Neutral Citation: 1995 ONICDRG 18
File No. A-009110
ONTARIO INSURANCE COMMISSION
BETWEEN:
NADINE OSBOURNE
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
File No. A-009111
AND BETWEEN:
NADINE OSBOURNE
Applicant
and
YORK FIRE & CASUALTY INSURANCE COMPANY
Insurer
SECOND DECISION ON A PRELIMINARY ISSUE
Issues:
The Applicant, Nadine Osbourne, was crossing the road after leaving her school bus when she was struck by a motor vehicle on December 1, 1993. She sustained multiple contusions, including a severe head injury.
The Applicant applied for statutory accident benefits payable under Ontario Regulation 672, from the following Insurers: Allstate Insurance Company of Canada (Allstate), York Fire & Casualty
Insurance Company (York Fire), and Continental Insurance Company (Continental). Each Insurer denied coverage under the priority provisions of section 268 of the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The parties were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act. At the pre-hearing of this matter conducted on August 2, 1994, all parties agreed to release Continental from the claim for statutory accident benefits under the Schedule1.
The Applicant brought forward an application for payment of statutory accident benefits on an interim basis, pending an arbitrator's decision as to which of the two remaining Insurers is responsible for payment of benefits. A decision concerning the payment of interim benefits was issued by Arbitrator Palmer on November 18, 1994.
The sole issue in this preliminary hearing is:
- Which Insurer, Allstate or York Fire, is responsible for payment of any statutory accident benefits under the Schedule, to which the Applicant may be entitled in respect of her accident on December 1, 1993?
The Applicant seeks her expenses incurred in respect of the preliminary hearing held before Arbitrator Palmer on November 7, 1994, as well as this preliminary hearing.
Result:
- Nadine Osbourne may look to York Fire for payment of any statutory accident benefits to which she may be entitled. Nadine Osbourne is an "insured person" under section 2.2.3(e) of the standard O.P.F. 1 policy (section 2 of the Schedule) issued by York Fire to Winston Smart.
She is a "dependant" of Dorna Osbourne within the meaning of section 2.2.2 of the policy (section 3(2) of the Schedule). Dorna Osbourne is a "spouse" of the named insured, Winston Smart, under section 2.2.3(e) of the policy issued by York Fire, and within the meaning of the definition of "spouse" under section 224(1)(c) of the Insurance Act (section 5.2.4 of the policy).
- Nadine Osbourne is entitled to payment of expenses from York Fire, in connection with this arbitration as well as the preliminary issue before Arbitrator Palmer held November 7, 1994.
Counsel for the Applicant informed me that numerous claims for Supplementary Medical and Rehabilitation Benefits under section 6 of the Schedule, and Care Benefits under section 7 of the Schedule, have been submitted to the Insurers in connection with the Applicant's accident. Furthermore, counsel submits that additional significant expenses must be incurred on behalf of Nadine as soon as possible in order to maximize her recovery and rehabilitation.
Allstate has paid all claims submitted, up to the date of the preliminary motion for interim benefits before Arbitrator Palmer, on a "without prejudice" basis pending the outcome of Arbitrator Palmer's decision concerning payment of interim benefits. Arbitrator Palmer concluded that Nadine Osbourne is entitled to interim benefits with payments to be shared equally between Allstate and York Fire, pending the outcome of my decision on coverage. Nadine's counsel states that York Fire has failed to comply with the interim decision of Arbitrator Palmer and that no interim payments have been made by York Fire to the date of this hearing. Counsel for the Applicant states that the Applicant intends to seek a special award against York Fire under section 282(10) of the Insurance Act, on the basis that the Insurer has unreasonably withheld or delayed payments.
On consent of all the parties, these issues are not before me in this hearing. At the request of all parties, I will remain seized of these issues in the event they cannot be resolved by negotiation.
Hearing:
The hearing was held in North York, Ontario, on January 30 and 31, 1995, before me, Janice Mackintosh, arbitrator. At the conclusion of the hearing I rendered an oral decision, with written reasons to follow, pursuant to section 282(13) of the Insurance Act.
Present at the Hearing:
For the
Applicant:
The Applicant was unable to attend the hearing. Dorna Osbourne attended in the capacity of litigation guardian.
Winston Smart
Applicant's
Jim Howe
Representatives:
Barrister and Solicitor
Joseph Pileggi
Law Clerk
Allstate's
James Flaherty
Representative:
Barrister and Solicitor
Allstate's
Philip Langford
Officer:
Claims Manager
York Fire's
Raymond Watt
Representative:
Barrister and Solicitor
Witnesses:
Dorna Osbourne
Winston Smart
12 exhibits were filed and are listed in Schedule 1. Other documents before the arbitrator are also listed in Schedule 1.
Authorities referred to by the parties are listed in Schedule 2.
Factual Background:
The Applicant, Nadine Osbourne, was born on December 28, 1979. She was almost 14 years of age when she was struck by a motor vehicle after leaving her school bus on December 1, 1993. The motor vehicle that struck her was insured through Allstate. The school bus, from which she had alighted, was insured through Continental. Prior to the accident, York Fire had issued a standard Ontario Automobile Policy of insurance O.P.F. 1 (the Policy) to Winston Smart. Dorna Osbourne and Winston Smart married on December 31, 1994, a year after Nadine Osbourne's accident.
At the time of the accident, Nadine Osbourne lived at Pickering Parkway with her mother, Dorna Osbourne, and attended high school on a full-time basis. The parties agree that Nadine Osbourne was principally dependent for financial support upon her mother, within the meaning of section 3(2) of the Schedule (section 2.2.2 of the policy). Nadine's father, Locksley Osbourne, and her mother Dorna Osbourne, had permanently separated in 1983 when Nadine was approximately four years old. They were divorced in 1988.
When the accident occurred, neither Dorna nor Locksley Osbourne owned a motor vehicle nor were they named insureds under a contract evidenced by a motor vehicle liability policy.
At the time of Nadine's accident, Dorna Osbourne was involved in a relationship with Winston Smart. Allstate submits that Dorna Osbourne was the common-law spouse of Winston Smart under the definition of "spouse" in section 224(1)(c) of the Insurance Act (section 5.2.4 of the policy). Allstate claims that Dorna Osbourne should look to Winston Smart's policy with York Fire for statutory accident benefits in connection with Nadine's accident.
York Fire concedes that Dorna Osbourne and Winston Smart maintained a friendly relationship at the time of the accident. However, York Fire submits that they had stopped cohabiting at least seven months prior to Nadine's accident and were no longer "spouses" within the meaning of section 224(1) of the Insurance Act, when the accident occurred. York Fire claims that Dorna Osbourne must look to Allstate, the Insurer of the vehicle that hit Nadine, for payment of statutory accident benefits.
Dorna Osbourne met Winston Smart in August 1985, when Nadine was approximately five and one half years old. In August 1986, they began to live together in Winston's home on Bower's Court. Dorna's youngest daughter, Nadine, her older daughter, Simone, and Winston's daughter, Wendy, lived with them. In 1987, Winston sold his home on Bower's Court and purchased a combined residential and commercial property on Kingston Road. The family lived in the residential portion and Winston conducted a tailoring business out of the commercial portion. In 1990, Winston and Dorna jointly purchased another home on Denmar Road. Winston kept the Kingston Road property for business and the family moved to Denmar Road.
During this time, Dorna Osbourne worked at Dylex, and Winston Smart was an assembler with General Motors doing full-time, shift work. In addition, Winston Smart operated a part-time tailoring business out of his Kingston Road premises. It was not unusual for Winston Smart to work at his tailoring business after finishing his shift at General Motors, and to sleep one or two nights a week at his Kingston Road business premises rather than Denmar Road.
Winston Smart earned at least twice as much income as Dorna Osbourne. Dorna generally paid household expenses while Winston paid the mortgages. However, Winston regularly gave Dorna additional money as needed. Over the years, Winston developed a close relationship with Nadine Osbourne and exhibited a settled intention to treat her as his child. Dorna Osbourne also viewed Winston's daughter, Wendy Smart, as her step-daughter.
Dorna Osbourne cooked most of the family's meals and did most of the laundry. Winston Smart did most of the general maintenance and upkeep around the Kingston Road and Denmar Road properties. They did the family shopping together. They spent most of their weekends, leisure time and vacations together. They attended family functions, weddings, and social events together and were generally viewed as a couple by their family and friends.
During this seven and one half year period, all parties agree that Dorna and Winston could be considered "spouses" since they cohabited continuously for a period of not less than three years, within the meaning of the definition of "spouse" under section 224(1)(c) of the Insurance Act (section 5.2.4. of the policy).
In 1992, Winston Smart began to experience financial difficulties. By December 1992, he had lost the Kingston Road property and was having difficulty financing the Denmar Road property. By the end of December 1992, he was forced into bankruptcy. Winston was able to retrieve his sewing machines and tailoring equipment from the Kingston Road premises, which had been padlocked; however, he was reluctant to move his machines to Denmar Road in case that property was also seized by creditors. In January 1993, Winston obtained a one year lease on a three bedroom townhouse with a basement, on Fieldlight Blvd. He moved his sewing machines and equipment there and continued his tailoring business for extra cash.
Financial worries and tensions grew between Winston and Dorna. Winston had resigned himself to losing the Denmar Road property whereas Dorna was determined to keep it. She believed that if she could distance herself from Winston Smart's bankruptcy and renegotiate the mortgage of the Denmar Road property she might be able to save it. Consequently Winston Smart and his daughter, Wendy, moved from Denmar Road to the rented townhouse on Fieldlight Blvd.
Unfortunately, Dorna Osbourne was not able to protect herself from the effects of Winston Smart's bankruptcy. Her wages at Dylex were garnisheed. She was unable to renegotiate the terms of the mortgage, and she lost the Denmar Road property. By the end of March or April 1993, she too was forced into bankruptcy. Dorna and Nadine Osbourne left Denmar Road and rented a small, two bedroom flat above a store on Pickering Parkway, approximately 10 minutes away from Winston's townhouse on Fieldlight Blvd. Winston Smart was anxious to keep his sewing machines, equipment, and tailoring business well away from Dorna's bankruptcy.
In every other respect the relationship between Dorna Osbourne and Winston Smart continued as before. Dorna prepared Winston's meals and box lunches for work. Winston ate most of his meals with Dorna, Nadine, and sometimes Wendy, in the Pickering Parkway flat. Dorna washed their laundry and Winston took care of household repairs. They did the shopping together. Winston spent most weeknights and weekends with Dorna except when he worked the night-shift or moonlighted at his tailoring business at Fieldlight. Winston kept clothing and possessions both at Dorna's flat and at the Fieldlight townhouse. Winston's daughter, Wendy, who was approximately 17 years old, spent time at her mother's home, Dorna's home, and at Fieldlight. Winston continued to contribute to Dorna and Nadine's expenses. He remained involved in Nadine's life and continued to feel responsible for her. Winston and Dorna attended social occasions and family celebrations together as a couple. Friends and family understood that their separate addresses were due to their financial problems.
In the summer of 1993, money was tight for Winston and Dorna. They discussed marriage and planned to buy another home together as soon as their financial situation stabilized. In October 1993, Winston Smart was discharged from bankruptcy but Dorna's bankrupt status continued. Dorna, Nadine and Winston planned their regular trip to Florida to visit Dorna's family in December 1993. Winston did the driving on these trips and used his car. Unfortunately, all plans were put on hold following Nadine's motor vehicle accident on December 1, 1993.
As a result of the accident, Nadine Osbourne suffered severe head injuries, internal injuries, and a fractured right femur. After emergency treatment in Pickering, Nadine was transferred to the Hospital for Sick Children where she spent more than 70 days in a coma. Dorna Osbourne stopped working at Dylex and remained at Nadine's bedside. Dorna lived for some time at the parental support residence at the Hospital for Sick Children. She received no financial assistance from Dylex and initially received no automobile insurance benefits. In late December 1993, she applied to the Ministry of Community and Social Services for General Welfare Assistance but received no payment until March 1994. On the Application for General Welfare Assistance (Exhibit 11), Dorna described herself as a "sole support parent" and the "head of family whose spouse is absent". Under the heading "Next of Kin - Name", she provided the name of Winston Smart and described his relationship to her as that of a "friend". However, during the same time period, Dorna described her living situation to Nadine's rehabilitation case manager, as follows (Exhibit 4):
VIII. Family Structure/Support System:
...Nadine's stepfather, Mr. Winston Smart, has been part of Nadine's life since she was five years old. He is intensely involved in Nadine's recovery and provides ongoing support to Mrs. Osbourne.
X. Accommodation/Transportation
Mrs. Osbourne explains that Nadine lives with her and her boyfriend Winston Smart in a small two bedroom apartment above a store in Pickering.
Following the accident, Winston continued to contribute to Nadine and Dorna's expenses but Dorna required more help as she was no longer working and had additional expenses arising from Nadine's care. Winston gave up the townhouse on Fieldlight to free up additional funds for Dorna. However, Dorna's two bedroom flat on Pickering Parkway was too small to accommodate Winston's sewing machines and equipment. Winston persuaded a friend to give him a room in her basement for the equipment, as well as a room to sleep. Winston carried on his tailoring business from these premises.
In the difficult days and months that followed Nadine's accident, Dorna Osbourne and Winston Smart were completely focused on Nadine's care. They gave no thoughts to their own living arrangements.
On January 25, 1994, Nadine was moved to Bloorview Treatment Centre. On February 7, 1994, Nadine spoke for the first time since the accident, calling for Winston and Dorna. On April 8, 1994, Nadine was transferred to the Hugh MacMillan Rehabilitation Centre. In May 1994, Nadine began the lengthy process of learning to walk again. In October 1994, the worst of their financial difficulties had passed and Winston returned to Dorna's flat on Pickering Parkway. He continued to maintain a separate location for his tailoring business. On November 4, 1994, Nadine was able to return to the two bedroom flat on Pickering Parkway. In December 1994, Dorna, Nadine, and Winston picked up their previous plans to travel to Florida to visit Dorna's family. Dorna and Winston were married in Florida on December 31, 1994.
The Law
To claim benefits against a particular Insurer, Nadine Osbourne must establish that she is an "insured person" under that Insurer's policy, or the Schedule. The phrase "insured person" is defined under section 2.2.3 of the policy (section 2 of the Schedule). The relevant portions of section 2.2.3 of the policy (section 2 of the Schedule) provide:
Definitions and Interpretation
2.2 In Part B (Accident benefits),
2.2.3 "insured person", in respect of this Policy, means,
(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 an 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.
Neither Nadine Osbourne nor her mother were named insureds under a contract evidenced by a motor vehicle liability policy. Nadine was not the occupant of a vehicle when she was struck by the car insured by Allstate. Since she was involved in an accident in Ontario, she is an "insured person" under Allstate's policy pursuant to section 2.2.3 (d). Nadine Osbourne may also be an "insured person" under York Fire's policy pursuant to section 2.2.3(e), if she is the "dependant" of Dorna Osbourne and Dorna Osbourne is the "spouse" of the named insured, Winston Smart.
The priority as between these two Insurers is determined under section 268 of the Insurance Act, and is not an issue before me.
The term "spouse" is not defined within the Schedule, however, it is defined under section 5.2.4 of the policy and section 224(1) of the Insurance Act as follows:
Part VI.
Automobile Insurance
Definitions
224.-(1) In this Part,
"spouse" means either of a man and a woman who,
(a) are married to each other,
(b) have together in good faith entered into a marriage, or
(c) are not married to each other and have cohabited continuously for a period of not less than three years, or have cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child.
[emphasis added]
On the date of the accident, December 1, 1993, Dorna Osbourne and Winston Smart had maintained separate residences for approximately seven months. They continued to maintain two residences for a further ten months until October 1994.
York Fire maintains that the continuous cohabitation of Dorna Osbourne and Winston Smart ceased in March or April 1993 when they each obtained separate residences. York Fire submits that at the time of the accident, Dorna Osbourne was no longer a "spouse" of Winston Smart within the meaning of the definition at section 224(1)(c) of the Insurance Act (section 5.2.4 of the policy).
Counsel for the Applicant and counsel for Allstate submit that Dorna Osbourne and Winston Smart have continuously cohabited from August 1986, throughout the 17 month period in which they maintained two addresses, to the date of their marriage on December 31, 1994.
Counsel for York Fire referred to several definitions of "cohabit" and "cohabitation" as follows:
Black's Law Dictionary
Cohabitation:
To live together as husband and wife. The mutual assumption of those marital rights, duties and obligations which are usually manifested by married people, including but not necessarily dependent on sexual relations.
Shorter Oxford Dictionary
Cohabit:
To dwell or live together;
To live together as husband and wife.
Dictionary of Canadian Law
cohabit:
To live together in a conjugal relationship, whether within or outside marriage.
To live together in a family relationship. (Child and Family Services and family relations act, S.N.B. 1980, c. C-2.1, s.1.
Words and Phrases Legal Maxims Canada
cohabit:
(Ont.) Under a separation agreement, the plaintiff's benefits were dependent upon her not "cohabiting" with a man "as though they were man and wife..." for a period of more than 45 days. Per Hutchinson, Co. Ct. J. : "I draw from [the] authorities that the phrases 'cohabit', 'living arrangement', 'live with a man in a state resembling matrimony' and 'live with a person as if they were husband and wife' have common features in that these contemplate an integrated relationship between the man and the woman that will usually have many of the following elements, though not necessarily all of them: financial interdependence, a sexual relationship, a common principal residence, obligations on the part of each to share the responsibilities of running the home, shared use of assets such as cars, boats, etc., shared responsibilities for raising children, shared vacations and the expectation each day that there be continued mutual dependency..."(at p. 45).
Bellis v. Innes(1980), 1980 CanLII 3813 (BC SC), 21 R.F.L. (2d) 40 (B.C. Co. Ct.)
Counsel for York Fire submits that living together in the same residence is central to each of these definitions. Counsel suggests that the change from a joint residence, to two separate residences over an extended period, is a clear indication that Dorna Osbourne and Winston Smart intended to cease cohabitation.
Counsel for Allstate maintains that the definition of "spouse" and the meaning of "cohabit" pertain to the nature of the relationship shared by the parties, rather than their physical place of residence. Counsel suggests that at all times, Dorna Osbourne and Winston Smart shared an integrated relationship that exhibited all the elements referred to in the definitions above, with the single exception of a common principal residence.
I find that the term "cohabited" used in the context of the definition of not married "spouse" at section 224(1)(c) of the Insurance Act contemplates an integrated relationship between a man and a woman which usually contains the elements described by Hutchinson, B.C. Co. Ct. J. at page 45 of his decision in Bellis v. Innes. I agree with counsel for York Fire that the sharing of a principal residence is a significant indicator of the intention to cohabit. However, it is not the only indicator and is not, in and of itself, determinative of the issue.
In this case, Dorna Osbourne and Winston Smart shared a principal residence for approximately seven and one half years until March or April 1993. Counsel for York Fire invited me to find that Dorna Osbourne and Winston Smart stopped sharing their principal residence due to irreconcilable differences arising from their financial situation, and an intention to interrupt or terminate their integrated relationship. Dorna Osbourne and Winston Smart frankly admitted that money worries and tensions developed as their financial situation deteriorated. They agreed that their financial situation triggered the decision to maintain separate residences. However, they claim that their decision was motivated by the intention to somehow minimize the impact of their respective bankruptcies upon each other by maintaining separate residences, rather than by the intention to end or reduce the relationship. In all other respects, their relationship continued as before. They always intended to recreate a home together once their financial difficulties were resolved and they acted on that intention as soon as the severe crisis following Nadine's accident subsided. They married in December 1994. I found the evidence of Dorna Osbourne and Winston Smart to be forthright, consistent and believable and I accept it on these points.
I conclude that Dorna Osbourne and Winston Smart cohabited continuously from 1987 to December 31, 1994 when they married. I am satisfied that their cohabitation continued despite a 17 month period during which they maintained two separate addresses. Dorna Osbourne was a "spouse" of the named insured, Winston Smart, under section 2.2.3(e) of Winston Smart's policy with York Fire, and within the meaning of the definition of "spouse" under section 224(1)(c) of the Insurance Act, R.S.O. 1990, c.I 8, as amended (section 5.2.4. of the policy). Accordingly, Nadine Osbourne may look to York Fire for payment of any statutory accident benefits to which she may be entitled.
Order:
Nadine Osbourne may look to York Fire for payment of any statutory accident benefits to which she may be entitled. Nadine Osbourne is an "insured person" under section 2.2.3(e) of the standard O.P.F. 1 policy (section 2 of the Schedule) issued by York Fire to Winston Smart. She is a "dependant" of Dorna Osbourne within the meaning of section 2.2.2 of the policy (section 3(2) of the Schedule). Dorna Osbourne is a "spouse" of the named insured, Winston Smart, under section 2.2.3(e) of the policy issued by York Fire, and within the meaning of the definition of "spouse" under section 224(1)(c) of the Insurance Act (section 5.2.4 of the policy).
Nadine Osbourne is entitled to payment of expenses from York Fire, in connection with this arbitration as well as the preliminary issue before Arbitrator Palmer held November 7, 1994.
March 6, 1995
Janice Mackintosh
Arbitrator
Date
SCHEDULE 1
Exhibits:
Motor Vehicle Accident Report
Marriage Certificate (copy)
Three transcripts
(a) February 28, 1994
(b) January 19, 1995 - Ms. Osbourne
(c) January 19, 1995 - Mr. Smart
January 1994 Assessment Report from Palmer Progressive Rehabilitation
1989 Tax Notice for 411 Kingston Road West
Westbury Canadian Life annual premium notice, dated January 28, 1993
The Durham Board of Education Student Registration Form (for Nadine - 1989/90)
Letter from the Royal Bank of Canada, dated August 10, 1988
Agreement of Purchase and Sale - Denmar Road property
Notice of Sale Under Mortgage - Denmar Road property
Application for Assistance under the General Welfare Assistance Act
Correspondence from Department of Social Services
Other Documents Before the Arbitrator:
Report of Mediator, dated April 18, 1994
Application for Appointment of an Arbitrator, dated March 18, 1994
Response by Insurer, dated April 28, 1994 (Allstate) and May 25, 1994 (York Fire)
Pre-hearing letter, dated August 4, 1994
SCHEDULE 2
Authorities referred to by counsel for York Fire:
Black's Law Dictionary
Shorter Oxford English Dictionary
Dictionary of Canadian Law
Words and Phrases Legal Maxims Canada
Bellis v. Innes (1980), 1980 CanLII 3813 (BC SC), 21 R.F.L. (2d) 40 (B.C. Co. Ct.)
Margaret McGuire (Deceased) and Zurich Insurance Company and State Farm Mutual Automobile Insurance Company, June 20, 1994, OIC File Nos. A-002988 and A-002989.
McIntyre et al. v. West Wawanosh Mutual Insurance Co. (1994), 1994 CanLII 7500 (ON CTGD), 113 D.L.R. (4th) 759 (Ont. Ct. Gen. Div.)
Re Harris and Godkewitsch (1983), 1983 CanLII 2002 (ON PROVCT), 41 O.R. (2d) 779 (Prov. Ct.)
Leonard Robinson and Zurich Insurance Company, October 12, 1994, OIC File No. A-007196
Kossakowski v. Sierchio (1983), 1983 CanLII 4466 (ON HCJ), 36 R.F.L. (2d) 395 (Ont. Co. Ct.)
Authorities referred to by counsel for Allstate:
Statutory Accident Benefits Schedule - Accidents Before January 1, 1994
Insurance Act, R.S.O. 1990, c.I.8, as amended, section 224(1)
Family Law Act, R.S.O. 1990, c.F.3, section 29
Succession Law Reform Act, R.S.O. 1990, c.S.26, section 57
Ontario Family Law Act manual, section 29, ss 2.02
Re Feehan and Attwells (1979), 24 O.R.(2d) 249 (Hastings Co. Ct.)
Re Sanderson and Russell (1979), 1979 CanLII 2048 (ON CA), 24 O.R.(2d) 429 (C.A.)
Re Duma and Sembay (1981), 7 A.C.W.S.(2d) 275 (Ont. S.C.)
Ricci v. Cacciatore-Ricci (1989), 16 A.C.W.S.(3d) 435 (Ont. S.C.)