Neutral Citation: 2003 ONFSCDRS 69

FSCO A02-001343

BETWEEN:

YU FENG CHOU

Applicant

and

ING-HALIFAX INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Lawrence Blackman

Heard: April 28, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Lisa Oriente for Ms. Chou

Melanie Malach for ING-Halifax Insurance Company

Issues:

On November 1, 2000, Mr. Jui-Kai Chou was killed as a result of a tragic single car accident on southbound Highway 400, when the rear tire blew out on the car he had borrowed. His mother, the Applicant, Mrs. Yu Feng Chou, applied as a dependant of the deceased for statutory accident benefits from ING-Halifax Insurance Company ("ING-Halifax"), payable under the Schedule.¹ ING-Halifax disputed that Mrs. Chou was a dependant of her son. The parties were unable to resolve their dispute through mediation and Mrs. Chou applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. Accordingly, the issues in this hearing are:

Is Mrs. Chou entitled, pursuant to paragraphs 25(2)(2) and (3) of the Schedule, to a death benefit in the amount of $35,000?
Is ING-Halifax liable to pay Mrs. Chou's expenses in respect of this arbitration, pursuant to subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mrs. Chou entitled to interest on any overdue payment of benefits, pursuant to subsection 46(2) of the Schedule?

ING-Halifax has withdrawn its claim for its legal expenses in respect of this arbitration.

Result:

Mrs. Chou is not entitled to a death benefit in the amount of $35,000.
The issue of Mrs. Chou's entitlement to and the amount of legal expenses may now be addressed.

EVIDENCE AND ANALYSIS:

1. The Statutory Context

Section 25 of the Schedule provides a monetary payment in specified circumstances, when an insured person dies as a result of a motor vehicle accident. Subparagraph 25(2)(2)(i) specifically allows for a lump sum payment of $10,000 to each of the insured's dependants. Where there is no spousal or same-sex partner entitlement to a death benefit under paragraph 25(2)(1), an additional $25,000 is payable to the insured person's dependants, divided equally among the persons entitled.

The parties agree, and I find, that the deceased, Mr. Jui-Kai Chou, was an insured of ING-Halifax at the time of this accident, that he died as a result of an accident and that there was no entitlement to a benefit under paragraph 25(2)(1). The legal dispute in this case is whether Mrs. Chou was a dependant of her son.

Subsection 2(6) of the Schedule states that for the purpose of the 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.

The Applicant conceded that she was not dependent on her son for care. Hence, the only legal question is whether Mrs. Chou was principally dependent on her son for financial support.

2. The Applicant's Case

The Applicant was born in 1927 in China. She has not had the benefit of any formal education. Mrs. Chou worked as a farmer in China. She was married at age 19. She had five children, four daughters and her one son, the late Jui-Kai Chou. Mrs. Chou's husband died when he was 49.

In 1984, Mrs. Chou came to Canada with her son and a daughter, Ms. Lai Chuan Chou. The three stayed for about a year with another of Mrs. Chou's daughters, Ms. Lai Xai Chou. The Applicant worked in the home cooking. Mrs. Chou has not worked outside the home while in Canada.

Because of lack of room in Ms. Lai Xai Chou's home, Mrs. Chou and her two other children moved first to a rental unit and then into a house purchased by Ms. Lai Chuan Chou and her husband. Mr. Jui-Kai Chou paid rent for both himself and his mother, as well as paying for other of his mother's expenses. The amount of rent was not specified.

Oral testimony was given by the Applicant and her two daughters, with the assistance of a Cantonese interpreter. The Applicant's evidence was that from 1984 until his death, her son gave her $900 cash in one lump sum the last week of every month to provide for her needs. Ms. Lai Chuan Chou explained that it was a custom of the Chinese community that the son is responsible for his mother and that it would be a loss of face if the son did not properly support his mother. Ms. Chou also explained that the sum of $900 was chosen because the word "nine" in Chinese means living longer and longer.

At some unspecified date, Mrs. Chou decided to move out of her daughter's home. This appeared to be due to a combination of insufficient space and some level of incompatibility between the Applicant and her growing Canadian-born grandchildren. The deceased, however, continued to live with his sister until the date of the accident.

Mrs. Chou applied, through her community, for a rental unit. She testified that she was able to afford the apartment because her son promised to pay the rent. At a certain point she began receiving government benefits. Mrs. Chou stated that these monies were insufficient to pay all of her expenses. She testified that she had neither savings, a pension plan nor any other source of income. She does not have a dental or medical insurance plan. The Applicant indicated that her daughters have their own financial responsibilities for their families and that before this accident very seldom gave her any money. Mrs. Chou's daughters confirmed that their mother has no independent means of financial support.

The family's evidence was that sometimes Mr. Chou would give the monthly amount of $900 directly to his mother; at other times if he was not going to be available he would give the money to his sister, Ms. Lai Chuan Chou, with whom he lived. The sister would count the money before giving it to their mother.

The family also testified that Mr. Chou would also buy things for his mother on a regular basis. Mrs. Chou stated that in addition to the $900, the deceased would sometimes buy groceries. From time to time he would drive his mother to the doctor or to buy the groceries or clean her apartment. Sometimes (according to the mother) or every week (according to Ms. Lai Chuan Chou) Mr. Chou would take his mother out for Dim Sum.

The Applicant gave oral evidence of her current expenses as being representative of her expenses at the time of the accident. Her monthly rent, including utilities, at WoodGreen Community Housing Inc. ("WoodGreen") is $346. Her monthly phone bill is $26.43, in addition to long distance costs of $80 to $100, evidently, a month in calling cards to talk to her two daughters in China. In addition to unspecified grocery expenses, Mrs. Chou also testified as to her considerable expenses for Chinese medications for rheumatism and other complaints. It was difficult to ascertain from her oral evidence even a rough estimate as to the monthly cost of these expenses. Mrs. Chou also now buys about ten TTC tickets a month. She also testified that she was missing about half of her teeth at the time her son passed away and several more have fallen out since, and that she requires dental work, which she is unable to afford. No estimate was given as to the cost of this dental work. Various expense receipts were submitted for groceries and medications, which totalled $2,196.51 in 2002 and $2,232.89 in 2003. As well, $470 in calling cards for an unspecified period were entered into evidence.

The Applicant agreed that she received monies from the government, which are noted in her income tax returns. On cross-examination, Ms. Lai Chuan Chou expressed significant surprise that her mother was receiving over $12,000 a year from the government. Mrs. Chou indicated that the forms were prepared by a worker at WoodGreen, as she is not able to read. Mrs. Chou testified, however, that the monies received from the government were insufficient to meet her basic needs.

The Applicant submits that I should accept the above evidence as credible. Mrs. Chou further submits that I must consider the unique circumstances of her case, namely, that she is a senior citizen living on her own in a country where she has never worked and is unable to speak the prevalent language, is without any savings or retirement plan and without any earning capacity, and that her expenses for her basic survival exceed her fixed government income.

Mrs. Chou argues that her only means of meeting her expenses at the time of this accident was her late son. She submits that interpreting the legislation in accordance with its proper broad, liberal and remedial intent means that this is not simply a case of mathematics, of adding up numbers. Rather, the evidence of her being part of a class of persons for whom pension income does not meet their basic needs is sufficient to be brought within the legislation as a dependant.

3. The Insurer's Case

The Insurer submits that Mrs. Chou's monthly expenses at the time of this accident are set out in her statement signed August 13, 2001 (and witnessed by her daughter, Ms. Lai Chuan Chou), namely, on average, $327 for rent, $26 for telephone and $1,000 for food and various supplements and medications. This amounts to somewhat more than $16,000 a year.

The Insurer further submits that, as set out in her income tax returns, Mrs. Chou received income from the government (in the form of taxable pension, net supplements, GAINS and Ontario Tax Credit) of $12,525.56 in 1999 and $12,789.51 in 2000. In both 1999 and 2000, over $10,850 was received from the federal Customs and Revenue Agency Old Age Security. In neither year was any income tax payable.

ING-Halifax submitted that at most, the monies the deceased provided to his mother could be calculated at $10,800. The Insurer, however, disputes that Mrs. Chou actually received this amount, given the lack of confirming documentation as well as the modest income declared in Mr. Chou's income tax returns (reporting taxable income of $5,832.54 in 1999 and $15,253.50 in 2000) not supporting his ability to provide the monies alleged.

In any event, the Insurer submits that even if this level of support is accepted, the Applicant cannot succeed. It argues that this hearing is not about whether Mrs. Chou required additional monies from her son. Rather, the Insurer submits that the onus is on the Applicant to prove that she was principally dependent on her son at the time of his death, which, it argues, means being more than 50 per cent dependent on that source. Given that Mrs. Chou's best case is that she received $10,800 a year from her son, which is less than the monies received from the government, she cannot be found to have been principally dependent on her late son.

4. Analysis

To my mind, the issue of dependency in the particular facts of this case centres on two questions. First, the degree to which Ms. Chou was financially dependent on her son at the time of the accident. Second, whether that level of dependency made her principally dependent for financial support on her late son.

Based on the evidence before me, I accept that Ms. Chou is a woman of limited financial means. I further accept that she had received, on an ongoing basis, some level of financial assistance from her only son. I accept that beyond familial love and affection, there was also a cultural imperative in this regard. Over and above the monthly amount of $900 (which was the consistent evidence of both the Applicant and her daughters), no monetary figure, not even the roughest estimate, was provided as to the son's additional contributions. As the evidence is limited and sketchy about these further alleged contributions and as it is uncertain as to why, on any regular basis, extra monies were provided to purchase items intended to be covered by the monthly $900 payment, I am unable to guess at even an approximate value for the monies allegedly provided. Regarding transportation and cleaning services, while I accept that financial support is broad enough to include "money's worth" or "the reasonable value of goods and services provided and exchanged,"² given the evidence of the son often being unavailable, in addition to lack of any detail, I also have doubts as to the frequency of such services, and am unable to calculate same.

Regarding the alleged monthly payment of $900, I am not persuaded by the Applicant's evidence that this exact sum had been provided every month since 1984, or more germane to this case, that this precise sum was provided every month in 1999 and 2000, which I find to be, as stated by Arbitrator Samis in the matter of Federation Insurance Company of Canada and Liberty Mutual Insurance Company (May 7, 1999) under the Arbitrations Act 1991, S.O. 1991 c.17, "a period of time which fairly reflects the status of the parties at the time of the accident." I make this finding for the following cumulative reasons:

There is no contemporaneous evidence confirming the alleged payments. There is no evidence independent of family members.
There is nothing in writing confirming these payments or the obligation to make these payments. Mr. Jui-Kai Chou's bank records show a 1999 starting balance above $14,000, decreasing to $8,204 at the time of the accident. From April 30, 1999 to November 1, 2000 (during which time there would have been 18 alleged payments of $900) there are 35 cash withdrawals from the account. Not one withdrawal was in the amount of $900 or close to that amount. Only four withdrawals are for more than $200 (two being on the same day). In addition, on three further occasions $200 is taken out twice on the same day. These larger withdrawals are sometimes at the beginning of the month, sometimes during the middle (as opposed to the testimony of payments being made the last week). No indication is given in the records as to the reason for the withdrawals.
There was no documentation provided confirming the receipt of any monies by Mrs. Chou. The Applicant does have a bank account. The government cheques are deposited into that account. Mrs. Chou testified that she did not produce her bank records because no one asked her for them. Mrs. Chou testified that her bank records would not confirm that she received monies from her son.
There is no objective or independent evidence supporting the deceased's financial ability to consistently pay the level of support alleged. Mr. Chou's declared taxable income was $5,832.54 in 1999 and $15,253.50 in 2000. According to Ms. Lai Chuan Chou's August 13, 2001 statement, her brother paid her $300 a month rent. Presumably, he had other personal expenses.

FSCO case law allows that in the case of false tax returns, specifically where one does not declare one's entire income, some level of reliable evidence is required to address the misrepresentations made. In this case, Mrs. Chou testified that her son did not mention his work very often. She did not know where he worked (other than sometimes in a restaurant and sometimes in renovation) or how much he made, only that he was paid in cash. Ms. Lai Xai Chou testified only that her brother worked in a restaurant or in renovation; as she did not see him often, she did not know how he was paid.

Ms. Lai Chuan Chou's August 13, 2001 statement indicated that her brother was paid mainly in cash. She could not remember a time when he was not working. Ms. Chou recalled her brother working in an unnamed restaurant for $600 a week cash and that his last job was in renovation for about $500 cash per week, an unnamed contractor having given her Mr. Chou's last week's wages. However, no putative employer, co-worker, customer or independent person with first-hand knowledge was called to testify as to the deceased's pre-accident employment to counter the evidence of the income tax returns. I draw an adverse inference from this omission.

Mrs. Chou provided cancelled cheques to her son from a variety of sources. Eliminating duplicates, these totalled $5,229.72 in 1999 and $12,585.60 in 2000. The evidence, however, did not establish that all of these cheques were in fact employment related.

The essence of the Applicant's evidence was that her son had the means to support her. Ms. Lai Chuan Chou's August 13, 2001 statement asserts that her brother owned a house (which he rented out) as well as a car. As noted above, Mr. Chou had some $8,000 in a bank account at the time of his death. Considering his limited cash withdrawals, the implication of the Applicant's evidence would be that her son had a considerable amount of cash in his home or elsewhere. However, I received no evidence as to the estate of the deceased. Given Mrs. Chou's evidence that she presently has no savings nor has she had enough money to do any dental work, the logical conclusion is that the Applicant received little if anything from her son's estate. The logical inference is then that her son had very modest net assets at death, unless one accepts that, contrary to his cultural obligations, no provision was made for his mother.
In order to prove her pre-accident expenses, the Applicant provided grocery and medication receipts, largely from 2002 and 2003. It was the general purport that she had similar expenses before the accident. The oral evidence was that since the accident, the Applicant's daughters have been helping her financially, but cannot continue to do so. Ms. Lai Chuan Chou testified that she does not provide money to her mother on a regular basis, just whenever Mrs. Chou needs something, she will purchase it. The evidence was also that Mrs. Chou is to pay back the monies provided by the daughters. There was no evidence that the daughters have taken over paying the deceased's alleged $900 monthly commitment or anything approximating that. Nonetheless, the Applicant remains in her apartment with essentially the same expenses (although there was some evidence that Mrs. Chou was trying to use her medications less frequently). Ms. Lai Chuan Chou testified that her mother could not return to the daughter's house after the accident because the grandchildren are grown and need their separate rooms.

The significance of this evidence is, firstly, that no precise or even approximate estimate was given as to the level of monetary support now being given to Mrs. Chou, notwithstanding that this information is entirely within the witnesses' control, especially as they are evidently keeping track of this for the purpose of repayment. I adversely infer then that the support is presently considerably less than $900 a month. Secondly, that Mrs. Chou is largely able to maintain her prior expenses on significantly less than the alleged monthly support of $900 is further evidence that Mr. Chou was not providing that amount each and every month.

Ms. Lai Xai Chou testified that since 1984 she personally had only seen her brother give her mother money on two occasions, but had on a few occasions seen him give her sister monies intended for Mrs. Chou. Ms. Lai Chuan Chou testified that sometimes her brother had given her $900 which she counted and passed on to her mother. Hence, neither sister saw first hand the deceased pay $900 each month.

I accept the Applicant's evidence that she had a good relationship with her son, who wished to please her. She was obviously in significant sorrow over his tragic and untimely death. I accept that her son has assisted her financially since 1984. I have difficulty, however, accepting her evidence that every month from 1984 to his death in 2000, her son paid her $900. This seems unlikely, given the changes in her living arrangements, the commencement of payment of a government pension and notwithstanding what one would expect to be the vagaries of employment in the restaurant and renovation industries over the course of sixteen years.

The Applicant submitted into evidence an August 1, 2002 letter (in both English and Chinese) from WoodGreen confirming her total monthly rent of $346. The letter, however, also stated that the gross monthly income of $1,054.65 which Mrs. Chou provided had determined her rent and that she was to immediately report any change in gross monthly income of $30.00 or more. Mrs. Chou testified that WoodGreen did not ask whether she received money from relatives or other sources, nor did she tell them. The Applicant did not provide any further documentation from WoodGreen, specifically confirming what income questions were in fact asked. Certainly, however, the letter does not provide independent support for Mrs. Chou's claim that she was principally dependent on her son.

I thus conclude that Mrs. Chou was receiving an indeterminate level of support from her late son which was less than $10,800 a year. With that determination, it is then necessary to turn to the second question of whether this level of dependency was such that at the time of the accident Mrs. Chou was principally dependent for financial support on her late son.

The Applicant relies on the decision of Berhe and State Farm Mutual Automobile Insurance Company (FSCO A01-001117, September 9, 2002) (now under appeal). In that decision, Arbitrator Killoran considered the dependency criteria set out by Arbitrator Manji in Mark, including that an "applicant must 'chiefly' or 'primarily' or 'for the most part' derive his or her financial support" from the person upon whom dependency is claimed rather than from other sources. As stated by Arbitrator Manji, the "determination of the nature and degree of dependency is essentially one of fact and requires an assessment of all of an applicant's particular circumstances at the time of the accident to determine whether the applicant was in fact chiefly deriving his or her support from the other person" (emphasis added).

Although as in this case Mrs. Berhe had no ability to be self-supporting, the accepted evidence was that Mrs. Berhe's only means of support were her children; there was no evidence of Mrs. Berhe receiving a government pension in Ethiopia. As well, in that case, the deceased's bank records showed several withdrawals greater than the amount Mrs. Berhe asserted she received on a monthly basis, whereas there is only one such withdrawal in Mr. Chou's records. In addition, the Arbitrator had before her a finding of dependency rendered by Ethiopian tribunal, the latter having heard evidence from a priest, a government worker and a textile factory worker, whom one gleans from the decision, were residents in Mrs. Berhe's neighbourhood rather than being relatives.

Macdonald J. in Co-Operators General Insurance Company v. Halifax Insurance Company 2002 CanLII 79675 (ON SC), [2002] O.J. No. 2459, June 21, 2002, cited with favour the decision of Senior Arbitrator Naylor in Singh and State Farm Mutual Automobile Insurance Company (OIC A-001525, June 4, 1993), Singh and Pilot Insurance Company (OIC A-001526, June 4, 1993) that to be principally dependent for financial support on another person, the claimant must be "chiefly or for the most part derive his or her financial support" from the other person.

Gans J., in an appeal decision from a private arbitration decision, held in Economical Mutual Insurance Co. v. Pafco Insurance Company 2001 CanLII 62779 (ON SC), [2001] O.J. No. 3419 (August 28, 2001) that a mathematical analysis (i.e. looking at the source of 51% of one's financial needs) would not constitute an error of law.

The Court of Appeal in Liberty Mutual Insurance Company and Federation Insurance Company of Canada [2000] O.J. No. 1234 (April 10, 2000) upheld Arbitrator Samis following the decision of the court in Miller v. Safeco Insurance Co. of America (1985) 1985 CanLII 2022 (ON CA), 50 O.R. (2d) 797.

Arbitrator Manji in Mark considered the appellate approved criteria in Miller v. Safeco, namely the amount and duration of the financial dependency, the financial or other means of the applicant, the ability of the applicant to be self-supporting at the time of the accident as well the overriding governing principle of interpretation that the benefits legislation is remedial and as such should be accorded a broad and liberal interpretation that best meets its objectives. However, I note that the definition being considered in Miller v. Safeco was "any dependant relative," not principally dependent. However, no where in the case law do I see support for the proposition that being dependent is sufficient to meet the statutory test under this Schedule, or that the legislation is meant to compensate those whose supplementary income from the deceased was required to meet their needs, however basic.

Rather, the Applicant must have been principally dependent on the deceased. To some extent this may be a mathematical exercise. Lives, however, are not always led with mathematical precision. As stated by Arbitrator Jones in Co-Operators General Insurance Company and Her Majesty the Queen in the Right of the Province of Ontario (the Motor Vehicle Accident Claims Fund) held under the Arbitration Act 1991, "[v]ery few people keep such detailed records of their expenses as is required for a hearing such as this." Hence, one must also look at what is in accordance with the preponderance of probabilities.

In this case, given the vague evidence of additional support or services above the $900, the lack of any contemporaneous, objective or independent evidence regarding the alleged monthly payment of $900 or the late son's ability to maintain same, the contradictory evidence of the deceased's income tax returns and bank statements, the undisputed evidence of receiving in excess of $12,000 a year from the federal government and the only modest change in Mrs. Chou's post-accident expenses notwithstanding her son's support being only partially replaced by her daughters, I am not persuaded that the Applicant depended chiefly, primarily or for the most part for financial support on the deceased at the time of this accident. Rather, I find that she was principally dependent for financial support on her Old Age Security pension and supplement. Accordingly, I find that Mrs. Chou was not a dependant of her late son at the time of the accident as defined under the Schedule, and hence not entitled to the benefits claimed.

EXPENSES:

The parties agreed that it was appropriate to postpone determination of the issue of expenses until my decision on the dependency issue was rendered.

Having now dealt with all issues in dispute other than that of legal expenses, if the parties cannot agree on the entitlement to or the amount of the legal expenses of this proceeding, either party may request, in writing, an appointment before an arbitrator to determine expenses, in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, May 31, 2001).

May 8, 2003

Lawrence Blackman Arbitrator

Date