Neutral Citation: 2004 ONFSCDRS 138

FSCO A03–001272

BETWEEN:

CHANTAL AREAL

Applicant

and

LIBERTY INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Lawrence Blackman

Heard:

August 18, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received by September 8, 2004.

Appearances:

Rebecca Nelson for Mrs. Areal

Pamela A. Brownlee for Liberty Insurance Company of Canada

The Applicant, Mrs. Chantal Areal, is the mother of Jeffry Chantal, a young man of twelve. Jeffry was badly injured in a car accident on September 17, 2000. As a result, Mrs. Areal applied, in her own capacity, for statutory accident benefits from Liberty Insurance Company of Canada ("Liberty"), payable under the Schedule.¹ Liberty Insurance accepted Mrs. Areal's claim under subparagraph 2(1)(a)(ii) of the Schedule, namely, that although she was not personally involved in the accident, she was an insured person because she had suffered psychological or mental injury as a result of her son's physical injuries sustained in the September 17, 2000 accident.

Liberty, however, took the position that Mrs. Areal was only entitled to claim those benefits which reasonably and necessarily flowed from her psychological or mental injury. Mrs. Areal argued that her entitlement extended to accident benefits claimed as a result of physical injuries she sustained while caring for her son after the accident. Mrs. Areal relied on the aforementioned subparagraph 2(1)(a)(ii), as well as on subparagraph 2(1)(a)(i) of the Schedule, namely that she, or her son, were involved in an accident involving the insured automobile or another automobile.

The parties were unable to resolve their dispute through mediation, and Mrs. Areal 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 in dispute, as ultimately agreed by the parties, are:

Does Mrs. Areal qualify as an insured person under subparagraph 2(1)(a)(i) of the Schedule?
If not, what entitlement flows to Mrs. Areal from her conceded entitlement under subparagraph 2(1)(a)(ii) of the Schedule?
Is either party entitled to their legal expenses of this preliminary issue hearing?

Mrs. Areal does not qualify as an insured person under subparagraph 2(1)(a)(i) of the Schedule.
As a result of her conceded entitlement under subparagraph 2(1)(a)(ii) of the Schedule, Mrs. Areal, in her own capacity, has potential entitlement to all benefits under the Schedule, as long as she meets the specific requirements of the particular benefit section in question. In the case of medical benefits under section 14 of the Schedule, Mrs. Areal must establish that the benefits sought are reasonable and necessary expenses incurred by or on her behalf as a result of the accident.
Mrs. Areal is entitled to her expenses of this preliminary issue hearing. If the parties are unable to agree on same, an expense hearing can be arranged in accordance with the provisions of the Dispute Resolution Practice Code (Fourth Edition, Updated - October 2003).

i. Agreed Statement of Fact

The parties agree on, and I make the following findings of fact:

The Applicant, Chantal Areal, is the mother of Jeffry Areal (born April 30, 1992). Jeffry Areal was involved in a motor vehicle accident on September 17, 2000. Jeffry was eight years of age at the time of the accident. The Applicant was not involved in the motor vehicle accident.
The Applicant claims entitlement for medical and rehabilitation treatments for physical injuries that she sustained as a result of caring for her son.
The Applicant is a named insured under the policy of automobile insurance issued by the Insurer, along with her spouse, Manuel Areal. Jeffry Areal is a dependant of the Applicant and her spouse, Manuel Areal.
The Insurer has accepted that Jeffry Areal is an insured under its policy and has been paying certain accident benefits on behalf of Jeffry Areal as a result of the injuries he sustained in this motor vehicle accident.
An Application for Accident Benefits was submitted by the Applicant to the Insurer dated December 18, 2000.
As a result of the accident, Jeffry Areal sustained a catastrophic impairment resulting from a serious brain injury. Jeffry's other injuries included a fractured right femur, a fractured right tibia and multiple abrasions.
Jeffry Areal was hospitalized at the Hospital for Sick Children from the date of the accident until October 24, 2000. Thereafter, Jeffry was hospitalized at Bloorview MacMillan from October 31, 2000 to April 27, 2001. Towards the end of his hospitalization at Bloorview MacMillan, Jeffry was involved in a combined home and outpatient rehabilitation program.
The Applicant was employed at the time of the accident.
During his hospitalizations Jeffry required attendant care. The Applicant took time off work during Jeffry's hospitalizations. The Applicant provided attendant care to Jeffry while he was hospitalized and continues to provide attendant care to date. The Insurer has paid the Applicant attendant care benefits from the date of the accident to the present time.
The attendant care required by Jeffry included physical care and the Applicant had to lift and carry her son on a regular basis during the early stages of his recovery.
As a result of the attendant care she provided to Jeffry, the Applicant sustained physical injuries to her low back, pain in her right buttock and leg, upper back, neck, shoulders and right wrist.
On referral from her family physician, the Applicant attended at Multi-Rehabilitation Services Inc., for chiropractic and rehabilitation treatments. A Treatment Plan was submitted to the Insurer by Dr. M. Moreira of Multi-Rehabilitation Services Inc., dated January 12, 2001, recommending treatment at an estimated cost of $3,130.
The Applicant also underwent acupuncture therapy on August 28 and 29, 2001 with Dr. J. Wong. A receipt was submitted to the Insurer in the amount of $90.
As a result of the accident and the injuries to Jeffry Areal, the Applicant sustained psychological and/or mental injuries. The Applicant received psychological treatment with Dr. J. Pilowsky. The Insurer has paid for this treatment.
By correspondence dated January 31, 2001, the Insurer advised the Applicant that there was coverage under the automobile policy only for psychological or mental injury as a result of the accident which had resulted in a physical injury to her child. As the chiropractic treatment was not considered to have arisen as a direct result of the motor vehicle accident, the Treatment Plan as submitted would not be considered.
The issue of the Applicant's entitlement to medical/rehabilitation treatment for physical injuries sustained as a result of caring for her son ($1,624.80 - Multi-Rehabilitation Services/Chiropractic Treatment; $6,750 - Multi-Rehabilitation Services/Rehabilitation Treatments and $90 for Acupuncture Treatment with Dr. Wong) were unsuccessfully mediated in September 2003.

ii. the Statutory Context

The Schedule sets out the rights and obligations of insurers and of insured persons. This preliminary issue hearing is essentially about how Mrs. Areal becomes an insured person for the purposes of the Schedule, and, secondly, what rights flow to her from the definition of insured person under which she qualifies.

Subsection 2(1) of the Schedule defines the term "insured person" as follows:

"insured person", in respect of a particular motor vehicle liability policy, means,

(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 or spouse or same-sex partner, if the named insured, specified driver, spouse, same-sex partner or dependant,

(i) is involved in an accident in or outside of Ontario that involves the insured automobile or another automobile, or

(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 or spouse's dependant or same-sex partner's dependant,

(b) in respect of accidents in Ontario, a person who is involved in an accident involving the insured automobile, and

(c) in respect of accidents outside Ontario, a person who is an occupant of the insured automobile and who is a resident of Ontario or was a resident of Ontario at some point during the 60 days before the accident;

The parties disagree as to whether the Applicant is an insured person under subparagraph 2(1)(a)(i). While the parties agree that Mrs. Areal is an insured person under subparagraph 2(1)(a)(ii), they differ as to what benefit entitlement flows to insured persons encompassed by that provision.

iii. Does Mrs. Areal qualify as an insured person under subparagraph 2(1)(a)(i) of the Schedule?

The Applicant raises two arguments regarding this provision.

(a) Subparagraph 2(1)(a)(i) does not refer to the same person throughout

The first argument is that Mrs. Areal, as a named insured, becomes an "insured person" because her dependant, Jeffry, was involved in an accident involving an automobile. This argument is based on the supposition that the person noted in the first part of subparagraph (a) does not have to be the same as the person noted in the latter half, i.e.:

"insured person", in respect of a particular motor vehicle liability policy, means,

(a) the named insured [Chantal Areal], 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 or spouse or same-sex partner, if the named insured [Chantal Areal], specified driver, spouse, same-sex partner or dependant [Jeffry Areal],

(i) is involved in an accident in or outside of Ontario that involves the insured automobile or another automobile, or (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 or spouse's dependant or same-sex partner's dependant,

[emphasis added]

The Applicant argues that the list of persons following the word "if" are superfluous unless that second list is intended to include individuals beyond those set out in the first enumerated list.

Respectfully, I do not accept this argument. Grammatically, the use of the definite article "the," rather than the indefinite article "a" preceding both the first and the second list of individuals, is consistent with Liberty's submission that the person noted after the word "if" is intended to be the same person noted before the word "if."

Such an interpretation does not make the enumerated list of persons following the word "if" superfluous. Rather, the purpose of the latter words is to make it clear that not all enumerated persons are insured persons in respect of a particular motor vehicle policy. Such individuals become "insured persons" only, as the Insurer submits, "if" they "meet the further qualifications of [subparagraphs] 2(1)(a)(i) or (ii) for entitlement to accident benefits."

To decide otherwise, would allow a person to claim benefits as an "insured person," notwithstanding they were neither involved in an accident nor had suffered a psychological or mental injury, or suffered any injury whatsoever, as long as their spouse, same-sex partner or dependant came within subparagraphs (i) or (ii). Respectfully, I cannot agree that such an interpretation is consistent with the legislative framework.

(b) the Applicant herself falls within subparagraph 2(1)(a)(i)

The Applicant's second argument (within this same provision) is that she herself comes within subparagraph 2(1)(a)(i) as being involved in an accident that involves an automobile.

The parties referred to numerous cases² dealing with the definition of "accident" under the Schedule, namely, whether "the use or operation of an automobile directly [caused] an impairment," in this case to Mrs. Areal, or whether there was a break in the chain of causation. With respect, I do not find these cases helpful regarding the definition of "insured person" under subparagraph 2(1)(a)(i).

Subparagraph 2(1)(a)(i) requires that an applicant be "involved in an accident" that involved an automobile. Webster's³ defines the word "involve," in part, as "to engage as a participant." There is no evidence that Mrs. Areal was in any way a participant in an accident that involved an automobile. To overexert oneself in providing post-accident services or to be emotionally affected following an accident is not the same as being involved in an accident. Succinctly, however, the parties themselves agree in their Statement of Fact that "[t]he Applicant was not involved in the motor vehicle accident." Hence, the requirements of subparagraph 2(1)(a)(i) are not met.

iv. What entitlement flows to Mrs. Areal from her conceded entitlement under subparagraph 2(1)(a)(ii) of the Schedule?

Liberty concedes that Mrs. Areal is an "insured person" because she suffered psychological or mental injury as a result of an accident that resulted in physical injury to her son Jeffry, notwithstanding that Mrs. Areal herself was not involved in the accident. The Insurer, however, submits that Mrs. Areal’s entitlement as an insured person under subparagraph 2(1)(a)(ii) of the Schedule limits her to only those benefits which flow from her psychological or mental injury. Liberty argues that the Legislature always intended that there would be two classes of insured persons for entitlement purposes, namely, those involved in motor vehicle accidents and those not involved in a motor vehicle accident but who suffered psychological or mental injury as a result of physical injuries sustained by someone falling within the enumerated list.

Respectfully, I do not agree. If this had been the intent of the Legislature, it would have been a very simple thing to have added such a restriction in subparagraph 2(1)(a)(ii). The absence of such a restriction leads me to the conclusion that there is not a "two-tier" system of entitlement arising from subsection 2(1).⁴ Rather, I find that under subsection 2(1), "an insured person, is an insured person, is an insured person." Once one is found to be an insured person, one has the same potential entitlement to all benefits, as long as one meets the further specific requirements of the particular provision in question, in this case, for example section 14.

Further, Liberty’s argument that this category of insured person (under subparagraph 2(1)(a)(ii) of the Schedule) is only entitled to benefits relating to the injury for which they are granted compensation appears to be in contradiction to the decision in Correia and TTC Insurance Co. (FSCO P00-00061, July 16, 2001). In that case, Director's Delegate Naylor, in holding that "Ms. Correia's [post-accident clinical] assessment-related injuries were sustained as a result of an accident," referred to the decision below of Arbitrator Makepeace (FSCO A00-000045, October 27, 2000), that:

New injuries clearly may be related to an impairment sustained in the accident. The arbitrator gave examples of cases in which someone fell down the stairs due to dizziness related to, or a knee weakened from, the effects of an accident and sustained new injuries. Those new injuries can be viewed as a direct consequence of the accident and a result of it. Likewise, if someone undergoes surgery for accident-related problems and, through no one’s fault, suffers new impairment in the course of the operation, such consequences are directly traceable to the accident.

In her own decision, Arbitrator Makepeace stated that:

For example, in Barreira and Allstate⁵ Arbitrator Evans found that the insured person’s fall downstairs, some three and a half years after her 1991 accident, "was related to the accident because the episodes of dizziness commenced after the accident and are linked by several medical hypotheses to the accident."

As stated above, I find that the threshold for specific entitlement for insured persons is to be found not in the definition section for "insured person," but in the specific benefit section in question. In the case of section 14 medical benefits, the threshold requirements are that:

(i) the Applicant is an insured person (which is agreed);

(ii) that she sustained an impairment as a result of the accident (which is also agreed, i.e. that she sustained psychological and/or mental injuries);

(iii) that the expenses are reasonable and necessary (the parties specifically indicated that this question was not before me);

(iv) that the expenses fall within one of the enumerated categories (this was not disputed);

(v) that the expenses were incurred by or on behalf of the insured person (this was not argued); and,

(vi) that the expenses were incurred as a result of the accident.

Liberty referred to the decision in Kumar and Coachman Insurance Company (FSCO A00-000201, April 27, 2001) upheld on appeal (FSCO P01-00026, August 9, 2002) wherein Director’s Delegate Makepeace stated that in that case the issue was not "when the ball stops rolling, the issue . . . is whether it starts" [emphasis in the original]. Liberty submits that in Mrs. Areal’s case at hand the "ball" never starts. I respectfully disagree. It is conceded that Mrs. Areal is an insured person who has sustained an impairment as a result of an accident.

Hence, the true question in this case is whether the expenses now submitted were incurred "as a result of an accident." In that regard, (then) Arbitrator Makepeace stated in Correia that:

I conclude that the extent of coverage for the consequences of an accident is governed by the "as a result of test, which requires proof that the accident materially or significantly contributed to the disability or impairment that gives rise to the claim for benefits.

EXPENSES:

Taking into consideration the Applicant’s overall success in this preliminary issue hearing, the novel issues raised, the importance of ensuring access to adjudication especially of novel issues brought in good faith, and the professionalism, courtesy, preparedness and skilled advocacy shown throughout by both counsel, I exercise my discretion, in accordance with Regulation 664, R.R.O. 1990, as amended, to award Mrs. Areal her legal expenses incurred in respect of this preliminary issue hearing.

If the parties are unable to agree on same, an expense hearing can be arranged in accordance with the provisions of the Dispute Resolution Practice Code (Fourth Edition, Updated - October 2003).

September 24, 2004

Lawrence Blackman Arbitrator

Date