Neutral Citation: 1999 ONFSCDRS 19

FSCO A96-000341

BETWEEN:

JANICE MARK

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Shemin Manji

Heard:

October 29, 30 and 31, 1996, December 23, 1996

January 14, 15, 21, 22 and 23, 1997

June 10, 11 and 12, 1997

September 10 and 11, 1997, and

November 26 and 27, 1997, at the Financial Services Commission of Ontario, Toronto

Final submissions were received on January 2, 1998.

Appearances:

David S. Wilson for Ms. Mark

Claire E. Walker for Dominion of Canada General Insurance Company

Herschel Gold for Mrs. Chi Wah Tang Kwan

Mr. Tik Wan Kwan died as a result of a motor vehicle accident on March 30, 1995. At the time of the accident, Mr. Kwan was living in a common-law relationship with Ms. Mark. Ms. Mark applied for death benefits, as both a spouse and a dependant. Dominion paid Ms. Mark only one-half of the death benefit provided for in subsection 51(1) of the Schedule¹ on the basis that Mr. Kwan had two spouses at the time of his death. Further, Dominion refused to pay a dependant death benefit on the basis that Ms. Mark was not a dependant of Mr. Kwan at the time of the accident. The parties were unable to resolve their disputes through mediation and Ms. Mark applied for arbitration at the Financial Services Commission of Ontario² under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

What is the amount of the death benefit to which Ms. Mark is entitled pursuant to subsection 51(1) of the Schedule?
Was Ms. Mark a dependant of Mr. Kwan at the time of the accident and, therefore, entitled to an additional benefit pursuant to subsection 51(4)(a) of the Schedule?
Is interest payable on all the death benefits to which Ms. Mark is entitled, including the payments already made to her?

Ms. Mark is entitled to one-half of the benefit under subsection 51(1) of the Schedule.
Ms. Mark was not a dependant of Mr. Kwan at the time of the accident and therefore is not entitled to an additional benefit under subsection 51(4)(a) of the Schedule.
Dominion shall pay interest on one-half of the minimum benefit of $25,050 for the period August 8, 1995 to January 15, 1996. Dominion shall pay interest on the further sum of $12,661.44 for the period December 13, 1995 to July 3, 1996 and July 23, 1996 to November 14, 1996. Dominion shall pay interest at the rate set out in section 68 of the Schedule.

1. What is the amount of the death benefit provided for in subsection 51(1) of the Schedule to which Ms. Mark is entitled?

On March 30, 1995, Mr. Kwan was struck by a vehicle while crossing a street. He was in a coma for a week then died on April 6, 1995. At the time of the accident, Mr. Kwan was 82 years old. He had lived in a common-law relationship with Ms. Mark since 1980.

The quantum of the death benefit payable under subsection 51(1) of the Schedule is not in dispute. The parties agree that the proper amount based on Mr. Kwan's net weekly income, is $75,422.88. Further, it is not in dispute that Ms. Mark is entitled to claim as a spouse of Mr. Kwan. One-half of the death benefit has been paid to Ms. Mark. The issue is whether at the time of the accident Mr. Kwan had more than one spouse, as subsection 51(7) of the Schedule provides that:

If at the time of the accident the insured person had more than one person entitled to claim as his or her spouse, the payment under subsection (1) shall be divided equally between or among such persons who survive the insured person and who at the time of the death were still spouses of the insured person.

The word "spouse" is defined in section 1 of the Schedule as follows:

"spouse" means either of a man and a woman who,

(a) are married to each other,

(b) have together entered into a marriage that is voidable or void, in good faith on the part of the person asserting a right under this Regulation, or

(c) have lived together in a conjugal relationship outside marriage at some point during the previous year and have lived together in a conjugal relationship outside marriage,

(i) continuously for a period of at least one year...

Dominion submits that Ms. Mark is only entitled to one-half of the death benefit because at the time of the accident Mr. Kwan had two spouses — Ms. Janice Mark and Mrs. Chi Wah Tang Kwan.

The parties agree that Mr. Tik Wan Kwan and Mrs. Chi Wah Tang Kwan lived together from November 1941 to 1976, separating shortly after they arrived in Canada. They also agree that they had seven children born in China and Hong Kong. The issue is whether Mr. and Mrs. Kwan were legally married on November 15, 1941.

Dominion and Mrs. Kwan claim that Mr. and Mrs. Kwan were legally married on November 15, 1941 in Yuen Village in China.

Ms. Mark takes the position that no marriage took place between Mr. Kwan and Mrs. Chi Wah Tang Kwan. Further, she takes the position that although Mr. and Mrs. Kwan lived together as a couple, they did not live as man and wife. Accordingly, she submits that she is entitled to the full amount of the death benefit because she was the only person entitled to claim as Mr. Kwan's spouse at the time of the accident.

I am satisfied that Mr. and Mrs. Kwan were legally married on November 15, 1941 in Yuen Village in China.

The validity of a marriage ceremony is governed by the law of the jurisdiction in which the ceremony took place — the lex loci celebrationis³^, A marriage is valid if it is celebrated in accordance with local custom.⁴

Professor Bernard Luk, an Associate Professor of East Asian History at York University, testified that in China, prior to the formation of the People's Republic of China in 1949, there was no requirement that a marriage be registered with any government authority to be valid. A marriage was valid if performed in accordance with Chinese tradition and custom. The ceremony had to take place before the Elders of the village⁵ in which the groom lived. The ceremony would include the bride and groom kowtowing (bowing) first to Heaven and Earth, then to their ancestors, then to their parents and each other. The bride, accompanied by the groom, would then serve tea to the parents, and blessings would be exchanged. The bride and groom were then considered to be husband and wife. A reception would follow.

I accept Professor Luk's evidence as to what constituted a valid marriage in China in 1941, in the absence of any other expert testimony.

Mrs. Chi Wah Kwan testified that she was married in accordance with Chinese tradition and custom. She testified that she was born in China on September 11, 1922 and was 19 years old at the time of the marriage. She testified that she came to know Tik Wan Kwan as a result of her mother's friendship with Mr. Kwan's aunt. Mrs. Kwan testified that at the time she lived in Wo Chow City. After corresponding with Tik Wan Kwan by letter for a time, she travelled to his village, Yuen Village, to marry him. She testified that she made the long journey from Wo Chow City to Chekhom, a town near Yuen Village, by boat. When the boat arrived in Chekhom, she was met at the shore by Mr. Kwan and his aunt. Mrs. Kwan stayed with Mr. Kwan's aunt for about a week before the wedding. During the week, she travelled to Yuen Village by bicycle to meet Mr. Kwan's parents.

Mrs. Kwan testified that her parents were not able to attend the wedding. It was wartime and the city in which they lived, Macaw, was occupied by the Japanese, therefore, travel to Yuen Village was not possible.

Mrs. Kwan testified that on the morning of November 15, 1941, she dressed in a traditional red wedding gown covered with flowers and made of material similar to silk. This wedding dress was sent to her by her mother. She testified that she was transported from Mr. Kwan's aunt's home in Chekhom to Mr. Kwan's parents' home in Yuen Village by sedan chair, carried by four men. When she arrived at the front door of the house, Mr. Kwan came out and accepted her into the house. She was taken to a room to wait while the wedding decorations were being prepared. When everything was ready, the ceremony began with she and Mr. Kwan kneeling down together and praying. They kowtowed three times to worship the gods and the ancestors. They then kowtowed to Mr. Kwan's parents. They served tea to Mr. Kwan's parents. She and Mr. Kwan were then given "lucky money" by Mr. Kwan's parents. Mr. Kwan and his mother gave her a ring and other jewellery.

Mrs. Kwan testified that a great number of people from the village and Mr. Kwan's close relatives were present at the marriage ceremony.

Mrs. Kwan testified that after the wedding a banquet was hosted by Mr. Kwan's parents, to which all the people in the village were invited. This reception took place in a temporary bamboo structure which had been erected in the village. Afterwards, she returned to Mr. Kwan's parents' house with her new husband.

Mrs. Kwan testified that she stayed in the village with Mr. Kwan for a few days after the wedding. After that Mr. Kwan, who was in the army, travelled around China a great deal. Mrs. Kwan travelled with him at all times.

I accept Mrs. Kwan's testimony. Although I had difficulty with some of Mrs. Kwan's testimony at the hearing, I found her credible in respect of her testimony that she and Mr. Kwan were married on November 15, 1941, in Yuen Village. Her testimony was consistent with other evidence adduced at the hearing.

Mrs. Kwan's testimony of the marriage ceremony is supported by the testimony of Mr. Kam Foo Kwan.⁶ I found Mr. Kam Foo Kwan to be a sincere and credible witness. Mr. Kam Foo Kwan is a retired businessman and the past president of the Hong Kong Chinese Association. He testified that he is from the same village as Mr. Tik Wan Kwan and was present at Mr. and Mrs. Kwan's wedding. He was 24 years old at the time. Mr. Kam Foo Kwan's evidence was consistent with Mrs. Kwan's in respect of the details of the marriage ceremony. In addition, he testified that there were at least 50 to 60 people from the village at the marriage ceremony, both young and old, and that the marriage ceremony was very similar to other Chinese marriage ceremonies he had attended in China before he left China in 1949.

Mr. Kam Foo Kwan also testified that, as an officer in the military in November 1941, Mr. Kwan was well respected in the community. Mr. Kam Foo Kwan testified that at the time it was not customary in China for couples to live together when they were not married. They would lose the respect of the community and be viewed as "a wild couple". Further, their children would not be recognized by the Elders of the village as children of the family.

Mrs. Kwan's testimony in respect of the marriage ceremony is also supported, in part, by the evidence of Ms. Kwan Har Ing.⁷ Although parts of Ms. Kwan Har Ing's testimony were inconsistent with a prior statutory declaration that she had signed and I had difficulty with some of her evidence, I found her testimony in respect of the marriage ceremony credible. It was consistent with that of Mr. Kam Foo Kwan.

Ms. Kwan Har Ing was born in Yuen Village on May 24, 1934. She testified that she attended at Mr. and Mrs. Kwan's marriage. Although she was only seven years old at the time, she recalls the wedding. Specifically, she recalls Mrs. Kwan being brought into the village in a sedan chair. She was part of a group of young girls who were to meet Mrs. Kwan when she arrived. She testified that she was not present for the entire marriage ceremony, but recalls seeing both young and old people in the house and she observed Mr. and Mrs. Kwan serve tea to Mr. Kwan's parents and also observed Mr. Kwan's parents giving the couple a "lucky money" envelope.

Neither Mrs. Kwan nor Mr. Kam Foo Kwan nor Ms. Kwan Har Ing specifically referred to the Elders of the village being present at the marriage ceremony, although Mr. Kam Foo Kwan and Ms. Kwan Har Ing testified that they recalled both young and old people from the village being present. However, I am satisfied, based on this testimony and on other evidence, that on November 15, 1941, Chi Wah Tang married Tik Wan Kwan substantively in accordance with Chinese custom and tradition. Specifically, a document entitled "Marriage Certificate" dated April 29, 1996,⁸ which appears to be an official Chinese government document in which a Notary Public, from the Kaiping Notary Public Office, Guangdong Province, The People's Republic of China, confirms that Kwan Tik Wan and Tang Chi Wah (also known as Kwan Tang Chi Wah) were married "...by holding the Chinese traditional wedding in Kaiping City,⁹Guangdong Province on Nov. 15, 1941."¹⁰ Also before me in evidence is a handwritten certificate of marriage from the People's Government of Chikan (Chekhom) Town, Kaiping City, Guangdong Province. This document appears to contain the thumb prints of six villagers who were present at the wedding ceremony, certifying that Kwan Tik Wan and Tang Chi Wah were married on November 15, 1941 in Yuan (Yuen) Village in accordance with the traditional custom of China.¹¹

Ms. Mark submits that the fact that these documents appear to be official Chinese documents is irrelevant. She submits that at best they constitute untested hearsay evidence, and at worst, an attempt to mislead the arbitrator. I disagree. In my view, these documents are relevant and admissible. They are public documents and fall within the public document exception to the hearsay rule.¹² I am entitled to accept these documents as prima facie evidence of the facts to which they certify.¹³

Further, there is evidence that both Mr. Tik Wan Kwan and Mrs. Chi Wah Tang Kwan represented themselves to others as husband and wife prior to the accident. Mr. Tik Wan Kwan's Application for Renewal of a Hong Kong Certificate of Identity is dated June 14, 1974. This document identifies Chi Wah Tang as Mr. Kwan's wife. The "Case Data" for Mr. Tik Wan Kwan's application for government housing in Hong Kong, dated December 14, 1976, identifies him as the tenant and Chi Wah Tang as his wife. Mrs. Kwan's Hong Kong Certificate of Identity, issued in 1963, identifies her husband as Kwan Tik Wan. Mrs. Kwan's "Canadian Immigration Identification Record," completed by her for the purpose of immigrating to Canada and signed by her when she came to Canada in 1975, indicates that she was married and accompanied by her husband Kwan Tik Wan.

Ms. Mark led some evidence to contradict Dominion's claim that a marriage was entered into between Tik Wan Kwan and Chi Wah Tang in November 1941. She produced two unsworn statements allegedly signed by Mr. Kwan's sisters, Guan Rui Qing and Guan Rui Xin. The sisters presently reside in Hong Kong and China and were not able to attend as witnesses at the hearing. The sisters were 10 and 14 years of age in November 1941. The statements are virtually identical. The sisters state that their brother brought Chi Wah Tang Kwan to Yuen Village in November 1941, but that they were together for one day only and no marriage ceremony took place on November 15, 1941 or at any other time, between them.

I cannot give much weight to these unsworn statements because they raise some questions as to the credibility of the sisters. For example, their evidence that they did not attend a marriage ceremony between Mr. and Mrs. Kwan is inconsistent with the testimony of Mrs. Kwan, Mr. Kam Foo Kwan and Ms. Kwan Har Ing that the two sisters were present at the marriage ceremony. Further, the sisters indicate that, after bringing her to Yuen Village, Mr. Kwan did not live with Chi Wah Tang for more than two days, however, they do not explain how the couple managed to have seven children after November 1941. In the circumstances, I prefer the testimony, under oath, of Mrs. Chi Wah Tang Kwan, Mr. Kam Foo Kwan and Ms. Kwan Har Ing and the official Chinese documents on the question of whether a marriage took place on November 15, 1941.

The only other evidence presented by Ms. Mark in support of her position that no marriage took place is her testimony that Mr. Kwan stated to her on a number of occasions that he and Chi Wah Tang had simply lived together and had never been married. However, Ms. Mark's testimony was contradictory. She also testified that Mr. Kwan only mentioned to her that "he had another woman but didn't mention anything else" and in a statement given to Dominion shortly following Mr. Kwan's death, she stated only that she was not aware that Mr. Kwan was officially married to a woman by the name of Chi Wah Tang Kwan.

In the face of significant evidence of a ceremony of marriage followed by a period of lengthy cohabitation by Tik Wan Kwan and Chi Wah Tang Kwan during which they had seven children and also evidence that it was not customary for couples to live together outside marriage at that time in China, I am not prepared to find, based on Mr. Kwan's sisters' statements and Ms. Mark's evidence alone, that no marriage took place between Tik Wan Kwan and Chi Wah Tang.¹⁴Since I have found that a marriage took place between Mr. Tik Wan Kwan and Mrs. Chi Wah Tang Kwan and there is no evidence that a divorce has been granted to either party, I find that at the time of the accident, Mr. Tik Wan Kwan had two persons who were entitled to claim as his spouses — Ms. Mark and Mrs. Chi Wah Tang Kwan. Therefore, in accordance with subsection 51(7), Ms. Mark is only entitled to one-half of the payment pursuant to subsection 51(1) of the Schedule.

2. Was Ms. Mark a dependant of Mr. Kwan at the time of the accident, and therefore, entitled to an additional benefit pursuant to subsection 51(4)(a) of the Schedule?

Subsection 51(4)(a) of the Schedule provides as follows:

(4) If an insured person dies as a result of an accident, the insurer shall pay, in addition to any benefit payable under subsection (1) or (2),

(a) $10,000 to each person who was a dependant of the insured person at the time of the accident;...

Section 4 of the Schedule defines a "dependant" as:

...a person is a dependant of another person if the person is principally dependent for financial support or care on the other person or the other person's spouse.

Ms. Mark claims that she was principally dependent for financial support on Mr. Kwan at the time of the accident.

The words "principally dependent for financial support" have been considered in a number of arbitration decisions. In Towsley and Towsley and Royal Insurance Company of Canada,¹⁵ I set out a number of criteria that have been suggested by the decisions in determining whether an insured person was "principally dependent for financial support," with which I agree, including:

the phrase "principally dependent for financial support" requires more than some financial dependence. It requires principal dependence. The applicant must "chiefly" or "primarily" or "for the most part" derive his or her financial support from that person as opposed to other sources;
the dependence must be financial; the phrase does not refer to other forms of dependence such as social dependence except to the extent that social factors pertain to financial dependence;
the term "financial support" is broad enough to extend beyond money to include the concept of "money's worth" or the reasonable value of goods and services provided and exchanged;
the determination of the nature and degree of dependency is essentially one of fact and requires an assessment of all of an applicant's particular circumstances at the time of the accident to determine whether the applicant was in fact chiefly deriving his or her support from the other person. The actual circumstances must be looked at, not an imputed earning capacity;
the question of dependency requires an assessment of the applicant's particular circumstances in their entirety at the time of the accident; however, the applicant's position cannot be determined solely by a single snapshot of his or her circumstances at that date;
matters such as the amount and duration of the financial dependency, the financial or other means of the applicant, the ability of the applicant to be self-supporting (at the time of the accident) are appropriate considerations for determining the question of financial dependency;
while the ability to be self supporting is a relevant criterion of dependency, nothing in the Schedule suggests that this must be measured with reference to a subsistence-level standard of living; and
the overriding principle governing interpretation of the dependency provisions is that the benefits legislation is remedial and as such should be accorded a broad and liberal interpretation that best meets its objectives.

The onus is on Ms. Mark to prove on a balance of probabilities that she was principally dependent for financial support on Mr. Kwan at the time of the accident.

The evidence is that at the time of his death, Mr. Kwan ran his own business as a Chinese herbalist and that, although he was not declaring the income he earned from this business on his income tax returns, his net income from the business during the 12 month periods ending March 1993, March 1994 and March 1995 was $30,097, $27,639 and $25,471, respectively. In addition, he received various government payments totalling approximately $900 a month. Therefore, Mr. Kwan's gross income in the year prior to his death was approximately $36,000. Ms. Mark testified, however, that Mr. Kwan died leaving an estate of no more than $2,000.

Ms. Mark was 58 years old at the time of the accident. She was not employed. However, she owned a number of assets. She had real estate holdings in which her equity totalled between $115,000 to $143,000.

Ms. Mark owned the home on Deloraine Avenue in which she and Mr. Kwan resided. Ms. Mark inherited this home on the death of her late husband. It was appraised by T. McCormick & Associates, on behalf of the insurer, as being worth between $190,000 and $210,000. I accept this appraisal in the absence of any other evidence.¹⁶ Ms. Mark testified that the outstanding mortgage on this property at the time of the accident was $150,000.

In addition to her home, Ms. Mark also owned property on Grange Avenue. This rental property was appraised by T. McCormick & Associates, as worth between $174,000 to $203,000. Ms. Mark testified that the outstanding mortgage on this property at the time of the accident was at least $200,000. However, the mortgage was paid by her son-in-law.

Ms. Mark also owned a one-half interest in a rental property on Dundas Street West. Her daughter and son owned the other half. This property was appraised by T. McCormick & Associates, as worth $150,000 to $160,000. This property was free and clear of any encumbrances.

In addition to her real estate holdings, Ms. Mark had liquid assets having a value of approximately $101,408. They were made up of the following:

T-bills

$40,000.00

Bonds

$30,000.00

Bell Canada Shares

$ 5,235.00

U.S. Dollar Account

$ 4,553.80

GICs

$12,000.00

RRSP

$ 9,618.95

Ms. Mark's income tax return indicates that her total income in 1995 was $18,037.03. This consisted of income of $3,491 from the Canada Pension Plan,¹⁷ interest and other investment income of $6,025.04 and rental income from her two commercial properties of $2,195.73.¹⁸ This amount also included a withdrawal of $6,325.72 from her RRSP.

Ms. Mark submits that although her total income was $18,037.03, the income from the RRSP is not real "income," but is simply a transfer of an asset into "income" and therefore should not be considered "income." Accordingly, she submits that her real income for the year was $11,711.31. I do not accept this submission. In 1995, Ms. Mark had at her disposal or available to her an income of $18,037. The issue in this case is whether and to what extent Ms. Mark was financially dependent on Mr. Kwan at the time of the accident. If at the time of the accident she was converting part of her capital into income in order to meet the couple's ongoing expenses, this should be taken into account.¹⁹

Ms. Mark's income tax return for 1995 indicates that she declared Capital Cost Allowance (depreciation) in the amount of $3,140 and that this amount was deducted from the rental income from her two commercial properties even though she did not in fact expend this money. Dominion submits that depreciation is not an expense but a deduction for income tax purposes, therefore, Ms. Mark had available to her an additional $3,140 above the income of $18,037.03 for a total income of $21,177.03. Ms. Mark disagrees. She submits that it would be inappropriate to deem an amount properly deducted for depreciation as income for the purposes of this proceeding. She submits that, although this expense does not require an immediate cash outlay such as a mortgage payment, this expense represents the fact that the asset may truly be depreciating. I agree with Dominion that Ms. Mark had at her disposal or available to her an additional $3,140. The issue in this case is not what is "income" for income tax purposes, but rather the extent of Ms. Mark's financial dependency on Mr. Kwan at the time of the accident. I find that Ms. Mark's total income in 1995 was $21,177.49.

No evidence was adduced by Ms. Mark as to the specific amounts of her and Mr. Kwan's living expenses, other than the mortgage and property taxes on the home she shared with Mr. Kwan.

Ms. Mark submits that her failure to call evidence with respect to specific amounts should not be fatal to her position as there is other satisfactory evidence available to explain how various expenses were being incurred. In describing the financial arrangement between herself and Mr. Kwan, Ms. Mark identified the specific expenses paid by Mr. Kwan. Ms. Mark submits that her evidence was that Mr. Kwan was "...incurring the cost of the lion's share of the expenses." Mr. Kwan paid for most of the utilities, food, clothing, vacations and hairdressing and, in addition, the full amount of other expenses she identified.²⁰ Ms. Mark submits that from the evidence of Mr. Kwan's income, it may be reasonably inferred that all of his income was being expended to pay for these items, given that there was no evidence of any special "hobbies" or needs on the part of Mr. Kwan, and the fact that he died leaving an estate of no more than $2,000. Ms. Mark submits that even if Mr. Kwan was only spending half of his income on her, that amount would still have approximated some $17,500 to $18,500 annually, an amount which was significantly in excess of her income. She submits that the more preferable way of understanding the financial arrangement, however, was that she and Mr. Kwan each spent their income on specific items. In that the contribution of Mr. Kwan was considerably greater than her contribution, she was, therefore, dependent on Mr. Kwan.

Ms. Mark submits that her case is comparable to that of the applicant in Raffoul and State Farm Mutual Automobile Insurance Company²¹ and the plaintiff in Pagliarella v. Di Biase Brothers Inc.²²

I am not satisfied that Mr. Kwan's financial contribution was greater than Ms. Mark's. Unlike the situations in Raffoul and Pagliarella, this is not a case where support was overwhelmingly flowing in one direction, i.e., from Mr. Kwan to Ms. Mark. The evidence indicates that support was also flowing from Ms. Mark to Mr. Kwan.²³

Mr. Kwan ran his herbalist business from Ms. Mark's property on Grange Avenue. Ms. Mark did not charge Mr. Kwan any rent for the use of the premises. Ms. Mark did collect rental income of $430 per month from Mr. Kwan's son, Albert, who ran an accounting business from this property. As well, a tenant on the second floor paid Ms. Mark rent of $700 per month. Mr. Perry Stewart of T. McCormick and Associates testified that Ms. Mark could have earned an additional $6,960 per year had she charged fair market rent for the premises used by Mr. Kwan's business. I accept his evidence as there was no evidence to the contrary.

Ms. Mark also assisted Mr. Kwan with his business. Ms. Mark testified that she worked with him daily for ten years prior to his death, passing bandages, mixing medicines, cleaning the office and cooking for him at the office. Ms. Mark's testimony in respect of the amount of time she spent daily in the office is confusing.²⁴ My overall impression was that she spent a considerable amount of time with Mr. Kwan at the business. Ms. Mark testified that Mr. Kwan did not pay her for her assistance in the business. Dominion submits that in the circumstances it is reasonable to impute to Ms. Mark some of the business income, given that she helped to generate it. Dominion submits that Mr. Kwan's business income was approximately $28,000 a year. It submits that one-third of Mr. Kwan's business income, or about $9,000 a year, should be imputed to Ms. Mark.

Ms. Mark submits that there is no basis in law for imputing income to her in these circumstances. She submits that, as stated in Raffoul, a determination of dependency requires a realistic assessment of the applicant's actual financial circumstances — the actual circumstances of the applicant must be looked at and not his or her imputed earning capacity.

I agree with the comments made in Raffoul. However, the facts in this case are different. Dominion asks that a value be assigned to the services that Ms. Mark was actually providing to Mr. Kwan's business at the time of the accident. It is not suggesting that Ms. Mark's financial circumstances be based on income that she might have earned if she had worked. As I indicated earlier, previous arbitration decisions have held that the term "financial support" is broad enough to extend beyond money to include the concept of "money's worth" or the reasonable value of goods and services provided and exchanged.²⁵ I agree with Dominion that some value should be attributed for Ms. Mark's assistance to Mr. Kwan's business and that a figure of $9,000 a year is reasonable. She would have earned at least this amount of money if she had been employed full-time and paid minimum wage for the services she provided to Mr. Kwan's business.

Ms. Mark also contributed towards some of the couple's living expenses. She testified that she paid the property taxes of about $2,000 per year from her own income and she paid $1,100 per month towards the mortgage from her rental income on the home she shared with Mr. Kwan. The balance of the mortgage, $250 per month, was paid by her son Edward. Ms. Mark's evidence in respect of her contribution towards some of the couple's other living expenses is vague and I am not able to attach a dollar value to it.

This case illustrates the difficulty of attempting to determine the relative financial contributions of spouses who are essentially interdependent. I believe that Mr. Kwan relied on Ms. Mark's assets, income and services, and Ms. Mark also relied on Mr. Kwan's income to support their lifestyle.

However, overall, the evidence indicates that Ms. Mark's income, in combination with the economic value of the goods and services she was providing Mr. Kwan, was likely equal or greater than the income or benefits she was receiving from Mr. Kwan.²⁶ Accordingly, I conclude that Ms. Mark was not principally dependent for financial support on Mr. Kwan at the time of the accident within the meaning of section 4 of the Schedule. She is therefore not entitled to the additional benefit pursuant to subsection 51(4)(a) of the Schedule.

3. Is interest payable on all death benefits to which Ms. Mark is entitled, including the payments already made to her?

Ms. Mark is entitled to one-half of the death benefit pursuant to subsection 51(1) of the Schedule. The parties have agreed that the proper amount of the full death benefit based on Mr. Kwan's net weekly income is $75,422.88. Ms. Mark is therefore entitled to $37,711.44. Ms. Mark received one-half of the statutory minimum benefit, i.e., the sum of $25,050, on January 15, 1996. She received the balance, i.e., a sum of $12,761.34, on November 14, 1996, which included interest at the rate set out in section 68 of the Schedule from July 4, 1996 to July 22, 1996. The issue is whether she is entitled to any further interest on the amounts paid to her at the rate set out in section 68, i.e., 2 per cent per month compounded monthly?

Dominion takes the position that Ms. Mark is not entitled to further interest.

The scope of the authority to award interest is set out in sections 67 and 68 of the Schedule, which provide as follows:

- (1)...an insurer shall mail or deliver a benefit that is payable under...Part XI, ...to the person entitled within thirty days after the insurer receives an application for the benefit.

(2) An amount payable under...Part XI, ...is overdue if the insurer fails to comply with subsection (1).

If payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue at the rate of 2 per cent per month compounded monthly. [Emphasis added]

In my view, the language of these sections is mandatory. It leaves no room for discretion. If an amount payable under Part XI (the part relating to death benefits) is overdue, interest at the rate set out in section 68 is payable from the date the amount became overdue.

Dominion submits that the words to the person entitled in subsection 67(1) import a requirement that the claimant prove entitlement before the time begins to run under this section.

I do not accept this submission. I do not read the section as imposing any such requirement. Dominion is proposing that I construe the section by adding to it words which are not found in it. I read the provision as stating that no matter when entitlement to a benefit payable under Part IX is proven, once entitlement is accepted or ordered, the applicant is entitled to interest from thirty days after the insurer receives the application for the benefit. It is the insurer, not the insured person, who must bear the consequences of a decision not to pay benefits that are later found to be owing.

Dominion submits that it is open to an arbitrator to find that a benefit is not overdue and that interest is not payable by the insurer where it is shown that it was "impossible for the insurer to determine the correct amount of the benefit payable." Specifically, in respect of Ms. Mark's claim for interest on one-half of the statutory minimum benefit, Dominion submits that this is a situation where the insurer was under an obligation to act in good faith towards two insureds both claiming entitlement to a benefit which the statute requires be split if both can substantiate entitlement. Dominion submits that in the absence of the parties' consent to any of the benefit being paid out, the insurer is under a positive duty not to disburse any funds. It submits that until the competing claimant, Mrs. Kwan, consented to one-half of the death benefit being paid out to Ms. Mark, it could not make the payment. This occurred on November 3, 1995. Dominion submits that upon receiving Mrs. Kwan's consent, it made the payment promptly.

I do not accept Dominion's submission. Mrs. Kwan has never disputed that Ms. Mark is entitled to claim as a spouse of Mr. Kwan's. Accordingly, even if I were to accept Dominion's submission that it is open for me to determine that a benefit is not overdue in these circumstances, I find that the minimum one-half of the death benefit ought to have been paid to Ms. Mark within thirty days after Dominion received the application for the benefit.

In respect of Ms. Mark's claim for an amount in excess of the statutory minimum, Dominion submits that it had no knowledge of a potential claim in excess of the statutory minimum until November 3, 1995, and it had no basis upon which to assess the claim that the death benefit should exceed the statutory minimum until November 8, 1995 at the earliest. Dominion submits that, given the nature of the source documentation underlying Ms. Mark's accountant's report and the limitations contained in the report itself, it could not simply accept as accurate the contents of the report. It was required to retain its own expert. It was not until the pre-hearing on July 4, 1996 that the quantum of the death benefit was settled at $75,422.48. Dominion submits that in the circumstances, it would be grossly unfair to order that interest be paid to Ms. Mark at what it submits to be a punitive rate of 2 per cent per month compounded monthly.

Dominion relies on Director's Delegate David Draper's decision in Economical Mutual Insurance Company and Trendle²⁷ in support of the proposition that it is open to an arbitrator to find that a benefit is not overdue and that interest is not payable by the insurer where it is shown that "it was impossible for (the insurer) to determine the correct amount of weekly benefits payable... "

In Trendle, Director's Delegate Draper was not prepared to treat the increased payments ordered in that case as overdue "...until finally determined through the dispute resolution process, including th(e) appeal." The reason for this was that in that case "...the arbitrator specifically found that 'it was impossible for (the insurer) to determine the correct amount of the weekly benefits payable to Mr. Trendle' without the 'several days of hearing and the careful testimony and documentation of many witnesses to sort through the maze of half truths provided by Mr. Trendle.' "

The decision in Trendle was made in the context of the interest provision in the prior Schedule²⁸ The wording in section 67 of the Schedule is similar but not identical to that found in section 24 of the prior Schedule.²⁹

Further, since the decision in Trendle, Director's Delegate Susan Naylor has issued her decision in Canadian Surety Company and Sebastian.³⁰ In Sebastian, the applicant initially filed no documentation in support of the income stated in his application. Later he reconstructed invoices. The insurer argued that interest at the rate set out in subsection 24(4) of the prior Schedule should not start to run until after it was provided with at least the first set of reconstructed invoices. This was more than two years after the date of the Applicant's application. Director's Delegate Naylor rejected this submission. She stated that section 24 was mandatory. There was no residual authority or discretion. An application is completed when it is filled in, not when sufficient documentation is provided to determine the claim.

My interpretation of the interest provisions in the Schedule is consistent with that of Director's Delegate Naylor in Sebastian.

Dominion submits that very early on, before either party had applied for mediation, it advised both parties that it wished to pay the funds into Court pursuant to section 271 of the Insurance Act. This, it submits, would have terminated its obligation to pay interest at the statutory rate, as of the date of the payment into Court. This course of action was vehemently opposed by both Ms. Mark and Mrs. Kwan. At their specific request, Dominion made no payment into Court.

In my view, notwithstanding the parties' requests, Dominion could have unilaterally applied to the Court for an order for payment into Court pursuant to subsection 271(1) of the Insurance Act. It chose not to do so. In the absence of any evidence that Ms. Mark waived her right to interest at the statutory rate, I have no option but to require that Dominion pay interest on the amount overdue in accordance with section 68 of the Schedule.

In this case, from the documents filed by the parties, it appears that Ms. Mark's application for the minimum benefit provided for in subsection 51(1) of the Schedule, was submitted to Dominion under cover of a letter to Dominion dated July 4, 1995. It is not clear how, or when, the application for the benefit was received by Dominion. In the absence of specific evidence on this point, I will assume that the application was sent by mail and posted on the day it was dated. Under the usual postal rule, five days are allowed for mail delivery. Allowing five days, the minimum benefit was overdue 30 days later, i.e., August 8, 1995. Thus, interest on one-half of the minimum benefit at the rate set out in section 68 is payable from August 8, 1995 to the date of actual payment being January 15, 1996.

In respect of Ms. Mark's claim for an amount in excess of the statutory minimum, the evidence indicates that she first applied to Dominion for the excess amount in a letter from her counsel dated November 8, 1995. Again, it is not clear how or when this letter was received by Dominion. Again I will assume that the letter was sent by mail and posted on the day it was dated. Allowing the usual five days, the excess amount was overdue 30 days later, i.e., December 13, 1995. Thus, interest on the balance of the death benefit at the rate set out in section 68 of the Schedule is payable from December 13, 1995 to July 3, 1996 and July 23, 1996 to November 14, 1996.³¹

EXPENSES:

I did not receive submissions from the parties on this issue. Accordingly, I may be spoken to, if the parties cannot agree on this issue.

January 27, 1999

Shemin Manji Arbitrator

Date