Neutral Citation: 2001 ONFSCDRS 71

FSCO A00-000905

BETWEEN:

RICK HISSON

Applicant

and

ZURICH INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Lawrence Blackman

Heard:

April 30, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Dale V. Orlando for Mr. Hisson

Jonathan A. Schwartzman for Zurich Insurance Company

Ms. Becky-Jo Hisson tragically died as a result of a motor vehicle accident which occurred on June 11, 1999. Her father, the Applicant Mr. Rick Hisson, applied for a statutory death benefit from Zurich Insurance Company ("Zurich"), payable under the Schedule.¹ Zurich denied Mr. Hisson's application. The parties were unable to resolve their disputes through mediation, and Mr. Hisson applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Insurance Act"). The hearing proceeded by agreed statement of fact and oral submissions.

The issues in this hearing are:

Is Mr. Hisson entitled to a $10,000 death benefit pursuant to subparagraph 25(2)(5)(i) of the Schedule?
Is Mr. Hisson entitled to a special award pursuant to subsection 282(10) of the Insurance Act?
Is Mr. Hisson entitled to interest, in accordance with section 46 of the Schedule?
Is Zurich liable to pay Mr. Hisson's arbitration expenses, pursuant to subsection 282(11) of the Insurance Act?
Is Mr. Hisson liable to pay Zurich's arbitration expenses pursuant to subsection 282(11) of the Insurance Act?

Mr. Hisson is entitled to a death benefit of $10,000, together with interest in accordance with section 46 of the Schedule.
Mr. Hisson is not entitled to a special award.
The parties may now speak to the question of the expenses of this arbitration proceeding.

Is Mr. Hisson entitled to a death benefit?

(i) Facts

The parties, either in their filed statement and exhibits or in oral arguments, agreed on the following facts, which I so find:

Becky-Jo Hisson was born on November 30, 1981;
On June 11, 1999, Becky-Jo was involved in a motor vehicle accident;
Becky-Jo died the same day as a result of this accident. She was seventeen years old;
Becky-Jo was an insured person at the time of this accident;
At the time of this accident, Becky-Jo was living with her mother, Shirley Hisson, her father, Rick Hisson, and two brothers;
Rick Hisson and Shirley Hisson were married on August 1, 1985. At the time of this accident, they were living together as husband and wife;
Becky-Jo was not principally dependent upon Rick Hisson for financial support at the time of the accident (although there was some financial dependency upon Mr. Hisson who received Canada Pension Plan benefits of $15,927.96 in 1998 and $7,931.28 in 1999, but not as much financial dependency as on Mrs. Hisson, who earned approximately $24,000 in 1998 and $26,000 in 1999). At the time of the accident, Becky-Jo was to return to Erindale College in September 1999 to earn further credits towards her Grade 12 diploma. She was working part-time at Zellers as a cashier, but was not making any financial contribution to the fixed family expenses. She used her earnings for social and recreational activities and for extra clothing;
Becky-Jo was not principally dependent for care on Rick Hisson at the time of the accident nor was he her primary caregiver (however, Mr. Hisson was mainly at home at the time of the accident, having suffered a heart attack in 1996; he did all of the housework and prepared all of the meals; he also drove Becky-Jo wherever she needed to go and provided fatherly advice);
By letter dated July 6, 1999, Shirley and Rick Hisson applied to Zurich for death and funeral expenses;
On her Application for Accident Benefits, also sent by letter dated July 6, 1999 to Zurich, Shirley Hisson indicated under marital status that she was separated and checked off in the income tax status box "equivalent to married." The expected annual income of spouse or dependant is indicated as zero. Shirley Hisson believed that there was a tax advantage to indicating her marital status as separated;
By cheque dated July 23, 1999, Zurich paid a $10,000 death benefit to Shirley Hisson, pursuant to subparagraph 25(2)(5)(i) of the Schedule;
By letter dated November 19, 1999, the Applicant's counsel wrote to Zurich, claiming a further death benefit of $10,000 for Rick Hisson, pursuant to subsection 25(2) of the Schedule;
On December 23, 1999, Zurich denied payment of the requested benefit, indicating it had paid the benefit of $10,000 under subparagraph 25(2)(5)(i); and,
On February 1, 2000, Rick Hisson applied for mediation at the Commission.

I specifically find, based on the exhibits before me and the agreed facts, that at the time of the June 11, 1999 motor vehicle accident:

Becky-Jo was principally dependent for financial support on Shirley Hisson; and that,
Rick Hisson was Shirley Hisson's spouse, pursuant to section 2 of the Schedule (which incorporates the same meaning as in Part VI of the Insurance Act).

Subsection 2(6) of the Schedule (included in the Definitions and Interpretation section) states that:

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.

I further specifically find, based on this definition provision, that Becky-Jo, at the time of this accident, was a dependant of Rick Hisson, based on the latter being the spouse of the person (namely, Shirley Hisson) on whom Becky-Jo was principally dependent for financial support.

(ii) The Law

Mr. Hisson claims a death benefit of $10,000, pursuant to subparagraph 25(2)(5)(i) of the Schedule. Section 25 states, in part:

5.(1) The insurer shall pay a death benefit in respect of an insured person if he or she dies as result of an accident,

(a) within 180 days after the accident

(2) The death benefit shall provide for the following payments:

(5) 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.

At first glance, Mr. Hisson would appear to be entitled to payment of the $10,000 death benefit. It is agreed that Becky-Jo was an "insured person." It is agreed that she died as a result of an accident, as defined in the Schedule. It is agreed that she died within 180 days of that accident. It is agreed, and I specifically find, that Mr. Hisson was "a person in respect of whom the insured [Becky-Jo] was a dependant at the time of the accident," as defined in subsection 2(6) of the Schedule.

The difficulty is that subparagraph 25(2)(5)(i) speaks of "[a] payment of $10,000" to "a person in respect of whom the insured person was a dependant at the time of the accident." Zurich submits that this subparagraph authorizes only one single payment of $10,000. The Insurer maintains that as it has made such payment to Shirley Hisson, it has no further obligations under this provision.

Zurich maintains that if the drafters of the Schedule had intended more than one payment to be made under this provision, then it would simply have indicated that "[a] payment of $10,000" was to be made to each "person in respect of whom the insured person was a dependant at the time of the accident." Zurich points to the death benefit provisions dealing with the insured person's dependants in paragraph 25(2)(2), and former spouses to whom there was a support obligation in paragraph 25(2)(4), both of which specifically require a payment to "each" person in the recipient category.

This reasoning has been followed in two court cases provided to me. In John v. CIBC Insurance (an unreported decision of the Ontario Court (General Division) dated July 28, 1998), Kruzick J. held that the benefit in question was payable only to one insured (respectfully, I note that the benefit is not payable to an insured, but rather to a "person" fitting the defined relationship to the insured person). Kruzick J. reasoned that if the Legislature had intended more than one payment, it would have said so and pluralized the word "person."²Kruzick J. concluded that the intention "was to benefit only one dependant." However, I also respectfully note that the provision does not benefit a dependant. The payment inures to the benefit of "a person in respect of whom the insured person was a dependant."

In Fraczek v. State Farm Mutual Automobile Insurance Company (an unreported decision of the Ontario Court (General Division), dated July 17, 2000), Stinson J. agreed with the analysis in John. Stinson J. focused on the word "each" in paragraphs 25(2)(2) and (4), when multiple payments were contemplated. Stinson J. held that as the insurer had already paid a $10,000 death benefit to the father of the deceased, no further payment was due to the mother. In dicta it is suggested, however, that where there is more than one person in respect of whom the deceased was a dependant, the insurer should endeavour "to determine the identity of those persons and make the payment to them jointly, as arguably they are entitled to share the $10,000 sum."

As implied by Stinson J., subsection 2(6) of the Schedule allows for more than one eligible recipient under subparagraph 25(2)(5)(i). As I read subsection 2(6), one can be a dependant of another person if one is:

(a) principally dependant for financial support on the other person;

(b) principally dependant for financial support on the spouse (as defined in Part VI of the Insurance Act, and which can include more than one person ) of the other person;

(d) principally dependant for care on the spouse (which can include more than one person, as noted above) of the other person.

Put differently, there are more than one person in respect of whom an insured person can be a "dependant."

One difficulty with the analysis in John and in Fraczek is the decisions fail to ask why the Legislature would allow only one payment of $10,000 to be made to a potential group of more than one recipient, without any set method of dividing that sum between those falling within that category. In endeavouring to divine the will of the Legislature, no note is made in these cases that the other death benefit provisions which clearly allow for only one payment to a class of multiple possible recipients, specifically note how the payment is to be divided, namely:

– paragraph 25(2)(3) speaks of an additional payment of $25,000 to a class of dependants, "to be divided equally among the persons entitled;"

– subparagraph 25(2)(5)(iii) provides that a payment of $10,000 (the same payment in question herein) "be divided equally among the persons entitled," namely "the dependants of a person in respect of whom the insured person was a dependant at the time of the accident," should no payment be required under the preceding subparagraphs;

– subsection 25(4) states that if the insured person had more than one entitled spouse at the time of the accident, "the payment shall be divided equally among them."

Why then did the Legislature neglect to provide a specific provision for how the single payment of $10,000 was to be divided for multiple recipients, if subparagraph 25(2)(5)(i) indeed clearly allows for only one single payment? I can conclude only that the absence of the word "each" preceding the word "person" in that provision or the absence of the word "persons" in the plural, is cancelled out by the absence of any provision indicating that the payment is a one lump sum amount to be divided in a certain manner amongst the persons in that class, leaving the provision, to me, ambiguous.

The Insurer, however, submits that the introductory words of paragraph 25(2)(5) of "[a] payment of $10,000 to," clearly means one single payment of $10,000 for that class of recipients. Paragraph 25(2)(4) of the Schedule, however, also speaks of "[a] payment of $10,000 to." However, that provision clearly allows "each former spouse" $10,000. Hence, in that provision "[a] payment of $10,000" can mean multiples of $10,000.

I also note that subsection 25(1) uses the indefinite article when it states that "[t]he insurer shall pay a death benefit in respect of an insured person if he or she dies as a result of an accident." There is, however, no question that "a" death benefit can encompass multiple payments, e.g. a payment to the insured person's spouse, plus payments to each of the insured person's dependants, plus payments to each person in respect of whom the insured person had an obligation at the time of the accident to provide support.

In State Farm and Kristensen (FSCO P99-00051, July 6, 2000), Director's Delegate Naylor referred to the use of the indefinite article "a" in subparagraph 25(2)(5)(i), wherein she stated that:

According to dictionary definitions, "a" can mean one or any one of a greater number; it depends on the context.

Delegate Naylor, however, noted two significant changes regarding this specific benefit from its predecessor legislation in Bill 68 and Bill 164,³ namely:

(i) the payment of $10,000 is no longer to "the" person but to "a" person; and,

(ii) the recipient is no longer one upon whom the "deceased" was "dependent" but rather one "in respect of whom the insured was a dependant. "

The latter change now provides wording which mirrors subsection 2(6). Delegate Naylor reasoned that "there is a general presumption that changes to the wording of legislation are purposeful."⁴ Relying "on the principle of expressio unius est exclusio alterius: to express one thing is to exclude another,"⁵ Delegate Naylor upheld the decision of Arbitrator Renahan⁶ that both parents of a deceased 16-year old were each entitled to a $10,000 death benefit, under subparagraph 25(2)(5)(i). I find Delegate Naylor's reasoning persuasive.

Arbitrator Renahan was of the view that subparagraph 25(2)(5)(i) was "equally capable of meaning that the benefit is 'a payment of $10,000 to each person in respect of whom the insured person was a dependant' or 'a payment of $10,000 to the person or persons in respect of whom the insured was a dependant to be divided equally among them.'" He decided in favour of the latter interpretation, citing the Report of Inquiry into Motor Vehicle Accident Compensation in Ontario of Mr. Justice Osborne, for the following reason:

If the purpose of the benefit is to recognize the value of a child's life to the people upon whom the child was a dependant, it seems reasonable under this legislative scheme that the value to every person who loses a child is the same regardless of whether the child had one or two parents upon whom he was a dependant and regardless of whether his parents have divorced and remarried. Each person upon whom the child was a dependant suffers a separate loss and the legislature has decided that $10,000 is a modest, but not insignificant amount to recognize that loss. In my view, dividing a death benefit between or among those people who qualify, diminishes the value of the child's life to each person and is contrary to the legislative intent.

There is much to commend such reasoning. The Insurer, however, although submitting that the provision in question was not ambiguous, also relied on the consideration that the Schedule, as part of Bill 59, "is essentially remedial legislation . . . One of the objectives implicit in the title of the Act is to achieve stability in car insurance rates. It seems clear that one of the ways to do so was to reduce the extremely generous accident benefits provided for under Bill 164."⁷

The Applicant, however, countered with the comments in Argentini v. Wellington Insurance Co. (1995), 1995 CanLII 7232 (ON CTGD), 26 O.R. (3d) 408, wherein Sheard J., in interpreting the uninsured automobile coverage provisions of an insurance policy, notwithstanding that the "language [was] virtually identical to the originating sections" of the Insurance Act, held that:

the defendant insurer prepared the insurance contract and proffered it to Giorgio Argentini. I do not think therefore that the contra proferentem rule should be excluded. The application here of that rule, that the meaning least favourable to the defendant prevails, assists the plaintiffs.

I am, however, ultimately persuaded by the interpretative presumption against tautology.

As noted above, subparagraphs 25(2)(5)(ii) and (iii) of the Schedule provide:

A payment of $10,000 to,

Delegate Naylor opined in Kristensen that:

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 presumption against tautology, as set out in Driedger at page 159, is that:

It is presumed that the legislature avoids superfluous or meaningless words, that it does not pointlessly repeat itself or speak in vain. Every word in a statue is presumed to make sense and to have a specific role to play in advancing the legislative purpose.

As stated by Arbitrator McMahon in Jarvis (see supra at footnote 2), in interpreting the equivalent (but somewhat differently worded) section under Bill 68, the "survival" sections of the provision "must be given some real meaning and purpose."

I find that subparagraph 25(2)(5)(ii) can only be given "real meaning and purpose" if more than one payment can be made under paragraph 25(2)(5).

The apparent difficulty with subparagraph 25(2)(5)(ii) is that if a "spouse" fits within the definition subsection 2(6) and hence is an eligible subparagraph 25(2)(5)(i) beneficiary, why is "spouse" also mentioned in paragraph 25(2)(5) as a surviving alternative recipient to "a person in respect of whom the insured person was a dependant at the time of the accident."

The logical explanation to me is that where there is a spouse who is also the primary caregiver, that spouse is potentially eligible for two separate $10,000 payments under paragraph 25(2)(5).

The first payment is received, pursuant to subparagraph 25(2)(5)(i), in the spouse's own right as a defined person, under subsection 2(6), in respect of whom the deceased was a dependant.

The second payment is received, pursuant to subparagraph 25(2)(5)(ii), as a derivative claim as surviving spouse of "the person in respect of whom the insured person was a dependant at the time of the accident" as long as the surviving spouse was also the insured person's primary caregiver.

To give a hypothetical example, let us say that the insured person Z has two parents who are married to each other, namely X in respect of whom Z was financially dependent at the time of an accident and Y in respect of whom Z was dependent for care at the time of the accident. If Z dies in an accident, X and Y would each receive $10,000.

Let us say that both Z and X are injured in the accident, and that as a result both die within 30 days of the accident. In respect of Z, Y would firstly be entitled to the sum of $10,000 either as the primary care provider or as the spouse of the primary financial provider, pursuant to subsection 2(6) and subparagraph 25(2)(5)(i). X is not entitled to a death benefit in respect of Z, as subsection 25(3) provides that no death benefit is payable to a person who dies before the insured person or within thirty days after the insured person. However, Y, as the surviving spouse and primary care provider "inherits" X's $10,000 benefit pursuant to subparagraph 25(2)(5)(ii), and would receive a total death benefit in respect of Z of $20,000.

However, let us say that the deceased Z was financially dependent on X and dependent for care on Y. X and Y are not spouses. Both Z and X die within 30 days of the accident. X leaves behind four dependants, other than Z. If only one $10,000 payment is payable, then the equitable solution provided by the courts might be that Y receives $5,000 (per capita) and that the dependants each receive $1,250 (per stirpes, dividing the $5,000 equally). However, subparagraph 25(2)(5)(iii) itself requires that there be "a $10,000 payment" "to the dependants" (the three subparagraphs being connected by the word "or"). If there is only one $10,000 payment and that is made to the dependants, Y, the person upon whom Z was dependent for care, and who presumably more keenly feels the loss of the deceased, receives nothing. I cannot believe that the legislation allows for such a result. Rather, fairness and logic both dictate that Y receive a $10,000 payment, and the four dependants each receive $2,500, the division specifically set out in subparagraph 25(2)(5)(iii).

Hence, I am persuaded, on a balance of probabilities, that subparagraph 25(2)(5)(i) allows payments of $10,000 to each person who comes within the subsection 2(6) definition. Accordingly, I find that Rick Hisson is entitled to a $10,000 death benefit from Zurich, over and above the $10,000 death benefit already paid by Zurich to Shirley Hisson.

Is Mr. Hisson entitled to a special award?

The Applicant claims a special award pursuant to subsection 282(10) of the Insurance Act. That provision states that:

If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

The Applicant submits that since the Kristensen appeal decision was released on July 6, 2000, Zurich has unreasonably withheld from Rick Hisson the $10,000 death penalty and that a special award at the maximum amount of 50% is warranted.

I am not persuaded that any special award is warranted.

Subparagraph 25(2)(5)(i) is a difficult provision to interpret. Only one decision at the Commission, namely Kristensen, has dealt with that provision. The Applicant relies solely on that decision. That decision is presently under judicial review. There have been two court decisions on this same provision. Both found differently than Kristensen.

It can hardly be said that the law is settled in this area. Accordingly, I cannot find that it was unreasonable for the Insurer to withhold payment. The Applicant, however, is entitled to interest on the benefit, in accordance with section 46 of the Schedule.

EXPENSES:

I wish to again sincerely thank both Mr. Orlando and Mr. Schwartzman for their professional and cooperative approach to this proceeding and for their very able submissions on behalf of their respective clients.

I may be spoken to, should the parties be unable to agree on the question of expenses of this arbitration proceeding.

May 15, 2001

Lawrence Blackman Arbitrator

Date