Elena Acosta v. Motor Vehicle Accident Claims Fund, 2003 ONFSCDRS 112

Neutral Citation: 2003 ONFSCDRS 112

FSCO A02-001618

BETWEEN:

ELENA ACOSTA

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Lawrence Blackman

Heard:

July 2, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received April 30, June 2 and June 4, 2003.

Appearances:

Carlos A. Castro, representative for Ms. Acosta

Robert W. Kerkmann, counsel for the Motor Vehicle Accident Claims Fund

Issues:

Mr. Juan Acosta was injured in a motor vehicle accident on August 1, 2000. His wife, Ms. Elena Acosta, applied for statutory accident benefits from the Motor Vehicle Accident Claims Fund ("MVAC"), payable under the Schedule.¹ MVAC denied Ms. Acosta's claim, maintaining that she was not an insured person as defined under the Schedule. The parties were unable to resolve their disputes through mediation and Ms. Acosta 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 issues are:

Is Ms. Acosta an insured person pursuant to section 2 of the Schedule?
Is either party entitled to its expenses of this arbitration proceeding, pursuant to subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

Result:

Ms. Acosta is not an insured person pursuant to section 2 of the Schedule.
If the parties cannot agree on the entitlement to or the amount of the expenses of this proceeding, they may request an appointment for a determination of same in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, May 31, 2001).

EVIDENCE AND ANALYSIS:

Facts:

The parties, by written Agreed Statement of Facts as supplemented orally at the arbitration hearing, concurred on the following, which I find as facts:

On August 1, 2000, Mr. Juan Acosta was struck by a cement truck.
As a result of this accident, Mr. Acosta sustained physical injuries.
The Applicant, Elena Acosta, was at all material times the spouse of Mr. Acosta.
Ms. Acosta was not involved in the accident, being neither at the scene nor observing it.
For the purposes of section 2 of the Schedule (and without prejudice to MVAC's right to otherwise challenge Ms. Acosta's benefit entitlement) as a result of her husband's accident, Ms. Acosta sustained a psychological injury.
Neither Mr. Acosta nor Ms. Acosta owned a motor vehicle at any material time, nor were they a named or specified driver in any policy of automobile insurance.
Initially, neither Mr. Acosta nor Ms. Acosta knew the identity of the vehicle which struck Mr. Acosta.
Both Mr. Acosta and Ms. Acosta applied to MVAC for accident benefits.
The cement truck was later identified as being owned by Toronto Redi-Mix Limited and insured by CGU Insurance Company of Canada. MVAC is responding to Ms. Acosta's application for accident benefits in accordance with section 2 of Ontario Regulation 283/95 (Disputes Between Insurers).
In this proceeding, Ms. Acosta seeks entitlement to caregiver benefits, the cost of a treatment plan, interest, her expenses of the arbitration proceeding and a special award.

MVAC's Argument:

MVAC submits that it is not an insurer, but rather "a statutory body created by the legislature as a payor of last resort to provide a fund by which payment can be made to accident victims who would otherwise fall through the cracks where insurance coverage is absent."² In the context of the Schedule, MVAC stands in as a notional no-fault insurer of an unidentified or uninsured vehicle and pays accident benefits only because insurance coverage is otherwise absent.

In this case, as the owner of the cement truck was initially unidentified and as Ms. Acosta first provided a completed application for benefits to MVAC, MVAC responded as the notional insurer in accordance with section 2 of Ontario Regulation 283/95 (Disputes Between Insurers).

MVAC submits that Ms. Acosta can have no greater rights to accident benefits by applying to MVAC than if the application for accident benefits had initially been made to CGU as the insurer of the cement truck. MVAC argues that the fundamental question remains as to whether Ms. Acosta is "an insured person."

MVAC notes that under subsection 268(1) of the Insurance Act, entitlement to statutory accident benefits is subject to the terms, conditions, provisions, exclusions and limits set out in the Schedule. The term "insured person" is defined in section 2 of the Schedule. As Ms. Acosta was not personally involved in the August 1, 2000 accident, MVAC argues that she would become an "insured person" only if she was:

(a) the named insured, any person specified in the policy as a driver of the insured automobile, the spouse or same-sex partner of the named insured, and any dependant of the named insured, spouse or same-sex partner, if the named insured, specified driver, spouse, same-sex partner or dependant,

(ii) is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside of Ontario that results in a physical injury to his or her spouse, same-sex partner, child, grandchild, parent, grandparent, brother, sister, dependant, spouse's dependant or same-sex partner's dependant,

MVAC submits that if the legislature had intended no distinction between named insureds (and their spouses, same-sex partners and dependants) on the one hand, and those not named on the other, it would have drafted the provision accordingly. MVAC argues that the clear intent of the legislative drafters was to draw a distinction between these two classes regarding the definition of "insured person."

MVAC agrees that Mr. Acosta, as "a person who is involved in an accident involving the insured automobile" in respect of an accident in Ontario, is an "insured person" by virtue of paragraph (b) of the definition in the Schedule. MVAC submits that as Ms. Acosta meets neither that definition nor the definition set out above, she is not an "insured person" entitled to claim benefits under the Schedule.

Applicant's Argument:

Ms. Acosta submits that the Schedule provides equal benefits to all citizens of Ontario (subject to the exclusions under Part IX), regardless of whether those citizens have their own motor vehicle insurance or not. As such, the Applicant argues that one can have no lesser rights under the Schedule because one does not own an automobile, did not have automobile insurance or was neither a named or specified driver under any policy of automobile insurance.

At the beginning of the hearing, Ms. Acosta confirmed that she did not intend to raise a constitutional issue (that is, either questioning the constitutional validity or constitutional applicability of legislation, regulations or by-laws, or a common law rule, or claim a remedy under subsection 24(1) of the Canadian Charter of Rights and Freedoms, in relation to an act or omission of the Government of Ontario). Hence, notice had not been given to the Attorney General of Canada and the Attorney General of Ontario, as would have been required by Rule 80 of Dispute Resolution Practice Code (Fourth Edition, May 31, 2001) ("the Code").

Rather, Ms. Acosta reiterated that this is a matter of interpretation of the meaning of "named insured" under the Schedule. The Applicant referred to section 224 of the Insurance Act which states, in part, that:

"insured" means a person insured by a contract whether named or not and includes every person who is entitled to statutory accident benefits under the contract whether or not described therein as an insured person;

The Applicant argued that by virtue of being involved in an accident, her husband became a named insured. Accordingly, as the spouse of a named insured, Ms. Acosta is an insured person under the Schedule, having satisfied the other requisite criteria for "insured person" set out above.

Decision:

Elmer A. Driedger, in Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), states (at page 105) that the first step in statutory construction is to read the Act as a whole in its entire context, so as to ascertain the intention of Parliament, and the object and scheme of the Act. The next step in statutory interpretation is as follows:

The words of the individual provisions to be applied to the particular case under consideration are then to be read in their grammatical and ordinary sense in the light of the intention of Parliament embodied in the Act as a whole, the object of the Act and the scheme of the Act, and if they are clear and unambiguous and in harmony with that intention, object and scheme and with the general body of the law, that is the end.

In Driedger on the Construction of Statutes, 3rd ed. (Toronto and Vancouver: Butterworths Canada Ltd., 1994), Ruth Sullivan states (at page 34) that modern courts favour the purposive approach to statutory interpretation, an approach which could be summarized as follows:

(1) All legislation is presumed to have a purpose. It is possible for courts to discover, or to adequately reconstruct, this purpose through interpretation.

(2) Legislative purpose should be taken into account in every case and at every stage of interpretation, including the determination of ordinary meaning.

(3) Other things being equal, interpretations that are consistent with or promote legislative purposes should be preferred and interpretations that defeat or undermine legislative purpose should be avoided.

(4) The ordinary meaning of a provision may be rejected in favour of an interpretation more consistent with the purpose if the preferred interpretation is one the words are capable of bearing.

I find that the ordinary meaning of the definition of "insured person" in the Schedule regarding persons not involved in an accident is clear and unambiguous and includes only those individuals:

– who are named insureds, specified drivers of the insured automobile, spouse or same-sex partner of the named insured, or designated dependant,

– who suffer psychological or mental injury,

– as a result of an accident in or outside of Ontario,

– that results in a physical injury to his or her spouse, same-sex partner, child, grandchild, parent, grandparent, brother, sister, dependant, spouse's dependant or same-sex partner's dependant.

One could argue that this provision is unfair to a variety of persons in addition to individuals such as Ms. Acosta, such as:

A potential claimant who is not involved in an accident but who suffers psychological or mental injury as a result of an accident in Ontario, but is a non-dependant child, parent, sibling etc.; or,
A potential claimant whose relation suffered not physical but psychological injury.

In respect of other provisions of the "insured person" definition under the Schedule, one can similarly argue that the restrictions in coverage (such as, in regard to accidents outside Ontario, between previously resident occupants of insured automobiles versus pedestrians struck by Ontario vehicles) provide different rights to different citizens and hence are unfair.

However, subsection 268(1) of the Insurance Act states that:

Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

The Schedule does not provide unlimited benefits for everyone. Rather, it provides limited benefits, as enumerated, for a limited segment of society, regardless of whether they are Canadian citizens. The limitations on the definition of "insured person" set out in section 2 which are the subject of this preliminary issue hearing are not inconsistent with that general purpose of the Schedule, but rather are consistent with the intent of subsection 268(1) of the Insurance Act.

Nor am I persuaded that there is any inconsistency between the definition of "insured person" in the Schedule and section 224 of the Insurance Act. The latter states that "insured" means a person insured by the contract whether named or unnamed. I do not see the purpose of that provision as defining which unnamed persons are insured by the contract. Rather, as I stated in Crosbie and Co-Operators General Insurance Company, Crosbie and Pilot Insurance Company (OIC A-009908 and A-012239, October 16, 1995), I find that the purpose of section 224(1) was:

to provide equality of entitlement and equality in the right to recovery by insured persons, whether named as policyholders under the policy (and therefore a party to the contract with the Insurer) or not named (and therefore not being a party) . . . Those sections allow an individual who is not a party to the insurance contract to take action and to recover from insurers as if such individuals were parties to the contract of insurance.

[emphasis added to the words "insured persons"]

I find that part of the definition of "insured person" in the Schedule relevant to this hearing, in its grammatical and ordinary sense, to be clear and unambiguous. I find the words in harmony with the legislative purpose. Accordingly, I find that Ms. Acosta was the spouse of an unnamed insured. Therefore, I find that Ms. Acosta does not come within the definition of "insured person" in the Schedule. As she was not an insured person, she does not have equality in her right to entitlement or to recovery under the Schedule with those who are insured persons. No constitutional challenge being made to the provision, as far as statutory interpretation goes, that should be the end of the matter.

Accordingly, Ms. Acosta is not entitled to proceed to an arbitration hearing with respect to her accident benefit claims.

Expenses:

If the parties cannot agree on the entitlement to or the amount of the expenses of this proceeding, they may request an appointment for a determination of same, in accordance with Rule 79 of the Code.

July 22, 2003

Lawrence Blackman Arbitrator

Neutral Citation: 2003 ONFSCDRS 112

FSCO A02-001618

FINANCIAL SERVICES COMMISSION OF ONTARIO