Liberty Mutual Insurance Company v. Baldev Kaur, 2000 ONFSCDRS 98

Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2000 ONFSCDRS 98

Appeal P99-00060

Appellant

and

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Stephen B. Macaulay (for Liberty Mutual)

Bassanio Ghose (for Baldev Kaur)

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 arbitration order dated October 20, 1999, as corrected by order dated December 10, 1999, is confirmed.
Ms. Kaur is entitled to her reasonable appeal expenses, payable by Liberty Mutual Insurance Company.

June 7, 2000

David R. Draper

Director's Delegate

Date

I. NATURE OF THE APPEAL

This is an appeal by Liberty Mutual Insurance Company ("Liberty Mutual") from an arbitration order dated October 20, 1999, with a correction dated December 10, 1999. Liberty Mutual claims the arbitrator erred in concluding that Baldev Kaur's claim for death benefits and funeral expenses was not time-barred. In the alternative, it submits that he erred in determining that Ms. Kaur was a dependant of her deceased daughter and that her deceased son was her dependant.

II. ANALYSIS

The facts of this case are tragic. Ms. Kaur was living with her daughter, Shelley, and her son, Tajinder, in a basement apartment in her brother-in-law's home. Due to a workplace injury, she had been unable to work since 1991 and, starting in 1993, began receiving a monthly disability pension from the Canada Pension Plan. Shelley was 23 years old and attending university full-time. She also worked approximately 30 hours per week as a cashier in a grocery store. Tajinder was a 16-year-old high school student who earned some money selling newspapers.

In the summer of 1994, the family travelled to India for Shelley's marriage to a man she met on an earlier trip. According to Ms. Kaur, the plan was for Shelley to return to Canada with her new husband. Unfortunately, these plans were interrupted by a terrible accident. After the wedding, Shelley, her new husband and Tajinder decided to visit a local resort area. Ms. Kaur did not go with them. On this trip, their rented car collided with a bus, killing them all.

Ms. Kaur returned to Canada approximately one month after the accident, but did not notify Liberty Mutual or any other insurer about the accident until much later. According to the arbitrator, it is not clear whether the initial contact was made in February 1998 by a lawyer who was representing her at that time, or not until August 1998, when she applied for mediation with the assistance of a paralegal. In any event, the arbitrator found that Liberty Mutual was not notified for at least three and a half years after the accident.

At arbitration, Ms. Kaur claimed death benefits and funeral expenses in respect of both Shelley and Tajinder. In response, Liberty Mutual argued that her claim was out-of-time because she failed to provide notice of the accident within 30 days, as required by s.59(1) of the SABS-1994.¹In the alternative, Liberty Mutual contested Ms. Kaur's claim that she was dependent on Shelley for financial support and care, and that Tajinder was financially dependent on her.

The arbitration hearing took place over two days in May 1999. The only exhibits were Ms. Kaur's income tax returns for 1991-1993 and Shelley's income tax returns for 1991-1994. Two witnesses testified: Ms. Kaur and Mr. Surinder Singh, the brother-in-law who rented his basement apartment to Ms. Kaur and her children. A court reporter was present and Liberty Mutual filed a transcript in support of its appeal.

C. Timeliness

The application process is set out in s.59 of the SABS-1994. According to subsection (1), the insured person must "notify the insurer within thirty days after the circumstances arose that gave rise to the entitlement to benefits, or as soon as practicable thereafter." In this case, the circumstances arose on July 15, 1994 — the date of the accident. Although Ms. Kaur did not contact Liberty Mutual until long after the 30-day period expired, the time limits are not absolute. Subsection 59(4) provides that "a failure to comply with a time limit set out in subsection (1) or (3) does not disentitle a person to benefits if the person has a reasonable excuse." This was the issue before the arbitrator. Looking at the situation, she concluded that Ms. Kaur was so profoundly affected by the accident that she had a reasonable excuse for the delay, despite the lengthy period involved:

My finding that a delay of three and one-half years can be excused under subsection 59(4) is restricted to the unique circumstances of this case for the reasons expressed above, and should not be interpreted as a general sanction for delays of this length. (p.9)

On appeal, Liberty Mutual cites previous arbitration decisions that stand for the following principles:

The onus is on the insured person to establish a "reasonable excuse."
Ignorance of the law alone is not a "reasonable excuse."
The test of "reasonable excuse" is both a subjective and objective test that should take account of both personal characteristics and a "reasonable person" standard.
In the absence of a reasonable excuse, the lack of prejudice to the insurer is not a sufficient basis for extending the 30-day time limit.

While I agree with these principles, I find nothing in the arbitrator's decision to suggest that she did not apply them. On the contrary, she examined whether Ms. Kaur established a reasonable explanation for the delay, comparing her actions to what might be expected from other people in her situation. At page 8 of the decision, the arbitrator finds that while grief would be an expected response for anyone facing Ms. Kaur's loss, she was affected more profoundly due to her own disabilities, her limited ability to communicate in English and her reliance on Shelley to help her with day-to-day tasks.

The arbitrator also acknowledged that a lack of prejudice to the insurer is not a sufficient basis for extending the 30-day time period.² While she notes that a claim for death benefits and funeral expenses does not involve the same kind of evolving evidence as a disability claim, the decision properly focusses on whether Ms. Kaur had a reasonable excuse for the delay in contacting Liberty Mutual.

Another objection is that, in Liberty Mutual's submission, the arbitrator failed to consider the assistance Ms. Kaur received from her brother-in-law and others. As an example, it points to the fact that within a couple of months of the accident, she had her brother-in-law sell her old car, purchase a new one and arrange for insurance. This, Liberty Mutual claims, is a clear indication that she continued to deal with her affairs, which reasonably included contacting her insurer about the accident.

I am not convinced that the arbitrator viewed the evidence as narrowly as Liberty Mutual suggests. She clearly understood that following the accident, Mr. Singh and his wife looked after Ms. Kaur by cooking her meals and making sure she did not sleep alone.³ However, she also seems to have accepted that Ms. Kaur was unable to discuss the accident for a considerable period of time. In my view, Ms. Kaur's desire to get rid of a car that reminded her of Shelley is not inconsistent with her inability to deal with her loss. While Mr. Singh and his wife were willing to help, they needed direction from Ms. Kaur to pursue her legal interests, direction the arbitrator found she was not reasonably able to provide.

In large measure, Liberty Mutual's appeal challenges the arbitrator's factual findings. While there were weaknesses in Ms. Kaur's case, I am satisfied there was evidence to support the arbitrator's findings. The lack of medical evidence about Ms. Kaur's own condition, both before and after the accident, is the most surprising. In my view, she took a significant risk in not providing this kind of evidence. However, the arbitrator found her testimony, supported by Mr. Singh, sufficient to establish a reasonable excuse. I am not prepared to second-guess this assessment, particularly as there is no indication that Ms. Kaur failed to provide any medical information requested by Liberty Mutual.

The delay in this case was long. As Liberty Mutual argues, three and a half years is quite a departure from 30 days. However, the history of the legislation offers an important insight. The predecessor to the SABS-1994 also had a 30-day time limit for giving initial notice to the insurer.⁴ As in the SABS-1994, this time limit was not absolute. The legislation provided that a failure to comply did not invalidate a claim if the insured person had "a reasonable excuse and so long as there is compliance within two years of the accident." This suggests that a reasonable excuse could extend the time limit for up to two years. In the SABS-1994, the two-year cap was removed. In my view, it is hard to see this as anything other than a recognition that delays of more than two years might be justified.

As the arbitrator states, it takes unusual facts to justify such a lengthy delay. She found, however, that this is one of those unusual cases. I am not persuaded that she acted outside her authority and, therefore, the appeal on this issue is dismissed.

D. Dependency - Shelley

"Dependant" is defined in s.4 of the SABS-1994:

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.

At the arbitration hearing, Ms. Kaur claimed entitlement to death benefits and funeral expenses in relation to Shelley on the basis that she was a principally dependent on Shelley for both financial support and care. The arbitrator did not accept her argument on financial dependence, but agreed that she was principally dependent on Shelley for care.

On appeal, Liberty Mutual argues that the amount of care provided by Shelley fell well short of the kind of care contemplated by the definition of dependant in the SABS-1994. In its submission, the evidence clearly established that Ms. Kaur was able to look after her own personal needs and daily tasks, although at a fairly basic level. While Shelley's assistance might have improved the quality of Ms. Kaur's life, Liberty Mutual argues that her responsibilities at school and work, as well as her own social life, left her little time to act as her mother's primary caregiver.

There is some strength to Liberty's Mutual's argument. However, as held in previous arbitration decisions, care dependency cannot be determined on the same kind of mathematical basis as financial dependency.⁵ The important factor in this case is Shelley's critical role in allowing her mother to live independently. This is captured in Mr. Singh's testimony, where he states that Shelley took on a fundamentally different role than his children and most other children.⁶ While children often help with household chores, particularly as they get older, Shelley took responsibility for fundamental tasks that her mother was not able to do.

I was referred to one other arbitration decision involving a claim by parents that they were principally dependent on their child for care. In Giroux and Co-Operators General Insurance Company and Motor Vehicle Accident Benefits Claims Fund, (OIC A95-000203, November 6, 1997), Alan and Sheila Giroux, both deaf, claimed that they were entitled to death benefits on the death of their 24-year-old son, Glen, on the basis that they were principally dependent for care on him. The arbitrator rejected the claim for the following reasons:

The evidence is clear that the Giroux have the independent ability to look after their own personal needs for food, clothing, self-care and hygiene, transportation, and financial support. They were able to independently care for and raise their son to maturity. They have some ability to communicate with others for routine daily purposes. There is no evidence that, due to their deafness, they required any extraordinary emotional support from their son, or were otherwise dependent on him for their physical well-being.

In my view, this decision represents different factual findings, not a different approach to dependency. While Ms. Kaur's claim would have been strengthened by supportive medical evidence, I am satisfied that the arbitrator's findings are adequately supported by the testimony she heard. Consequently, the appeal on this issue is dismissed.

C. Dependency - Tajinder

At arbitration, Liberty Mutual argued that if Ms. Kaur was financially dependent on Shelley, as she claimed, it would be inconsistent to find Tajinder financially dependent on her. The arbitrator accepted this analysis, but found it inapplicable due to her conclusion that Ms. Kaur was not financially dependent on Shelley.⁷ As a result, she found no impediment to concluding that Tajinder was principally dependent on his mother for financial support.

On appeal, Liberty Mutual challenges the factual basis of the arbitrator's decision. It submits that there was little or no evidence to support Tajinder's financial dependence on Ms. Kaur. In my opinion, however, Tajinder's situation justifies the brief reasons provided by the arbitrator. He was a 16-year-old, grade 10 student who lived at home and had little independent income. Absent compelling evidence to the contrary, which was not present here, I see no reason why dependence cannot be largely assumed. For this reason, the appeal on this issue is dismissed.

III. APPEAL EXPENSES

Given the outcome and Ms. Kaur's appropriate participation in this appeal through her lawyer, I have no hesitation in concluding that she should recover her reasonable appeal expenses.

June 7, 2000

David R. Draper

Director's Delegate

Date

Footnotes

Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule—Accidents after December 31, 1994 and before November 1, 1996.
Arbitration decision, p.8.
Arbitration decision, p.7.
R.R.O. 1990, Regulation 672, as amended, the Statutory Accident Benefits Schedule—Accidents Before January 1, 1994, s.22.
For example, see Weiler and Personal Insurance Company of Canada, (OIC A95-000259, April 1, 1996).
Arbitration transcript, volume 2, p.36-37.
Arbitration decision, p. 16.