Neutral Citation: 1997 ONICDRG 122

OIC A96-000871

ONTARIO INSURANCE COMMISSION

BETWEEN:

GLENN GRAHAM

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON PRELIMINARY ISSUES

Issues:

Mr. Glenn Graham was involved in an automobile accident on January 29, 1993, which occurred in his employer's parking lot. In March 1994, he applied for accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm") under Ontario Regulation 672.¹ State Farm refused to pay any statutory accident benefits on the basis that Mr. Graham was entitled to receive workers' compensation benefits. Mr. Graham subsequently applied for benefits under the Workers' Compensation Act, R.S.O. 1990, Chap. W.11 ("the WCA"). Mr. Graham's claim for health care benefits was allowed by the Workers' Compensation Board ("the WCB"), however, his claim for lost wages was denied on the basis that there was no medical evidence that his time off work was related to the accident.

On November 2, 1995, Mr. Graham referred State Farm's refusal to pay any accident benefits to mediation. Mr. Graham claims that at mediation State Farm agreed to pay weekly income benefits, and further agreed to pay supplementary and medical benefits, provided it was satisfied that the expenses he submitted were reasonable and necessary.

State Farm claims that at mediation it agreed to pay statutory accident benefits on the understanding that the WCB had rejected Mr. Graham's right to claim workers' compensation benefits. After mediation it learned that the WCB had decided that Mr. Graham was entitled to workers' compensation benefits. Accordingly, it refused to pay any accident benefits.

Mr. Graham applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended ("the Insurance Act").

The issues in this hearing are:

1. Were the issues between the parties resolved at mediation?

2. If the answer to the first question is no, is Mr. Graham precluded from receiving benefits under section 20 of the Schedule because he is entitled to receive benefits under a workers' compensation law or plan?

3. If Mr. Graham is entitled to receive workers' compensation benefits, is he, nevertheless, entitled to interim payments under section 21 of the Schedule?

Result:

1. The issues between the parties were not settled at mediation.

2. Mr. Graham is precluded from receiving benefits under the Schedule because he is entitled to receive benefits under the WCA.

3. Mr. Graham is not entitled to interim payments under section 21 of the Schedule.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on January 6, 1997, before me, Shemin Manji, Arbitrator. At the hearing, I received a factum from State Farm. Subsequent to the hearing, I received written submissions from State Farm dated January 7 and February 14, 1997. I received written submissions from Mr. Graham dated January 29, 1997.

Present at the Hearing:

Applicant:

Glenn Graham

Mr. Graham's Representative:

Darrell P. March Barrister and Solicitor

State Farm's Representative:

Brad Hartley Barrister and Solicitor

State Farm's Officer:

William R. Langille

Witnesses:

1. David S. Wilson

2. William R. Langille

Exhibits:

The exhibits are set out in Appendix A to this decision.

Reasons for Decision:

1. Were the issues between the parties resolved at mediation?

The mediation was conducted by way of telephone conference call on December 4, 1995 between the mediator and the parties. Mr. Graham participated, represented by Mr. David S. Wilson. Mr. William G. Langille, Claims Supervisor, participated on behalf of State Farm.

Mr. Graham claims that at mediation, it was agreed that State Farm would treat him as a person entitled to receive benefits under the Schedule. In particular, he alleges that State Farm agreed that it would pay him weekly income benefits once he complied with the following two conditions: (1) that Mr. Wilson (on his behalf) send State Farm a copy of the March 1, 1995 letter from the WCB, denying him workers' compensation benefits; and (2) that he assign to State Farm any workers' compensation benefits to which he may become entitled in the future as a result of the accident of January 29, 1993.

Mr. Graham also claims that State Farm agreed to pay him supplementary and medical benefits, provided it was satisfied that the expenses submitted were reasonable and necessary.

Mr. Graham submits that he complied with the two conditions, but State Farm has refused to pay any accident benefits.

State Farm submits that it has taken the position that Mr. Graham was entitled to workers' compensation benefits since it learned about the circumstances of Mr. Graham's accident, and maintained this position during mediation in December 1995. State Farm submits that at mediation it agreed to pay Mr. Graham interim benefits under section 21 of the Schedule only on the understanding that this section in fact applied, i.e., that Mr. Graham's claim for workers' compensation benefits had been rejected by the WCB, and there was an outstanding dispute between Mr. Graham and the WCB as to whether Mr. Graham was in the course of his employment at the time of the accident. State Farm submits that as a pre-condition to paying Mr. Graham any benefits, it asked Mr. Wilson (who was then representing Mr. Graham) to send State Farm a copy of the letter from the WCB, detailing why it had rejected Mr. Graham's claim for workers' compensation benefits.

State Farm submits that the WCB letter, received following mediation, indicated that there was no outstanding dispute about Mr. Graham's entitlement to workers' compensation and, in fact, Mr. Graham's claim for health care benefits had been allowed. The WCB had denied Mr. Graham's claim for lost time benefits only on the basis that Mr. Graham's disability, after he terminated work in August 1993 (approximately eight months after the accident), was not related to the accident.

State Farm submits that in light of this information it is not obliged to pay any accident benefits.

The parties never reduced their agreement, or the basis of the agreement, to writing.

In the appeal decision Aggarwal and Allstate Insurance Company (June 30, 1994), OIC P-002621, the Director of Arbitrations, Elisabeth Sachs, stated that where a party challenges the notion that settlement of a particular issue was reached in mediation, the reference point is the Report of Mediator. Although it is not necessarily the determining factor, if the report is clear and unambiguous, it will lend weight to the position of the party asserting a settlement was reached on the terms set out in the report.

Mr. Graham submits that the Report of Mediator accurately sets out the agreement reached by the parties. Under the category "Issues Resolved," the Report of Mediator states:

Issue: Weekly Benefits

Details: Entitlement/Eligibility for Benefit

Mr. Glenn Graham was involved in a motor vehicle accident on January 29, 1993, and submitted an application for benefits to the State Farm Mutual Automobile Insurance [ "State Farm"], pursuant to the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 ("SABS").

Mr. Graham had received no weekly benefits to date. Mr. Graham claimed entitlement to weekly benefits at the rate of $614.80 per week from August 14, 1993 and ongoing pursuant to s. 12(1) of the SABS.

In an effort to resolve this dispute, Mr. Graham and State Farm agreed that:

i) Mr. Graham's lawyer, David Wilson, will send to State Farm the Workers' Compensation Board's letter dated March 1995 refusing to pay Mr. Graham benefits.

ii) Mr. Graham will sign the appropriate assignment pursuant to s. 21(1) of the SABS that assigns to State Farm any benefits under the workers' compensation law to which Mr. Graham may become entitled as a result of the motor vehicle accident.

iii) When steps i) and ii) are complied with, State Farm will pay Mr. Graham a weekly income benefit at the rate of $614.80 per week from August 14, 1993 and ongoing, subject to State Farm satisfying itself that the definition of 'gross weekly income' pursuant to s. 12(4)(b) of the SABS includes 6% vacation pay, and that the correct collateral benefit received by Mr. Graham for the period August 28, 1993 to December 15, 1993 was $580.00 and for the period December 16, 1993 and ongoing was $435.00.

Issue: Supplementary Med\Rehab Ben - Section 6

Details: Medical Services/Expenses

Mr. Graham claimed entitlement to the cost of various medical and rehabilitation expenses pursuant to s. 6(1) of the SABS.

In an effort to resolve this dispute, the parties agreed:

i) Mr. Graham's lawyer will forward to State Farm an accounting of the medical and rehabilitation expenses that Mr. Graham's collateral insurer, Great West Life, has refused to pay.

ii) State Farm will review this and determine what amounts, if any, it will pay for.

I do not find the Report of Mediator very helpful. It indicates that Mr. Graham and State Farm agreed that State Farm would pay interim benefits under section 21 of the Schedule if certain steps are taken by Mr. Graham. That such an agreement was reached at mediation is not disputed by State Farm. State Farm claims that it entered into the agreement based on the incorrect understanding that Mr. Graham's claim for workers' compensation benefits had been denied by the WCB in its entirety. Thus the issue is whether there was a misunderstanding between the parties of the basis of the agreement to pay Mr. Graham interim benefits, pursuant to section 21(1) of the Schedule and, if so, whether State Farm should be held to the agreement in these circumstances.

The Report of Mediator does not set out the basis for the agreement. It does not indicate the understanding or intentions of the parties when they entered into the agreement and, specifically, it does not indicate why State Farm would agree to pay Mr. Graham interim benefits under section 21 of the Schedule, when ostensibly in law it was not required to do so. Thus, it is necessary for me to look behind the Report. I must attempt to glean the understanding or intentions of the parties through their conduct and statements prior to, at, and after mediation.

Mr. Graham applied for statutory accident benefits in March 1994, more than a year after the accident.² In his Application for Accident Benefits,³ Mr. Graham indicated that he had been involved in an automobile accident on January 29, 1993 and that it occurred at 7:20 a.m. while he was in the course of his employment in the employee parking lot of his employer, Westburne Supply.

After receiving the Application for Accident Benefits, and obtaining a statement from Mr. Graham,⁴ State Farm denied Mr. Graham's claim on the basis that he was entitled to receive benefits under a workers' compensation law or plan.⁵

Mr. Graham took no further action in respect of his claim for accident benefits until he applied for mediation in early November 1995.⁶ However, in the interim, he issued a statement of claim in the Ontario Court (General Division) on January 18, 1995 against the driver and owner of the vehicle that he alleged struck his automobile in the accident.⁷

Mr. Graham also applied to the WCB for benefits. A letter from the WCB dated March 1, 1995 indicates that Mr. Graham's claim was allowed for health care benefits only. His claim for lost time benefits was denied because he "...delayed in laying off work until approximately eight months after the accident" and "[b]ased on the medical information, there [was] nothing to support that the lost time eight months later [was] related to [the] initial incident of January 29, 1993."⁸

After Mr. Graham filed his Application for Mediation with the Ontario Insurance Commission and before mediation took place, there was some written and verbal communication between the parties.

Mr. Wilson sent State Farm a letter dated November 20, 1995 with enclosures.⁹ The letter focused on the quantum of the weekly income benefits to which Mr. Graham was entitled. Although Mr. Wilson did not make any submissions in the letter in respect of Mr. Graham's medical condition, he enclosed numerous medical reports. Mr. Wilson's letter did not address the basis of State Farm's denial of benefits (i.e., entitlement to workers' compensation benefits) nor did Mr. Wilson enclose a copy of the letter from the WCB.

Mr. Wilson testified, however, that prior to mediation he had a conversation with the State Farm's adjuster on the file, Mr. Bahram Behrouzi. Mr. Wilson testified that he believes that in that conversation he informed Mr. Behrouzi that Mr. Graham's claim for workers' compensation benefits had been turned down. Mr. Wilson testified that State Farm would have also been aware that Mr. Graham's claim for workers' compensation benefits had been turned down and the reason for the denial from the material that he sent State Farm prior to mediation. While the package of material that he sent to State Farm did not include the WCB letter, it included a report from a Dr. James E. Sweeney, psychologist, dated June 9, 1995, wherein Dr. Sweeney indicates that Mr. Graham's claim for workers' compensation benefits had been denied on the basis of the lack of a causal relationship between the accident of January 29, 1993 and the absence from work commencing eight months later.¹⁰

The WCB had not ruled Mr. Graham ineligible for workers' compensation benefits. While the WCB had denied Mr. Graham's claim for lost time benefits, it had allowed his claim for health care benefits. Accordingly, I find that Mr. Wilson's representation to Mr. Behrouzi was inaccurate.

Mr. Langille was the supervisor of the adjuster assigned at State Farm to handle Mr. Graham's claim for accident benefits, and as noted earlier, he represented State Farm at the mediation. Mr. Langille testified that prior to attending at mediation he did not review the medical reports Mr. Wilson provided because from State Farm's perspective the principal issue at mediation was whether Mr. Graham was entitled to workers' compensation benefits, not Mr. Graham's disability.

I accept Mr. Langille's evidence that prior to mediation State Farm was not aware of the reason why the WCB had denied Mr. Graham workers' compensation benefits.

There is conflicting evidence about what the parties said during mediation.¹¹ Mr. Wilson testified that during the telephone mediation, after setting out his position on the issues of quantum and disability, either Mr. Langille or the mediator asked him about the status of Mr. Graham's WCB claim. Mr. Wilson testified that he referred to the WCB letter and advised Mr. Langille and the mediator that Mr. Graham's claim had been refused. He testified that he informed them that "...there was not much logic to the letter but it was the Board's position that the disability was not related to the accident of January 29, 1993."

The extent to which Mr. Wilson reviewed the contents of the WCB letter, which he alone was privy to is not clear from his testimony. In his examination-in-chief, he testified that he "...briefly summarized the highlights of the letter." Later, in reply to Mr. Langille's testimony, Mr. Wilson testified that he had read significant portions of the letter.

Mr. Wilson testified that Mr. Langille asked for a copy of the WCB letter to confirm that no benefits were being paid to Mr. Graham. Mr. Wilson testified that Mr. Langille asked for the assignment in the event that any appeal by Mr. Graham of the WCB's decision was successful. Mr. Langille was concerned that Mr. Graham not receive double compensation in such an event.

Mr. Wilson testified that in the discussion between the parties during mediation at no time, did the word "entitled" come up, and Mr. Langille made no distinction between Mr. Graham being entitled to claim workers' compensation benefits and being entitled to receive these benefits.

In respect of Mr. Graham's claim for supplementary medical and rehabilitation benefits, Mr. Wilson testified that he and Mr. Langille agreed that the "WCB issue" would not stand in the way of Mr. Graham receiving these benefits. They agreed that Mr. Graham would submit invoices of his expenses, and the expenses would be paid if State Farm was satisfied that they were reasonable and necessary.

Mr. Langille's testimony about what was said by the parties during mediation differs from Mr. Wilson's. Mr. Langille testified that Mr. Graham's entitlement to receive workers' compensation benefits was the central issue for State Farm at mediation and that at mediation he maintained the position that Mr. Graham was precluded from receiving accident benefits because he was entitled to receive workers' compensation benefits.

Mr. Langille testified that during mediation he understood Mr. Wilson to say that section 20 of the Schedule did not apply in Mr. Graham's case because Mr. Graham was not entitled to claim workers' compensation benefits. Mr. Langille testified that he did not understand why Mr. Graham's WCB claim would be denied since the accident occurred on his employer's premises. However, as he understood that entitlement to workers' compensation benefits had been denied by the WCB, and that Mr. Wilson had appealed the WCB decision, he felt that Mr. Graham was entitled to receive interim benefits under section 21 of the Schedule. However, State Farm required hard evidence that the claim had been denied, i.e., the letter the from WCB, and an assignment.

Mr. Langille testified that Mr. Wilson did not tell him that the WCB had found that Mr. Graham had a right to claim workers' compensation benefits, but that his claim for lost time benefits had been rejected based on the medical evidence. Mr. Langille testified that had he been told this, he would have relied on section 20, and would not have agreed to pay him benefits under section 21 of the Schedule.

Mr. Langille testified that only after mediation, when he received a copy of the letter from the WCB, did he learn that the WCB had accepted Mr. Graham's claim for workers' compensation benefits, i.e., that he was in the course of his employment at the time of the accident. He then learned it had allowed his claim for health care benefits, and had only rejected his claim for lost time benefits, on the basis that there was no medical evidence that his lost time off work was related to the accident.

In The Law of Contract,¹² G.H.L. Fridman writes that "(c)ontract depends upon agreement. There must be consensus ad idem." I am not satisfied that there was consensus ad idem in this case. I find that during mediation Mr. Langille did not have an accurate understanding of the WCB's decision concerning Mr. Graham's entitlement to workers' compensation benefits. I accept Mr. Langille's testimony that he understood from Mr. Wilson that the WCB had decided that Mr. Graham was not entitled to claim any workers' compensation benefits on the basis that his accident did not arise from and during the course of his employment. Based on this misunderstanding, Mr. Langille appropriately agreed that State Farm had an obligation to pay interim benefits (if he otherwise qualified for them), under section 21 of the Schedule, upon Mr. Graham providing State Farm with the appropriate assignment. I find that by agreeing to pay Mr. Graham interim benefits under section 21, while Mr. Graham and the WCB resolved the issue of Mr. Graham's entitlement to workers' compensation benefits, Mr. Langille did not abandon, as Mr. Wilson indicated in his testimony, State Farm's position that section 20 of the Schedule applied in Mr. Graham's case. On the contrary, the fact that it requested an assignment pursuant to section 21 of the Schedule, indicates that it did not abandon its position that Mr. Graham was entitled to workers' compensation benefits and, therefore, precluded from receiving accident benefits under section 20 of the Schedule.

Mr. Wilson may not have intended to mislead the mediator or State Farm when he said that workers' compensation benefits had been denied. This may be how he interpreted the letter, based on his understanding of workers' compensation law. In my view, State Farm reasonably interpreted this information to mean that the WCB had denied Mr. Graham's claim for workers' compensation benefits in its entirety and it entered into the agreement based on this understanding.

Mr. Graham submits that the letter from the WCB was sent to State Farm shortly following mediation, but it took State Farm almost three months before it advised him that it was not going to comply with the agreement based on the contents of the letter. In the interim, State Farm approved the assignment to be executed by Mr. Graham.¹³ State Farm's delay in not responding to the WCB letter immediately concerns me.¹⁴ However, I am not satisfied that the delay or the approval of the assignment means that State Farm accepted that notwithstanding the contents of the WCB letter, Mr. Graham was nevertheless entitled to receive accident benefits.

I find that State Farm should not be held to the agreement and is not required to pay statutory accident benefits in accordance with the agreement.

2. Is State Farm required to pay benefits under the Schedule?

A. Is Mr. Graham entitled to receive workers'compensation benefits?

State Farm submits that it is not required to pay benefits under the Schedule to Mr. Graham because he is entitled to receive benefits under the WCA, pursuant to section 20 of the Schedule. Section 20 provides as follows:

20. The insurer will not pay benefits under this Regulation in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any workers' compensation law or plan.

Mr. Graham submits that he is not disentitled from receiving benefits under the Schedule because State Farm "...effectively admitted that Mr. Graham was disabled as a result of the accident of January 29, 1993...".

I find this submission is of little assistance because it is initial eligibility, not disability which is in issue.

Mr. Graham submits that because section 20 is an exclusionary clause, State Farm has the burden of proof.

I agree with Mr. Graham that State Farm has the burden of proof in this case, because it is invoking an exclusionary provision to deny Mr. Graham benefits.¹⁵

Mr. Graham submits that an exclusionary clause such as section 20 of the Schedule should be given a narrow interpretation, and one should resolve any ambiguity in the word "entitled" in section 20, by deciding in favour of the insured person. Mr. Graham submits that section 20 of the Schedule has no application to the facts as presented at the hearing as he is not entitled to receive benefits from the WCB. Mr. Graham submits that the letter from the WCB says "[t]here is no entitlement in this claim for lost time benefits." Mr. Graham also submits that this letter "...documents the position of the Workers' Compensation Board that the injuries sustained by Mr. Graham presented within his application were not related to the accident of January 29, 1993. Consequently, the Board was of the position that Mr. Graham was not entitled to received [sic] Workers' Compensation benefits as a result of the accident."

Mr. Graham submits that I have no jurisdiction to go behind the decision of the WCB because it has exclusive jurisdiction to determine the issue of "entitlement."

I agree with Mr. Graham that the decision of the WCB is determinative of the issue. In particular, I agree with the following comments of Arbitrator Guy Jones in Pavkovic and AXA Insurance (Canada) (December 13, 1995), OIC A-007529:

While I agree that I must ultimately decide whether the Applicant is entitled to benefits under the Schedule, I am of the view that once the Workers' Compensation Board has made a decision on the question of entitlement to workers' compensation benefits, then I as an arbitrator have no jurisdiction to go behind the Board's decision. It is clear that only the Workers Compensation Board can ultimately determine the issue of entitlement to workers' compensation benefits and its decision is therefore determinative of the issue.

However, I disagree with Mr. Graham that the letter from the WCB states that he is not entitled to receive workers' compensation benefits

Even if I were to read the word "entitled" in section 20 of the Schedule narrowly as Mr. Graham is suggesting that I do, i.e., as the denial by the WCB of benefits for any reason, the WCB does not state in the letter that Mr. Graham is not entitled to receive any workers' compensation benefits. The WCB states that Mr. Graham's claim for health care benefits was allowed. The language used in section 20 is broad. Section 20 says: "(t)he insurer will not pay benefits under this Regulation in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any workers' compensation law or plan." [Emphasis added] The section makes no distinction between the types of benefits being received by the insured person. In this case, the section applies because Mr. Graham is entitled to receive health care benefits under the WCA.¹⁶

In any event, I do not accept that the word "entitled" in section 20 of the Schedule should be interpreted as Mr. Graham suggests. As was noted by Senior Arbitrator Frederika Rotter in Salmon and Toronto Transit Commission (Markel Insurance) (December 20, 1991), OIC A-000235, the words of a statute are not restricted to what are sometimes called their "ordinary" or "literal" meanings, but are extended to the most reasonable meaning which can be extracted from the purpose and object of what is sought to be accomplished by the statute. In my view the most reasonable meaning which can be extracted from the purpose and object of section 20 of the Schedule is that the test for "entitled" to workers' compensation benefits, as that word is used in section 20, is that which is set out in section 4(1) of the WCA:

4.-(1) Where in any employment, to which this Part applies, personal injury by accident arising out of and in the course of employment is caused to a worker, the worker and the worker's dependants are entitled to benefits in the manner and to the extent provided under this Act. [Emphasis added]

The wording of section 20 of the Schedule has not been changed by the amendments to the Insurance Act. In Madill v. Chu, 1976 CanLII 32 (SCC), [1976] 71 D.L.R. (3d) 295, the Supreme Court of Canada set out the facts and test necessary to establish "entitled" for the purposes of a provision which contained wording very similar to that found in section 20 of the Schedule:

The singular feature of the present case is that no evidence was adduced by either party at the trial and the record is therefore confined to an agreement as to the existence of facts which disclose that the respondent's injuries were caused while he was in the course of his employment in an industry included in Schedule 1 of the statute...There is no suggestion that his injuries were attributable to any misconduct on his part. These facts, to which the respondent agreed, in my opinion constitute prima facie evidence that the respondent's injury was one for which the accident fund was "liable to pay compensation" and was therefore an injury in respect of which the respondent was entitled to the benefits of the Workers' Compensation Act. [Emphasis added]

The test set out by the Supreme Court of Canada for "entitled" to workers' compensation benefits was whether the worker's injuries were caused while he was in the course of his employment in an industry included in Schedule 1 of the statute and the worker's injuries were ones for which the accident fund was liable to pay compensation. This is essentially the test for entitlement set out in section 4(1) of the WCA.

Mr. Graham submits that the intent of sections 20 and 21 of the Schedule is to prevent double recovery - to prevent the possibility of an insured person receiving both workers' compensation benefits and statutory accident benefits at the same time as a result of the same accident. In this case, in view of the fact that he (Mr. Graham) is not receiving workers' compensation benefits as a result of the accident of January 29, 1993, "...it is incumbent upon the [insurer] to confer a benefit on Mr. Graham and to provide some basic compensation irrespective of the fault of the accident. (He) has no other resources for benefits other than from State Farm."

The interpretation of "entitled" proposed by Mr. Graham would allow everyone contemplated in section 20 of the Schedule to be eligible to receive "interim" benefits under the Schedule where their benefits have been denied by the WCB for any reason. I cannot accept that this was the result contemplated or intended by section 20 of the Schedule. I believe that the intent of section 20 of the Schedule was more than to prevent double compensation, as Mr. Graham suggests, but rather to keep work-related automobile accidents entirely out of the statutory accident benefits scheme.¹⁷

In Davis v. Pafco Insurance Company Limited (February 3, 1997), OIC A-000640, the applicant made a similar argument to that being made by Mr. Graham. In that case, the applicant was injured in an automobile accident while at work. He elected and received workers' compensation benefits for a period of time. The benefits were terminated by the WCB on the basis that he was able to resume his pre-accident employment. The applicant returned to work, but was let go shortly thereafter. He then applied for benefits under the Schedule from the automobile insurer. The insurer refused to pay benefits on the basis that the applicant was entitled to claim workers' compensation benefits. The applicant argued that the insurer was required to pay statutory accident benefits because he was no longer receiving workers' compensation benefits. He submitted that section 76(1) of the Statutory Accident Benefits Schedule - For Accidents from January 1, 1994 to October 31, 1996 (which is identical to section 20 of the Schedule) only disallowed the simultaneous receipt of benefits from both sources. In that case Arbitrator Deena Baltman disagreed, stating that the wording of section 76(1):

...[does not] permit an applicant to re-elect accident benefits after exhausting his claim for WCB benefits. Such conduct would allow an applicant access to more than one source of benefits for the same injury, and thereby defeat the legislative goals of economy and simplicity.

I agree with Arbitrator Baltman's comments and believe they are applicable to section 20 of the Schedule.¹⁸ I also agree with Arbitrator David Draper in Roblin and The Co-operators General Insurance Company and Zurich Insurance Company (March 14, 1994), OIC A-004942, that "...someone who is entitled¹⁹ to workers' compensation benefits as a result of an automobile accident must look to the Workers' Compensation Board for all of his or her statutory benefits and not to the insurer. The only exceptions are set out in section 21."

Mr. Graham relied on the decision of the Ontario Court of Appeal in Stante v. Boudreau (1980) 1980 CanLII 1875 (ON CA), 29 O.R. (2d) 1 and Chrappa v. Young-Huem Ohm et al. (unreported) (May 1995) in support of his interpretation of the word "entitled". I did not find these decisions helpful in interpreting the word "entitled" in the context of section 20 of the Schedule. The courts in these cases were interpreting the word "entitled" in a different context - in the context of section 267 of the Insurance Act (previously section 237 of the Insurance Act) - the collateral source rule.

In my view, the letter from the WCB indicates that the WCB accepted that Mr. Graham had sustained personal injury by accident arising out of and in the course of employment on January 29, 1993. Therefore, he is entitled to workers' compensation benefits within the meaning of section 20 of the Schedule. Since I have determined that Mr. Graham is "entitled" to workers' compensation benefits, the workers' compensation exclusion in section 20 applies, and State Farm is not required to pay any benefits under the Schedule, unless the exceptions in section 21 apply.

B. Do the exceptions in section 21 apply?

Mr. Graham submits that even if I find that he is entitled to receive benefits under the WCA, State Farm is still required to pay benefits under the Schedule, pursuant to section 21(1) of the Schedule. Section 21(1) of the Schedule states:

21.(1) Despite section 20, the insurer will pay full benefits under this Regulation to a person described in that section until the resolution of any action brought by the person in any court to recover for personal injuries resulting from the accident under which the workers' compensation claim arose or until the person receives payments under a workers' compensation law or plan if,

(a) the person makes an assignment to the insurer of any benefits under any workers' compensation law or plan to which he or she is or may become entitled as a result of the accident; and

(b) the administrator or board responsible for the administration of the workers' compensation law or plan approves the assignment.

Mr. Graham submits that section 21(1) specifically states that an insurer is required to pay full benefits under the Regulation "...until the resolution of any action brought by the person in any court to recover damages for personal injuries resulting from the accident..." Mr. Graham submits that he adduced evidence at the hearing of an outstanding action commenced by him against the tortfeasor to recover damages. This action has yet to be resolved.

State Farm contends that Mr. Graham cannot gain entitlement to statutory accident benefits by bringing an action which has no prospect of success because his right to maintain an action in tort against the operator and owner of the Sprint Electric vehicle has been taken away by section 10(9) of the WCA. State Farm relies on the decision of the Director's delegate in Salmon and Toronto Transit Commission (June 29, 1992), OIC P-000235, in support of this proposition.

In Salmon and Toronto Transit Commission, the Director's delegate held that a person could not gain entitlement to statutory accident benefits by bringing an action which had no prospect of success under the Insurance Act. The Director's Delegate noted, however, that entitlement to statutory accident benefits should only be removed on the grounds that the person had not brought a bona fide action in the clearest of cases.

Section 10(9) of the WCA takes away a Schedule 1 worker's right of action against another Schedule 1 employer, executive officer, director and worker where the worker and the worker of the other Schedule 1 employer "were in the course of their employment at the time of the happening of the injury."²⁰

There is no dispute that Mr. Graham was an employee of a Schedule 1 employer.²¹ State Farm contends that the other vehicle involved in the accident was a Sprint Electric vehicle operated by an employee of that business who was on Westburne Supply's premises as a customer, i.e., also in the course of his employment, at the time of the accident. State Farm submits that Sprint Electric, as an electric contractor, falls in Class 22²² as well as Class 24²³ of Schedule 1 of the WCA. Therefore, State Farm submits that Mr. Graham, a Schedule 1 worker, cannot maintain an action against the owner and operator of the Sprint Electric vehicle.

State Farm submits that Mr. Graham's inability to maintain an action against the owner and the operator of the Sprint Electric vehicle is the reason why he has made no effort to prosecute the tort action in any fashion. State Farm submits that to date now four years after the accident and two years after the claim was issued and one-and-a-half years after service of the claim on the defendants,²⁴ nothing has been done to proceed with the action.

Mr. Graham disagrees. He submits that the only significant evidence on the question of whether he has commenced an action which cannot succeed as a consequence of section 10(9) of the Schedule was that of Mr. Wilson, which was not contradicted. Mr. Wilson testified that he had no knowledge that the operator of the Sprint Electric vehicle was a Schedule 1 employee in the course of his employment at the time of the accident. Therefore, it is far from clear that his action will fail as submitted by State Farm.

Mr. Graham submits that the delay in the prosecution of the action was due solely to the fact of the length of time that is required to be able to prove the existence of an injury which meets the verbal threshold in section 266 of the Insurance Act.

In this case, I believe that I need not consider the question of whether Mr. Graham's right of action against Paul McQuade and Donald Walter Mazepa operating as Sprint Electric has been taken away under the WCA. I also believe that I need not consider the question of whether he has brought a bona fide action against Paul McQuade and Donald Walter Mazepa operating as Sprint Electric.

Where an injured worker's right to sue has not been taken away by the WCA, section 10(1) of the WCA requires that the worker must elect to sue or claim workers' compensation benefits. He cannot both sue and receive workers' compensation benefits. An injured worker who chooses to sue forgoes any right to receive workers' compensation benefits for the duration of the lawsuit but would be eligible to apply for statutory accident benefits from his or her automobile insurer. Conversely, an injured worker who chooses to receive workers' compensation benefits is not eligible to apply for statutory accident benefits. As noted recently by the Director's delegate Susan Naylor in Rocchetti and Royal Insurance Company of Canada (June 3, 1997), P96-00044:

It is important to note that the regulations do not confer a right on an insured to chose between statutory accident benefits and workers' compensation. The right of election is within the workers' compensation regime - the right to elect between claiming workers' compensation benefits or instituting an action in tort - a consequence of which may give rise to eligibility for accident benefits.

Pursuant to sections 10(6) and 9(1) and (2) of the WCA, a notice to elect compensation is required to be given to the WCB within three months after the happening of the accident or such longer period as the WCB may allow. The WCA does not prescribe any formal method of election. In light of this, in my view, the claiming of workers' compensation benefits by an injured worker indicates that he or she has elected to claim workers' compensation benefits.²⁵

In this case, I find that Mr. Graham elected to receive workers' compensation benefits. The evidence indicates that Mr. Graham applied for²⁶ and was entitled to receive²⁷ some workers' compensation benefits (health care benefits) before he commenced his action against the tortfeasor in January 1995. I was presented with no evidence by Mr. Graham indicating that after applying for workers' compensation benefits he delivered a notice to the WCB to withdraw his election to claim workers' compensation benefits before commencing the court action against the owner and driver of the other vehicle involved in the January 29, 1993 accident or that the WCB consented to the withdrawal of his claim for workers' compensation benefits. On the contrary, Mr. Wilson testified that Mr. Graham was appealing the WCB's decision denying him lost time benefits as a result of the accident. This confirms that Mr. Graham has not withdrawn his election claiming workers' compensation benefits.

Since Mr. Graham has elected to receive workers' compensation benefits, State Farm is not required to pay statutory accident benefits pursuant to the first branch of section 21(1) of the Schedule.²⁸

Mr. Graham submits that, like section 20, section 21 of the Schedule is an exclusionary clause and it is State Farm's responsibility, and not his, to establish that he does not fall within the exceptions in section 21(1) of the Schedule. I disagree. As section 21(1) provides for very specific exceptions to the general exclusion set out in section 20, the onus is on the insured person to prove that he or she can satisfy the requirements of section 21(1) of the Schedule²⁹ In this case, Mr. Graham has not established that he falls within the first branch or exception in section 21(1) of the Schedule.

Mr. Graham also submits that he falls within the second exception in section 21(1) of the Schedule. He submits that even though it may be determined that he was entitled to receive workers' compensation benefits, he has not received any payments from the WCB. Mr. Graham submits that section 21(1) includes the obligation for the insurer (here State Farm) to pay benefits until such time as any dispute between Mr. Graham and the WCB is resolved.

Mr. Graham submits that he has complied with all the requirements of section 21 - he has executed and forwarded to State Farm an assignment of any benefits that he is to receive under the workers' compensation law or plan to which he is or may become entitled as a result of the accident.

The second exception to section 20, as set out in section 21(1) reads as follows: "Despite section 20, the insurer will pay full benefits under this Regulation to a person described in that section ...until the person receives payments under a workers' compensation law or plan...." This section specifically states that it should be read in the context of section 20 of the Schedule. I agree with State Farm that when read in the context of section 20 of the Schedule this exception applies in a situation where the issue of whether the worker suffered a personal injury by accident "arising out of and in the course of his employment" is to be determined by the WCB or where there is a dispute between the worker and the WCB on this issue and the worker is appealing the WCB's decision. It does not apply in a situation, such as the one here, where the WCB has already determined that the worker has suffered a personal injury by accident "arising out of and in the course of his employment" and has even allowed his claim for certain benefits and the only dispute between the worker and the WCB is based on the medical evidence available and his or her ability to qualify for certain other types benefits. Mr. Graham's remedy, if any, lies not with the automobile insurer but with the WCB and the Workers' Compensation Appeals Tribunal.

In Automobile Insurance In Ontario, Allan O'Donnell explains the intent of this second exception in section 21(1) as follows:

In a small percentage of cases the automobile insurer may believe that its insured was a worker in the course and scope of his employment at the time that the injury occurred whereas the Workers' Compensation Board will be of a different view or may not have made up its mind at all. So that the insured worker does not fall between two stools, the government had to determine which of the Workers' Compensation Board or the automobile insurer should be paying benefits to the worker while the dispute was resolved. The decision was that automobile insurers should pay no-fault benefits under the automobile policy while the automobile insurer, the worker and the Workers' Compensation Board resolved the question as to which one of them was liable to pay benefits to the worker...

In conclusion, I find that Mr. Graham does not fall within the second branch or exception in section 21(1) of the Schedule.³⁰ Accordingly, State Farm is not required to pay him statutory accident benefits under section 21 of the Schedule.

Order:

1. The issues between the parties were not settled at mediation.

2. Mr. Graham is precluded from receiving benefits under the Schedule because he is entitled to receive benefits under the WCA.

3. Mr. Graham is not entitled to interim payments under section 21 of the Schedule.

June 30, 1997

Shemin Manji Arbitrator

Date

APPENDIX A

Exhibit 1

Applicant's Document Brief

Exhibit 2

Letter from WCB dated March 1, 1995

Exhibit 3

Assessment of Claim by Insurer dated May 6, 1994

Exhibit 4

Statement of Claim - Ontario Court (General Division) between Graham and Graham v. McQuade and Mazepa operating as Sprint Electric, dated January 18, 1995, Court File No. 95-CQ - 59939

Exhibit 5

Application for Accident Benefits of Mr. Graham dated February 8, 1994

Exhibit 6

Medical Report of Dr. Jane Howell dated February 10, 1994

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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Although the Application for Accident Benefits is dated February 8, 1994 (Exhibit 5), it was enclosed with letter from Mr. Wilson to State Farm dated March 22, 1994 - Exhibit 1, Tab 2
3. 3The Application for Accident Benefits is dated February 8, 1994 - Exhibit 5
4. 4Testimony of Mr. William Langille
5. 5Assessment of Claim by Insurer dated May 6, 1994
6. 6Application for Mediation dated November 2, 1995 - Exhibit 1, Tab 3
7. 7Ontario Court (General Division) - Between Glenn Graham and Maureen Graham and Paul McQuade and Donald Walter Mazepa operating as SPRINT ELECTRIC, Statement of Claim issued January 18, 1995, Court File 95-CQ-59939 - Exhibit 4
8. 8Letter from the WCB dated March 1, 1995 - Exhibit 2
9. 9Exhibit 1, Tab 4
10. 10Exhibit 1, Tab 4
11. 11Neither party raised the issue of whether evidence about discussions between parties at mediation is admissible. However, I agree with Arbitrator Nancy Makepeace in Love and State Farm Mutual Automobile Insurance Company (October 13, 1993), OIC A-003806, that such evidence is admissible where the issue is the existence or validity of the agreement reached at mediation.
12. 123rd Edition (Scarborough: Carswell Thomson Professional Publishing 1994), at page 247
13. 13Facsimile Cover Sheet from State Farm to Mr. Wilson dated January 10, 1996 - Exhibit 1, Tab 13
14. 14The WCB letter was enclosed with Mr. Wilson's letter to State Farm dated December 8, 1995 - Exhibit 1, Tab 7
15. 15I also said this in Sofantzidelis and AXA Insurance (Canada) (May 7, 1997), OIC A95-000384
16. 16Even though his claim for health care benefits under the WCA has been allowed, he is claiming similar benefits from the automobile insurer at the same time.
17. 17O'Donnell, A., Automobile Insurance In Ontario (Toronto: Butterworths, 1991)
18. 18My decision and reasoning in this case is also consistent with that of Arbitrator Fred Sampliner in Brasil and State Farm Mutual Automobile Insurance Company (March 12, 1996), OIC A-013383
19. 19As I understand the meaning of this word in the context of section 20 of the Schedule and as the word has been defined in Roblin, Brasil and Davis (supra).
20. 20The employers covered by the WCA are listed in two Schedules contained in Regulation 1102. Schedule 1 employers contribute to the Accident Fund and are not individually liable for workers' compensation benefits. Schedule 2 employers are large employers, for example, government ministries and agencies, shipping companies and railways, which pay for workers' compensation benefits directly.
21. 21Mr. Wilson testified that he believed that the WCB accepted Mr. Graham as a Schedule 1 employee.
22. 22Construction, installation or operation of electric power lines, electric power-transmission lines, electric-light systems, electric-light works and electric power plants not included in Schedule 2
23. 232.i. installation of lighting fixtures; and ii. electric wiring of buildings
24. 24Mr. Wilson testified that the statement of claim was served on the defendants in June 1995. He also testified that to date Mr. Graham has not been served with a Statement of Defence.
25. 25My opinion in this respect is consistent with that of the Court in Cooper v. Canadian Northern Ontario Railway Co. [1924] O.L.R. 256.
26. 26Mr. Wilson's testimony (Mr. Wilson testified that he represented Mr. Graham in respect of his claim for workers' compensation benefits sometime between January 1994 and January 1995). See also Workers' Compensation Board Physician's First Report dated May 26, 1994 - Exhibit 1, Tab 4
27. 27Letter from the WCB dated March 1, 1995 - Exhibit 2
28. 28In this case, I have also not considered whether Mr. Graham has complied with other requirements of section 21(1) before he can receive statutory accident benefits because I do not think it is necessary. He must not only elect to sue the tortfeasor instead of taking benefits under the WCA, he must also make an assignment to the automobile insurer paying the statutory accident benefits whereby "top up" provisions as set out in section 8(2) of the WCA are assigned with the consent of the WCB to the automobile insurer paying the statutory accident benefits. There is no evidence in this case that such an assignment was made by Mr. Graham. This is a different assignment from the assignment made where there is a dispute about entitlement to workers' compensation benefits.
29. 29I recently said this in Sofantzidelis and AXA Insurance (Canada) (supra) in the context of section 76(2) of the Statutory Accident Benefits Schedule - Accidents After January 1, 1994 and Before November 1, 1996.
30. 30Again, I have not discussed whether Mr. Graham meets the other requirements of the section i.e. whether he has made an assignment and the assignment has been approved by the WCB, because it is not necessary.