Neutral Citation: 1996 ONICDRG 152

Appeal P96-00049

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ROYAL INSURANCE COMPANY OF CANADA

Appellant

and

DONNA CHRISTO

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Stanley C. Tessis (for Royal Insurance)

Murray N. Ellies, Q.C. (for Donna Christo)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration order, dated April 23, 1996, is confirmed.
Royal Insurance will pay Ms. Christo's appeal expenses.

September 11, 1996

David R. Draper Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by the Royal Insurance Company of Canada ("Royal") from an arbitration order, dated April 23, 1996, that Dustin Christo, a child not yet born at the time of the accident, is an "insured person" for the purpose of claiming statutory accident benefits.

II. BACKGROUND

Donna Christo was involved in a motor vehicle accident on January 19, 1992. She was pregnant at the time. Her son, Dustin, was born on January 26, 1992, about seven weeks premature.

Ms. Christo claims that Dustin's premature birth was caused by the accident, resulting in hypovolemic shock, possible retardation and delayed growth. She maintains, therefore, that he should receive supplementary medical and rehabilitation benefits under section 6 of Ontario Regulation 672, Statutory Accident Benefits Schedule - Benefits Before January 1, 1994 ("the Schedule"). While Royal does not accept that Dustin's problems are related to the accident, it refused his claim on the basis that he was not an "insured person" at the time of the accident and, therefore, was not entitled to statutory accident benefits.

The arbitration proceeded on the preliminary issue of whether Dustin was an "insured person." The parties agreed that for the purposes of the preliminary hearing, the arbitrator should assume that Dustin was injured as a result of the accident. If the outcome is that Dustin can claim statutory accident benefits, Royal will dispute causation. My understanding is that although the parties have obtained some medical and rehabilitation reports about Dustin's condition, he has not received any benefits.

In a decision dated April 23, 1996, the arbitrator concluded that "a person who was injured in a motor vehicle accident while en ventre sa mere, and was subsequently born alive, is an "insured person" for the purpose of claiming statutory accident benefits," and ordered that the matter could proceed to arbitration.

Royal appealed this order. The appeal raised three preliminary issues:

Timeliness: The Commission did not receive Royal's Notice of Appeal until May 27 or 28, 1996, just beyond the 30-day time limit. Royal asked for an extension, as authorized by section 282(3) of the Insurance Act (the "Act").
Preliminary issue: The Dispute Resolution Practice Code provides that "the Director will not hear an appeal of a preliminary or interim order of an arbitrator until an arbitrator has finally decided all of the issues in dispute in the arbitration, unless the order being appealed finally determines the rights of the parties" (s.43.1). However, section 67 allows any rule to be waived in a particular case. Royal asked for permission to appeal the arbitrator's order despite its preliminary nature.
Stay: Royal asked for an order staying the arbitration order pending the appeal, pursuant to section 283(6) of the Act. This would mean that the arbitration would not proceed until the appeal is determined.

After hearing the submissions of counsel, I was persuaded the appeal should be allowed to proceed, and the arbitration should not go ahead pending the appeal decision. Royal's delay in filing its appeal was very minor and in my view, it made little sense to proceed with the arbitration when the appeal of the preliminary issue could be determined relatively quickly. As Mr. Ellies fairly observed, it may have been a mistake to proceed with the preliminary issue first, but having done so, he and his client must live with that decision.

III. ANALYSIS

Royal's position is that Dustin is not entitled to any accident benefits even if he has ongoing medical or rehabilitation needs due to injuries he suffered while still a foetus. I find this a rather shocking proposition. However, Royal's argument is coherent and deserves consideration.

Dustin's claim is under section 6 of the Schedule, which provides:

- (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 . . . (emphasis added)

"Insured person" is defined in section 2 of the Schedule. The relevant provision states:

"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,

(emphasis added)

The crux of Royal's position is that by using the term "insured person" in section 6, the Lieutenant Governor in Council excluded those who were not yet "persons" at the time of the accident.

In support of its position, Royal submits that it is settled law that a foetus is not a "person."¹

Royal also points to a number of decisions finding a temporal component in the legislative scheme for accident benefits, with the accident as the "triggering event."² It submits that at the time of the accident, Dustin was still a foetus and, therefore, not a "person." Because Dustin was not a person at the time of the accident, Royal maintains that he could not be an "insured person" or an "occupant" for the purposes of qualifying for accident benefits. This approach, Royal claims, is consistent with decisions interpreting the Schedule and its predecessors.³

The arbitrator did not accept Royal's interpretation. She distinguished the earlier decisions, concluding that a person who was injured in an automobile while en ventre sa mere, and was subsequently born alive, is an "insured person" for the purposes of claiming statutory accident benefits, at least in relation to his or her own accident-related injuries.

Royal submits that the arbitrator erred in her interpretation. I do not agree. Like the arbitrator, I find Royal's approach too narrow. None of the cases cited deals with the right of a child to make a claim based on his or her own injuries arising out of an event that predated his or her birth. I agree with the arbitrator that Dustin's claim is fundamentally different from those considered in the earlier cases and, therefore, those decisions can and should be distinguished.

At the time of the accident, Ms. Christo clearly was an insured person. She also was pregnant. Royal acknowledges for the purposes of this preliminary issue that her unborn child suffered injuries as a result of the accident. If "he" had required medical care while still a foetus, there is little doubt that Ms. Christo would have been entitled to accident benefits for her reasonable expenses.

Royal contends, however, that once Dustin was born, his medical and rehabilitation costs were not covered because he was not an "insured person" at the time of the accident. If, as Royal argues, status is determined at the time of the accident, why would Dustin not continue to be treated as indistinct from his mother, with accident benefits for his care available through her? Although this is a possible approach, I agree with the arbitrator that the legislation bears the more sensible interpretation of recognizing Dustin's independent status after birth.

In my view, the arbitrator properly interpreted the term "insured person" within its legislative context. Social and legal controversy about the status of the foetus strongly suggests that there is no ordinary or common meaning of "person" when applied to unborn children. The question is whether, within the context of section 6 of the Schedule, "insured person" includes a child who was involved in an accident while en ventre sa mere.

I do not read any of the cases cited as establishing that the term "person" can never include a subsequently born child. The decisions in Dehler, Borowski and Tremblay, cited above, all dealt with challenges to abortion laws brought on behalf of unborn children. The courts held that a foetus has no independent legal status to assert rights, including Charter rights. However, Ms. Christo is not claiming accident benefits on behalf of a foetus, but for her son, Dustin. I agree with the arbitrator that these cases simply do not deal with the rights of a child following his or her birth.

As noted by the arbitrator, the courts have long relied on a legal fiction to deal with the unfairness that would result if a child could not seek compensation in tort for an injury he or she suffered en ventre sa mere. The legal fiction is summarized in Seede et al. v. Camco Inc. (1985), 1985 CanLII 1938 (ON HCJ), 50 O.R. (2d) 218:

In Ontario there is no right of action in an unborn child to recover damages nor in favour of an unborn child unless the child is born alive. On the other hand, when the unborn child becomes a living child through birth and suffers damages as a result of prenatal injuries caused by the fault or the negligence of another the cause of action is completed. This right to the born-alive child is provided by the law on the basis of a fiction in respect of property rights clothing an unborn child who is subsequently born alive with the same rights as a child living at the time of the death of the benefactor . . . (p.221)

The arbitrator examined the words of the Schedule and concluded that there was nothing to preclude the operation of the en ventre sa mere principle in relation to Dustin. In taking this approach, she relied on the following excerpt from Vasey v. Economical Mutual Insurance Co. (1986), 1986 CanLII 2558 (ON HCJ), 54 O.R. (2d) 692:

In interpreting statutes such as the Insurance Act, I think cognizance must be taken that this fiction would be known to legislative draftsmen and the legislation would be passed with this fiction in mind. (p.695)

Royal contends that the arbitrator erred in relying on this excerpt from Vasey because it came from an earlier case and was obiter dicta. Although the result in Vasey was that the plaintiff could not rely on the fiction, I am not persuaded that this undermines the principle expressed. I agree with the arbitrator that the decisions in Vasey, Ridgley and McLean, and by implication Robinson and Catherwood, cited above, all turn on the fact that the legislation included requirements that an unborn child could not meet. In other words, the legislation was sufficiently specific to oust the en ventre sa mere fiction.

The facts in Vasey were as follows. Mr. Betz was killed in an automobile accident. At the time of the accident, he had been living with Ms. Vasey for almost one year, and she was pregnant. Their son, Cory, was born four and a half months after the accident. Both Ms. Vasey and Cory applied for death benefits under old Schedule C to the Insurance Act, the predecessor to the Schedule. Ms. Vasey's entitlement was dependent on her fitting within the following definition of "spouse":

(d) either of a man and woman not being married to each other who have cohabited,

(ii) in a relationship of some permanence where there is a child born of whom they are the natural parents,

and have so cohabited within the preceding year.

McTurk D.C.J. held that Ms. Vasey was not a "spouse" because at the time of the accident, there was not a "child born of whom they are the natural parents." Although he recognized the legal fiction of en ventre sa mere, he concluded that it is available only for the benefit of the unborn child, not his or her parents.

The second issue in Vasey was Cory's entitlement to accident benefits. The issue was whether he was a "dependant" within the meaning of subsection 2, Part B(3)(b)(i), which provided:

(3) "Dependant" means,

(b) a person,

(i) under the age of 18 years who resides with and is principally dependent upon the head of the household or the spouse of the head of household for financial support.

Judge McTurk distinguished the decision of the Alberta Court of Appeal in Fitzsimonds v. Royal Ins. Co. of Canada (1984), 1984 ABCA 7, 7 D.L.R. (4th) 406, [1984] 2 W.W.R. 762, 29 Alta. L.R. (2d) 394, which applied the en ventre sa mere fiction to a death benefits case. He noted that the relevant definition of "dependent relative" in the Alberta legislation was different from in Schedule C, which defined "dependent" as being "a person who resides with and is principally dependent on the head of the household" (emphasis included in the Vasey decision). The suggestion is that the definition included requirements that could not be met by an unborn child.

In reaching his decision, Judge McTurk agreed with the reasoning in Scrimshaw v. Constitution Ins. Co. of Canada (1979), 1979 CanLII 2109 (ON HCJ), 26 O.R. (2d) 371, 102 D.L.R. (3d) 447, [1979] I.L.R. para. 1-1160, a decision considered but not followed in Fitzsimonds. In Scrimshaw, Judge Honey of the District Court of Ontario held that a child en ventre sa mere at the time of the accident did not fit within the definition of a child "under the age of 21 years and who resides with and is wholly dependant on the head of the household for financial support." Again, the logic seems to be that an unborn child could not have been a person who resided with or was wholly dependent for financial support on anyone at the time of the accident.

Although not essential to his decision, Judge McTurk went on to consider the decision in Dehler. In that case, Robins J. held that the plaintiff could not challenge the therapeutic abortion provisions of the Criminal Code on behalf of "those unborn persons or that class of unborn persons whose lives may be terminated by abortion in the defendant hospitals." Applying Dehler, Judge McTurk held that Cory was not a dependant within the meaning of Schedule C in that he was not a person at the date of the accident, nor was he residing with or principally dependent upon the head of the household" (p.699).

The arbitration decisions in Ridgley and Beiler followed Vasey. In Ridgley, the issue was whether Michael Ridgley could recover death benefits under the Schedule as his deceased father's dependant, even though he was not born until four months after the accident. The arbitrator held that the reasoning in Vasey was supported by the wording in the Schedule because it contained a specific provision that death benefits were payable only to a surviving dependant "who was a dependant at the time of the accident." She went on to conclude:

I agree that, intuitively, it may seem unfair that Michael Ridgley is denied a benefit for a loss which affects him fully and equally as his older brother. Nevertheless, I conclude that under the decided cases in Ontario and according to the plain words in the Schedule, Michael Ridgley cannot be considered a surviving dependant "who was a dependant at the time of the accident", nor can he be considered a "person" who was a dependant of another person for the purposes of the Schedule.

The issue in Beiler was whether an insured person could receive child care benefits under section 13(4) of the Schedule for a child who was en ventre sa mere at the time of the accident. The arbitrator agreed with the reasoning in Ridgley, concluding that a child born after the accident was not a "person who at the time of the accident was residing with the insured person and in respect of whom the insured person was the primary caregiver." In the arbitrator's opinion, the use of "at the time of the accident" limited benefits to children who were born alive and residing with the insured person at the time of the accident.

I agree with the arbitrator that the decisions in Vasey, Ridgley, and Beiler all turned on the particular wording of the legislation being considered. In each case, there was something in the legislation to convince the decision-maker that a child not yet born at the time of the accident could not meet the requirements for eligibility. The focus of section 6, in contrast, is on the person's current medical and rehabilitation needs "resulting from the accident," not on his or her status at the time of the accident. Like the arbitrator, I am not persuaded that the use of the term "insured person" is sufficient to preclude the operation of the en ventre sa mere fiction.

The Schedule was enacted as part of a legislative package that limited tort rights in exchange for enhanced "no-fault benefits." The Ontario Court of Appeal described the new compensation scheme as follows:

In our view, the Ontario legislature enacted s. 266 and other related Amendments to the Act for the purpose of significantly limiting the right of the victim of a motor vehicle accident to maintain a tort action against the tortfeasor. The scheme of compensation provides for an exchange of rights wherein the accident victim loses the right to sue unless coming within the statutory exemptions, but receives more generous first-party benefits, regardless of fault, from his or her own insurer. The legislation appears designed to control the cost of automobile insurance premiums to the consumer by eliminating some tort claims. At the same time, the legislation provides for enhanced benefits for income loss and medical and rehabilitation expenses to be paid to the accident victim regardless of fault.⁴

In my opinion, it was quite appropriate for the arbitrator to consider the legislative context in interpreting section 6 of the Schedule. Section 266 of the Act limits the right of the "injured person" to sue. It is difficult to see how a child injured while still en ventre sa mere could avoid this restriction. I agree with the arbitrator, therefore, that Royal's interpretation of section 6 is contrary to the "trade-off" central to the legislative reforms.

For all these reasons, I find no error in the arbitrator's conclusion that Dustin is an "insured person" for the purpose of claiming accident benefits under section 6 of the Schedule. Mr. Tessis pointed out that the arbitrator did not specifically state which part of the definition of " insured person" applies. In my view, however, it is implicit in the decision that following his birth, Dustin should be treated as an occupant of the vehicle along with his mother.

V. EXPENSES

Royal was unsuccessful in its appeal and, therefore, should pay Ms. Christo's reasonable appeal expenses.