Neutral Citation: 1998 ONFSCDRS 29

FSCO A97-001660

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

WANDA GRAY

Applicant

and

ZURICH INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Issue:

Wanda Gray was injured in a snowmobile accident on January 10, 1994. She received statutory accident benefits from Zurich Insurance Company ("Zurich"), payable under the Schedule.¹ Ms. Gray claimed that the Schedule permitted her to elect to receive loss of earning capacity benefits and applied for arbitration under the provisions of the Insurance Act, R.S.O. 1990, c.I.8, as amended.² Zurich disagreed and requested a hearing to determine this question as a preliminary issue.

The issue in this hearing is:

1. Does the Schedule permit Ms. Gray to elect to claim a loss of earning capacity benefit? Ms. Gray also claims interest on any amounts owing and her expenses incurred in the hearing.

Result:

1. The Schedule does not permit Ms. Gray to elect to claim a loss of earning capacity benefit.

Evidence and Findings:

Background

Wanda Gray sustained significant injuries in a snowmobile accident on January 10, 1994. Her entitlement to caregiver benefits was the subject of an arbitration decision in 1996 in which Arbitrator Palmer found that she qualified for caregiver benefits until January 10, 1996, based on her "partial inability to carry out a normal life," under subparagraph 18(1)3.ii of the Schedule.³

Ms. Gray subsequently notified Zurich that she elected to claim a loss of earning capacity benefits under sub-paragraph 21(1)6. of the Schedule. Zurich did not agree that the Schedule permits her to make such an election.

Analysis

Section 21 of the Schedule obliges an insurer to promptly deliver a written offer with respect to loss of earning capacity benefits in certain circumstances. Ms. Gray claims that she is entitled to such an offer under subparagraph 6 of section 21(1), which provides:

6. The insured person qualified for weekly caregiver benefits under Part IV, is unable as a result of the accident to earn what he or she could reasonably have earned at the time of the accident, elects at any time 104 weeks or more after the onset of the disability in respect of which he or she first qualified for weekly caregiver benefits to be governed by this Part instead of Part IV or V and,

i. continues to qualify for weekly caregiver benefits, or

ii. ceases to qualify for weekly caregiver benefits because there is no longer any person who meets the qualifications set out in subsection 18(5).

The Applicant submits that she "continues to qualify for weekly caregiver benefits"and on this basis is entitled to a loss of earning capacity benefit.⁴

Section 18 of the Schedule states:

18.-(1) An insured person who sustains an impairment as a result of an accident is entitled to a weekly caregiver benefit if the insured person meets the following qualifications:

1. At the time of the accident, the insured person was residing with a person in respect of whom the insured person was the primary caregiver and the person receiving the care was less than sixteen years of age or required the care because of physical or mental incapacity.

2. The insured person was not employed on a full-time basis and was not self-employed at the time of the accident.

3. As a result of and within two years of the accident, the insured person,

i. suffers a substantial inability to engage in the caregiving activities in which he or she engaged at the time of the accident, or

ii. suffers a partial or complete inability to carry on a normal life.

Ms. Gray submits that section 18 of the Schedule creates a deliberate, clear distinction between circumstances in which an insured person qualifies for benefits and circumstances in which benefits are payable. She submits that qualification is a general classification which initially makes an insured person eligible to be considered for benefits, and that additional subsections determine when and for how long an insured who qualifies will actually receive payment of benefits.

For example, while the Applicant may qualify for benefits under subparagraph 18(1)3.ii, weekly caregiver benefits are not payable to her after 104 weeks. She qualifies if she meets the initial conditions to be eligible in section 18(1). Ms. Gray submits that she meets those qualifications and is, therefore, entitled to loss of earning capacity benefits.

I do not agree with the Applicant that she continues to qualify for the caregiver benefit within the meaning of section 18(1) of the Schedule. Paragraphs 1, 2 and 3 of section 18(1) spell out the qualifications which an insured person must meet. One of those qualifications is that the insured person must meet a certain level of disability. Under subparagraph 3, the Applicant must either be substantially unable to engage in caregiving activities or suffer a partial or complete inability to carry on a normal life.

The question of whether the Applicant met either of these tests was adjudicated before Arbitrator Palmer in 1996. In her decision Arbitrator Palmer ruled that Ms. Gray did not meet the test of substantial inability to provide caregiving activities in subparagraph section 18(1)3.i. She stated: "I conclude that, on the evidence adduced at the hearing, after February 14, 1995 [when Zurich terminated Ms. Gray's caregiver benefits], Ms. Gray has not suffered a substantial inability to engage in the caregiving activities in which she engaged at the time of the accident. I so find..."

Arbitrator Palmer concluded that Ms. Gray met the test of a partial inability to carry on a normal life under subparagraph 18(1)3.ii of the Schedule, until January 10, 1996. The arbitration hearing was conducted on April 28, 30 and May 1, 1996. The arbitrator's reasons were released dated August 2, 1996. I find the dates to be significant.

Arbitrator Palmer explicitly found that Ms. Gray's compensable period of disability ended on January 10, 1996, more than three months before the hearing. Ms. Gray did not appeal Arbitrator Palmer's decision. She is bound by the finding made by Arbitrator Palmer that after January 10, 1996, she did not suffer a partial inability to carry on a normal life. There has been no suggestion in the evidence before me that Ms. Gray is suffering a complete inability to carry on a normal life, or has suffered any relapse or significant deterioration in her condition. For these reasons I conclude that Ms. Gray is not entitled to claim a loss of earning capacity benefit.

Expenses

Both parties claim their expenses. Counsel for the Insurer requested the opportunity to make submissions regarding expenses following my decision on the preliminary issue. Ms. Gray should forward her submissions to the Insurer within three weeks of the date of this decision; the Insurer should respond within two weeks of receiving those submissions. Ms. Gray will have a further week to reply to those submissions. The parties should forward copies of their submissions to me. I will issue further reasons on the expenses issue.

Order:

1. Ms. Gray is not entitled to elect to claim a loss of earning capacity benefit.

2. I remain seized of the issue of expenses.

August 31, 1998

Suesan Alves Arbitrator

Date

Appendix

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, on March 6, 1998, before me, Suesan Alves, Arbitrator.

Present at the Hearing:

Ms. Gray's Representative:

Andrew R. Kerr Barrister and Solicitor

Zurich's Representative:

Guy Farrell Barrister and Solicitor

Witnesses:

No witnesses testified. Counsel for each party filed a statement of fact and law and authorities on which they relied, and made oral submissions.

Exhibits:

No documents were filed as exhibits

Footnotes

1. 1The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94 and 781/94. It is called the Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996.
2. 2Effective July 1, 1998, the Ontario Insurance Commission was changed to the Financial Services Commission of Ontario, pursuant to the Financial Services Commission of Ontario Act, S.O. 1997, c.28.
3. 3Gray and Zurich Insurance Company, (OIC A95-000412, August 2, 1996).
4. 4At the time of the accident, Ms. Gray was the primary caregiver of her infant son. There was no sugestion at the hearing that Ms. Gray ceased to qualify for weekly caregiver benefits because she was no longer Cody's primary caregiver, that he did not reside with her, that he no longer required care, or that he was more than sixteen years of age.