Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 25

Appeal P00-00044

OFFICE OF THE DIRECTOR OF ARBITRATIONS

LUMBERMENS MUTUAL CASUALTY COMPANY

Appellant

and

LISA M. DANIELS

Respondent

Before:

Stewart McMahon, Director's Delegate

Counsel: Representative:

Harry Brown (for the Appellant) David Daniels (for the Respondent)

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 allowed. Paragraph 1 of the arbitration order dated July 5, 2000 is replaced with the following:

Lisa Daniels is not entitled to transportation expenses for the contested trips.

Lumbermens Mutual Casualty Company shall pay Ms. Daniels her expenses of the appeal, fixed at $50.00.

February 20, 2001

Stewart M. McMahon Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Lumbermens Mutual Casualty Company (Lumbermens) appeals from an arbitration order dated July 5, 2000. At issue was the Insurer's obligation to pay transportation expenses.

Ms. Daniels was injured in an automobile accident on September 24, 1997. She was 13 years old at the time. As of the arbitration hearing in June 2000, she had travelled to over 200 medical appointments. Each round trip was less than 50 kilometres. She was driven to most of these appointments by one or other of her parents in their own vehicle.

Lumbermens relied upon provisions in s.14(6) of the Statutory Accident Benefits Schedule - 1996 (SABS-96)¹ and the Transportation Expenses Guideline (the Guideline)² that exempt insurers from responsibility for the first 50 kilometres of each trip in the "insured person's vehicle." The arbitrator concluded that the exemption did not apply in Ms. Daniels' circumstances.

For the reasons that follow, I conclude that Lumbermens is entitled to rely upon the 50-kilometre exemption, and accordingly, it does not owe Ms. Daniels transportation expenses for the contested trips.

II. ANALYSIS

Section 14 of the SABS-96 provides for the payment of various medical benefits, including expenses incurred in travelling to and from appointments. There are two important limitations on the insurer's obligation to pay these expenses. First, s.14(5) provides that the insurer is only responsible for expenses authorized by the Guideline. Second, s.14(6) exempts the insurer from liability for expenses related to the first 50 kilometres of each trip taken in "the insured person's automobile."

The Guideline authorizes the use of both private passenger vehicles and taxis. In more extreme circumstances the Guideline authorizes the use of planes, trains and buses. However, the Guideline is designed to encourage individuals to drive themselves to and from appointments in their own automobile. It provides that the insurer is only responsible for reimbursing the insured person's taxi fares if; they do not own or have access to an automobile, are unable to operate an automobile, or other circumstances make it reasonable and practical to take a taxi.

As noted above, s.14(6) exempts the insurer from responsibility for expenses related to the first 50 kilometres of each trip taken in the insured person's automobile. The wording of section 14(6) becomes important, and I set it out in full below:

The insurer is not liable to pay a medical benefit under clause (2)(g) for expenses related to the first 50 kilometres of transportation in the insured person's automobile to and from a treatment session. [emphasis added]

The combined effect of the Guideline and s.14(6) is to require the insured persons to drive herself to and from appointments in her own vehicle, where possible, while at the same time relieving the insurer from responsibility for reimbursing her for the cost of these trips, provided they do not exceed 50 kilometres.

The drafters have differentiated between modes of travel that require the insured person to make a payment to a third party, such as the payment of a taxi fare, and those where the cost can be subsumed within the ordinary expenses inherent in operating an automobile. In the former, the insurer is required to reimburse the insured person, whereas in the latter, the insured person is expected to absorb the expense.

To give effect to this intention, the words "the insured person's automobile" will necessarily include any vehicle the insured person owns or leases. But, frequently it will have to include other automobiles that we would commonly refer to as "the insured person's automobile," despite the fact that they do not own or lease it. The most common example would be a family vehicle routinely used by one spouse, but that is owned or leased in the name of the other spouse. The Guideline addresses this situation by providing that the insured person's automobile includes those they own or lease, and "any other automobile to which the insured person has access."

The arbitrator refused to apply the Guideline because he interpreted the provision "any other automobile to which the insured person has access," to include any vehicle the insured person had permission to ride in. He concluded that this provision rendered the limitation in s.14(6) SABS-96 to trips "in the insured person's automobile" meaningless. To avoid rendering s.14(6) meaningless, he refused to apply the Guideline.

To my mind, the arbitrator erred by interpreting the words of the Guideline so widely. The key to the modern rule of interpretation is to read general words and phrases in context. See Driedger on the Construction of Statutes, 3^rd edition, Ruth Sullivan (Toronto: Butterworths, 1994), at 131. Interpreting a general word or phrase in the context of the statutory provision as a whole, allows the reader to interpret the words widely enough to give effect to the intention of the legislation. Conversely, it also allows general words or phrases to be limited so that they do not extend the reach of the provision beyond its proper application. This is particularly important when interpreting an exempting provision.

The portion of the Guideline being considered reads as follows:

For the purpose of these guidelines, the "insured person's automobile" includes any automobile owned or leased by the insured person or any other automobile to which the insured person has access.

As can be seen, the phrase "any other automobile to which the insured person has access" is found at the end of a sentence that principally defines the insured's automobile by reference to a vehicle he or she owns or leases. In addition, it is part of a larger scheme that, as I suggested above, attempts to differentiate between trips that involve payment to some third party such as a taxi driver, and those that can be subsumed within the ordinary expenses inherent in operating an automobile. The general words of the phrase must be interpreted in this context. By restricting the meaning of "any other automobile to which the insured person has access" to family automobiles or similar circumstances, the goal of the legislation can be promoted, but its reach is not overextended to the point where the Guideline becomes inconsistent with the SABS-96.

The Guideline also extends the 50-kilometre exemption to minors who are driven to appointments. Again, this provision must be read in context. It is part of a scheme designed to treat trips taken in a family vehicle differently. To give effect to this intention, the extension of the exemption to children should only be applied when they are driven to appointments in the family automobile.

If the provisions of s.14(6) are read together with the Guideline, Lumbermens is clearly exempted from paying for the trips in issue. Ms. Daniels was driven to the appointments by her parents in their own vehicles, and each trip was less that 50 kilometres. On this basis, I would overturn the arbitrator's award.

Ms. Daniels was represented by her father. Before ending, I wish to comment briefly on the two submissions he made.

Mr. Daniels indicated that the accident took place while his daughter was a passenger in a neighbour's car, and that the neighbour was not responsible for the accident. He submitted that in these circumstances, neither he or his wife should have to assume any financial liability.

In 1990 the government put into place a "no-fault" scheme that compensated injured motorists irrespective of fault. The two subsequent schemes have largely maintained this no-fault approach. These schemes also provide that, in most instances, the insured person looks to their own insurer, regardless of whose automobile they are in at the time of the accident. Minors and other dependants look to their parents' insurer. As a result of these provisions, Mr. Daniels' daughter is required to look to his policy for indemnity, and who was at fault is immaterial.

Mr. Daniels also questioned the legitimacy of Lumbermens' refusal to pay the travel expenses, when, in his submission, he would have been justified in sending his daughter to the various appointments by taxi at far more cost to the Insurer.

It is easy to sympathise with Mr. Daniels' submission. However, this matter proceeded on a limited set of facts that were sufficient to allow for a determination of whether the 50-kilometre exemption applied. I have no way of knowing what other factors might have effected a request to pay for the cost of taxis. I must decide this case on the proper interpretation of the 50-kilometre exemption provisions. It would be quite wrong of me to distort the meaning of these provisions because I felt sorry for one party or another.

In replacing a fault-based tort scheme, with a no-fault scheme which is based upon a pre-set schedule of benefits, some arbitrary limits had to be drawn. The decision to make insured persons assume the expenses for trips in their own vehicles, that do not exceed 50 kilometres, is one such limit. Drawing these lines is ultimately the responsibility of the Legislature, or those to whom they delegate the task. Where the intention of the drafters is clear, I cannot simply ignore it.

III. CONCLUSION

Lumbermens is entitled to rely upon the provisions of section 14 (6) of the SABS-96, and the Guideline, to deny Ms. Daniels transportation expenses relating to trips of less than 50 kilometres in her parents' automobiles.

The decision of the arbitrator is overturned. Paragraph 1 of the arbitration order dated July 5, 2000 is replaced with the following:

Lisa Daniels is not entitled to transportation expenses for the contested trips.

IV. EXPENSES

At the appeal stage, an insured person who is unsuccessful is not awarded their expenses as readily as at the arbitration stage. However, where the issue is novel, and of general importance, and the insured person advances a reasonable position, previous appeal decisions have included an order of expenses in favour of an unsuccessful insured person.

This is the first time the contested provisions have been interpreted by the Financial Services Commission. In addition, Ms. Daniels was successful at first instance. Because she was represented on the appeal by her father, she has not incurred any significant out-of-pocket expenses. In the circumstances, Lumbermens shall pay Ms. Daniels her expenses of the appeal fixed at $50.00.