Neutral Citation: 2000 ONFSCDRS 214

FSCO A98-001030

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

K. M. (MINOR)

Applicant

and

GENERAL ACCIDENT ASSURANCE CO. OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Susan Sapin

Heard:

Februrary 8, 2000, in Hamilton

Appearances:

Reno M. Berlingieri for Ms. M (Minor)

Christopher J. Schnarr for General Accident Assurance Co. of Canada

Issues:

On October 13, 1996, the Applicant, K M (Minor), was injured in a tragic motor vehicle accident in which her mother, L M, was killed. At the time, L M was a single mother, and K M was four years old. Both are "insured persons" as defined in the Schedule.¹ K M received death benefits of $10,250.46 from General Accident Assurance Co. of Canada ("General Accident") under section 51 of the Schedule, payable to dependants of an insured person who dies as a result of an accident. General Accident refused to pay further benefits for expenses incurred in caring for K M after her mother's death, on the basis that these expenses are not payable under the Schedule. The parties were unable to resolve their disputes through mediation, and K M (Minor) applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The parties asked for a determination of two preliminary legal issues, which they framed as follows:

1. Absent an impairment, is K M (Minor) entitled to payment of benefits for babysitting, housekeeping, attendant or dependant care under the Schedule, which she requires as a result of her mother's death in the motor vehicle accident?

2. Does the death of her mother in and of itself constitute an impairment for K M (Minor) for the purpose of claiming further benefits under the Schedule?

Result:

1. K M (Minor) is not entitled, absent an impairment, to payment of benefits other than the lump sum death benefits already paid pursuant to subsection 51(4) of the Schedule.

2. The definition of "impairment" in section 1 of the Schedule cannot be read to include "death." However, as a question of fact, the death of a parent may give rise to an impairment for a minor dependant, thus entitling her to benefits under the Schedule.

EVIDENCE AND ANALYSIS:

Background:

The parties' agreement to frame the issues as they have requires some explanation.

For the majority of statutory accident benefits available under the Schedule, such as weekly benefits, medical, rehabilitation, attendant care, dependent care and housekeeping benefits, the wording in each of the relevant sections states that the benefits are payable to an "insured person" if he or she sustains an "impairment" as a result of an accident.² Only four sections do not state that an insured person must suffer an impairment for benefits to be payable. These are sections 51 (death benefits) and 52 (funeral benefits), found in Parts XI and XII, respectively, of the Schedule; and sections 56 (damage to clothing, etc.) and 57 (cost of examinations), included under Part XIII ( "Compensation for other pecuniary losses.")

The Insurer argues that Part XI (death benefits) and Part XII (funeral benefits) specifically provide for payment of benefits to the dependant(s) of an insured person who dies as a result of a motor vehicle accident, regardless of whether the dependant is an insured person or whether the dependant suffered an impairment as a result of the accident. The Insurer's position is that these sections comprise a comprehensive set of benefits in those circumstances. It argues that, unless K M herself actually sustained an impairment as a result of the accident, the $10,250 death benefit she received is the only benefit to which she is entitled under the Schedule, and any expenses incurred to care for her as a result of her mother's death are intended to be paid out of these monies, as well as out of the $96,703 death benefit paid to her father, N M.

Usually, the care needs of minor dependant children of insured persons injured in accidents are looked after indirectly under the Schedule, even where the children suffer no impairment as a result of the accident, because the injured parent is entitled to weekly income replacement benefits, if employed, or weekly caregiver benefits, if not. Benefits are also available to the injured parent to pay for dependant care or housekeeping services that the parent cannot perform because he or she suffers an impairment as a result of an accident.³

In the Applicant's case, because her mother died and her father N M was both unemployed and not living with his daughter at the time of the accident, the benefits outlined above are not available through either parent. Despite her permanent and devastating loss, therefore, the Applicant is in fact worse off under the Schedule, in terms of financial compensation and ability to meet her needs for care, than if her mother had been injured, rather than killed, in the accident. Furthermore, section 267.1(1) and (2) of the Insurance Act specifically precludes her from pursuing a claim in tort to recover any pecuniary expenses she has or will incur to replace the care formerly provided by her mother.

The Applicant argues that the $10,250 death benefit she received is clearly insufficient to provide for her many needs as a motherless child, or to pay for replacement services, and that she should not be forced to rely on the death benefits paid to her father. She argues that the Insurer's interpretation of the Schedule results in gross unfairness and substantial under-compensation to her, and that as a matter of policy, the Schedule should be interpreted to entitle her to receive benefits that recognize and compensate her for the enormous financial and non-financial losses she has suffered, and will suffer, as a result of the death of her mother, who was both caregiver and breadwinner at the time of the accident.

Furthermore, the Applicant argues that the requirement that she prove an impairment in order to be entitled to accident benefits over and above the death benefits she received is unfair for two reasons. Firstly, it results in under-compensation because any impairment, due to her extremely young age, is likely to be short-lived. Secondly, it may limit her to benefits of a medical nature only, which could not address the full spectrum of her needs. She argues that this unfairness cannot have been intended by the drafters of the Schedule.

Hence the particular framing of the issues. The Applicant seeks a positive answer to either one or both of the questions posed. She suggests that an interpretation of the Schedule that dispenses with impairment as a precondition to entitlement, or that expands the definition of impairment to include death, would remove impediments to obtaining accident benefits to which she should, as a matter of policy, be entitled.

Facts:

The issues in this case arise directly from the facts, which are particularly compelling.⁴ On October 13, 1996, L M was killed when the car she was driving collided with another vehicle. Her three passengers suffered multiple injuries. The passengers were her son I M, from a previous marriage, her husband N M, from whom she was separated but not divorced, and their four-year old daughter K M. K M suffered a fractured skull.

At the time of the accident, K M and I M lived with their mother, who was employed as a family therapist. N M, a self-employed tailor, was unemployed at the time of the accident due to impairments suffered in a previous motor vehicle accident. After the October 13, 1996 accident, N M moved into his late wife's home. I M moved out in December 1997, and K M continues to live there with her father.

N M received death benefits of $96,703 pursuant to subsection 51(1) of the Schedule. Subsection 51(1)(b) provides for a lump sum payment to a surviving spouse of $50,000; the remaining $46,703 was paid under subsection 51(1)(a), and represents a lump sum based on the deceased's employment income. K M and I M each received death benefits of $10,250.46, a lump sum payable to dependants of the deceased insured person, irrespective of her income, pursuant to subsection 51(4)(a).

Care needs of the Applicant:

It is difficult not to have a great deal of sympathy for this little girl's individual circumstances. Her mother, as a working single parent, not only provided a steady income, but was also K M's primary caregiver. Although no facts were provided about the extent of L M's role in K M's life, I have, for the sake of the legal arguments being made only, defined L M's caregiving role as broadly as possible to include all aspects of parenting a small child, such as responsibility for 24-hour care, supervision, education, training, moral and spiritual guidance, companionship, as well as the more mundane aspects of daily living such as hygiene, grooming, cooking, housekeeping, provision of necessaries and transportation to and from school, appointments and other activities. K M's father, who is unemployed and suffers impairments of his own, is apparently unable in this case to assume all of these responsibilities.⁵ If K M does not receive compensation under the Schedule adequate to enable her to pay someone to look after her many needs, she and her father will have to rely on the goodwill of family and neighbours, if available, and, ultimately, social assistance. The Applicant argues that such an outcome cannot have been intended by the drafters of the Schedule. The Insurer replies that the issue is one of child welfare, not insurance.

What the Applicant really seeks, in effect, is an interpretation of the Schedule that would entitle her to benefits that would compensate her for her actual needs, which result from the accident. The first question posed by the parties, therefore, should really read:

Question #1 - Absent an impairment, what benefits is K M (Minor) entitled to under the Schedulethat would compensate her for expenses incurred to replace the care formerly provided by her mother?

Statutory Intent

The Applicant argues that it cannot have been the intent of the drafters of the Schedule to limit financial compensation to $10,260 to someone in her circumstances. She suggests that her remedy is a broad and liberal interpretation of the Schedule.

There is no question that the Statutory Accident Benefits Schedule under dispute in this case is remedial legislation deserving of a broad and liberal interpretation. This has consistently been the view of arbitrators at the Financial Services Commission. As confirmed by Director's Delegate David Draper in Tustin and Canadian General Insurance Group (FSCO P99-00004, August 13, 1999), where he quoted from the Court of Appeal:

The legislation should be interpreted sensibly, assuming that its intention is to provide fair and reasonable compensation to accident victims. As stated by the Court of Appeal in Bapoo v. Cooperators General Insurance Company (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616: "The interpretation of a statutory provision should not only comply with the legislative text and promote the legislative purpose, it should produce a reasonable and just outcome."

However, in any exercise of statutory interpretation, one must first look to the wording of the legislative provisions in question, in this case the sections of the Schedule dealing with entitlement, in order to determine whether there is language capable of supporting the broad interpretation suggested.

1) Statutory language

a) Entitlement to the type of benefit claimed requires an impairment

For the most part, the Applicant's care needs, as outlined on page 6 above, where they arise from an accident, would normally be covered under the following parts of the Schedule:

PART VII - Supplementary Medical Benefits - s.36

PART VIII - Rehabilitation Benefits - s.40

PART X - Attendant Care Benefits - s.47

PART XIII - Compensation for Other Pecuniary Losses - s.54 Dependant Care Expenses s.55 Housekeeping and Home Maintenance Expenses⁶

With respect to entitlement to benefits, each of these sections begins with the identical words: "If an insured person sustains an impairment as a result of an accident, the insurer shall pay for..." [emphasis added].

"Impairment" is specifically defined in section 1 of the Schedule, which states:

"impairment" means a loss or abnormality of psychological, physiological or anatomical structure or function;

This language is clear, unambiguous and straightforward. It cannot be "interpreted" so as to dispense with the stated requirement that an insured person must sustain an accident-related impairment in order to qualify for the benefits specified in each section in which the word appears.⁷

Furthermore, a contextual analysis of the Schedule as a whole makes it clear that benefits are payable in order to reduce or eliminate an impairment. (In the case of weekly benefits, they are only payable as long as there is an impairment that prevents a person from resuming pre-accident activities). It would be inconsistent with both the plain language and the overall structure of the Schedule to award the type of care benefits claimed by the Applicant under any of the sections above, where the benefits do not reduce or eliminate an impairment sustained by her as a result of the accident.

The requirement that there be an impairment is not restricted to the entitlement provisions alone. Reducing accident-related impairments (rehabilitation, essentially) is integral to the operation and structure of the Schedule, and the word "impairment" appears frequently throughout. The Schedule requires, for example, that measures adopted and expenses incurred to reduce or eliminate impairments must be reasonable and necessary, and it sets out mechanisms necessary to ensure that this test is met. For medical, rehabilitation and attendant care benefits, insurers can require a certificate, prepared by "a member of a health profession who is authorized by law to treat the person's impairment," stating that the proposed measures are reasonable and necessary for the person's treatment, rehabilitation or care.⁸ The Schedule further sets out an entire procedure to assess the reasonableness and necessity of these expenses through Designated Assessment Centres.

To ignore the plain words of the statute by eliminating impairment as a precondition to receipt of benefits renders all of the above carefully crafted components of the statutory accident benefits scheme redundant. It also undermines the purpose of the Schedule, which is to provide insured persons with benefits promptly, at a reasonable cost, and in an administratively manageable fashion. Such an outcome could not have been intended by the drafters of the Schedule.

b) There is no entitlement to "replacement services "under the Schedule:

If the Applicant were truly unable, on the facts, to base her claim for care-related benefits on an accident-related impairment, there is unfortunately little else in the Schedule that might entitle her to compensation for expenses incurred to replace the services previously provided by her deceased mother. To the extent that replacement services (housekeeping or babysitting, for example) are quantifiable, they would be considered to be pecuniary losses. Pecuniary losses are lumped together in this Schedule under Part XIII, entitled, appropriately enough, "Compensation for Other Pecuniary Losses." They consist of:

s.53 Expenses of visitors

s.54 Dependant care expenses

s.55 Housekeeping and home maintenance expenses

s.56 Damage to clothing, glasses, hearing aids, etc.

s.57 Cost of examinations

The entitlement language in these sections is quite restrictive, and the benefits modest. With the exception of the cost of damaged clothing and the cost of examinations, compensation is, as with the other entitlement sections discussed, conditional upon a finding of impairment. This includes compensation for expenses of visitors under section 53, dependant care expenses under section 54, and housekeeping expenses under section 55.

Had the drafters of the Schedule intended to compensate for the cost of replacement services simply as a pecuniary loss with no conditions attached, presumably they would have done so in Part XIII. Yet there is no language in this Part to indicate entitlement for replacement services absent an impairment, nor is such language to be found anywhere else in the Schedule. This silence is significant.

Furthermore, arbitrators have consistently interpreted the entitlement provisions in the Schedule, and in the no-fault schedule that preceded it (the "Ontario Motorist Protection Plan", or "OMPP"), to mean that the purpose of accident benefits is to reduce or eliminate the impairment suffered by the insured person, rather than to replace services formerly provided by an insured person to her family.⁹ The fact that the Schedule does not provide a young dependant child with benefits to replace her lost mother's services, unless the services relate directly to an impairment suffered by either the child or her parent, is, unfortunately in the case of this Applicant, entirely consistent with the overall purpose and structure of this particular Schedule.

The language is clear that unless the Applicant herself sustains an impairment as a result of the accident, she does not qualify for medical, rehabilitation, attendant care or housekeeping benefits under sections 36, 40, 47 and 55 of the Schedule.

c) The Applicant does not qualify for benefits solely in her capacity as a dependant, except for death and funeral benefits.

As stated, absent an impairment of her own, the Applicant is not entitled to care-type benefits or to recover expenses incurred for her care as a pecuniary loss. Nor is there language anywhere in the Schedule that entitles her to any benefits solely in her capacity as a surviving dependant, except for the death benefits she received, as the following discussion will explain.

A "dependant" is defined, for purposes of the Schedule in section 4, as a person who is "principally dependent for financial support or care..." on another person or the other person's spouse. The word appears in only two other sections of the Schedule — section 51, dealing with death benefits, and section 54,¹⁰ which provides payment for additional expenses incurred in caring for dependants of an insured person injured in an accident, in very specific circumstances:

54.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for additional expenses reasonably incurred by or on behalf of the insured person in caring for the insured person's dependants as a result of the accident.

(2) Subsection (1) applies only in respect of an insured person who was employed at the time of the accident....

(3) No benefit is payable under this section after the insured person dies...

[emphasis added]

In the case before me, the "insured person" referred to can only be the Applicant's mother, and not the Applicant herself. I find subsection (3) to be clear, unambiguous, and conclusive: No benefit is payable, at all, to anyone, under this section after the insured person dies.

Apart from being one of only two sections in the Schedule where the term "dependant' is used, (as noted above), section 54 is also one of only three sections in the Schedule where the death of an insured person is specifically mentioned, the other two being section 51 (death benefits) and section 52 (funeral benefits). I find that this fact supports the Insurer's argument that sections 51 and 52 of the Schedule specifically address payments of benefits where an insured person dies and where that insured person has a dependant, and that these sections provide a comprehensive set of benefits to dependants in those circumstances.

d) The language in the Schedule limits insurers'liability for the ongoing care needs of surviving dependants after the death of the insured person:

The language used in sections 51, 52 and 54 is clear evidence that the legislature intended to limit insurers' ongoing liability to uninjured dependants after the death of an insured person. Such limiting of ongoing liability to surviving dependants is consistent with the overall purpose of the Schedule, which is to ensure prompt payment of benefits in an administratively manageable fashion, to a carefully defined set of individuals, at reasonable cost. A one-time, standard, fixed sum payment upon death, for which there is no procedure in place to measure ongoing need or reasonableness, as there is for impairment-related benefits, is consistent with the legislative purpose.

Regarding the clear and unambiguous language of subsection 54(3), that no benefit is payable after the insured person dies, the Applicant attempted to argue that if similar limiting language were missing in other provisions, such as section 55, for example, which deals with housekeeping benefits, then it could be implied that the drafters of the legislation did not intend that the particular benefit in question should cease after the death of the insured person.

This argument is absurd for several reasons.

Firstly, the statement that "No benefit is payable under this section after the insured person dies" is necessary in section 54, because subsection 54(1) states that "...the insurer shall pay for additional expenses incurred....on behalf of the insured person in caring for the insured person's dependants as a result of the accident." [emphasis added]. The care needs of dependants referred to in this section do not cease on the death of the insured person. So, unless it is specifically stated that no benefits are payable after the insured person dies, section 54(1) could be interpreted to mean that dependant care expenses could continue to be incurred on behalf of the insured person after she or he dies, presumably, if one considers the language of section 18 (see below), until the dependants reach 16 years of age. Clearly, as noted above, the drafters did not intend this to happen.

Secondly, it is not necessary in other sections of the Schedule to point out that benefits cease when the insured person dies, because that conclusion is obvious, as in section 55, for example, which reads:

55. If an insured person sustains an impairment as a result of an accident, the insurer shall pay for additional expenses reasonably incurred by or on behalf of the insured person as a result of the accident for housekeeping and home maintenance services.

If the insured person were to die, she could neither incur expenses for housekeeping, nor have them incurred on her behalf. The prospect is absurd. Section 55 could not be interpreted to imply that a surviving dependant would be entitled to housekeeping benefits after the death of the insured person.¹¹ The Applicant's argument, that entitlement to benefits after death can be implied because the legislature chose not to add the specific words "If an insured person sustains an impairment or dies....."is not supportable.

e) The use of the words "dependant" and "care" in the Schedule, coupled with a broad and liberal interpretation of "impairment," could lead to entitlement to care-related benefits under the Schedule:

Although the Schedule defines a dependant as a person requiring the financial support or care of another, the term "care" itself is not defined in the Schedule, although it is used in various contexts throughout.¹² Section 18, for example, provides for weekly caregiver benefits to be paid to an insured person who, at the time of the accident, sustained an impairment, was not employed, and who resided 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 ..." [emphasis added]

I find that the definition of the word "dependant" in section 4 of the Schedule, and the way it and the word "care" are used in sections 18 and 54, indicates that the Schedule explicitly acknowledges the obvious, that children under the age of 16 require the care of a parent. I find it reasonable that small children who lose one or both parents require the particular care that the lost parent provided, that the type of care could be as broad as I outlined it on page 6 of this decision, and that the loss of such care to a small child could itself be considered an impairment for that child. Such conclusions must, of course, depend entirely on the facts of any given case, and on the evidence presented, but I am aware of nothing in the Schedule, the jurisprudence, or in the principles of statutory interpretation that would preclude an arbitrator from making such findings on the facts.

I make these observations because it seems to me that a broad and liberal interpretation of the terms "impairment" and "care" is consistent with the intent and purpose of the Schedule. I see no reason why, when facts and evidence support it, it would not be open to an arbitrator to make a finding that a small child left without care as a result of the loss of a parent in an accident, has sustained, at the very least, a psychological impairment. A finding of impairment in such circumstances would open the door for the Applicant to receive the full range of benefits available to insured persons under the Schedule, including rehabilitation benefits under section 40, and possibly attendant care benefits under section 47. As any benefits claimed would then be subject to the test of reasonableness, which would depend on the individual circumstances of each case, this should alleviate the Insurer's legitimate concerns about the difficulty of limiting potential liability.

I would think that the comments of Arbitrator Naylor, emphasizing the importance and legitimacy of housekeeping and babysitting services to a person's rehabilitation, would apply equally to the care needs of a child suffering shock, grief and significantly changed circumstances after the death of a parent:

I find that the Applicant reasonably requires a safe, comfortable and clean environment in which to live and to recover from his injuries. He needs to eat properly prepared meals.....I am satisfied that the housekeeping and babysitting services provided by Ms. Gomez were intended to address these needs, and can therefore reasonably be characterized as required for the Applicant's rehabilitation.¹³

A small child requires no less than a clean, safe, nurturing home environment. To the extent that such care was provided by the deceased parent prior to the accident, and is not readily available afterwards, it is not reasonable that the loss of care might cause an impairment in the child's functioning. In my view, this possibility falls within the language, structure, purpose and scope of the Schedule, particularly when one examines the extensive rehabilitation measures available under section 40, discussed under Question #2(B), below.

2) Legislative context

The Applicant argued that it could not have been the intent of the statute to limit the compensation she received for her mother's death in the accident to the $10,250 she received under the Schedule, because such severely restricted compensation is not in keeping with the legislative context of the Schedule.

To illustrate this point, she compared the death benefits available under the Schedule to the substantial compensation for both pecuniary and non-pecuniary losses she claims she could recover in other jurisdictions, under tort law in Ontario prior to the introduction of no-fault legislation, and under the previous (OMPP) and subsequent (Bill 59) no-fault legislation, for the loss of a working mother. The Applicant relied on several cases to support her arguments about the unfairness of the Schedule under consideration. I understand her arguments to be as follows:

1. Tort law is far more flexible, generous and accurate than the Schedule; (Based on a tort case from British Columbia where a judge was very generous in awarding compensation for the death of a working parent in an automobile accident, under such heads of damage as loss of the parents' income, loss of household services and loss of future inheritance. The judge also took certain factors into account, such as continuation of the standard of living to which the dependants were accustomed, and how long the period of dependency should continue (in that case, up until the age of 24 years).¹⁴ Presumably, the same principles would apply in the case of a tort action in Ontario prior to the advent of no-fault legislation;

2. Under OMPP, the Applicant could sue under the Family Law Act, R.S.O. 1990, C. F.3 (FLA) to recover pecuniary losses occasioned by her mother's death. Therefore, death benefits under OMPP were akin to damages for loss of care, companionship and guidance under section 61(2)(e) of the Family Law Act, i.e. they were intended to compensate solely for the non-pecuniary aspects of the loss of a parent in a motor vehicle accident, outside of any other pecuniary losses incurred;¹⁵

3. Section 267.1 of the Insurance Act, enacted in Bill 164, precludes the Applicant from bringing an action for pecuniary loss under section 61(1) of the Family Law Act, but permits an action for non-pecuniary loss under 61(2)(e), "loss of guidance, care and companionship." However, the word "care" in s.61(2)(e) has both a pecuniary and a non-pecuniary component. Housekeeping services are pecuniary because they are easily quantifiable. Other aspects of care, such as the intangible value of having the loved one perform the service in question, are not pecuniary. Accordingly, s.267.1(2) of the Insurance Act bars the Applicant from recovering the cost of replacement housekeeping services, or any item of care under the FLA, to the extent that it is pecuniary in nature.¹⁶ This restriction, coupled with the Applicant's inability to recover any pecuniary losses under the Schedule unless she can prove an impairment, is unfair, because it results in under-compensation and is unduly restrictive compared to tort and OMPP. It therefore must be an unintended oversight, or should be remedied by a broad and liberal interpretation of the Schedule;

4. If death benefits under OMPP compensated for non-pecuniary losses only, then so do death benefits under the Schedule, in which case the lack of a corresponding right to sue for pecuniary losses, results in an outcome that is much less than was available previously, and is therefore arbitrary and unjust, and cannot have been intended.

Although an analysis of the legislative context may be helpful in determining statutory intent in certain cases, I do not find this to be one of them. There is simply no ambiguity in any of the language in the Schedule that suggests that any of the differences between it and the tort system or other no-fault legislation were the result of oversight. Bill 164 was introduced in an attempt to limit the spiralling cost of automobile insurance brought about by precisely the type of substantial tort awards referred to by counsel for the Applicant. It was intended to provide benefits to insured persons injured in motor vehicle accidents in a timely, cost-effective and administratively manageable way, and to do so irrespective of fault.

I find the comments of the Director of Arbitrations in Vo and Maplex to be a complete answer to the Applicant's arguments in this regard:

The Schedule was designed to promptly provide claimants with benefits to which they are found to be entitled, regardless of fault in an accident. The benefits are not subject to the same customized determination as are damages in the tort regime...To that extent, there is an arbitrary element in how the statutory accident benefits scheme operates in any given case.¹⁷

3) The purpose of death benefits under Part XI (section 51)

I do not accept the Applicant's argument, as outlined in paragraph 4 above. In my view, the Insurer's argument that the lump sum death benefits under the Schedule were increased significantly from OMPP precisely to offset the restriction to sue in tort is correct. Section 51 of the Schedule provides for a lump sum payment to surviving dependants of the insured person who fulfill certain conditions, as follows:

51.—(1) If an insured person dies as a result of an accident, the insured person is survived by a spouse who was his or her spouse at the time of the accident and,

(a) the insured person met any of the qualifications set out in subsection 7(1), the insurer shall pay the spouse an amount equal to the insured person's net weekly income from employment determined in accordance with section 81 or 82 multiplied by 187.2;

(b) the insured person did not meet any of the qualifications set out in subsection 7(1), the insurer shall pay the spouse $50,100.

Although the section is lengthy, detailed and comprehensive, it is silent about the purpose of death benefits. It does not indicate, for example, whether the death benefits are intended to compensate for pecuniary losses, non-pecuniary losses, or both.

However, I find that it is clear from the content of section 51(1) that both types of losses have been included.

In fact, that was the finding of Arbitrator Renahan, in a somewhat different context,¹⁸ where he stated:

The benefit under section 51(1) addresses two losses which arise on the death of a spouse; a financial loss, where the insured spouse had income from employment [51(1)(a)], and a non-financial loss [51(1)(b)]. The benefit for the non-financial loss is fixed at $50,000 without any inquiry as to the relationship between the spouses. The benefit for the financial loss is based on the insured spouse's income from employment at the time of death.

N M, as the surviving spouse, received $46,000 as compensation for financial loss under subsection 51(1)(a), based on his wife's income, and $50,000 under subsection 51(1)(b), for "non-financial loss." Had there been no surviving spouse, the $46,000 financial loss component of the death benefit would have gone to K M, as a dependant under subsection 51(4). She would have had to share it equally with any other dependants.

As it was, K M received only the benefit provided to surviving dependants under subsection 51(4), which reads as follows:

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) $10,020 to each person who was a dependant of the insured person at the time of the accident; [emphasis added]

The Applicant argues that the death benefits did not compensate her for her pecuniary losses, or, if they did, she was grossly undercompensated. As a matter of policy, she should not have to rely on the money her father received to pay for replacing her mother's services, because there is no guarantee she would receive the benefit of it.

I do not accept this argument. On the contrary, the language of section 51(4) is clear that the benefit K M received was in addition to benefits payable under ss.51(1) and (2). Subparagraph 51(1)(a) includes the $46,000 paid to N M based on his wife's income. I find that it is clear that the money K M received was in addition to the money paid to her father as the surviving spouse, and that the inference is that the money paid to the father is also intended to benefit his dependant child. This is reinforced by the fact that K M would have been entitled to the $46,000 directly under s.54(4), had there been no surviving spouse. This interpretation is entirely consistent with the law in Ontario, which requires Mr. M to support his daughter and provide for her needs. The Insurer is correct in stating that any failure on his part to do so is not an insurance issue, but a child welfare issue.

I accept the Insurer's argument that the structure of the death benefits payable under Parts XI and XII is consistent with the legislative intent of providing prompt payment of benefits in an administratively manageable fashion. The Schedule is a restrictive code of limited benefits payable to a carefully defined set of individuals. The benefits are not intended to compensate individuals for the actual monetary value of their losses. (see Footnote 17)

In conclusion, the language, structure, context and jurisprudence of the Schedule to be consistent with the interpretation that in order to qualify for most benefits, apart from death benefits, an insured person must sustain an impairment as a result of the accident.

Question # 2 - Does the death of her mother in and of itself constitute an impairment for K M for the purpose of claiming further benefits under the Schedule?

(A) As a question of law, the answer to this question is no.

Section 1 of the Schedule states:

"impairment" means a loss or abnormality of psychological, physiological or anatomical structure or function;"

I accept the Insurer's argument that the legislature's use of the word "means" where it could have used "includes" indicates that the definition of impairment is exhaustive, and had the drafters of the Schedule intended the death of a parent automatically to be considered an impairment, they would have said so. As discussed above, with respect to section 54, where it was intended that benefits be affected by death and it was necessary to state this specifically, this was done.

To answer this question in the positive would be to rewrite the sections of the Schedule where the word "impairment" appears to read, in effect, "where an insured person suffers an impairment or dies." One does not have to go far in this exercise to see the absurdities that would result, even if an arbitrator had such power to "rewrite," which she does not.¹⁹ There is no portion Schedule that would bear such a distortion of meaning.

The Applicant referred to several cases in support of the principle that legislation should be interpreted sensibly to produce reasonable and just outcomes.²⁰ However, these cases are to be distinguished from the case before me. In Christo, Arbitrator Makepeace examined the state of tort law and applied a common law rule to resolve an ambiguity in the no-fault legislation where the legislation was silent. In Ironside, the issue was how broadly to interpret a provision, where there was language that could support the interpretation.

In the case before me, there is no ambiguity in any of the sections under consideration and no language to support the interpretation that the term "impairment" can include death. Although I suppose that a common-sense argument could be made that death is in fact the "ultimate impairment," no case law to support such an argument was presented to me. As discussed under d) above, I am not persuaded that importing the words "death" or "dies", or their meaning, into any part of the Schedule where they are not already specifically mentioned, is within the scope of my authority as an arbitrator to interpret the statute.

(B) As a question of fact, the death of a caregiving parent can be considered to be an impairment for a minor child.

As I indicated earlier, under e) above, as a question of fact, I see no reason why the death of a parent could not qualify as an impairment for the purpose of entitling a child to certain benefits under the Schedule, in particular benefits available under sections 40 or 47.

Section 40 of the Schedule provides:

(1)—If an insured person sustains an impairment as a result of an accident, the insurer shall pay for reasonable measures,

(a) to reduce or eliminate the effects of any disability resulting from the impairment; and

(b) to facilitate the insured person's reintegration into his or her family,...and the rest of society.

(4) The payments required by subsection (1) for the purpose of facilitating the insured person's reintegration into his or her family and the rest of society include payment for social rehabilitation measures that are reasonably necessary to,

(a) return the insured person as much as possible to the family and social situations in which he or she lived before the accident;

(b) assist the insured person to adjust to family and social situations as a result of the accident; and

(c) maintain the insured person's level of function within the home and family.

(5) (e) other goods and services that the injured person requires.

[emphasis added]

It is clear from the language of this section that the scope for rehabilitation measures is very wide indeed. These provisions would appear to be tailor-made to assist a little girl to overcome the death of her mother and lead as normal a life as possible under her changed circumstances.

Counsel for the Applicant was concerned that proof of impairment might be a difficult or impossible task in the case of a very small child. This need not be so. The type of proof required would be what is reasonable in the circumstances, to be determined by the arbitrator who hears the facts. The Applicant is only required to make out her case on a balance of probabilities. It may very well be that the standard type of periodic medical or psychological examination usually required by insurers might be too intrusive or ineffective, to be reasonable in a case such as this one. Although children's experts in these fields are available, general statistical or research evidence on the effects of the death of a parent or lack of a parent figure or basic care on young children could also be submitted.

This, however, is not for me to decide. The Schedule is set up to require fact-based decision-making at every step, from determining impairment and impairment-related needs to identifying measures reasonable and necessary to meet those needs. It makes trying to frame certain issues as legal questions to be decided on a preliminary basis, with few facts, somewhat impractical. It amounts to putting the cart before the horse, as it were. The better approach is to put all the relevant facts and evidence before an arbitrator, and argue for a broad and liberal interpretation of the term "impairment" based on the evidence, rather than attempt to resolve the legal issues in an evidentiary vacuum.

EXPENSES:

I exercise my discretion to award K M (Minor) her expenses incurred in this preliminary issue hearing.

November 28, 2000

Susan Sapin Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 214

FSCO A98-001030

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

K. M. (MINOR)

Applicant

and

CANADIAN GENERAL INSURANCE GROUP

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Absent an impairment, K M (Minor) is not entitled to payment of benefits under sections 36, 40, 47, 54 and 55 of the Schedule.

2. Whether or not K M (Minor) suffers an impairment for the purposes of the Schedule is a question of fact.

November 28, 2000

Susan Sapin Arbitrator

Date

APPENDIX 1 — AGREED STATEMENT OF FACTS

In an attempt to expedite a determination on the dispute between the parties, the parties have agreed to proceed with a preliminary issue hearing. The parties have agreed to an agreed Statement of Fact and two legal issues to be asked of the hearing arbitrator. The agreed Statement of Fact is as follows:

On October 13, 1996, while driving on the QEW Highway, the M automobile was involved in a two car collision. L M, the driver, was killed. N M, a front seat passenger and I M, a rear seat passenger, suffered multiple injuries. K M, daughter of L M and N M, born [late 1991], was a rear seat passenger who suffered multiple injuries including a skull fracture.

At the time of the motor vehicle accident, N M and L M were living separate and apart but were not divorced. K M, the daughter of N M and L M, and I M, the natural son of L M, lived with their mother. L M was employed with Family Services as a family therapist. N M was a self employed tailor, who at the time of this accident was off work, despite attempts to return to work, due to previous injuries suffered in a motor vehicle accident of June 1995. Mr. M had pre-existing impairments, due to the June 1995 motor vehicle accident and then suffered further injuries as a result of this October 13, 1996 accident.

N M received death benefits in the amount of approximately $96,703.00. K M received death benefits of approximately $10,250.46. I M received death benefits of approximately $10,250.46.

After this October 13, 1996 motor vehicle accident, N M moved into the previous premises of L M and began to reside with K M and I M. I M moved out of this home on or about December 1997. K M has continued to live with her father N M.

APPENDIX II — LAW

PART VII - SUPPLEMENTARY MEDICAL BENEFITS

Entitlement to Benefits

36.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for,

(b) ...psychological...services;

(h) ...other goods and services of a medical nature that the insured person requires.

PART VIII - REHABILITATION BENEFITS

Entitlement to Benefits

40.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for reasonable measures,

(a) to reduce or eliminate the effects of any disability resulting from the impairment; and

(b) to facilitate the insured person's reintegration into his or her family...and the rest of society.

(4) The payments required by subsection (1) for the purpose of facilitating the insured person's reintegration into his or her family and the rest of society include payment for social rehabilitation measures that are reasonably necessary to,

(a) return the insured person as much as possible to the family and social situations in which he or she lived before the accident;

(b) assist the insured person to adjust to family and social situations as a result of the accident; and

(c) maintain the insured person's level of function within the home and family.

(5) The payments required under this section include payment of all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for a purpose referred to in clause (1)(a) or (b) for,

(a) social rehabilitation, including life skills training, family counselling, social rehabilitation counselling, financial counselling, home renovations and home devices to accommodate the needs of the insured person, vehicles, vehicle modifications to accommodate the needs of the insured person, and communications aids for the insured person's home;

(c) services provided by a case manager related to the coordination of medical, rehabilitation and attendant care services for the insured person;

(d) transportation for the insured person to and from counselling sessions, training sessions and assessments, including transportation for an aide or attendant;

(e) other goods and services that the insured person requires.

PART X - ATTENDANT CARE BENEFITS

Entitlement to Benefits

47.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for,

(a) services provided by an aide or attendant;

(2) For the purpose of clause (1)(a), an aide or attendant may be any person who is capable of providing the services, including a family member of the insured person, even if the aide or attendant does not possess any special qualifications.

PART XIII - COMPENSATION FOR OTHER PECUNIARY LOSSES

Dependant Care Expenses

54.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for additional expenses reasonable incurred by or on behalf of the insured person in caring for the insured person's dependants as a result of the accident.

(3) no benefit is payable under this section after the insured person dies.

Housekeeping and Home Maintenance Expenses

55. If an insured person sustains an impairment as a result of an accident, the insurer shall pay for additional expenses reasonably incurred by or on behalf of the insured person as a result of the accident for housekeeping and home maintenance services.

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98. Sections of the Schedule and other legislative provisions referred to in this decision are in Appendix 2 to this decision.
2. 2"Impairment" is defined in section 1 of the Schedule as "...a loss or abnormality of psychological, physiological or anatomical structure or function;"
3. 3Sections 7, 18, 54 and 55 of the Schedule, respectively.
4. 4The full text of the parties' agreed statement of facts is appended to this decision as Appendix 1.
5. 5Mr. M does not qualify for caregiver benefits under section 18 of the Schedule, because he did not reside with K M at the time of the accident. Neither is he entitled to dependant care benefits under section 54, because he was not employed at the time of the accident.
6. 6The relevant portions of these sections are set out in Appendix II to this Decision.
7. 7The only lack of clarity in the definition of impairment is that, grammatically, the three adjectives "psychological, physiological, or anatomical" each clearly describe the two nouns, "structure" and "function." This yields six distinct terms. The meaning of five of these terms, "anatomical structure or function" or "physiological structure or function," or "psychological function" is relatively clear even to a layman. The meaning of "psychological structure," however, is not. It is difficult to understand, without the help of a psychologist, what that term actually means. It might, for instance, be of some significance in helping the Applicant to establish impairment in this case. Or, it may be meaningless. It is this type of potentially confusing language that invites interpretation. However, there is an exercise which requires some evidence, which I do not have before me.
8. 8Sections 37, 43 and 48.
9. 9As in Ferreyra and Royal Insurance Company of Canada (OIC A-000301/325/384, July 9, 1992)
10. 10Actually, the term is used in section 91, which deals with rental and company automobiles, but this section is not relevant to the issues in dispute in this case.
11. 11Unless, of course, the surviving dependant is herself "an insured person who sustains an impairment as a result of an accident". In that case, I see no reason why a dependant minor who suffers an impairment could not claim for housekeeping services formerly provided by a parent who died as a result of the accident. Such an entitlement is supported by the plain language of the section. There is nothing absurd in saying that housekeeping expenses can be incurred on behalf of the insured person, (the dependant in this case), "as a result of the accident".
12. 12Section 47, "Attendant care benefits" and section 18 "Caregiver benefits"
13. 13Chamale and Wellington Insurance Company (OIC A-000849, September 25, 1992) at p.14 and p.20
14. 14Ratansi v. Abery [1994] B.C.J. No. 1939 B.C.S.C.
15. 15Macartney v. Warner 2000 CanLII 3247 (ON CA), [2000] O.J. No. 31 O.C.A.
16. 16Mensink et al. v. Dale et al. 1997 CanLII 12183 (ON CTGD), [1997] 36 O.R.(3d) 402
17. 17Chuong Vo and Maplex General Insurance Company (OIC P-002777, March 11, 1994). The Schedule contains several instances where the value of benefits does not correspond to the actual loss. Some examples are: an insured person can only recover 90% of their net income up to a weekly maximum, which may not reflect their actual losses, and no weekly benefits are payable in the first week after the accident; for a university student, education disability benefits may be calculated based on an average industrial wage that may not accurately reflect the person's earning potential; and payments under Part V to persons who are not caregivers and who were not employed in the three years prior to the motor vehicle accident do not reflect the person's actual or potential losses.
18. 18Weiler and Personal Insurance Company of Canada (OIC A95-000259, April 1, 1996). In that case, Arbitrator Renahan dealt with the entitlements of the insured person's surviving spouse, who also met the requirement of being factually dependent upon his wife.
19. 19See the similar discussion regarding housekeeping benefits under section 55, at page 14 above. Section 47, "Attendant care benefits," is another example.
20. 20Christo and Royal Insurance Company of Canada (OIC A-015318, April 23, 1996); Ironside and Royal Insurance Company of Canada (FSCO A97-001143, January 19, 1999); and Tustin (Supra).