Neutral Citation: 1996 ONICDRG 156

OIC A95-000354

ONTARIO INSURANCE COMMISSION

BETWEEN:

RENEE C. MALLET

Applicant

and

PILOT INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Renee C. Mallet, was injured in a motor vehicle accident on July 10, 1993. She applied for and received statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under Ontario Regulation 672.¹ Pilot has continued to pay weekly income benefits to Ms. Mallet, but at the minimum rate of $185.60 under section 12 of the Schedule. Ms. Mallet believes she is entitled to a larger amount per week. The parties were unable to resolve their dispute through mediation and Ms. Mallet applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue in this hearing is:

1. To what amount of weekly income benefit is Ms. Mallet entitled?

Ms. Mallet also claims interest on any amounts owing, and her expenses incurred in the hearing.

Result:

1. Ms. Mallet is entitled to weekly income benefits in the sum of $185.60.

Hearing:

The hearing was held in London on August 22, 1996, before me, K. Julaine Palmer, Arbitrator.

Present at the Hearing:

Applicant:

Renee C. Mallet

Ms. Mallet's

Ian D. Wright

Representative:

Barrister and Solicitor

Pilot's

Grace Pang

Representative:

Barrister and Solicitor

No witnesses testified at the hearing. An Agreed Statement of Facts and two sets of related documents were filed as exhibits.

Evidence and Findings:

This case calls for an interpretation of the provisions of section 12 of the Schedule and, especially, section 12(7) relating to the calculation of a person's gross weekly income.

When Ms. Mallet was injured in a motor vehicle accident on July 10, 1993, she had been working at Curly's Cafe for just two weeks. During that time she earned $738.00 plus vacation pay, for a total of $758.32. Ms. Mallet also earned a small amount from an aesthetics business. In the four weeks before the accident she had a gross income from her business of $42.00, after deduction for business expenses which ceased as a result of the accident.

If Ms. Mallet's total gross weekly income in the four weeks preceding the accident ($800.32) is divided by four, her average gross weekly income is $200.08, and she would be entitled to $185.60 in weekly income benefits under the Schedule. This is the amount the Insurer has paid.

However, in Ms. Mallet's submission, her income from Curly's Cafe should be averaged over the two weeks she worked there, which would result in an entitlement to $311.73 in weekly income benefits. Ms. Mallet's lawyer was eloquent in his submissions about the innate justice of this approach. He submitted that such a calculation more accurately reflects the income lost by Ms. Mallet as a result of the accident because she was indeed employed at the date of the accident.

Mr. Wright submitted that the provisions of section 12(7) of the Schedule are ambiguous and the approach of Sr. Arbitrator Naylor in the McCormick² and Scavuzzo³ cases should be followed. He contrasted Ms. Mallet's entitlement to the minimum amount of benefits, calculated by averaging over four weeks, with her entitlement under section 12(2)1.iii of the Schedule, if she had been hired by an employer before the accident, but had not yet started work. In that case, according to the provisions of section 12(7)2.ii, she would be entitled to claim the gross weekly income payable under the employment contract. Mr. Wright submitted that in such a comparison one can see the working of an injustice against Ms. Mallet. Mr. Wright also submitted that the approach followed by Arbitrator Makepeace in the Rajbir Singh and Wellington Insurance case ⁴to interpret section 12(7) in a way that "provides for the most accurate assessment of the applicant's pre-accident financial circumstances" would call for the averaging of Ms. Mallet's income over the final two weeks before her accident, without regard to the minimal income she earned in the first two weeks.

The Insurer's lawyer, Ms. Pang, submitted that the words of section 12(7) are plain and unambiguous. She submitted that the calculation of the average gross weekly income for the four or 52 weeks preceding the accident is not a flexible one. It includes days not worked in each week and weeks not worked within the relevant time periods. The applicant is not entitled to disregard those weeks during which she did not work or earned no income.⁵ She submitted that the fact that section 13 of the Schedule provides weekly benefits for persons who did not work during the four weeks prior to the accident and did not work for 180 days in the year prior to the accident strongly suggests that periods of unemployment are not to be ignored when calculating weekly benefits.⁶

Conclusion:

The contrast in the treatment of the calculation of weekly income benefits, between the person who becomes entitled to benefits by virtue of a contract of employment made before the accident and the person who, although working at the time of the accident, has not worked the full four weeks prior to it, is troubling in a piece of remedial legislation. However, as arbitrators have often ruefully observed, an arbitrator's function is not to attempt to remedy a perceived injustice in situations where the plain or ordinary meaning of the legislation is apparent.

In the Bush⁷ case and others thereafter, I expressed support for the reasoning of Arbitrator Draper in the Vo and Maplex General Insurance case. The plain, ordinary meaning of section 12(1)1 calls for the calculation of an applicant's average gross weekly income over four weeks or 52 weeks, even if she had no gross weekly income (or very little) during some of those weeks. In a Schedule based on averaging past earnings without the benefit of provisions allowing for extrapolation, it is my view that Ms. Mallet is entitled only to the minimum weekly income benefit of $185.60.

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. The prescribed expenses and amounts are set out in Schedule F of the Dispute Resolution Practice Code-1995 Release (the "Code" and in Ontario Regulation 664, R.R.O. 1990, Dispute Resolution Expenses.

In the McCormick ⁸ case, Sr. 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 main, in the appeal decision in Calogero and The Co-Operators General Insurance Company (February 13, 1992), OIC P-000251.

Since no decision has yet been rendered in the appeal of the Vo case, I feel Ms. Mallet was entitled to challenge the Insurer's interpretation of section 12. I exercise my discretion to allow the Applicant her expenses as set out in Schedule F of the Code. In the event that the parties cannot agree as to the total amount of expenses, a party may apply for assessment of the expenses through the Office of the Registrar.

Order:

1. Ms. Mallet is entitled to weekly income benefits in the sum of $185.60.

2. Ms. Mallet is entitled to her expenses incurred in respect of the arbitration.

September 17, 1996.

K. Julaine Palmer

Arbitrator

Date

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule —Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2McCormick and Economical Mutual Insurance Company (October 2, 1991), OIC A-000139
3. 3Scavuzzo and Canadian Home Assurance Company (March 18, 1992), OIC A-000626 and P-000626
4. 4(June 24, 1994), OIC A-004139 at p.26
5. 5Mouawad and Alpina Insurance Company (June 30, 1994), OIC A-003226 (appeal pending)
6. 6Vo and Maplex General Insurance Company (October 4, 1993), OIC A-002777
7. 7Bush and Pilot Insurance Company (April 25, 1994), OIC A-004681
8. 8Supra footnote 2 at p. 23