Neutral Citation: 1998 ONFSCDRS 31

FSCO A97-001633

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BETTY WRIGHT

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Issue:

The Applicant, Betty Wright, was injured in a motor vehicle accident on January 6, 1994. She applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule¹ The parties were unable to resolve their disputes through mediation, and Mrs. Wright applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.²

Allstate submits that Mrs. Wright is precluded from receiving income replacement benefits under section 14(2) of the Schedule, because she returned to work for a period longer than 90 days. Mrs. Wright submits that her entitlement to further income replacement benefits is governed by section 14(1) of the Schedule, and that she is not barred from receiving further income replacement benefits.

The issue in this hearing is:

1. Is Mrs. Wright precluded from receiving income replacement benefits after January 28, 1997 by section 14(2) of the Schedule, because she returned to work for a period of more than 90 days?

Mrs. Wright also claims interest on any amounts owing and her expenses incurred in the hearing.

Result:

1. Mrs. Wright returned to employment during the 104 weeks following the onset of disability in respect of which her income replacement benefits were paid. Her entitlement is governed by section 14(1) of the Schedule. Her entitlement to income replacement benefits has not been affected by her return to work. Mrs. Wright may proceed to arbitration with respect to her claims for income replacement benefits, interest and expenses.

2. The expenses of this motion are in the discretion of the hearing arbitrator.

Evidence and Findings:

The parties agree on the relevant facts. They disagree as to whether the provisions of section 14(1) or section 14(2) of the Schedule apply to Mrs. Wright's case.

Mrs. Wright was injured in a motor vehicle accident on January 6, 1994. She was off work completely until August 12, 1994, when she returned to work on a part-time basis. Between August 12, 1994 and August 11, 1995, Allstate continued to pay Mrs. Wright full or partial income replacement benefits. Mrs. Wright worked full-time between August 11, 1995 and January 28, 1997. The parties agree that no weekly income benefits were paid or owed to Mrs. Wright during this period.

Mrs. Wright resigned from her employment on December 19, 1996, initially effective December 23, 1996. She agreed to work for her employer until January 28, 1997 in order to train a replacement. Mrs. Wright claims that her injuries prevent her from working, and that Allstate should resume paying her income replacement benefits. Allstate submits that Mrs. Wright's claim is barred by section 14(2) of the Schedule. Mrs. Wright disputes this, and submits that section 14(1) is the section which is applicable.

Section 14 of the Schedule states:

14.-(1) A person receiving weekly income replacement benefits under this Part may return to or start an employment at any time during the 104 weeks following the onset of the disability in respect of which the benefits are paid without affecting his or her entitlement to resume receiving benefits under this Part if, as a result of the accident, he or she is unable to continue in the employment.

(2) After the 104-week period referred to in subsection (1), a person receiving weekly income replacement benefits under this Part may return to or start an employment for periods of up to ninety days without affecting his or her entitlement to resume receiving benefits under this Part if, as a result of the accident, he or she is unable to continue in the employment.

Analysis

In the case of Michael Morin and The Personal Insurance Company,³ , the Director of Arbitrations adopted Driedger's modern approach to statutory construction,⁴ that "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament." I apply that approach to interpret the provisions of section 14 of the Schedule.

The conceptual framework of the Schedule is one in which entitlement to a benefit is initially conferred, with subsequent sections altering that entitlement, by carving out exceptions. The visual analogy of a piece of Swiss cheese is perhaps apt.

In Fortney and Lombard⁵ Arbitrator Baltman considered the object of the Schedule. She noted that the accident benefit scheme in this Schedule, when compared with its predecessor,⁶"significantly expanded both the range and amount of benefits available to an applicant. At the same time, Bill 164 removed the right to sue in tort for economic loss, no matter how serious the injury. This means that an applicant must recover any economic losses solely from the Schedule." I agree with these observations.

Part II of the Schedule provides that an insured person is entitled to receive a weekly income replacement benefit while substantially disabled from performing the essential tasks of the employment in respect of which he or she qualifies for the benefit.⁷ While at first blush the Schedule appears to confer an absolute entitlement for the duration of disability, subsequent sections limit the payment of the benefit to a period of 104 weeks ⁸ and provide that a benefit is not payable during the first week of disability.⁹ Part VI of the Schedule contemplates that if a person continues to be entitled to receive income replacement benefits 104 weeks after the onset of disability, then an insurer will pay a loss of earning capacity benefit during the lifetime of the insured person, subject to adjustments provided in the Schedule. In most cases this will be a lesser amount than the weekly income replacement benefit. The Schedule sets out a number of other refinements which are not relevant to Mrs. Wright's case.

Section 13 of the Schedule obliges insured persons to return to pre-accident employment or to obtain employment which they are reasonably qualified to perform within the meaning of s.30(2) of the Schedule. Section 13 permits an insurer, on notice to the insured person, to reduce the amount of an income replacement benefit where the insured person fails to make reasonable efforts to comply with these obligations.

While some insured persons will succeed completely in their efforts to return to or obtain employment, inevitably, others will not. In Mrs. Wright's case, she alleges that she returned to work, her condition deteriorated, and she is no longer able to work because of her injuries. The legislature has specified how persons who are unable to remain at work as a result of their injuries will be treated in section 14 of the Schedule.

The Insurer's counsel submitted that the key fact was that the Applicant returned to work full-time as of August 11, 1995, and continued to work on a full-time basis until January 28, 1997. This was a period of approximately one and a half years, and greatly in excess of 90 days, and more than 104 weeks after the onset of disability. Accordingly section 14(2) governed.

I find that under the provisions of section 7 of the Schedule, the onset of a compensatory disability may take place at any point within two years of the accident. The use of the word "receiving" and "104 weeks following the onset of the disability," in section 14(1) both imply that the relevant point in time to be considered is when the insured person returns to work; not the amount of time he or she remains at the job.

In this case Mrs. Wright was not receiving benefits at 104 weeks and did not start working after 104 weeks. I agree with the Applicant, that in these circumstances, when she subsequently ceases work as a result of her injury, section 14(1) of the Schedule permits her to claim an entitlement to resume income replacement benefits, and that Allstate may offer her loss of earning capacity benefits under section 21(1)1 of the Schedule. I do not agree with the Insurer that because Mrs. Wright remained at work for more than 90 days, she is precluded from receiving further weekly income replacement benefits. Nothing in section 14 supports such a construction. Such a construction would discourage early returns to work, which are encouraged under section 13 of the Schedule.

The Insurer submitted that such a construction would mean that the provisions of section 14(2) would never come into play. I do not agree that this result would follow. In my view it is important to construe provisions having regard to the "Swiss cheese" framework of the legislation. Section 14(2) is necessary partly because of the provisions for loss of earning capacity benefits, and partly because persons may by agreement, or otherwise, receive income replacement benefits for more than 104 weeks.

In conclusion, the onset of the Applicant's disability commenced with the motor vehicle accident on January 6, 1994. She initially returned to work on August 12, 1994, within 104 weeks of the onset of her disability. Accordingly section 14(1) governs. Under that section, Mrs. Wright's entitlement to resume receiving income replacement benefits has not been affected. Mrs. Wright is not precluded from proceeding to arbitration with respect to her claims for income replacement benefits, interest and expenses. No request was made to me for expenses at this stage of the proceeding. The expenses of this preliminary motion will be in the discretion of the hearing arbitrator.

Order:

1. Mrs. Wright may proceed to arbitration with respect to her claims for income replacement benefits, interest, and expenses.

2. The expenses of this preliminary motion will be in the discretion of the hearing arbitrator.

August 31, 1998

Suesan Alves

Arbitrator

Date

Appendix

Hearing:

The hearing on the preliminary issue was held at the offices of the Ontario Insurance Commission, in North York, on May 20, 1998, before me, Suesan Alves, arbitrator.

Present at the Hearing:

Mrs. Wright's Representative:

L. Scott Smith

Barrister and Solicitor

Allstate's Representative:

Ian D. Kirby

Barrister and Solicitor

Witnesses:

The hearing proceeded on the basis of an agreed statement of facts and submissions from counsel.

Exhibits:

Exhibit 1

Agreed Statement of Facts

Other Documents Before the Arbitrator:

Pre-hearing letter dated March 17, 1998.

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993, and before November 1, 1996, called "the Schedule" in this decision. The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94.
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. 3Michael Morin and The Personal Insurance Company, (OIC P-00468, February 26, 1993).
4. 4E.A. Driedger, Construction of Statutes (2d Edition), (Toronto: Butterworths, 1983).
5. 5Fortney and Lombard General Insurance Company, ( OIC A97-000553, December 24, 1997).
6. 6Ontario Regulation R.R.O. 672 (the "No-Fault Benefits Schedule").
7. 7Section 8(1).
8. 8Section 8(2).
9. 9Section 8(3).