Neutral Citation: 2002 ONFSCDRS 112

FSCO A01-000827

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RAYMOND FORTIN

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Susan Sapin

Heard:

December 18, 2001, by telephone conference call.

Appearances:

William C. Goldstein for Mr. Fortin

James Adams for Economical Mutual Insurance Company

Issues:

The Applicant, Raymond Fortin, was injured in a motor vehicle accident on October 25, 2000. He applied for and received weekly income replacement benefits (IRBs) of $147.41 from Economical Mutual Insurance Company ("Economical"), payable under the Schedule.¹ Mr. Fortin disputed the Insurer's calculation of his IRB. The parties were unable to resolve their disputes through mediation, and Mr. Fortin applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

1. Should IRBs received due to a previous motor vehicle accident be included as "gross income from employment" pursuant to paragraph 8(3)2 of the SABS 1996 in order to calculate the Applicant's IRB from a second accident which occurred on October 25, 2000?

Result:

1. Mr. Fortin's IRBs received as a result of a previous motor vehicle accident cannot be included as "income" for the purpose of determining the IRB to which he is entitled under the SABS 1996 (the Schedule) for his October 25, 2000 motor vehicle accident.

ANALYSIS:

The issue and arguments of the parties:

At the time of his October 25, 2000 motor vehicle accident, Mr. Fortin was a self-employed carpenter. He had returned to work on July 25, 2000 after recovering from injuries sustained in a previous motor vehicle accident in March 1999. Prior to his return to work, Mr. Fortin received IRBs of $400 per week from the first accident. As a result of injuries sustained in the second accident, Mr. Fortin qualified for IRBs under section 4 of the Schedule (SABS 1996) on the basis that he was employed at the time of the accident and substantially disabled from performing the essential tasks of that employment. Economical calculated his IRB to be $147.41 per week, based on the income he earned from his employment between July 25, 2000 and the date of the accident, October 25, 2000.

Mr. Fortin argued that Economical should have included his previous IRB from the first accident in his income from employment when it calculated his IRB, because to exclude it significantly undercompensates him for his actual loss of income. Economical argued that, under the SABS 1996, an IRB does not qualify as "income from employment."

Subsections 6 and 8 of the SABS 1996 set out the rules for determining the amount of an IRB. Subsection 6(1) of the SABS 1996 provides that "the amount of the income replacement benefit shall be...80 per cent of the insured person's net weekly income from employment..." "Employment" is defined in subsection 2(5) and includes self-employment. "Income from employment," however, is not defined. Instead, subsection 61(1) sets out a mathematical formula to calculate "net weekly income" by deducting certain amounts from the insured person's "gross annual income from employment."

As a self-employed person, Mr. Fortin's income is determined in the same manner as his profit from his business would be determined under the Income Tax Act (Canada and Ontario) - essentially, income less expenses, in either of the 52 weeks prior to the accident, or the last fiscal year of his business.² The parties agree that the 52- week period applies in this case.

Based on these provisions and Mr. Fortin's income tax return, Economical calculated Mr. Fortin's IRB by dividing his net income from employment for the 13 weeks he actually worked prior to his October 25, 2000 accident by 52, yielding a weekly IRB of $147.41. Economical did not include the $400 weekly IRB Mr. Fortin received during the first 39 of the 52 weeks before the accident as income from employment for the purpose of calculating his IRB.

Mr. Fortin argued that the IRB of $400 from the first accident should be included as income from employment for the purpose of calculating his IRB from the second accident, and submitted that his IRB should be calculated as follows:

Oct 25/99 to July25/00 / 39 weeks at $400/wk (IRB)

$15,600.00

July 25/00 to October 25/00 / $10,289.82 (net) x 80%=

8,231.86

Income for 52 weeks

$23,831.86

Net weekly income

458.31

Mr. Fortin's calculation does not appear to be accurate. Even if IRBs from a previous motor vehicle accident could be included in employment income, an IRB of 80 per cent of his net weekly employment income, assuming as indicated that $10,289.82 represents net income, would actually work out to $398.30 per week. ([($15,600 + $10,289.82)/ 52] x 80%).

Mr. Fortin based his arguments in support of his position entirely on the arbitration decision in Shearstone and York Fire and Casualty Insurance Company (FSCO A00-000322, February 6, 2001), which held that payments received by an insured person pursuant to section 43 of the Workplace Safety and Insurance Act 1997("WSIA")³should be included in his "income from employment" for the purpose of calculating his IRB under the SABS 1996. Mr. Fortin maintained that IRBs are analogous to worker's compensation benefits, and so the same reasoning should apply.

The Shearstone arbitration award represented a significant departure from a long line of arbitration decisions dealing with similar provisions for calculating IRBs under the Ontario Motorist Protection Plan or "OMPP" (the SABS 1990),⁴one of the predecessor no-fault schemes. It was overturned on appeal on January 8, 2002, in favour of the previous jurisprudence, after Mr. Fortin's preliminary issue hearing. Economical relies on the SABS 1990 cases in support of its position.

These cases consistently held that workers' compensation benefits for temporary disability, as well as statutory IRBs, were not "income from employment," but, rather, "payments for loss of income" under section 12 of that Regulation, which provided for IRBs equal to the lesser of $600 or:

12(4)(b) 80 per cent of the insured person's gross weekly income from his or her occupation or employment, less any payments for loss of income, except Unemployment Insurance benefits,⁵

(i) received or available ...under the laws of any jurisdiction or under any income continuation benefit plan...[emphasis added'

Neither the term income from occupation or employment "nor payments for loss of income" is defined in that legislation, and Mr. Fortin and Mr. Shearstone were not the first to argue that a collateral benefit should be considered income" rather than a "payment for loss of income."

In determining whether a particular collateral benefit was a payment for loss of income, arbitrators considered the nature and source of the payment, viewed in the context of the program in which it operated. Temporary total workers' compensation disability benefits were intended to compensate for loss of income, and so were deductible under section 12(4)(b) of the SABS 1990, whether they related to the same motor vehicle accident, or to a prior workplace injury.⁶

Permanent disability pensions, on the other hand, were held not to be directly related to the employment income of an individual, because they were not intended to reimburse an injured worker for loss of that income. They were assessed according to the nature and degree of permanent disability and were payable for life, as compensation for permanent injury, regardless of subsequent earnings.⁷ They were neither included in employment income, nor deducted from it. Benefits contingent on a worker's participation in a rehabilitation program were also found not to be "payments for loss of income," but held to be a "living allowance." On that basis, they too were neither included in employment income, nor deducted from it. Until Shearstone, no arbitration or appeal decision had treated temporary total disability benefits as income from employment.⁸

In Jarvis⁹, Arbitrator Mackintosh acknowledged that the rationale for the distinction between what is "income from employment, "and what is "payment for loss of income" is not explicitly stated in the majority of the cases, except for Arbitrator Rotter's statement in Jolin and Jevco Insurance Company,¹⁰ that "the legislative scheme clearly distinguishes revenue which is "income from employment" from revenue which is payments for loss of income" and treats them quite differently." This rationale appears to have been based solely on a plain reading of the language of section 12 of the SABS 1990. Arbitrator Rotter concluded that employment income and payments for loss of income were mutually exclusive, i.e. certain payments could be one or the other, but not both at the same time.

In McCormick,¹¹ (then) Arbitrator Naylor explained what in my view is the key reason for the distinction between employment income and payments for loss of income, and for deducting certain types of benefits under subsection 12(4) — the desire to avoid double compensation:

the general intent and purpose of the provision of income replacement benefits is to provide compensation for loss of income arising from an inability to earn because of the effects of an automobile accident....if workers' compensation benefits are not accounted for and deducted from income replacement benefits, [the insured person] will receive payment under both schemes, both intended to compensate him for the same loss, namely, his loss of income from employment, as a result of his inability to work..... Moreover, the decision of the Supreme Court of Canada in Ratych v. Bloomer (1990) 1990 CanLII 97 (SCC), 69 D.L.R (4th) 25, confirms that the general pol icy of the law is against double compensation.¹²

In Jensen,¹³a SABS 1990 case upon which Economical relied in this hearing, Mr. Jensen argued that he should be able to include his workers' compensation benefits as income from employment, because the payments received after the accident were deductible from his IRB, and because the calculation of his IRB otherwise did not fairly reflect his earnings' loss. This was clearly a case not of "double compensation," but of actual "undercompensation." Although Director's Delegate Naylor expressed considerable sympathy for Mr. Jensen's position, she nevertheless concluded that the apparent distinction between income from employment and payments that indemnified against loss of income, while not necessarily a compelling indication of legislative intent, did make it more difficult to read subsection 12(4) as Mr. Jensen suggested. The rationale for the distinction, that double compensation was to be avoided, as noted in McCormick, was not mentioned.

Given that double compensation, the very reason for the legislated distinction between what is income and what are payments for loss of income, did not exist in Mr. Jensen's case, it is not clear to me that the distinction must necessarily be interpreted to exclude workers' compensation benefits (or, by analogy, IRBs) from employment income. I note also that the Director's Delegate stressed that her reasoning did not apply to the SABS 1994 or the SABS 1996, as the wording and context of these later schemes were different.¹⁴

In the Shearstone arbitration award upon which Mr. Fortin relied, Arbitrator Wilson undertook an analysis of the purpose of workers' compensation payments and their connection to employment that was very similar to that undertaken in the SABS 1990 cases noted above. His analysis, however, led him to the opposite conclusion. He held that "income from employment" should be broadly defined, and should include temporary workers' compensation benefits, because those benefits arose from the "state of being employed." Arbitrator Wilson did not address the legislative distinction between income from employment" and payments for loss of income" found in each version of the SABS. Nor did he address the jurisprudence noted above, which excluded workers' compensation payments from "income" under the SABS 1990.

While accepting the principle that the provisions of the SABS 1996 should not result in "double compensation," Arbitrator Wilson, like Mr. Fortin and previous arbitrators, was clearly concerned by an interpretation of the legislation that would result in undercompensation:

"to arbitrarily exclude Mr. Shearstone's pre-accident income from a workers' compensation plan, would artificially distort the calculation of his income replacement benefit. He would be paid, in fact far less than the normal and usual wage he was receiving from his employer....The common thread running through these provisions is that the indemnity, in this case the income replacement benefit should mirror the loss, subject to the legislative limits. While there may be some justification for excluding "windfal ls" that may distort an applicant's income picture, there is no compelling reason for extending the exclusion to payments which only mirror regular income from employment [emphasis added].

In the Shearstone appeal decision, Director's Delegate Makepeace held that the jurisprudence under section 12 of the SABS 1990 applied equally to similar provisions in the SABS 1996.

I believe Arbitrator Wilson was correct in his conclusion that there is no compelling reason to exclude loss of income payments from employment income. The only compelling reason to be found in the j urisprudence, in my view, is the principle against double recovery, a principle which is key to any interpretation of legislative intent in the no-fault context. As this important principle does not appear to have been raised in the Shearstone appeal, I disagree in part with the result in that decision. This will be discussed more fully below. Despite this, however, I consider myself bound by the decision of the Director's Delegate.

I will deal first with the arguments advanced by Economical at the preliminary issue hearing, which were as follows. First, that IRBs are not income from self-employment, because they cannot be characterized as profit from a business as defined in section 62. This is a compelling argument. The fact that the Schedule itself defines "income" differently for self-employed persons than for salaried employees cannot be ignored. Given that income from self-employment is specifically defined to be profit from a business as defined in the Income Tax Act, it is not evident that, even on a broad definition of income from employment, an IRB could be considered as profit from a business. In any event, in the Shearstone appeal decision, the Director's Delegate upheld FSCO jurisprudence on a different point, that "income from employment,"even broadly defined, did not extend to payments from a third party such as the Workplace Safety & Insurance Board (WSIB). Mr Fortin did not present any argument that this reasoning would not apply to IRBs paid by an insurance company pursuant to no-fault legislation.

Second, Economical argued that the SABS 1990 cases referred to above should be followed because IRBs are similar in nature to workers compensation benefits, and the wording in the current SABS 1996 is sufficiently similar to that in the SABS 1990 for the same analyses to apply. As noted above, the Director's Delegate in the Shearstone appeal confirmed that the distinction between employment income and payments for loss of income in the SABS 1990 jurisprudence applied to the SABS 1996.

Economical's third argument was that a finding that IRBs are income would render the deductibility provisions of the Schedule incapable of proper statutory interpretation. Economical's reasoning is as follows: Subsection 60(3) of the SABS 1996, unlike the SABS 1990 sets out a separate category of collateral benefits entitled "temporary disability benefits."¹⁵ Included in this category are IRBs and temporary workers' compensation benefits, among others. Under subsection 60(1), these collateral benefits are deducted from IRBs. According to Economical, if IRBs are now defined to be temporary disability benefits, deductible from employment income, then they cannot at the same time be employment income. (As per the reasoning in Jolin and other cases discussed above.)

Furthermore, subsection 6(2) also allows insurers to deduct from IRBs, 80 per cent of an insured person's net post-accident "income from employment." Economical argues that, if IRBs were in fact already deductible as post-accident income from employment "under section 6(2), which they are not, then there would be no need to include them in the definition of temporary disability benefit" in subsection 60(3). And, insurers would be entitled to deduct them twice.

This is an interesting argument, but one which, in my view, raises more questions than it answers. If, as Economical argues, IRBs cannot be "income from employment" because the SABS 1996 says they are now temporary disability benefits," then, by the same logic, neither can they be "payments for loss of income." That being the case, in my view, one must ask whether the SABS 1990 distinction between payments for loss of income" and income from employment," and its jurisprudence that says they are mutually exclusive, still applies. This point was not considered in the Shearstone appeal.¹⁶

Economical's final argument was that legislative evolution, as a tool of statutory interpretation, supports its position that IRBs cannot be considered to be income from employment under the current SABS 1996 .

This was in fact the reasoning of the Director's Delegate in Shearstone, which, simply put, is that the actual wording of the current Schedule, viewed in historical context, did not support the interpretation that workers' compensation benefits (or, by analogy, IRBs in Mr. Fortin's case) could be included in income. She compared the IRB provisions in the SABS 1996 with those in previous no-fault Schedules, on the basis that "It is well-established that the evolution of a provision may be looked at by the courts to help determine its meaning or purpose, to resolve conflict among competing provisions, or to detect drafting errors." In doing so she specifically rejected Arbitrator Wilson's approach, that each no-fault Schedule was self-contained.

As is well known, the SABS 1994, successor to the SABS 1990 and predecessor to the current Schedule, the SABS 1996, entirely eliminated the right to sue protected defendants in tort for pecuniary losses such as lost income. As a result, the provisions dealing with income replacement under the SABS 1994 were necessarily more comprehensive, and considerably more complicated, than those under the SABS 1990. For example, a new category of payment was defined, "temporary disability benefit," which included, among others, IRBs and workers' compensation benefits. (As noted, the definition of "temporary disability benefit" in the SABS 1994 is virtually identical to that in subsection 60(3) of the SABS 1996.)

Under subsection 9(6) of the SABS 1994, temporary disability benefits, as well as UI benefits, were specifically included in the calculation of gross income from employment. IRBs and workers' compensation benefits, therefore, were both included as income under subsection 9(6), and deducted as a "temporary disability benefit" under the collateral benefits rules in section 75, a calculation that more fairly reflected the insured person's real income loss.¹⁷

As Director's Delegate Makepeace pointed out, section 9(6) of the SABS 1994 was succeeded by subsection 8(6) of the SABS 1996, which also states that "gross income" shall include EI (formerly "UI") benefits. This time, however, temporary disability benefits were not included in the section. The Director's Delegate concluded that,

"the drafters [of s.8(6) of the current Schedule] evidently considered what payments for loss of income should be included in "gross income," and they decided UI benefits should be included. By implication, they intended to exclude other payments for loss of income.... The drafters of s.8(6) were presumably aware of the many OMPP cases that said workers' compensation benefits are not "income from employment." They must also be presumed to have known that s.9(6) of Bill 164 changed that law by expressly including temporary disability benefits, defined to include temporary workers compensation benefits, in "income from employment." [emphasis added].

In her view, the only reasonable explanation of the change between section 9(6) of the SABS 1994 and section 8(6) of the SABS 1996 was that the drafters intended to narrow the definition of "income" by removing workers compensation benefits (and, of course, other "temporary disability benefits" such as IRBs) from it.

In arriving at her conclusion, the Director's Delegate acknowledged the resulting unfairness to the applicant:

"As a result of excluding worker's compensation benefits from "income," Mr. Shearstone's income replacement benefits undercompensate his income loss resulting from the motor vehicle accident. Nevertheless, I have little doubt that this is what the drafters intended. Each of the accident benefit schemes represents a different balance between the legislative objectives of compensation and cost control. In my view, the most natural reading of the Schedule is one that excludes workers' compensation benefits from "income." Therefore, I find that the arbitrator's conclusion turned on an error of law in interpreting the regulation, and the decision cannot stand."

I do not agree that the fact that temporary disability benefits are not included in section 8(6) of the current Schedule must lead to the conclusion that they were deliberately excluded in order to limit IRBs, in cases where the amount of IRB is clearly inadequate, or to the conclusion that IRBs cannot be included in employment income, for several reasons.

Firstly, certain principles fundamental to the Ontario no-fault schemes, such as fair and adequate compensation and the presumption against double recovery, are missing from the strict statutory interpretation undertaken. These principles are relevant to cases such as Mr. Fortin's, where the issue in dispute is an IRB that is clearly inadequate.

In Jensen, Director's Delegate Naylor reiterated the legislative purposes underlying the rules determining the level of benefit identified by Justice Laskin in Bapoo v. The Co-operators General Insurance Company, (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616 (C.A.):

These included: ensuring a fair or adequate level of income replacement, seeing that applicants are not overcompensated and that automobile insurers pay last by taking other sources of income into account, and ensuring that benefits will be delivered quickly and efficiently by means of a system that is administratively manageable. (Emphasis added.)

In my view, there is an obligation to construe no-fault legislation in light of these principles. It is not disputed that the current Schedule was intended to scale back no-fault compensation. As stated by Director's Delegate Naylor:

The SABS is an integral part of a compensation scheme that includes both statutory benefits and access to damages based on fault. The Bill 59 legislative changes,¹⁸ of which SABS-1996 is a part, redrew the balance of the "exchange of rights" between accident benefits and tort. Access was broadened on the tort side. Subject to some exceptions, the right to recover pecuniary loss in a tort action, which had been removed under the previous scheme, was restored. Accident benefits were cut back. The declared objective of the changes was to stabilise insurance premiums.¹⁹

Despite this, it remains a legitimate question, whether the intent to cut back benefits should extend so far as to undermine the very purpose of no-fault legislation, which is to provide fair and adequate compensation. Secondly, as a result of the distinction in the SABS 1990 between employment income and "payments for loss of income," designed to limit double recovery, adjudicators have most often approached the question of determining an adequate IRB rate, not from the point of view of what should be included in income, but from the point of view of what no-fault insurers, who are the insurers of last resort, should be able to deduct from what they are required to pay. As we have seen, this was done by analyzing particular types of collateral benefits, to determine whether they were deductible from IRBs as "payments for loss of income." This is only one half of the equation.

In Wilcox,²⁰ Director's Delegate Draper conducted a comprehensive review of the successive no-fault schemes and arbitral and judicial interpretations of the meaning of terms such as "income" and "payments for loss of income." As he stated, "The deductibility of collateral benefits has kept policy analysts, legislators, and adjudicators busy for years." It has also led to some surprising reversals of judicial opinion. For example, long before the Court of Appeal decision in Cugliari, the courts considered CPP benefits to be payments for loss of income under the Insurance Act, and deducted them from damage awards on that basis. The Court of Appeal held that CPP benefits were not deductible. The underlying rationale was that it was not necessary to deduct them because their receipt did not offend the principle against double recovery. Leave to appeal this decision to the Supreme Court of Canada was denied.²¹ CPP benefits have also been found not to be deductible under subsection 12(4) of the SABS 1990.²²

I feel that an argument might be made, based on this line of reasoning, and in the appropriate circumstances, that the same principles that apply in determining whether a certain type of payment should be deducted from IRBs, one-half of the equation, should apply to the determination of what can be included in income from employment, the other half of the equation. The language under the current Schedule is not so clear and unambiguous that it stands in the way of a broad interpretation of "income from employment" that would include IRBs, where to do so does not result in double compensation, and to exclude IRBs results in inadequate compensation. These arguments were not made in the case before me, nor, to my knowledge, in Shearstone.

Thirdly, I feel an argument can be made that the omission of express wording in subsection 8(6) of the SABS 1996 to include temporary disability benefits in employment income is neither relevant nor determinative. There is nothing inherently illogical or contradictory in calculating an IRB by including it in employment income, and then deducting it from employment income, as was expressly done under the SABS 1994, provided this is consistent with legislative purpose which includes providing fair and adequate compensation and avoiding double recovery. In my view, the fact that IRBs were expressly included in employment income under the SABS 1994 but left out of successor provisions in the SABS 1996 is not of itself sufficient reason to exclude IRBs from employment income, in situations where the only rationale for excluding them, double recovery, is absent. Again, these arguments were not made in this case, nor to my knowledge were they made before the Director's Delegate in Shearstone.

EXPENSES:

I exercise my discretion to award Mr. Fortin his expenses incurred in this preliminary issue hearing.

July 23, 2002

Susan Sapin Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 112

FSCO A01-000827

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RAYMOND FORTIN

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. Mr. Fortin's IRBs received as a result of a previous motor vehicle accident cannot be included as "income" for the purpose of determining the IRB to which he is entitled under the Schedule as a result of his October 25, 2000 motor vehicle accident.

June 21, 2002

Susan Sapin Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.
2. 2Sections 8 and 62
3. 3S.O. 1997, c. 16, Schedule A
4. 4Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, R.R.O 1990, Reg. 672. In this Decision this Regulation will be referred to as the SABS 1990.
5. 5Unemployment Insurance Benefits (UI, or EI, "Employment Insurance Benefits," as they are now known), clearly "payments for loss of income" by any definition, have been consistently excepted from deductibility under each succeeding no-fault Schedule. Only under Bill 164 (Statutory Accident Benefits Schedule - Accidents on or after January 1, 1994, Ontario Regulation 776/93, as amended by Ontario Regulations 781/94 and 304/98), however, were UI benefits specifically included in gross income from employment under subsection 9(6).
6. 6McCormick and Economical Mutual Insurance Company (OIC A-000139, October 2, 1991); Join and Jevco Insurance Company, (OIC A-002187, October 27, 1993); Bush and Pilot Insurance Company, (OIC A-004687, April 25, 1994); MouawadandApina Insurance Company, Limited, (OIC A-003226, June 30, 1994),confirmed on appeal (OIC P-003226, April 7, 1992), application for judicial review dismissed, January 4, 1999 (Court File #920/92); Jarvis and Jevco Insurance Company, (OIC A-006063, April 26, 1996); Thorning and Alstate Insurance Company of Canada, (OIC A-010617, October 9, 1996); Windsor and Zurich Insurance Company, (OIC A-954390, March 17, 1997); and Jensen and GAN Canada Insurance Company, (FSCO P96-00079, March 31, 1999).
7. 7Jarvis and Jevco Insurance Company (OIC A-006063, April 26, 1996). Pallotta and Alpina Insurance Company Ltd., (OIC A-000808, April 22, 1992); Caring'and Wawanesa Mutual Insurance Company, (OIC A-000860, February 18, 1993), varied on another point (OIC V-000860, November 4, 1996); Shehadeh and The General Accident Assurance Company of Canada, (OIC A-001177, May 21, 1993) confirmed on appeal without reference to this point (OIC P-001177, February 21, 1996); Raickovic and Gore Mutual Insurance Company, (OIC A-002533, May 26, 1993); Rustico and Royal Insurance Company of Canada, (OIC A-002539, February 15, 1994); Mouawad and Alpina, as cited above; DeForest and Royal Insurance Company of Canada, (FSCO P96-00066, April 14, 1997).
8. 8I note that the Court of Appeal in Cugliari v. White employed a similar analysis in determining that CPP benefits were not deductible from damage awards in motor vehicle tort proceedings under section 267 of the Insurance Act, because they were payments for disability and not "payments for loss of income." Cugliari marked a’s ignificant reversal of j udicial opinion, a point I shall return to later, as, prior to Cugliari, courts had consistently held that CPP payments were payments for loss of income. Leave to appeal to the Supreme Court of Canada was denied.
9. 9Supra, see note 8 on Jarvis.
10. 10(OIC A-002187, October 27, 1993)
11. 11Supra, see note 7 on McCormick.
12. 12See also Cugliari, supra, which confirms that the original intention for differentiating "income from employment" and "payments for loss of income" under the SABS 1990 was to implement the recommendations of the 1988 Report of Inquiry into Motor Vehicle Accident Compensation in Ontario (the Osbourne Report), that no-fault legislation should eliminate certain instances of double recovery by permitting insurers to deduct some types of collateral benefits from IRBs. Specifically, indemnity payments, intended to compensate an insured person for pecuniary loss, were to be deducted from IRBs, but non-indemnity payments, which are paid upon proof of a specified event, regardless of pecuniary loss, such as workers' compensation permanent disability awards, were not deductible from IRBs.
13. 13Supra, see note 7 on Jensen.
14. 14The Director's Delegate in the Shearstone appeal decision took a different view, as discussed below.
15. 15The category of temporary disability benefits" was first created by the previous no-fault Schedule, the SABS 1994. The SABS 1996 category is virtually identical.
16. 16I find that an interpretation that "temporary disability benefits" no longer mean the same thing as "payments for loss of income" is supported by the decision in Wilcox and Economical Mutual Insurance Company, (FSCO P99-00015, March 2, 2000), where Director's Delegate Draper found that the use of distinct terms to refer to different types of collateral benefits under the SABS 1994 was significant.
17. 17UI benefits were specifically excepted from deductibility by subsection 75(2)(a), of the SABS 1994 as they have consistently been in all Schedules before and since, despite the fact that, by any definition, they are clearly "payments for loss of income."
18. 18Insurance Act, R.S.O. 1990 c. I.8, as amended by the Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21
19. 19Howden and Pafco Insurance Company (FSCO P00-00028, June 22, 2001), at p.7. There are many examples of scaled back income benefits. For example, IRBs are now 80% of net income to a maximum of $400 per week, compared to 80% of gross income under the SABS 1990 and a maximum of $600, and 90% of net income under the SABS 1994. Both the SABS 1990 and the SABS 1994 provided statutory minimum IRBs; under Bill 59 (the current Schedule) there is no minimum.
20. 20Supra, see earlier cite of Wilcox, p.12.
21. 21In Wilcox, monthly benefits received under a private disability insurance policy were also found not to be "net payments for loss of income...received...under an income continuation plan" under section 75 of the SABS 1994. The Di rector's Delegate agreed wi th the arbitra tor's analysis of the payments, that "these payments are more accurately described as payments upon the happening of an event, namely disability, than payments for loss of income or income continuation." (i.e., they were non-indemnity payments.) He agreed with the arbitrator that if CPP disability pension benefits did not involve double recovery, as determined by the Court of Appeal in Cugliari, neither did the private disability benefits in question.
22. 22Goos and Non-Marine Underwriters, Members of Lloyd's (OIC A96-000393, June 12, 1997)