Ontario Insurance Commission
Neutral Citation: 1995 ONICDRG 11
File No. A-007416
BETWEEN:
PINA COLES
Applicant
and
DOMINION OF CANADA GENERAL INSURANCE COMPANY
Insurer
DECISION
Issues:
The Applicant, Pina Coles, was injured in a motor vehicle accident on October 30, 1990. She applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. Weekly income benefits were terminated by the Insurer in October 1993. Ms. Coles claimed to be entitled to further weekly income benefits. 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, as amended.
The issues in this hearing are:
Is Ms. Coles entitled to further weekly income benefits after October 1993?
Is Ms. Coles entitled to a special award, under the provisions of section 282(10) of the Insurance Act?
The Applicant also claims interest on any amounts outstanding, and her expenses incurred in the hearing.
Result:
Ms. Coles is entitled to weekly income benefits, plus interest, under the provisions of sections 12(1) and 24(4) of the Schedule, to the date of this decision.
Ms. Coles is not entitled to a special award.
Ms. Coles is entitled to her expenses of the arbitration.
Hearing:
The hearing was held in North York on September 12, 13, and 16, and October 7, 1994, before me, K. Julaine Palmer, arbitrator. On November 1, 1994, I received a schedule of Accident Benefits Paid to Pina Coles, by prior agreement of the parties.
Present at the Hearing:
Applicant: Pina Coles
Applicant's Representative: Altor Shields Barrister and Solicitor
Insurer's Representative: Luke Mullen Barrister and Solicitor
Insurer's Officer: Barbara A. Smith Claims Service Representative
Witnesses:
Pina Coles, Michael Weinstock M.D., Ken Craven M.D., Barbara Smith, James E. Bateman M.D.
Evidence and Findings:
Background
Ms. Coles is a 45 year old clothing designer and seamstress who was injured in a motor vehicle accident on October 30, 1990. Ms. Coles had provided for potential disability from her occupation with two private insurance plans, as well as the statutory benefits under her automobile insurance policy. After her accident, Ms. Coles received benefits from all three policies. It is the inter-relationship between these policies which brings this matter to arbitration.
Dominion of Canada terminated Ms. Coles' weekly income benefits about 156 weeks after the accident. Ms. Coles had received large amounts from her private disability insurance for about two years following the accident. Ms. Coles claims that her entitlement to weekly income benefits under the first test for eligibility, in section 12(1) of the Schedule, should be extended by her receipt of disability benefits under the other policies. The Insurer maintains that payments were properly terminated 156 weeks after the accident. If Ms. Coles' contention is correct, she has not yet exhausted the weekly income benefits under the eligibility test of section 12(1) of the Schedule.
Analysis
Section 12 begins Part IV of the Schedule and sets out the eligibility criteria for income benefits under the regulation. In this case, section 12(5) is particularly important, because it describes periods when an Insurer is not required to pay a weekly benefit.
PART IV
WEEKLY BENEFITS
INCOME BENEFIT
12.–(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3).
(2) The following qualifications apply to an insured person who claims a weekly benefit under subsection (1):
- He or she must have been at the time of the accident,
i. employed or self-employed,
ii. on a temporary lay-off, or
iii. entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
- He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks of his or her occupation or employment.
(3) A person who was unemployed and who was not self-employed at the time of the accident is qualified to receive a weekly benefit under subsection (1) if he or she was employed or self-employed for any 180 days in the twelve-month period before the accident, and if he or she as a result of and within two years of the accident has suffered a substantial inability to perform the essential tasks of the occupation or employment in which he or she spent the most time during the twelve-month period before the accident.
(4) Subject to subsection (5), the weekly benefit sunder subsection (1) will be the lesser of,
(a) $600 plus, if Optional Benefit 2 has been purchased, the amount of the benefit chosen; and
(b) 80 per cent of the insured person's gross weekly income from his or her occupation or employment, less any payments for loss of income, except Unemployment Insurance benefits,
(i) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan, or
(ii) received under any sick leave plan.
(5) The insurer is not required to pay a weekly benefit under subsection (1),
(a) for the first week of the disability;
(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.
The key wording is that of section 12(5): "The insurer is not required to pay a weekly benefit...for the first week of the disability; ...for any period in excess of 156 weeks unless...". The words "156 weeks" are not qualified by any other phrase, such as 156 weeks "from the date of the accident", or 156 weeks "of disability", or l56 weeks "of benefits".
In this arbitration, the interpretation of when the 156 weeks runs is crucial. Ms. Coles' collateral policies of disability insurance paid her benefits after the accident for about two years. I find that the amounts paid were high enough that from a point 31 days after the accident until about November 30, 1992, when the Citadel policy payments ceased, Dominion of Canada need not have paid her any income benefit under the Schedule, because she was receiving more than 80% of her previous gross weekly income from these other policies (see section 12(4)).
If the 156 weeks run continuously from the date of the accident, then as of October 30, 1993 (or November 6, 1993, depending upon how the first week is treated), Ms. Coles has exhausted the period within which her eligibility for benefits is based upon the essential tasks of her occupation (sometimes called "own occupation") and must meet the test of section 12(5) (sometimes called "any occupation").
This interpretation calls for the implied insertion of the words "from the date of the accident" into the Schedule, a measure which is to be avoided in interpreting legislation. Moreover, those words have been used in section 11 (3) (b) of the Schedule, in the case of death benefits, which would imply that that is not what is meant here.
If, however, the 156 weeks is a measure of "156 weeks of disability", then as of October 30, 1993, Ms. Coles has also exhausted her eligibility for benefits under section 12(1), since she was disabled immediately after the accident. The same could not be said to be true, however, in all cases. Occasionally after motor vehicle accidents, the injured person is able to carry on for a period of time with his or her occupation, and only after a period of time becomes disabled as a result of the accident. In addition, some persons suffer intermittent disability after motor vehicle accidents.
This second interpretation also calls for the insertion of words into the Schedule, yet the words "of disability" appear in the preceding line. It would have been an easy matter to insert the words "of disability" after "156 weeks" if that was what the drafter intended.
However, if the 156 weeks refers to "156 weeks of payments", then Ms. Coles may be entitled to further benefits from her Insurer under section 12(1) of the Schedule, relating to her disability from her "own occupation", because she has not yet received benefits from her Insurer for that period.
The language of section 12(5) of the Schedule addresses payment of weekly benefits. The subject of the sentence is "the Insurer". The verb describes the action: "is not required to pay". To pay what? A weekly benefit. When? (a) for the first week of the disability; and (b) for any period greater than 156 weeks, unless certain conditions are met.
Benefits are calculated and paid on a weekly basis. The insurer is not required to pay benefits for more than 156 weeks, unless certain conditions are fulfilled. This Insurer has not paid 156 weeks of benefits to Ms. Coles. Accordingly, the test for her eligibility for continued benefits turns upon the language of section 12(1) of the Schedule, "own occupation", not the stricter test of section 12(5).
The present Schedule was added to the Insurance Act in 1990 to provide a more timely, efficient and enhanced program of weekly benefits and supplementary medical and rehabilitation benefits to those who are injured in motor vehicle accidents. At the same time, restrictions on the right to sue for damages were also placed on those injured (see section 266). The scheme created also envisaged the automobile insurer as the "last payer" so that other governmental and private insurance coverage for income replacement and health care benefits would be obliged to "pay first". [See, for example, section 12(4), section 9(1)].
In my view, this interpretation of section 12(5) as referring to 156 weeks of payment does no violence to the harmony and scheme of the Schedule. The automobile insurer continues to be the "last payer". If Ms. Coles' disability had ended in the first two years following the accident, this Insurer would have paid very little in weekly income benefits.
However, even on the Insurer's evidence, Ms. Coles could not now return to her former occupation as a clothing designer and seamstress. The Insurer's evidence is that she could perform sedentary work. In my view, Ms. Coles' weekly income benefits were terminated prematurely, since the 156 week period has not yet run.
I was not asked specifically in this case to determine the exact weekly income benefit to which Ms. Coles is entitled, although I did receive financial information in evidence. After the hearing was completed, as the parties agreed, I received a schedule of payments made by the Insurer prepared by Barbara Smith, claims service representative.
In any event, it is clear on the evidence before me that the payments under the Citadel policy, for the time it was in effect, exceeded 80% of Ms. Coles' gross weekly income from employment. Accordingly, by the formula of section 12(4)(b) of the Schedule, for the entire period during which those benefits were paid (which I understand to be 24 months, beginning 31 days post-accident), Dominion of Canada was not obliged to make any weekly income payments to Ms. Coles. More than $10,000.00 was paid to Ms. Coles during this time. This sum may have been paid in error, or by virtue of the operation of section 14(1) of the Schedule. (That section requires an insurer to pay full benefits under Part IV, until the insured person receives payments which would reduce the insurer's obligation, through the operation of section 12(4).) This issue was not argued before me by counsel. It may well be that the approach followed by the arbitrators in the Dana B. Levenson and The General Accident Assurance Company of Canada, February 18, 1992, OIC File No. A-000260; and Douglas P. Gibson and York Fire & Casualty Insurance Company, January 4, 1995, OIC File No. A-006150, cases is appropriate here. I make no order for repayment at this time.
As I have indicated above, the time has not yet run for Ms. Coles' disability to be considered under the "any occupation" category of section 12(5) of the Schedule, and accordingly, weekly income benefits are owing to Ms. Coles from approximately December 1, 1992 to date.
It will be a complex task to determine the exact amount owing to Ms. Coles, taking into consideration the various provisions of the Schedule with respect to interest, the overpayments in 1990 and 1991 and the lack of payments since November 1993. As well, the amounts which Ms. Coles admitted she earned after the accident should be deducted, according to the provisions of section 15 of the Schedule. I leave it to the parties to settle the amount owing. In the event that they cannot resolve the exact sum, then either party may apply to bring this matter back before me for determination.
Special Award
The Applicant has asked that I consider making a special award to her under the provisions of section 282(10) of the Insurance Act.
(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.
This is the first arbitration which has considered the interpretation of 156 weeks under section 12(5)(b) of the Schedule. If the period had been fulfilled as of November 1993, then the Insurer might have been seen to have acted reasonably in terminating the weekly income payments, based on Dr. Craven's conclusions about Ms. Coles' ability to work at a sedentary job. In all of the circumstances of this case, I do not find that the Insurer has acted unreasonably and I decline to make any award under the provisions of section 282(10) of the Insurance Act.
Expenses:
The Applicant seeks an award of the expenses she has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
(11) 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, October 2, 1991, OIC File No. A-000139, 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 and The Co-Operators General Insurance Company, February 13, 1992, OIC File No. P-000251.
The Applicant is entitled to her 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:
Ms. Coles is entitled to weekly income benefits, plus interest, under the provisions of sections 12(1) and 24(4) of the Schedule, to the date of this decision.
Ms. Coles is not entitled to a special award.
Ms. Coles is entitled to her expenses of the arbitration.
February 13, 1995
K. Julaine Palmer Arbitrator
Date