Financial Services Commission
Commission des services financiers de l’Ontario
Neutral Citation: 2000 ONFSCDRS 124
Appeal P99-00051
OFFICE OF THE DIRECTOR OF ARBITRATIONS
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Appellant
and
PETER KRISTENSEN and WANDA KRISTENSEN
Respondents
Before:
Susan Naylor, Director's Delegate
Counsel:
Philippa G. Samworth (for State Farm)
M. Claire Wilkinson (for Peter and Wanda Kristensen)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal is dismissed and the arbitrator's order dated September 30, 1999 is confirmed.
Peter and Wanda Kristensen are entitled to their appeal expenses.
July 6, 2000
Susan Naylor
Director's Delegate
Date
REASONS FOR DECISION
I. NATURE OF APPEAL
This case arises out of the tragic death of David Kristensen, who was involved in a car crash on November 18, 1996. He died from his injuries the next day. He was 16 years old.
At issue is the death benefit payable to David's parents, Peter and Wanda Kristensen, under s. 25(2) 5. i of the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, O. Reg. 403/96, as amended ("SABS-1996 "). This section provides for "A payment of $10,000 to... a person in respect of whom the insured person was a dependant at the time of the accident."
At the time of the accident, David was living at home and depended on his mother and father for financial support and care. State Farm Mutual Automobile Insurance Company ("State Farm"), which insured Mr. Kristensen's vehicle, paid $8,000 for funeral expenses and a death benefit of $10,000, paid jointly to Mr. and Mrs. Kristensen.
Mr. and Mrs. Kristensen take the position that they are each entitled to a death benefit of $10,000. State Farm accepts that it is liable to pay a death benefit in respect of David's death, but only the one payment.
State Farm relies on decisions under all three statutory accident benefits regimes holding that the death benefit payable in respect of the death of a dependant involves a single $10,000 payment. These are Jarvis and Allstate Insurance Company of Canada, (OIC A95-000399, September 10, 1996) under SABS-19901; Liberty Mutual Insurance Company and Harris, (FSCO P98-00015, November 18, 1998, rev'ing OIC A-00037, March 3, 1998, app. for judicial review pending), under SABS-1994,2 and Sylvia John v. CIBC Insurance, an unreported decision of Kruzick J., dated July 28, 1998, (Ont. Ct.(Gen. Div.)), under SABS-1996. The arbitrator allowed the Kristensens' claims, distinguishing the previous cases. State Farm appeals his ruling.
II. THE STATUTORY CONTEXT
The State Farm policy provides for the statutory accident benefits set out in SABS-1996, including death benefits under s. 25. The relevant provisions state:
25(1) The insurer shall pay a death benefit in respect of an insured person if he or she dies as result of an accident,........
(2) The death benefit shall provide for the following payments:
- A payment to the insured person's spouse of,
i. $25,000, or
ii. [the amount fixed by the optional benefit]
- A payment to each of the insured person's dependants, and to each person to whom the insured person had an obligation at the time of the accident to provide support under a domestic contract or court order, of,
i. $10,000, or
ii. [the amount fixed by the optional benefit]
If no payment is required by paragraph 1, an additional payment of $25,000 to the insured person's dependants and the persons, other than a former spouse of the insured person, to whom the insured person had an obligation at the time of the accident to provide support under a domestic contract or court order, to be divided equally among the persons entitled.
A payment of $10,000 to each former spouse of the insured person to whom the insured person was obligated at the time of the accident to provide support under a domestic contract or court order.
A payment of $10,000 to,
i. a person in respect of whom the insured person was a dependant at the time of the accident,
ii. the spouse of a person in respect of whom the insured person was a dependant at the time of the accident, if the spouse was the insured person's primary caregiver at the time of the accident and the person in respect of whom the insured person was a dependant at the time of the accident dies before the insured person or within 30 days after the insured person, or
iii. the dependants of a person in respect of whom the insured person was a dependant at the time of the accident, if no payment is required by subparagraph i or ii, to be divided equally among the persons entitled. [bold added]
(3) No payment shall be made under this section to a person who dies before the insured person or within 30 days after the insured person.
(4) If at the time of the accident the insured person had more than one spouse who is entitled to a payment under this section, the payment shall be divided equally among them.
(5) .....
(6) In this section,
"spouse" means a person who was a spouse at the time of the accident.
Higher optional coverage is provided for in some circumstances, but not, as here, in respect of the death of a dependant.3
For the meaning of "dependant," one goes to s. 2(6) of SABS-1996 which states:
2(6) For the purpose of this Regulation, 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.
III. ANALYSIS AND CONCLUSION
A. Background
A death benefit is paid in respect of an "insured person" who dies as a result of the accident. "Insured person" is defined in s. 2(1) to include any dependant of the named insured or spouse, if the dependant is involved in an accident in or outside Ontario involving the insured automobile or another automobile. State Farm accepts that David was dependent on his parents, both financially and for care, that he is a dependant under the terms of SABS-1996, that he is an insured person under his father's policy, and that a death benefit must be paid in respect of his death.
Under s. 25(2), the death benefit provides for the package of payments set out. The pattern of the provisions is to stipulate the amount and to whom it is to be paid: A payment of X to Y (or vice versa). The person to whom the payment is made derives their entitlement not by virtue of their being an "insured person" in their own right, but by virtue of their being in a prescribed relationship to the deceased.4
In the paragraphs dealing with the death benefit for spouses, dependants and former spouses, the language used clearly signals that more than one person can qualify for a payment and stipulates whether, as between those qualifying, the payment is to be split or involves payment to each person. Under the section,
A payment of $10,000 goes to each of the deceased's dependants, (pluralised) and to each person to whom the deceased had an obligation to support under contract or court order; if there is no spouse, an additional $25,000 is paid to the dependants (and other persons qualifying) to be divided equally among the persons entitled.5
A payment of $10,000 is also payable to each former spouse.6
The spousal benefit is worded in a slightly different way. It provides for a payment of $25,000 to the insured person's spouse, suggestive of only one spouse. However, s. 25(4) then goes on to provide that if the deceased had more than one spouse, the payment is to be divided equally among them.
Such language is found within s. 25(2) 5 itself. Subparagraph 25(2) 5. iii provides that, under certain circumstances, a payment of $10,000 is to go to a person's dependants (pluralised) to be divided equally among the persons entitled.
As against this, s. 25(2) 5. i, the provision under consideration here, uses the singular and does not stipulate how the benefit is to be treated if more than one person qualifies for a payment. State Farm argues, with considerable force, that if the drafters intended to provide a payment to more than one person under s. 25(2) 5. i, they would have used wording similar to that used in other paragraphs. It states that previous SABS regimes were similarly structured. State Farm submits that the death benefit provision dealing with the death of a dependant has been consistently worded in terms of there being only one eligible claimant.
Arguments of this nature were successful in the three decisions previously cited. In John v. CIBC, the insurer paid a death benefit to the deceased child's father, but refused a separate claim from his mother. Justice Kruzick reasoned:
As I read the provisions of s. 25(2) 5. i, .... the benefit is payable to only one insured and I so find. If the Legislature had intended to provide payment to more than one person, the wording would reflect that intention. In that case, the legislation would provide for payment to "a person or persons." It does not do so.
....Had the drafter intended more than one person to benefit here, I find they would have so provided: see Jarvis and Allstate Insurance Co. When I read the section on which the applicant relies, in conjunction with the other provisions in the schedule I conclude the intention was to benefit only one dependant: see Jarvis and Allstate.
In arriving at his conclusion, Justice Kruzick referred to the reasoning in Jarvis and Allstate decided under SABS-1990. While the structure of the death benefits provisions under both schemes is quite similar, I agree with the arbitrator that SABS-1996 effects a subtle but significant shift in language. For reasons set out below, it is my view that s. 25(2) 5. i must be taken as contemplating that more than one person may qualify for a payment. This leads to my conclusion that s. 25(2) 5. i, as construed, provides for more than one payment. In reaching this conclusion, I respectfully depart from Justice Kruzick's conclusion that the death benefit under SABS-1996 is intended to benefit only one person.
In ascertaining the meaning of the provision, the usual principles of statutory construction apply: a provision is to be interpreted in its total context.7 It is well established that the evolution of legislation may be relied on to assist interpretation. As Professor Sullivan states in Dreidger on the Construction of Statutes,8
the meaning or purpose of a statute is often clarified by viewing it in its original context and, with the assistance of permissible external aids, tracing it through successive versions.
B. Tracing the Provision
The following table sets out successive versions of the provision dealing with death benefits where a dependant dies. It also sets out the given meaning of "dependant." Relevant differences are highlighted.
Death Benefit
11.-(1) If, as a result of an accident, an insured person dies within the benefit period set out in subsection (3), the insurer will pay with respect to the insured person....
(d) if, at the time of the accident, the deceased was a dependant, $10,000,
(i) to the person upon whom the deceased was dependent or, if that person is dead, to the surviving spouse of that person if the surviving spouse was the deceased's primary caregiver, or
(ii) to the other surviving dependants of the person upon whom the deceased was dependent if that person and his or her spouse are dead.
11.-(5) Payments under clauses (1)(b) and (d) and clauses (2)(b) and (d) will be paid in equal shares to the surviving dependants.
51.-(5) If an insured person dies as a result of an accident and, at the time of the accident, the insured person was a dependant, the insurer shall pay $10,000,
(a) to the person upon whom the insured person was dependent or, if that person is dead or dies within thirty days of the insured person's death, to the surviving spouse of that person if the surviving spouse was the insured person's primary caregiver; or
(b) to the surviving dependants of the person upon whom the insured person was dependent, if that person is dead and no payment is required by clause (a).
(9) Payments under sub-section (2) or clause (5)(b) shall be paid in equal shares to the surviving dependants.
(2) The death benefit shall provide for the following payments:
A payment of $10,000 to,
i. a person in respect of whom the insured person was a dependant at the time of the accident,
ii. the spouse of a person in respect of whom the insured person was a dependant at the time of the accident, if the spouse was the insured person's primary caregiver at the time of the accident and the person in respect of whom the insured person was a dependant at the time of the accident dies before the insured person or within 30 days after the insured person, or
iii. the dependants of a person in respect of whom the insured person was a dependant at the time of the accident, if no payment is required by subparagraph i or ii, to be divided equally among the persons entitled.
Dependant
3.-(2) For the purposes of this Regulation, a person is a dependant of another person if the person is principally dependent for financial support on the other person or the other person’s spouse.
- For the purpose of this Regulation, 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.
2.-(6) For the purpose of this Regulation, 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.
Under SABS-1990, only one person could qualify for a death benefit under the equivalent of s. 25(2) 5. i. (s. 11(1)(d) and s.11(2)(d)). This was confirmed in Jarvis and Allstate. Under this version of the regulations, someone was treated as a dependant if he or she was principally dependent for financial support on another person or that other person's spouse, (s. 3(2); the words "or care" were not added until SABS-1994). It generally was held that to establish principal dependence on someone, the individual had to demonstrate that they chiefly or for the most part, derived their financial support from that other person.9 This led to the view that principal dependence denoted dependence on a single primary source - one spouse or parent as distinct from another.10However, as held in McDonald and State Farm Insurance Companies, (OIC A-001347, March 11, 1993, upheld P-001437, September 29, 1995), the plain meaning of s. 3(2) was that someone could be a dependant of more than one person, because it clearly contemplated an individual being a dependant of someone and that person's spouse. McDonald relied on a distinction between being "dependent" on a person i.e. the person who provided the main financial support, and being a "dependant" of a person, which included both the person on whom the individual depended for financial support and that person's spouse.11 Subsequent death benefit cases developed on the distinction.
Jarvis and Allstate involved the death of a child whose parents were married but separated. The child was principally supported by his mother but the father also applied for a death benefit on the basis that he was the mother's spouse. The arbitrator held that, viewed in the context of the section as a whole, the provision contemplated payment to only one person. He concluded that when the drafters referred to " the person upon whom the deceased was dependent," they meant the person on whom the deceased was actually financially dependent (in this case, the mother), not that person's spouse (i.e. the father).
The wording of the death benefit provision remained substantially the same under SABS-1994, but the definition of "dependant" was expanded by the addition of the words "or care" to include care-based dependency. The interaction of these provisions was the subject of the appeal decision in Liberty Mutual and Harris, which approved and applied the reasoning in Jarvis and Allstate.
In the Harris decision, Director's Delegate Draper held that the addition of care-based dependency meant that, in contrast to SABS-1990, a person could be dependent on more than one person. In that case, the parents of the deceased child were divorced at the time of the accident; the child chiefly depended on his mother for care, and on his father for financial support. They each applied to their own insurance companies for death benefits. The mother's insurance company refused to pay her the full amount on the basis that any obligation to pay a death benefit had been discharged by payment to the father.12
It should be noted that the issue in Harris was whether the death of a dependant could result in the payment of death benefits under two insurance policies. The focus therefore was somewhat different than in this case. The delegate concluded that death benefits were payable under only one policy, which one depending on application of the priority rules.
As Delegate Draper saw it, "the confusion is not with the amount of the death benefits, but with how they are to be paid." At p. 9 he stated:
In my view, the inclusion of care-based dependency in section 4 must mean that "dependent" in paragraph 51(5)(a) is no longer limited to financial dependence. This creates a problem because it means that two persons can qualify for a $10,000 payment that appears to have been intended for one person. The only practical solution, in my opinion, is that, in some cases, the payment will need to be split. I see no basis for increasing the amount payable based on a confusion about who should receive it. [emphasis added]
The delegate concluded that the deceased’s parents, possibly, should have shared the death benefits but that since each had received at least $5,000, no further benefits were payable in any event.
C. CONCLUSION
Delegate Draper attributed the problem he had identified to the fact that, while the definition of dependant was expanded, there was no corresponding change to the death benefits provision. SABS-1996 revised the language critiqued in Harris. Subparagraph 25(2) 5. i refers to "A payment ... to ... a person", whereas previous versions referred to "the person ... or if that person is dead, ... to the surviving spouse of that person". Use of the indefinite article does not necessarily signal that more than one eligible claimant is contemplated. According to dictionary definitions, "a" can mean one or any one of a greater number; it depends on the context. However, concurrently, the description of to whom payment is to be made has been changed. The intended recipient is no longer someone "upon whom [the insured person] was dependent" as under SABS-1990 and SABS-1994. Rather it is someone "in respect of whom the insured person was a dependant." On a plain reading this includes a person on whom the deceased was financially dependent or dependent for care, and the spouse of such a person or persons.
While it may not be automatically assumed that statutory amendments are intended to effect substantive change, there is a general presumption that changes to the wording of legislation are purposeful.13As between spouses, it now is unnecessary to identify the chief source of financial support or care, because the provision covers both the person providing the financial support or the care and the person's spouse. No priority is indicated as between such persons. The change renders the suggestion in Jarvis and Allstate that the first order of payment is to the person on whom the deceased was actually dependent inapplicable.
Subparagraph 25(2) 5. ii. maintains language dealing with payment to a spouse if the spouse was the deceased's primary caregiver. However, as the arbitrator notes, the provision has been restructured, and that part is a stand-alone subparagraph. In Jarvis and Allstate, the arbitrator viewed such language as limiting payment to a spouse. Given the plain terms of s.25(2) 5. i, it is difficult to see in what circumstances s. 25(2) 5. ii would have application. It cannot reasonably be read as a limit on the entitlement of a spouse. The proviso is readily understandable under SABS-1990 which gives priority to financial dependency, but appears to be in conflict with s. 25(2) 5. i. Given this, I do not find it a reliable indicator that payment is intended to go to only one spouse.
The fact that subparagraph 25(2) 5. i contemplates that more than one person may be eligible for a payment does not answer the question whether more than one $10,000 payment is payable and how the benefit is to be treated if more than one person qualifies for it. Both parties rely on the principle of expressio unius est exclusio alterius: to express one thing is to exclude another. On this, Dreidger states at p. 168:
An implied exclusion argument lies whenever there is reason to believe that if the legislature had meant to include a particular thing within the ambit of its legislation, it would have referred to that thing expressly. Because of this expectation, the legislature's failure to mention the thing becomes grounds for inferring that it was deliberately excluded. Although there is no express exclusion, exclusion is implied. The force of the implication depends on the strength and legitimacy of the expectation of express reference. The better the reason for anticipating express reference to a thing, the more telling the silence of the legislature.
State Farm submits that the drafters' silence must be taken as inferring that payment to one of several qualifying persons discharges an insurer’s obligations to pay a death benefit. Alternatively, it suggests that (although there appears to be no specific provision or authority for doing so) the payment should be shared or split between those qualifying. Unlike Jarvis and Harris, the facts of this case do not involve the situation where the spousal relationship has broken down. However, marriage breakdown is commonplace, and children may be members of more than one family unit. It must be assumed that the drafters were cognizant of this reality. In this context, I would suggest that it is more in accord with reasonable expectations to assume that, had the drafters intended the more restrictive outcome suggested by State Farm, they would have provided for it expressly.
The appeal is therefore dismissed, with expenses to the respondents.
July 6, 2000
Susan Naylor
Director’s Delegate
Date
"Dependant" is the noun. " Section 3(2) defines who qualifies as a "dependant." "A dependant" is someone who is "principally dependent for financial support on the other person or the other person's spouse." The plain meaning of section 3(2) in my view, is that if the children were principally dependent on either of their parents for financial support, or perhaps on them jointly, then they are dependants of both parents.
In Liberty Mutual and Harris, Delegate Draper added at p.6:
The legislation consistently uses "dependant" as a noun, describing the person's status. "Dependent" is the adjective, describing the insured person's relationship to the other person.
Footnotes
- The Statutory Accident Benefits Schedule - Accidents before January 1, 1994, R.R.O. 1990, Reg. 672, as amended ("SABS-1990").
- The Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996, O. Reg. 776/93, as amended ("SABS-1994").
- Section 27 allows policy holders the option of purchasing a higher level of protection under’s 25(2) 1. ii (spouses, to $50,000) and s. 25(2) 2. ii (dependants, to $20,000). It also allows the funeral benefit under s. 26 which is provided to pay for funeral expenses incurred up to a set amount, to be bumped up from a maximum of $6,000 to $8,000. There is no higher optional coverage provided under s. 25 (2) 5 in respect of the death of a dependant. The SABS-1990 provided for an optional benefit amount of $20,000, but the option was removed in SABS-1994. The Kristensens received the higher optional funeral benefit amount pursuant to transitional arrangements in s. 70 applying to policies in effect when SABS-1996 came into force.
- See Liberty Mutual and Harris.
- section 25 (2) 2 and 3.
- i.e. someone not still a spouse at the time of the accident: s. 25(2) 4 and s. 25 (6).
- Bapoo v. Co-operators General Insurance Co.(1998), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616 at 620; R. Sullivan, Dreidger on the Construction of Statutes, 3rd ed. (Toronto:Butterworths, 1994) at p. 131.
- See note 7 at p. 448.
- Singh v. State Farm (OIC A-001525 & A-001526, dated June 4, 1993)
- Jarvis and Allstate; cf. Mcdonald and State Farm Insurance Companies, in which the possibility that children could be dependent jointly on both parents was left open.
- In McDonald, three siblings who had lost both their parents in a car crash were held entitled to a death benefit in respect of the death of each parent under s. 11(1)(c) of SABS-1990 which provides for payment of a death benefit to "each of the [insured person's] surviving dependants." The arbitrator commented:
- The father's insurance company paid him $10,000 in death benefits, while the mother's company initially paid her $5,000, half the death benefit, but then disputed its liability to pay any benefit.
- Dreidger, p. 451