Neutral Citation: 1994 ONICDRG 46
File No. A-004757
ONTARIO INSURANCE COMMISSION
BETWEEN:
DANI TRIPONE
Applicant
and
GUARDIAN INSURANCE COMPANY OF CANADA
Insurer
and
LIBERTY MUTUAL FIRE INSURANCE COMPANY
Insurer
DECISION ON PRELIMINARY ISSUE
Issues:
The Applicant, Dani Tripone, was riding his bicycle on May 16, 1992, when he was struck by an automobile and injured. He applied for and received statutory accident benefits from Guardian Insurance Company of Canada ("Guardian"), payable under Ontario Regulation 6721. Guardian insured a Jeep Laredo owned by Mr. Tripone's father. Dani Tripone was listed as the principal driver of that vehicle.
Guardian claims that Dani Tripone is not entitled to statutory accident benefits under the policy.
Guardian claims that Liberty Mutual Fire Insurance Company ("Liberty Mutual"), the insurer of the automobile involved in the accident, should pay accident benefits in this case.
The parties were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c. I.8.
The preliminary issue in this arbitration is:
Which insurance company is responsible for paying statutory accident benefits to Mr. Tripone?
Result:
- Guardian is responsible for paying statutory accident benefits to Mr. Tripone.
Hearing:
The hearing was held in North York, Ontario, on February 7, 1994, before me, Frederika Rotter, Senior Arbitrator.
Present at the Hearing:
Applicant:
Dani Tripone
Applicant's Representative:
Altor Shields Barrister and Solicitor
Guardian's Representative:
Stephen Macaulay Barrister and Solicitor
Liberty Mutual's Representative:
George Frank Barrister and Solicitor
Witnesses:
Mr. Dani Tripone
Documents Before the Arbitrator:
Report of Mediator, dated June 14, 1993
Application for an Arbitrator, dated June 20, 1993
Response by Insurer, dated July 9, 1993
Copy of a letter confirming a pre-hearing discussion held on September 23, 1993, dated September 29, 1993
Report of Mediator, dated January 5, 1994
Copy of a letter confirming a pre-hearing discussion held on January 6, 1994, dated January 13, 1994
Exhibits:
Exhibit 1
Letter sent via facsimile, dated January 28, 1994, addressed to Mr. Altor Shields of Lofranco, Sabetti, Daly, from George O. Frank of Devry, Smith & Frank
Exhibit 2
Letter sent via facsimile, dated February 1, 1994, addressed to George Frank of Devry, Smith & Frank, from Altor Shields of Lofranco, Sabetti, Daly
Cases Referred To:
Daniel Cattrysse and The Westminster Mutual Fire Insurance Company, and Anglo Canada General Insurance Company, June 21, 1993, OIC File Nos. A-001618 and A-001789
Adolph Crnkovic et al. and Simcoe and Erie General Insurance Company, April 8, 1993, OIC File No. A-002228
Peter Najem and AXA Insurance Company, and Economical Mutual Insurance Company, July 27, 1993, OIC File Nos. A-001525 and A-003116
July v Neal (1986), 1986 CanLII 149 (ON CA), 57 O.R. (2d) 129 (C.A.)
Maninder Singh and State Farm Mutual Automobile Insurance Company, and Pilot Insurance Company, June 4, 1993, OIC File Nos. A-001525 and A-001526
Background Facts:
The preliminary issue for determination in this case is: which insurer is liable to pay statutory accident benefits? Guardian insured a vehicle owned by Mr. Tripone's father. It is not disputed that under section 268 of the Insurance Act Guardian is liable to pay benefits if it can be shown that Dani Tripone was either "an insured" under his father's policy, or a dependant of his father, the "named insured" in the policy.
At the hearing, Mr. Tripone testified that he is 22 years old and lives with his parents and older sister in the family home in Woodbridge, Ontario. He has always lived at home with his family.
Mr. Tripone testified that at the time of the accident, he was employed and earning about $500 weekly.
The accident occurred on May 16, 1992. Mr. Tripone was struck by a car while riding a bicycle.
At the time of the accident, the Tripone family owned three vehicles. Mr. Tripone was listed as the principal driver of a Jeep Laredo. The ownership of the Jeep was registered in the name of Mr. Tripone's father. The Jeep was insured with Guardian. Mr. Tripone testified that his mother and sister drove the other two cars, and that his father had the use of a company van, although he also drove the Jeep sometimes.
The parties agreed that Mr. Tripone's father was the "named insured" on the Guardian policy insuring the Jeep. Mr. Tripone testified that his father had paid an insurance premium of approximately $2,000 for coverage on the Jeep. He testified that the Jeep was the only vehicle insured under that policy.
The Law:
Part VI of the Insurance Act governs automobile insurance.
Section 268 of the Insurance Act sets out the rules for determining which insurer is liable to pay accident benefits. Section 268(2) provides:
268(2) 2.In respect of non-occupants,
i. the non-occupant has recourse against the insurer of an automobile in respect of which the non-occupant is an insured,
ii. if recovery is unavailable under subparagraph i, the non-occupant has recourse against the insurer of the automobile that struck the non-occupant,
iii. if recovery is unavailable under subparagraph i or ii, the non-occupant has recourse against the insurer of any automobile involved in the incident from which the entitlement to no-fault benefits arose,
iv. if recovery is unavailable under subparagraph i, ii or iii, the non-occupant has recourse against the Motor Vehicle Accident Claims Fund.
Further, section 268(5) provides:
268(5)Despite subsection (4), if a person is a named insured under a contract evidenced by a motor vehicle liability policy or the person is the spouse or a dependant, as defined in the No Fault Benefits Schedule, of a named insured, the person shall claim no-fault benefits against the insurer under that policy and, if there is more than one such policy, the person, in his or her discretion, may decide the insurer from which he or she will claim the benefits.
Accordingly, Mr. Tripone has recourse to Guardian if he is an insured under the Guardian policy, pursuant to section 268(2)2.i, or if he is a dependant of the named insured under that policy, pursuant to section 268(5).
1. Is Mr. Tripone "insured" under the Guardian policy?
Mr. Macaulay argued on behalf of Guardian, that Mr. Tripone is not insured under the Guardian policy, for the purposes of this accident, since he does not fall within the definition of "insured person" set out in the Schedule.
Section 2 of the Schedule (the definition section) provides:
"insured person", in respect of a particular motor vehicle liability policy, means,
(a) in respect of accidents in Ontario, an occupant of the insured automobile,
(b) in respect of accidents outside Ontario, a person living and ordinarily present in Ontario who is an occupant of the insured automobile,
(c) the named insured, his or her spouse and any dependant of either of them while the occupant of any other automobile,
(d) any person who is not the occupant of an automobile or of rolling stock that runs on rails who is involved in an accident in Ontario involving the insured automobile,
(e) the named insured, his or her spouse and any dependant of either of them who is not the occupant of an automobile or of rolling stock that runs on rails who is involved in an accident,
(f) the named insured, his or her spouse and any dependant of either of them who is not involved in an accident but who suffers psychological or mental injury as the result of an accident involving a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother or sister or a dependant of the named insured or of his or her spouse.
Mr. Macaulay argued that the definition of "insured person" in the Schedule determines who is eligible for accident benefits, and what motor vehicle liability policy should provide coverage. He submitted that the Schedule provides a complete and self-contained "code", which need not be interpreted with reference to the general provisions and definitions found in the Insurance Act itself.
He argued that Dani Tripone is not a dependant of his parents, since he is not principally dependant on them for financial support. Thus, he cannot be considered Guardian's insured for the purposes of this motor vehicle accident, according to the definition set out in the Schedule under section 2(e). He argued that instead, Mr. Tripone is covered under section 2(d).
I do not accept Guardian's submissions. I find that the definition of an "insured person", as set out in the Schedule, cannot be considered without reference to the provisions and definitions set out in the Act. A basic principle of statutory interpretation is that subordinate legislation must be construed in the context of and in harmony with the general scope and purpose of the Act.
Furthermore, the definitions of "insured person" in the Schedule are not necessarily or obviously mutually exclusive. That is, a person might well be an "insured person" under more than one of the paragraphs in the definition section. In that case, it is necessary to look to section 268 of the Act, which sets out the priority rules governing which insurer should pay benefits.
I find that Dani Tripone is in this position: he might be considered an "insured person" under more than one section of the Schedule.
The general scheme of the legislation, as set out in section 268, requires that individuals look first to their own carrier of insurance for statutory accident benefits. Section 268 specifically provides that "[e]very contract evidenced by a motor vehicle liability policy should provide for the statutory accident benefits set out in the Schedule. Mr. Macaulay conceded that Dani Tripone is considered Guardian's insured for the purpose of liability coverage for the Jeep.
In this case, a higher premium was assessed by and paid to Guardian, on the understanding that Dani Tripone was the principal driver of the Jeep. Guardian specifically assessed the risk and adjusted its premium because Dani Tripone was named as the driver.
Included in the premium, as required by law, was third party liability coverage, as well as statutory accident benefit coverage. Some coverage for loss or damage to the automobile was also purchased, I assume. The cost of a liability premium generally is the largest portion of the cost of insurance coverage for a young male driver.
Section 224(1) of the Act defines the term "insured" as follows:
"insured" means a person insured by a contract whether named or not and includes every person who is entitled to no-fault benefits under the contract whether or not described therein as an insured person
Section 224 explicitly indicates that an individual may be insured by a contract but not named in it. Furthermore, section 270 of the Act provides:
270 Any person insured by but not named in a contract to which section 265 or 268 applies may recover under the contract in the same manner and to the same extent as if named therein as the insured, and for that purpose shall be deemed to be a party to the contract and to have given consideration therefor.
If I was limited to the definition section of the Schedule to determine who was insured under a contract of insurance, section 270 of the Act would be rendered redundant or meaningless. That section would be unnecessary, since it would be conferring rights on individuals who already have been accorded full rights under the Schedule. I do not believe that this was the intention of the legislature, or an appropriate construction of remedial legislation.
I find instead that Mr. Tripone must be considered "a person insured by but not named in a contract" of insurance, within the meaning of section 270 of the Act, and accordingly entitled to recover statutory accident benefits under the insurance contract with Guardian.
I agree with and adopt the reasoning of Arbitrator Palmer in Daniel Cattrysse and The Westminster Mutual Fire Insurance Company, and Anglo Canada General Insurance Company, June 21, 1993, OIC File Nos. A-001618 and A-001789. The facts of that case are very similar to the present case: the Applicant's parents had purchased a car for their son to drive, and had also purchased insurance for the car, naming the son as principal driver. Arbitrator Palmer held, at page 19:
Section 224's definition tells us that "insured" includes people entitled to no-fault benefits under the contract whether or not described therein as an insured person.
The definition is expansive. It draws a wider circle than those persons described in section 2 of the Schedule.
In this case, Westminster Mutual Fire Insurance Company calculated the premium it would charge Felucien and Margaret Cattrysse to insure the 1987 Mustang by looking at who would be its principal driver. That person was Daniel Cattrysse. He was young, single male, with four years of driving experience. The rate charged on this policy because of the participation of Daniel Cattrysse was significantly greater than if his father or mother had been the principal operator. But, in insuring the 1987 Mustang, Westminster Mutual was not only providing a policy of third party liability insurance to its customers, it was providing a whole range of other coverages, some of which are statutorily prescribed, for which it charged separate premiums.
(at pp. 20-21) When Westminster Mutual accepted the premium for the 1987 Mustang, it did so knowing that section 268 of the Insurance Act sets out rules for determining which insurer is liable to pay no-fault benefits. The underlying principle of section 268 is that persons insured under contracts of automobile insurance in Ontario will look to the insurer chosen by them for accident benefits should they be so unfortunate to be injured in an accident.
I cannot accept that the $312 basic accident benefit premium was charged by Westminster Mutual to account for only such benefits as might arise when Daniel Cattrysse was the occupant of the Mustang. Such a view is preposterous -- it would limit Daniel Cattrysse's coverage to the recourse afforded him under the Anglo Canada policy, as the insurer of the automobile in which he chanced to be an occupant (s.268(2)1.ii). In addition to the reasons which I have set out above, in my view, the principle of fair exchange or of a fair indemnity received for premium paid in this case also calls for the finding that Daniel Cattrysse was indeed an "insured" contemplated by section 224 and section 270 of the Insurance Act....
I conclude that in the present case, and for the same reasons, it is both reasonable and fair to find that Mr. Tripone is a person who is "insured by but not named in a contract to which...section 268 applies" within the meaning of section 270, and therefore entitled to recover accident benefits, under the Guardian policy.
In this regard, I would also refer to the words of Assistant Chief Justice MacKinnon in July v. Neal (1986), 1986 CanLII 149 (ON CA), 57 O.R. (2d) 129 (C.A.), at page 135, as quoted by Arbitrator Palmer in Cattrysse (at page 11):
In coming to that conclusion I have had the following in mind. Insurance policies are statutory contracts and the wording of the terms as in the instant case normally are not the words of the insurer but the words of the statute or of the regulation. To such terms the contra proferentum rule does not apply. However, the insurance industry is consulted and does have input with regard to legislation affecting the industry. The individual insured has none. His role is to pay the premium for the expected indemnity. It appears to me that if there is doubt in the legislation establishing and governing the cover, and there are two possible interpretations of any aspect of the cover, the one more favourable to the insured should govern. [emphasis added]
2. Is Mr. Tripone a dependant?
Since I have found that Mr. Tripone is insured under the Guardian policy, and may assert a claim to accident benefits in his own right, it is not necessary for me to determine whether or not he is a dependant of his father, the "named insured" under the policy.
However, the issue was raised by the parties and for the purpose of completeness I will address it. Nevertheless, I stress that it is my view that Mr. Tripone is entitled to benefits from Guardian regardless of my findings on the question of dependence.
At the hearing, Mr. Tripone testified that he was employed at Woodbridge Heating & Air Conditioning, and was earning approximately $500 per week, gross. He had worked about 42 weeks in the year prior to the accident and had earned approximately $19,000.
He was living at home with his family. The family home is a 3,000 foot dwelling with a family room on the main floor and a finished basement which includes a recreation area. Mr. Tripone has his own bedroom and, along with the other family members, has unrestricted use of the rest of the premises (except for the bedrooms occupied by the others).
Mr. Tripone stated that at the time of the accident, he was making some irregular room and board payments (about $200 "most months"). His parents did not demand these payments. Other than these payments, Mr. Tripone made no contribution to the household expenses. I received evidence indicating that the home is mortgage-free. Mr. Tripone's parents pay for taxes, utilities, repairs and insurance, and these expenses come to about $10,000 per year.
Mr. Tripone testified that his mother does most of the housework, including food preparation, laundry and cleaning.
Mr. Tripone testified that when he was working, he normally ate breakfast and dinner at home. He had lunch at work, although he sometimes brought a prepared lunch from home. When he bought food outside the home, he paid for it from his own funds. He paid his own expenses for entertainment, vacations, clothing and grooming.
Mr. Tripone stated that at the time of the accident he had approximately $1,000 saved from his earnings at work.
Mr. Tripone testified that his father had paid $18,000 for the Jeep, and that he had contributed approximately $11,000 towards its cost himself. He explained that he had previously driven a Honda, and had contributed approximately $10,000 towards the cost of that car. The Honda was traded for the Jeep, and Mr. Tripone testified that he contributed an additional $1,000 for the Jeep. Mr. Tripone testified that he was making some payments ("about $200 a month") to his father for the Jeep. He stated that he was also repaying his father for the insurance premium. He did not state at what rate, or how frequently, he was making these payments to his father.
The issue of whether an individual is a dependant of his or her parents has been dealt with previously in a number of arbitration decisions. Section 3(2) of the Schedule provides that a person is a dependant of another person if the person is principally dependant for financial support on the other person or their spouse.
In Maninder Singh and State Farm Mutual Automobile Insurance Company, and Pilot Insurance Company, June 4, 1993, OIC File Nos. A-001525 and A-001526, Senior Arbitrator Naylor held that the word "principally" means "chiefly" or "for the most part". Accordingly, for an individual to be principally dependant on another, he or she must chiefly, or for the most part, derive his or her financial support from that person (or their spouse) as opposed to other sources.
The Maninder Singh case dealt with a situation where the Applicant, a young man of 20, was living at home with his parents, and was earning income. In that case, Senior Arbitrator Naylor had evidence about the Applicant's earnings, and of the earnings of the other family members. She also had evidence about the family's expenses, and was able to attribute a specific proportion of those expenses to the Applicant. From this evidence, she concluded that the Applicant was self supporting, and not a dependant of his parents. On a strictly monetary basis it was clear that his financial contribution to the household expenses was significantly greater than his proportional share of the expenses.
Similar analyses were performed by arbitrators in other cases: Adolph Crnkovic et al. and Simcoe and Erie General Insurance Company, April 8, 1993, OIC File No. A-002228, Cattrysse (supra) and Peter Najem and AXA Insurance Company, and Economical Mutual Insurance Company, July 27, 1993, OIC File Nos. A-001525 and A-003116. In each case, the arbitrator was able to examine the Applicant's costs and financial resources, and to determine with reasonable certainty whether the individual concerned was principally dependant for financial support on another, or on their own resources.
In the present case, I was not provided with sufficient evidence to permit me to perform a similar analysis. I did not receive sufficiently detailed evidence to allow me to realistically evaluate Mr. Tripone's actual costs of living.
While it might be possible to attribute the amount of $2,500, for example, as his share of some of the home expenses, I received no evidence about his share of the expenses for food and other basic household items (such as paper and cleaning products). I was not provided with figures for other expenses such as telephone or cable television services.
Mr. Tripone did not provide information about his discretionary spending on items like clothing, entertainment, food outside the home, and so on. He provided no information about his transportation costs (e.g. gas, maintenance of the automobile, public transit costs) apart from his evidence about the costs of his car and insurance.
Accordingly, I cannot make any realistic finding about Mr. Tripone's living expenses. Similarly, I cannot reasonably determine to what extent those expenses were met by his own resources, and how much his parents contributed.
Mr. Tripone was living at home. He paid only for food which he bought outside the home. He paid no rent. Although he testified that he "sometimes" made payments to his parents of $200 per month for room and board, on the evidence I conclude that his parents were principally responsible for providing him with food and accommodation -- the basic necessities. That is, his parents were chiefly, or for the most part, paying for his expenses for these items.
In addition to food and accommodation, his mother did the general housework, including meal preparation, cleaning and laundry. Although it is difficult to quantify in terms of money's worth, I find that Mr. Tripone does benefit financially from having these services provided to him. For example, if Mr. Tripone were not eating meals with his family, it is likely he would eat out more frequently or purchase pre-prepared meals. He would certainly have to incur some expenses for laundry services.
Besides providing food, accommodation and household services to their son, Mr. Tripone's father also significantly contributed to his financial support by providing him with a vehicle and insurance coverage. The father paid for the insurance and made a large contribution towards the purchase of the Jeep.
Although Mr. Tripone testified that he was paying his father back for the car and the insurance, the evidence as to the repayment was very vague. It was not clear to me whether this represented good intentions on the part of Mr. Tripone, or whether in fact any funds had changed hands.
In the absence of more specific evidence, and on the balance of probabilities, I conclude that Mr. Tripone's parents were financially supporting him. I find, from the evidence in this case, that Mr. Tripone's parents were principally or chiefly providing the necessities of life for their son. Mr. Tripone was paying out of his own funds for discretionary items only, and not for basic necessities.
Accordingly, and in the absence of more specific financial information, I conclude that Mr. Tripone was a dependant of his parents, within the meaning of section 3(2) of the Schedule.
Order:
- Guardian is responsible for paying statutory accident benefits to Mr. Tripone.
May 16, 1994
Frederika Rotter Senior Arbitrator
Date