Estate of Francesca DiGiovanni v. AXA Insurance (Canada), 2003 ONFSCDRS 127

Financial Services Commission of Ontario

Neutral Citation: 2003 ONFSCDRS 127 FSCO A01-001605

Between: Estate of Francesca DiGiovanni, Applicant and AXA Insurance (Canada), Insurer

Decision on a Preliminary Issue

Before: Robert Kominar Heard: Written submissions were received on February 27, 2003 and March 13, 2003.

Appearances: Luigi DiPierdomenico for Ms. DiGiovanni Jeffrey M.K. Garrett for AXA Insurance (Canada)

Preliminary Issue:

Francesca DiGiovanni died as a result of a motor vehicle accident on January 31, 2000. Her personal representatives applied for statutory accident benefits from AXA Insurance (Canada) ("AXA"), payable under the Schedule¹ AXA denied entitlement to weekly caregiver benefits.

The parties were unable to resolve their dispute through mediation, and the Estate of Ms. DiGiovanni 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 raised is:

1. Is the death of Ms. DiGiovanni an impairment for the purpose of qualifying for caregiver benefits, pursuant to s.13 of the Schedule?

Result:

1. The death of Ms. DiGiovanni is not an impairment for the purpose of qualifying for caregiver benefits, pursuant to s.13 of the Schedule.

Factual Background:

The parties agreed to proceed with this preliminary issue hearing based on limited facts. Ms. DiGiovanni was fatally injured in an automobile/pedestrian accident on January 31, 2000. Subsequent to her death her personal representatives applied for various statutory accident benefits under the Schedule. Although other benefits were applied for, the only benefits relevant to this preliminary issue hearing are caregiver benefits, pursuant to s. 13 of the Schedule.

At the time of her death it is alleged that Ms. DiGiovanni met the criteria to qualify for caregiver benefits as a result of her being the primary caregiver for her five grandchildren as well as for her father. Prior to a determination being made as to whether there is evidence that supports a factual finding that Ms. DiGiovanni was, at the time of her death, a person who met the relevant test to qualify for caregiver benefits, the parties have asked that a decision first be made on the preliminary issue of whether Ms. DiGiovanni's death qualifies as an impairment under the current Schedule.

The Relevant Law:

The issue before me is exclusively one of statutory interpretation. The caregiver benefit is set out in s.13 of the Schedule, which reads as follows:

13. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a caregiver benefit if the insured person meets all of the following qualifications:

14. At the time of the accident,

i. the insured person was residing with a person in need of care and

ii. the insured person was the primary caregiver for the person in need of care and did not receive any remuneration for engaging in caregiving activities.

2. As a result of and within 104 weeks after the accident, the insured person suffers a substantial inability to engage in the caregiving activities in which he or she engaged at the time of the accident.

(2) The caregiver benefit shall pay for reasonable and necessary expenses incurred as a result of the accident in caring for a person in need of care.

The parties agreed that a determination of whether Ms. DiGiovanni qualified for a caregiver benefit depended on whether her death constitutes an impairment. The term "impairment" is defined in s.2(1) of the Schedule as follows:

"impairment" means a loss or abnormality of a psychological, physiological or anatomical structure or function.

Applicant's Argument:

The essence of the argument advanced by counsel for the Estate of Ms. DiGiovanni is that there is no reason to narrowly interpret the concept of impairment in the Schedule as ending at the death of the insured person.²

Particularly, with respect to caregiver benefits, it is argued that the persons in need of care continue to sustain that need after the death of the insured person and so it is consistent with legislative policy not to terminate benefits at death. In essence, death is the most serious form of impairment there is, rather than a category distinct from impairment. In support of these conclusions, Applicant's counsel argued that the legislative history of the various no-fault benefit regulations that have been in place in Ontario lead one to conclude that the current Schedule is most appropriately interpreted by liberally extending the scope of no-fault benefits to balance decreased tort recovery.

Insurer's Argument:

AXA argues in response that it is inconsistent to interpret no-fault benefits, other than death and funeral benefits which are clearly meant to deal with fatality situations, in a way that extends entitlement beyond the death of an insured person. The Insurer submits that the legislator has provided post-mortem benefits, to the extent it chose to, in the death and funeral sections of the Schedule, and that any other claims to benefits after death would amount to "double-dipping". Further, AXA argues that interpreting benefits such as the caregiver benefit as continuing beyond the death of the insured creates serious procedural inconsistencies in the Schedule, as no procedure is provided for terminating benefits in such circumstances. Finally, AXA argues that interpreting the benefits as applying after death would lead to a slippery slope ending up in the insolvency of the insurance industry.

Analysis:

Is Death an Impairment?

I take as guidance in my approach to statutory interpretation the now well-known reference to Professor Sullivan by Justice Laskin in Bapoo v. Co-operators General Insurance Company.³

There is only one rule in modern interpretation, namely, courts are obliged to determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids. In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with legislative text; (b) its efficacy, that is, its promotion of the legislative purpose; and (c) its acceptability, that is, the outcome is reasonable and just.

Consistent with this approach, the first task of interpretation is to ascertain the most plausible meaning of the legislated language.

I am persuaded that the outcome advocated by AXA reflects the most reasonable and pragmatic interpretation of the Schedule. Notwithstanding the thorough and creative arguments advanced by counsel for Ms. DiGiovanni in his written submissions, the pivotal role that "impairment" plays in the Insurance Act and the regulatory scheme of the Schedule precludes me from deciding this issue in favour of the Applicant.

The definition section, s.2(1), clearly articulates the meaning of impairment within the Schedule. From an existential perspective, death may indeed represent the complete loss of all physiological, psychological, and anatomical function, and ultimately structure as well. I also note the oxymoron of anyone claiming that death is a "normal" state of living beings. Thus, in a colloquial sense it is plausible to argue, as counsel for Ms. DiGiovanni does, that death is an impairment for the purpose of the Regulation. Indeed, from a common sense perspective, one can easily understand the sentiment that death is the "ultimate impairment".⁴

However, notwithstanding commonly accepted meanings of the term, there are significant problems in accepting them as the intended statutory meaning of "impairment" within the Schedule. To reasonably interpret "impairment" in a way that would support the arguments made on behalf of Ms. DiGiovanni would require that the term carry two different, and inconsistent, meanings within the Schedule if absurdity is to be avoided. Impairment would have to mean something different in the caregiver section than it does in other sections. Given the frequency of occurrence and centrality of the concept of impairment in the Schedule, it would be unacceptable, and lead to manifest absurdity, to apply a different meaning of the term in s.13 than elsewhere. Only a clear expression of legislative intent to give the word "impairment" a different interpretation in the caregiver section than it has in the rest of the Regulation could warrant such an interpretation. No such legislative intent is expressed in the Schedule. If impairment is interpreted as including death in the case of a caregiver benefit then it must be similarly interpreted in regards to other benefits where it is a criterion of entitlement. Therein lies the fundamental problem with the argument advanced on behalf of Ms. DiGiovanni.

The concept of impairment underlies significant portions of the no-fault benefits scheme. To qualify for any of the three weekly benefits, it is a condition precedent that the insured person "sustains an impairment." In addition, medical, rehabilitation, attendant care, lost educational expense, visitors' expenses, housekeeping expenses, and the optional dependent care benefits all have as conditions precedent to entitlement that the insured person claiming them "sustains an impairment." It is not an exaggeration to say that the concept of impairment is central and fundamental to the operation of the current accident benefits scheme.

On a common sense basis it is plausible to argue that the caregiver benefit should not be terminated by the death of the insured person. Part IV of the Schedule prescribes that the purpose of this benefit is to "pay for reasonable and necessary expenses incurred as a result of the accident in caring for a person in need of care." There is nothing inherently inconsistent with thinking it reasonable that such a benefit should continue after the death of the insured person. Those in need of care are still in such need, and in fact are likely even more in need of care than they were before. Expenses understandably continue to be incurred on behalf of persons in need of care after the death of a caregiver. The lives of the persons cared for must go on and, so the argument goes, so should the benefit.

However, if impairment were interpreted as including death then the prospect of other benefits continuing after death would arise, and in my view lead this leads to manifest absurdity. Taking into account the complete Schedule, it simply does not make sense. Similar arguments to those made on behalf of Ms. DiGiovanni could be advanced in support of claims for post-mortem income replacement benefits, housekeeping benefits and medical treatment. It is difficult to envision these other benefits as they are currently structured continuing beyond the death of the insured person. To consistently interpret impairment in the Schedule as including death would require an arbitrator to go well beyond liberal and generous standards of statutory interpretation.

There is also another serious interpretive obstacle to accepting the arguments put forward on behalf of Ms. DiGiovanni. The Schedule is a regulation made under the Insurance Act. Although the term "impairment" is not defined in the statute itself, it is critical to note that the term is used there. Part VI of the Act, in addition to setting out the no-fault benefits provisions of the current law, also provides the criteria for tort recovery in automobile accidents. Particularly relevant is the following:

267(5)(5) Despite any other Act and subject to subsection (6), the owner of an automobile, the occupants of an automobile and any person present at the incident are not liable in an action in Ontario for damages for non-pecuniary loss, including damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act, from bodily injury or death arising directly or indirectly from the use or operation of the automobile, unless as a result of the use or operation of the automobile the injured person has died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important physical, mental or psychological function.⁵

Reading this section of the Insurance Act, it is unambiguously clear that the legislator intended to distinguish the concepts of death and impairment, as they are referred to disjunctively. When the statutory language is clear and unambiguous there is no need for interpretation.⁶ Death is not treated, legislatively, as "the ultimate impairment" but rather as a distinct state. From this one has to logically conclude that to be "impaired", as defined by the Schedule, one has to be alive.

The combined effect of the Insurance Act's distinction between the concepts of death and impairment and the absurdities that arise if one consistently interprets the definition of impairment in the Schedule to include death is that it is not reasonable or practical to accept the arguments made by the Applicant. Notwithstanding the tragic circumstances of Ms. DiGiovanni's death, the Schedule, as it now reads, does not support a claim for caregiver benefits after the death of the insured person.

Counsel for Ms. DiGiovanni raised in his written submissions a hypothetical scenario that is no longer uncommon in today's society and deserves to be noted. He asks me to consider that if Ms. DiGiovanni had been seriously injured but had not died, then, even if she were being maintained on life support in hospital indefinitely she could potentially be entitled to caregiver benefits. The real absurdity, he suggests, arises in allowing caregiver benefits to be paid indefinitely to someone who is in a vegetative state on life support, but stopping those benefits at the, sometimes arbitrary, moment of death. In effect, the argument being proffered here is that, from a pragmatic point of view, someone who is being maintained on life support is functionally the equivalent of being dead. Although, on a common sense and compassionate level I can appreciate the logic of Mr. DiPierdomenico's argument, I am required to interpret and apply what I find to be the clear and unambiguous language of the current Schedule. As I noted above, it is not implausible to imagine a caregiver benefit that continues after the death of the caregiver and that addresses issues arising out of advancing medical life support technology. The problem is that such a benefit was not created in current Schedule.

For the sake of completeness I will comment on subsidiary arguments advanced by the parties in their submissions. However, having concluded that the concept of impairment does not include death for the purposes of the Schedule, nothing significant in my view turns on them.

AXA argued that paying benefits after the death of an insured person would lead to the absurdity of benefits being indefinite in nature and that this would inevitably bankrupt insurers. I was not provided with any evidence to support AXA's Cassandra-like prophecy that the existence of a caregiver benefit that did continue after the death of the caregiver would spell financial ruin for the insurance industry. Having found that the legislator has not created such a benefit in the current Schedule nothing further needs to be said about this argument.

AXA argued that the death and funeral benefit sections of the Schedule are a complete code for post-mortem situations. Apart from pointing out that the Schedule does not require that benefits be paid to an insured person in the case of death or funeral benefits, no support for this conclusion was provided. What is clear is that the death and funeral benefits provided for in Part VII of the Schedule explicitly deal with fatality situations. As an arbitrator, my role is not to determine the moral sufficiency of the accident benefit scheme or whether it could be improved. Although I am not prepared to find that the death and funeral benefits of the Schedule provide a complete code for fatality situations, the existence of Part VII does lead me to the inference that the legislator directed its mind to fatal accidents and provided the benefits deemed appropriate.

AXA further argued that if caregiver benefits were available along with death benefits, it would amount to "double-dipping" by the Applicant, something not contemplated by the legislator. I do not accept the conclusion the Insurer advances. If the caregiver benefit had explicitly stated that it continued after the death of the insured person, then that would have been a choice the legislator made and the fact that it also created a death benefit would not necessarily create any inherent inconsistency.

Both parties made submissions related to the issue of how the duration of caregiver benefits would be addressed, were I to find that death is an impairment. AXA argued that since there is no procedure provided for in the Schedule to terminate benefits in a case like this, it is reasonable to conclude that such benefits were not intended. Given the overall structure of the Schedule, I find that there is some support for AXA's argument to be found in the recognition that the procedures put in place to terminate a benefit while the insured person is alive would not make sense after death. It is surreal to imagine dead people attending insurer examinations or requesting Designated Assessment Centre assessments. Clear and fair benefit termination procedures are an integral element of the no-fault scheme, so the absence of a sensible process for termination of benefits after the death of the insured person cannot merely be a legislative oversight. It is to my mind a further indicator that the legislator clearly did not intend death to be included within the concept of impairment.

Ms. DiGiovanni's counsel hypothesized that an actuarial calculation of normal life expectancy could be employed to determine the duration of post-mortem benefits. In response, AXA submits that there is no provision for such an approach to be found anywhere in the Schedule. I agree with AXA that no such procedure is contemplated in the current Regulation.

In conclusion, having regard to the Schedule as a whole, I cannot conclude that it is reasonable to include death within the meaning of "impairment". The meaning of the term is stipulated unambiguously in the Regulation. The concept of impairment, because of its centrality to the current no-fault benefits scheme, should be interpreted in a way that makes sense in each of its occurrences within the Regulation. In addition, impairment should be interpreted consistently with the provisions of Part VI of the Insurance Act which explicitly distinguishes death from impairment. Including death as an impairment would result in a carnival of absurdities and it is a well-accepted principle of statutory interpretation that absurdities are to be avoided. Finally, there is no evidence to support a conclusion that the legislator intended impairment to mean something different in the context of caregiver claims than elsewhere in the Schedule. I am not prepared in the circumstances to conclude that the legislator intended the incongruous consequences that would follow if death were generally interpreted to be an impairment throughout the Schedule.

Expenses:

The arguments made on behalf of Ms. DiGiovanni were novel, well prepared and not without merit. Each party shall bear its own costs in this matter.

August 28, 2003

Robert Kominar Arbitrator

Neutral Citation: 2003 ONFSCDRS 127 FSCO A01-001605

Financial Services Commission of Ontario

Between: Estate of Francesca DiGiovanni, Applicant and AXA Insurance (Canada), Insurer

Arbitration Order

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

1. The death of Ms. Di Giovanni is not an impairment for the purpose of qualifying for caregiver benefits, pursuant to s.13 of the Schedule.⁷

I. Each party shall bear its own costs in this matter.

August 28, 2003

Robert Kominar Arbitrator

The words of the individual provision 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.

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, 303/98, 114/00 and 482/01.
2. 2I regard it as an uncontroversial point that benefits which are properly due to a deceased insured person can be claimed by their personal representatives, and that is not the issue before me.
3. 31997 CanLII 6320 (ON CA), [1997] 36 O.R. (3rd) 616 (C.A.), at page 620, citing Driedger, The Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994) at p. 131.
4. 4This phrase was used in Arbtrator Sapin's decision in K.M. (Litigation Guardian of) and General Accident Assurance Co. of Canada (FSCO A98-001030, November 28, 2000), at p. 23. This decision was cited by both parties in support of their arguments. I have concluded that the case deals with a different question than that before me. I have however, come to a similar conclusion as Arbitrator Sapin , that death is not to be included as an impairment within the meaning of the current Schedule.
5. 5Emphasis added.
6. 6See E. Dreidger, Construction of Statutes, 2nd ed. (Toronto, Butterworths, 1983), at p. 105, commenting on the proper approach of an adjudicator in the face of clear and unambiguous language:
7. 7The 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, 303/98, 114/00 and 482/01.