, 1990:
13 weeks
$884.90 x 13 = $11,503.75 $11,503.75
T-4 for 1991 Earned Income
up to Mr. Bush's going on WCB
benefit August 5, 1991:
$28,648.83
Gross earnings October 1, 1990
to August 5, 1991
$40,152.58
Gross earnings from employment for
October 1, 1990 to October 1, 1991
$40,152.58 ÷ 52 = $772.17 per week
Following section 12(4) of the Schedule:
80% x 772.17 = $617.73
which is the weekly income benefit payable in the absence of any deductions according to section 12(4)(b). [Note: if there were no deductions the weekly income benefit would be $600.00, because section 12(4)(a) sets $600.00 as the usual maximum].
However, Mr. Bush received payments for loss of income under an income continuation benefit plan with Crown Life maintained by his employer, Courtice Steel Inc. He received $409.00 per week for a period of 46 weeks from October 2, 1991 to August 18, 1992, under policy number 62068. From August 19, 1992 forward, he has received $1,500.00 per month (gross) under a long term disability policy number 62069.
Section 12(4)(b) allows insurers to deduct 80 per cent from gross weekly income payments for loss of income, except unemployment insurance benefits, received by or available to the insured person under an income continuation benefit plan. Accordingly, Mr. Bush should have received $617.73 -$409.00 = $208.73 per week from the Insurer for the period October 9, 1991 to August 17, 1992. At that date, the monthly payment became $1,500.00 (or $346.15 per week). From August 18, 1992 forward, then, the payment should have been $617.73 - $346.15 = $271.58 per week.
It is not clear to me from the evidence exactly what amount the Insurer had paid to the date of the hearing by way of weekly income benefits. In the event money is owed to the Applicant, he is entitled to interest according to the provisions of section 24(4) of the Schedule. In the event the Insurer has overpaid, then it is entitled to repayment under section 27(1) of the Schedule together with interest according to section 27(4).
(b) What is the proper manner in which to deduct collateral benefits - net or gross amounts "received by the insured person"?
Section 12(4)(b) of the Schedule permits the insurer to deduct "payments for loss of income, except Unemployment Insurance benefits,...received by or available to the insured person...under any income continuation benefit plan" from 80 per cent of the insured person's gross weekly income from his occupation or employment. Since April 18, 1993, Crown Life has been forwarding $300.00 per month to Revenue Canada from the $1,500.00 monthly payments Mr. Bush has received. Thus, in his pocket he receives each month only $1,200.00 from the gross amount of $1,500.00. The balance is forwarded on his behalf to offset the tax liability which he may incur, since such payments from Crown Life are taxable. I have held that Mr. Bush should receive (after August 18, 1992) $271.58 per week in weekly income benefits from Pilot Insurance; those benefits are non-taxable. That figure takes into account the gross amount of $1,500.00 notionally "received" by Mr. Bush from Crown Life.
This issue was canvassed fully by Senior Arbitrator Naylor in the decision Sion Dray and Royal Insurance Company of Canada, January 31, 1992, OIC File No. A-000025. I concur entirely with Ms. Naylor in the reasoning and conclusions set out in detail over some eight pages in that decision. She concluded, with considerable reluctance, that "the deduction of gross payments more likely reflects the intent of this legislation." I agree, also with great reluctance.
Thus, Mr. Bush may receive approximately $18,000.00 per year (gross) in taxable payments for loss of income, together with approximately $14,122.16 in non-taxable weekly income benefits. Had he no income continuation benefit plan from his workplace, he would receive $31,200.00 in weekly income benefits ($600.00 x 52 weeks) each year, non-taxable. In the case before Senior Arbitrator Naylor, the actual net difference was approximately $70.00 per week; I do not know what the corresponding figures are for Mr. Bush. I agree that this does not appear to be a fair result. However, like Senior Arbitrator Naylor, I am persuaded that any unfairness that results from this interpretation of the Schedule is a matter for the Legislature.
From the financial records provided, it would appear that Crown Life paid nothing to Mr. Bush in 1991. Although the amounts were calculated weekly over the 46 weeks from October 2, 1991 to August 17, 1992, it appears that all the payments were made in 1992. Section 14(1) of the Schedule obliges automobile insurers like Pilot to pay full benefits until the insured person receives payments such as those from Crown Life, if an application has been made for such payments. I have no payment history of weekly benefits in this case. In any event, in the light of the wording of section 12(4) (b) (i) of the Schedule that the funds must have been "received by or available to" the Applicant under an income continuation benefit plan, the parties may agree, when the calculations are performed after receiving this decision, in order to avoid even further complexity, for the Insurer to deduct the amounts attributed to loss of income in 1991, as if they were received then from Crown Life.
Since these reasons were initially drafted, I have had the opportunity to consider the decision of Arbitrator Mackintosh in Marcia Edgar and Wellington Insurance Company, April 13, 1994, OIC File No. A-005441. That decision considers the issue of deducting the net or gross amount of payments for loss of income from 80 per cent of the Applicant's gross weekly income. Arbitrator Mackintosh concluded that section 12(4)(b) of the Schedule should be construed to provide a deduction of the net (after tax) amount of weekly payment for loss of income from a collateral loss of income plan. Although I am attracted by the outcome of the case, because of its basic fairness to the insured person, unfortunately I am not persuaded that the Legislature's words permit the construction favoured by Arbitrator Mackintosh. It is not apparent to me how the words of the Regulation can be so construed, based upon the personal income tax circumstances of individual insureds. The interpretation which Arbitrator Mackintosh propounds would require, I believe, in each such case, either an accurate predetermination of the correct benefit, or an after-the-year-end recalculation of the benefit, based upon the insured's ultimate personal income tax situation for the year. No mechanism is provided in the Schedule for obtaining this information.
I agree that many times in interpreting the words of the Schedule an individualized inquiry is called for, for example, in determining what is a "ceasing expense" in a particular insured person's business. However, in my view, there is no sign that the drafters of the Schedule intended the income tax liability of the insured person to be considered in determining the weekly income benefit. In my opinion, the wording as it presently stands creates a scheme that can markedly, although perhaps unintentionally, discriminate against those who have loss of income payments available to them, but it is not within my jurisdiction to provide the remedy.
Expenses:
The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.
The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664, R.R.O. 1990, Dispute Resolution Expenses.
In Ralph McCormick and Economical Mutual Insurance Company, November 2, 1991, OIC File No. A-000139, Senior Arbitrator Susan Naylor made the following comments about expenses, with which I agree:
The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act, as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.
Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.
The Director of Arbitrations approved this statement of the principles guiding an award of expenses in the appeal decision in Vito Luigi Calogero v. The Co-Operators General Insurance Company, February 13, 1992, OIC File No. P-000251.
The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code. In the event that the parties cannot agree as to the total amount of expenses, I remain seized of this matter and a party may apply for assessment of the expenses before me.
Order:
The Insurer should pay Cecilia Bush $17,208.00, for care benefits, and $520.00 as a visiting allowance, plus interest as provided under section 24 of the Schedule.
Joseph Bush is entitled to weekly benefits at the rate of $208.73 per week from October 9, 1991 to August 17, 1992, and at the rate of $271.58 per week from August 18, 1992 to the date of this decision.
The parties' entitlement to interest relating to weekly income benefits shall be calculated as set out in section 24(4) and 27(4) of the Schedule.
The Applicant is entitled to his expenses incurred in respect to the arbitration.
April 25, 1994
K. Julaine Palmer
Arbitrator
Date