Neutral Citation: 1999 ONFSCDRS 97

FSCO A99-000013

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SHARON MCCABE

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Lawrence Blackman, Arbitrator

Heard:

By telephone conference call on May 25, 1999. The Insurer's written submissions were received May 20, 1999. An Agreed Statement of Fact was received on May 21, 1999.

Appearances:

Donald J.C. Elliott for Ms. McCabe Matthew G. Duffy for State Farm Mutual Automobile Insurance Company

Issue:

The parties agree that the Applicant, Sharon McCabe, was injured in a motor vehicle accident on February 21, 1996. The parties further agree that at the time of this accident, the Applicant was employed as an early childhood educator with the Elm Children Centre. Ms. McCabe applied for and received Income Replacement Benefits ("IRBs") of $343.56 per week from State Farm Mutual Automobile Insurance Company ("State Farm"), starting February 28, 1996, pursuant to paragraph 7(1)1 of the Schedule.¹ The parties agree that Ms. McCabe returned to her job as an early childhood educator at the Elm Children Centre on September 11, 1996 and has continued in that job to date. State Farm ended payment of weekly income replacement benefits on September 10, 1996.

The Applicant asserts that at the time of the accident, she was in training to qualify for a better employment position. Ms. McCabe completed this training subsequent to this accident. It is agreed, for the purposes of this preliminary issue only, that subsequent to her return to work as an early childhood educator, Ms. McCabe had an opportunity to take alternate employment as a resource teacher. The parties agree that this position had not been offered to the Applicant prior to this accident. Ms. McCabe asserts that as a result of injuries sustained in this motor vehicle accident, she was physically unable to take this employment opportunity or other better positions.

The parties dispute whether Ms. McCabe is entitled to a Loss of Earning Capacity ("LEC") benefit. The parties were unable to resolve their dispute through mediation and Ms. McCabe applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue, as agreed, is therefore:

If Ms. McCabe were found to be substantially unable to perform the essential tasks of the post-accident employment opportunities available to her, would she be entitled to a Loss of Earning Capacity offer pursuant to paragraph 21(1)1 of the Schedule?

Result:

Ms. McCabe would not be entitled to a Loss of Earning Capacity offer pursuant to paragraph 21(1)1 of the Schedule should she be found to be substantially unable to perform the essential tasks of any post-accident opportunities available to her.

EVIDENCE AND ANALYSIS:

The Schedule allows for four categories of potential initial weekly disability benefits. One of these initial categories is IRBs. As noted above, Ms. McCabe was paid IRBs for somewhat over six months, pursuant to paragraph 7(1)1 under Part II of the Schedule. Entitlement for benefits under this provision requires initially that:

The insured person was employed at the time of the accident and, as a result of and within two years of the accident, suffers a substantial inability to perform the essential tasks of that employment.

The continuing entitlement test for ongoing IRBs is set out in subsection 8(1), also under Part II of the Schedule, and states that:

a weekly income replacement benefit under section 7 is payable during the period that the insured person suffers a substantial inability to perform the essential tasks of the employment in respect of which he or she qualifies for the benefit under section 7.

[emphasis added]

The Applicant claims that she is entitled to an LEC offer from the Insurer pursuant to paragraph 21(1)1 of the Schedule. This provision requires an insurer to deliver a written LEC offer if:

The insured person qualified for weekly income replacement benefits under Part II and continues to qualify for those benefits 104 weeks after the onset of the disability in respect of which he or she first qualified for those benefits.

The Insurer submits that the clear wording of this provision requires it to make an LEC offer only if, at the two-year mark, Ms. McCabe is substantially unable to perform the essential tasks of the employment in which she was engaged at the time of the accident. The Insurer submits that as Ms. McCabe had returned to her pre-accident employment well before the two-year mark and was continuing in that employment at the two-year mark and thereafter, she is not entitled to an LEC offer.

The Applicant submits that the Insurer's approach is fundamentally unfair. She argues that the the Insurer's interpretation of the Schedule penalizes her for returning to her pre-accident employment and denies her compensation for the additional income which she says she would have been able to earn from other post-accident employment opportunities, but for her continuing physical disability resulting from the accident. The Applicant submits that damages for the loss of such employment opportunities would have been available to her under general tort law. I note that under the legislation in effect at the time of this accident, Ms. McCabe would not have recourse for recovery of pecuniary losses in any tort action.

The Applicant, however, was unable to point to any statutory provision in support of her claim that her entitlement to an LEC benefit should be based on her prospective employment opportunities. Rather, the Applicant relied on general principles of equity and fairness.

Although not cited to me, I do note the comments of Laskin J. in Bapoo v. The Co-operators General Insurance Company, (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616 (C.A), who observed that arbitrators had stated that:

unfairness should be addressed by the Legislature, not by the courts. I disagree with their view. Avoiding unjust or unacceptable results is an essential part of the court's task in interpreting statutory language.

However, Laskin J. also stated that:

The modern approach to statutory interpretation calls on courts to interpret a legislative provision in its total context. The court's interpretation should comply with the legislative text, promote the legislative purpose and produce a reasonable and just meaning.

As has been noted in other Commission decisions, the Schedule represents a trade-off between broadening the scope of those who may recover compensation (to include tortfeasors) under this expanded contractual scheme, while at the same time limiting the extent of compensation previously available under tort law. What I am being asked by the Applicant in this case to do is not to comply with the legislative text (which I find in the context of this particular issue to be clear and unambiguous), promote the legislative purpose or produce a reasonable and just meaning, but rather, to rewrite the Schedule in order to afford this particular insured person compensation which has been legislatively circumscribed.

That is not the role of an adjudicator. As has also been noted by this Commission:

an arbitrator has no power to ignore or override the requirements of the No-Fault Benefits Schedule, properly construed, because its provisions may work unfairly in the case of a particular applicant. An arbitrator's jurisdiction is limited to the powers expressly or impliedly conferred by statute.²

I, therefore, find that paragraph 21(1)1 of the Schedule requires State Farm to make an LEC offer if Ms. McCabe both qualified for IRBs (which is agreed) and continues to qualify for those benefits at the two-year mark. I further find that continuing entitlement to IRBs in this particular case requires a retrospective look, as set out in paragraph 7(1)1 and subsection 8(1), to the employment in respect of which Ms. McCabe qualified for IRBs, namely her employment as an early childhood educator with the Elm Children Centre.

Accordingly, even if Ms. McCabe were found to be substantially unable to perform the essential tasks of the post-accident employment opportunities available to her at the two-year mark, that would not be sufficient to entitle her to a Loss of Earning Capacity offer pursuant to paragraph 21(1)1 of the Schedule.

EXPENSES:

The issue of the award of expenses of this proceeding is deferred to the arbitrator at the main hearing, presently scheduled to commence October 18, 1999.

May 31, 1999

Lawrence Blackman Arbitrator

Date