Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 9

Appeal P03-00024

OFFICE OF THE DIRECTOR OF ARBITRATIONS

CATHERINE MONCUR

Appellant

and

ING INSURANCE COMPANY OF CANADA

Respondent

Before:

Nancy Makepeace

Representatives:

Rodney D. Dale for Ms. Moncur

Douglas A. Wallace for ING

Hearing Date:

October 10, 2003

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is allowed. Paragraph 1 of the arbitration order, dated June 16, 2003, is revoked and replaced with the following:

2. In determining Ms. Moncur's loss of earning capacity benefits, ING shall calculate her pre-accident earning capacity based on gross annual income of $49,196.16.

3. ING shall pay interest on overdue benefits in accordance with s. 68 of the SABS-1994.

4. ING shall pay Ms. Moncur's appeal expenses, fixed at $1,000.

January 15, 2004

Nancy Makepeace Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal is about calculating the pre-accident earning capacity of a part-time employee with a seasonal work pattern - a supply teacher. Specifically, it concerns the formula, set out in s. 86 of the SABS-1994,¹ for converting part-time pre-accident employment income to full-time income for the purpose of determining pre-accident earning capacity under s. 29(1). The parties disagree about how that formula applies to a person who works fewer than 52 weeks a year.

While income replacement benefits ("IRBs") compensate the insured person for lost employment income resulting from accident-related disability, loss of earning capacity benefits ("LECBs") compensate for the long-term economic consequences of more serious injuries. Where the insured person continues to qualify for IRBs 104 weeks after the onset of disability, the insurer is required to offer LECBs based on 90 per cent of the difference between the insured person's pre-accident earning capacity ("PEC") and his or her residual earning capacity ("REC"). The insured person may dispute the PEC, the REC, or both.

At the time of the accident, on January 3, 1996, Ms. Moncur was employed as a supply teacher by two school boards. She worked about three days a week, and the parties agree that the school year was 194 days. ING concedes that Ms. Moncur is unable to work because of the brain injury she suffered in the accident. It paid IRBs of $192.86 per week based on Ms. Moncur's gross annual income of $13,592.11 in the 52 weeks before the accident.²

The parties also agree that Ms. Moncur is entitled to LECBs, and that her REC is zero. They disagree about how to convert her part-time income to full-time in determining her PEC. The

Insurer paid LECB benefits based on a PEC of $37,700. Ms. Moncur claimed a higher LECB based on gross annual income of $49,205. The Arbitrator found that her gross annual income was $36,714. ING has subsequently paid Ms. Moncur's benefits at the slightly reduced rate ordered by the Arbitrator.

Ms. Moncur appeals. I conclude the Arbitrator erred in law.

II. ANALYSIS

Section 29 of the SABS-1994 sets out the rules for determining pre-accident earning capacity. Different rules apply depending on the insured person's employment status at the time of the accident. Where the insured person was employed at the time of the accident, s. 29(1) states that her PEC is deemed to be her net weekly income from employment used for determining her IRBs immediately prior to the offer - $214.29, in Ms. Moncur's case.³ Since the parties agree her REC is zero, Ms. Moncur would receive an LECB in the same amount as her IRB - $192.86 per week - if the general rule applied. But s. 29(1) prescribes a second step for determining the PEC of a part-time employee: the person's net weekly income must be "converted to a full-time net weekly income in accordance with section 86, if section 86 applies."

Pursuant to s. 86(1), the conversion formula applies if:

(a) the person was employed on a part-time basis at some point during the period of time used under section 9 for the purpose of determining the amount of the person's weekly income replacement benefits;

(b) the person would have worked on a full-time basis at some time after the accident; and

(c) the gross income used under section 9 for the purpose of determining the amount of the person's weekly income replacement benefits includes income from employment other than self-employment.

The parties agree that s. 86 applies to Ms. Moncur. They disagree about how to apply the formula prescribed in subsections 86(2)-(4):

86.(2) The full-time net weekly income shall be determined in accordance with section 81 or 82 using a gross annual income determined in accordance with the following formula:

A= B x C x 52

where,

A = the gross annual income,

B = the person's hourly rate of wages or salary in the employment designated under subsection (3),

C = the number of hours in a regular work week for a person employed on a full-time basis in the employment designated under subsection (3), determined in accordance with subsection (4).

(3) For the purpose of subsection (2), the person shall designate one employment, other than self-employment, in which the person engaged on a part-time basis during the time period used under section 9 for the purpose of determining the amount of the person's weekly income replacement benefits.

(4) For the purpose of subsection (2), the number of hours in a regular work week for a person employed on a full-time basis in the employment designated under subsection (3) shall be determined in accordance with the following rules:

1. If the number of hours in a regular work week for a person employed on a full-time basis is fixed by a collective agreement or by law for a person employed in the position in which the person whose full-time net weekly income is to be determined was employed, that number of hours shall be used for the purpose of subsection (2).

2. If rule 1 does not apply but there is a standard number of hours in a regular work week for a person employed on a full-time basis in the position in which the person whose full-time net weekly income is to be determined was employed, that number of hours shall be used for the purpose of subsection (2).

3. If rules 1 and 2 do not apply but there is a standard number of hours in a regular work week for other persons employed on a full-time basis in the workplace in which the person whose full-time net weekly income is to be determined was employed, that number of hours shall be used for the purpose of subsection (2).

4. If rules 1 to 3 do not apply but there is a standard number of hours in a regular work week for persons employed on a full-time basis in the industry or profession in which the person whose full-time net weekly income is to be determined was employed, that number of hours shall be used for the purpose of subsection (2).

5. If rules 1 to 4 do not apply but there is a reasonable method for establishing the number of hours in a regular work week for a person employed on a full-time basis for the purpose of subsection (2), that method shall be used.

6. If rules 1 to 5 do not apply, the number of hours in a regular work week for a person employed on a full-time basis shall be deemed to be 36.5 hours for the purpose of subsection (2).

Ms. Moncur submits that the formula requires a straightforward calculation, according to which her gross annual income is the product of three figures: her hourly rate, the number of hours in a full-time regular work week, and 52. Since she was paid on a daily basis, she multiplies her daily rate of $189.25 by 5 (the number of days in a regular work week), for a total of $946.25, then divides that number by 36.5 (the number of hours in a regular work week, pursuant to paragraph 5 or 6 of s. 86(4)), to reach an hourly rate of $25.92. She then calculates:

$25.92 x 36.5 x 52 = $49,196.16.

The Arbitrator rejected Ms. Moncur's argument. His decision rested on two factual findings, neither of which is disputed on appeal:

. . . the maximum Mrs. Moncur could earn at the designated daily rate of $189.25 per day for 194 days is $36,714.50. This salary of $36,714 is the same amount specified in the Public Board collective agreement salary grid for a first year full-time teacher. (p. 8)

From these facts, he drew the following conclusions about the application of the “cascading” series of rules set out in s. 86(4):

In my view, paragraph 5 applies because “there is a reasonable method for establishing the number of hours in a regular work week for a person employed on a full-time basis for the purpose of subsection (2)” (emphasis added). In this case, the purpose of subsection (2) is not to determine how many hours a week a full-time teacher works. In this case, the purpose of subsection (2) is to convert a part-time teacher’s income to that of a full-time teacher.

In my view then, the “reasonable method for establishing the number of hours in a regular work week” for a full-time teacher must take into account that a teacher works 194 days in a year and earns $36,714. Since the number of days and annual salary for a full-time teacher are fixed, the hours a full-time teacher works in a regular work week is irrelevant to her or his annual income. If I selected any reasonable number of hours in a regular work week for a full-time teacher, the resultant hourly rate of pay would be inversely proportionate to the hours worked.

Accordingly, I find that Mrs. Moncur’s gross annual income within the meaning of subsection 86(2) of the Schedule [the SABS-1994] is $36,714. (p. 8)

On appeal, Ms. Moncur submits that the Arbitrator erred in law by failing to apply the formula set out in s. 86. She argues that s. 86 does not allow consideration of the number of days in the school year. Rather, the seasonal nature of teaching is a “personal and vocational characteristic,”⁴and nothing in s. 86 authorizes consideration of personal and vocational characteristics in converting part-time to full-time income. Ms. Moncur denies this produces a windfall for her. She argues that the result helps to compensate for the loss of her promising teaching career. It is agreed she would have found a permanent teaching job if not for the accident, and the agreed facts indicate Ms. Moncur would have had a promising career, considering her academic, vocational and avocational achievements. Ms. Moncur urges me to give s. 86 an interpretation that recognizes that LECBs replace damages for future economic loss under the Bill 164 scheme, which bars civil actions for economic loss against protected defendants arising out of motor vehicle accidents.

The Arbitrator rejected Ms. Moncur's submissions about the right to sue for economic loss on the basis that s. 86 does not allow for consideration of "personal and vocational characteristics" to give "an award similar to what Mrs. Moncur might have received if she could have sued for economic loss." (p. 6) He noted that unlike tort damages, accident benefits "are paid without regard to fault." (p. 7) Nor are they reduced to account for negative contingencies as are damages for future economic loss - "although Mrs. Moncur may have earned more than the average teacher because of her personal and vocational characteristics, she might have earned less if she stopped working for any other reason." (p. 7) The Arbitrator concluded his interpretation "complies with the legislative text and promotes the legislative purpose of converting part-time income to full-time income," and was "reasonable and just." (p. 9)

The application of s. 86 presents several difficulties in Ms. Moncur's situation.

First, the formula assumes the insured person is paid an hourly wage, and does not readily accommodate a pay scheme based on a daily, weekly or monthly rate, an annual salary or a fee for service arrangement.

Second, while s. 86(3) allows a person to "designate one [part-time] employment" for the purpose of determining PEC, it does not address variable pay rates from a single employer. Ms. Moncur worked for a Catholic board that paid $145 per day, and a public board that paid $129.75 per day for less than 15 continuous days of work and $189.25 per day for each day beyond that. In this appeal, ING does not dispute the Arbitrator's finding that s. 86(3) allows Ms. Moncur to choose the most favourable rate paid by the public board - $189.25 per day.

The parties' dispute concerns a third factor - the seasonal nature of Ms. Moncur's work. The parties agree that her working year was 194 days long.⁵ The s. 86 formula prescribes a 52-week year as a fixed value.

The parties offer different methods of calculation. ING argues that since the actual gross annual income for a full-time first year teacher is $36,714, that teacher's gross weekly income is $706.04 [$36,714 divided by 52]. That figure divided by 36.5, equals $19.34 per hour. Thus, the following formula:

Gross annual income = hourly rate x hours in a regular work week x 52 weeks

Gross annual income = $19.34 x 36.5 hours x 52 weeks

Gross annual income = $36,714.

While this exercise shows how ING's calculation can be expressed in terms of the s. 86 formula, it does so only at the cost of turning the formula on its head. Instead of starting from hourly rate and number of hours in the regular work week, ING's calculation works backwards from the annual salary of a full-time first year teacher. This begs the question at the very heart of this appeal: does s. 86 allow for consideration of the number of days or weeks in a full-time teacher's working year?

Ms. Moncur's approach to the formula suffers from the same defect. Her calculation differs from the Insurer's in the calculation of her hourly rate. Rather than starting from the annual salary of a full-time first year teacher, Ms. Moncur starts from her daily rate [$189.25], which she multiplies by 5, and then divides the weekly amount by 36.5, resulting in an hourly rate of $25.92. Thus, the following formula:

$25.92 x 36.5 x 52 = $49,196.16.

In fact, neither party proposes applying the s. 86 formula straightforwardly. The formula determines gross annual income based on three figures - hourly rate, number of hours in the regular work week of a full-time employee, and 52. It assumes that the insured person's hourly rate is known, and that the number of hours in a full-time employee's regular work week is known or ascertainable in accordance with s. 86(4).

The only element of the formula that applies straightforwardly in Ms. Moncur's case is the second one - the number of hours in a full-time employee's regular work week. The parties agree that none of paragraphs 1 through 4 of s. 86(4) apply to Ms. Moncur. There was some discussion at the appeal hearing about the relative merits of paragraph 5 and paragraph 6 of s. 86(4), but only in the context of the dispute about how to account for the short teaching year. There seems little basis for arguing that the default figure of 36.5 hours prescribed in paragraph 6 is wildly unrealistic. No one argues, for example, that a full-time regular teacher works 20 hours a week, or 60. The difficulty lies in the third element of the formula - the prescribed figure of 52 [weeks in the year].

This case presents a difficult interpretive problem. To resolve it, I adopt the approach described by the Court of Appeal in its much-quoted statement in Bapoo v. Co-Operators General Insurance Company.⁶

The modern approach to statutory interpretation calls on courts to interpret a legislative provision in its total context. The court's interpretation should comply with the legislative text, promote the legislative purpose and produce a reasonable and just meaning. Professor Sullivan described the modern approach in the following passage in Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994) at p. 131, which was cited by Kiteley J.:

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.

Interpreting s. 12(4)(b) to permit Co-Operators to deduct only the net disability income payments received by Bapoo does not offend the legislative text, gives effect to the purposes of the Schedule and, most important, is reasonable and just. On the other hand, interpreting s. 12(4)(b) to permit the deduction of gross disability income payments penalizes those insureds who prudently arrange for their own insurance or collateral benefits in the event of an accident, and therefore produces an unjust result.

Compliance with the legislative text is the most important factor in this case. The crux of the appeal is whether s. 86(4), in paragraph 5 or 6 or elsewhere, allows for consideration of the length of the school year in determining the number of hours in a regular work week. I conclude it does not.

On its most natural reading, s. 86 does not contemplate any variation in the number of work weeks in the year. Does s. 86(4) authorize a broader enquiry? Its preamble indicates it has a more limited purpose - determining the number of hours in a regular work week for a person employed on a full-time basis in the designated employment.⁷ Paragraphs 1 through 6 prescribe a "cascading" set of rules for doing this. The parties agree that paragraphs 1 through 4 do not apply to Ms. Moncur. The next question is whether, pursuant to paragraph 5, "there is a reasonable method for establishing the number of hours in a regular work week for a person employed on a full-time basis"? If none of rules 1 to 5 apply, paragraph 6 deems the number of hours in the regular work week to be 36.5. Although ING submits that its calculation finds support in paragraphs 5 or 6, I find no textual basis for this view.

Only paragraph 5, in referring to "a reasonable method," provides some discretion in the calculation, although limited to establishing the number of hours in a regular work week. In my view, nothing in paragraph 5 provides a general discretion to consider the number of work weeks in the year to "convert a part-time teacher's income to that of a full-time teacher," as submitted by ING and accepted by the Arbitrator. On the face of it, the discretion is limited to determining the number of hours in a regular work week. If there is any doubt about this, context puts it to rest. As a general rule, when a general provision in a statute or regulation follows a list of specific provisions, the general provision refers to items in the same class as the class to which the specific items belong.⁸ In this case, paragraph 5 follows a list of four rules for determining the number of hours in a work week, and precedes a final rule that deems the work week to be 36.5 hours long. Nothing in paragraph 5 suggests it was intended to grant a broad discretion to convert part-time income to full-time income by whatever method seems fair and reasonable. The effect of ING's interpretation is to render s. 86(2) and s. 86(4) meaningless.

There are three possible explanations for the mandating of a 52-week year: (i) the legislature assumed that a "full-time" employee is one who works 52 weeks a year; (ii) the legislature intended that variations in the work year be dealt with in the "earnings window" and extrapolation sections of the SABS - s. 7 and 9; or (iii) legislative oversight. I will address these in turn.

Though the parties agreed, in this case, that Ms. Moncur "would have worked on a full-time basis at some time after the accident," it could be argued that the legislature's decision to give the working year a fixed value of 52 weeks in s. 86 reflects an assumption that "full-time" means 52 weeks. This would mean that Ms. Moncur would be entitled to the part-time/full-time conversion only if she could establish that she would have worked during the summer, as well as during the regular school year, after the accident.

The attraction of this approach is that it avoids concerns about a windfall because Ms. Moncur's LECBs would be based on her actual net weekly income in the 52 weeks before the accident. However, because it equates Ms. Moncur's pre-accident earning capacity with her net weekly income used for IRB purposes, it results in a substantial undervaluation of her PEC.

There are other reasons for rejecting this approach. In ordinary usage, the terms "part-time" and "full-time" generally refer to the number of hours worked in a day, a week, or a pay period, not the number of weeks worked in the year. Neither "part-time" nor "full-time" is a defined term in the SABS. The term "full-time" is used in two other contexts. The most significant, for our purposes, relates to the school year.

Pursuant to s. 15(1) of the SABS-1994, an insured person who sustains an impairment as a result of an accident may be entitled to weekly education disability benefits if she "was enrolled on a full-time basis in elementary, secondary or post-secondary education at time of the accident" [emphasis added]. Benefits are available if the insured person, as a result of and within two years of the accident, suffers a substantial inability to continue her education, or suffers a partial or complete inability to carry on a normal life. Though the term "full-time" is not defined in this context either, there seems little doubt it refers to the regular elementary, secondary or post-secondary school year, and does not require attendance at "summer school." Considering s. 86(1) in the context of s. 15, it makes sense to assume that a teacher's "full-time" work year is limited to the school year.

Ordinary usage supports this interpretation; a teacher who works from September to June is not considered a "part-time" employee.⁹ Moreover, no one is required to work 52 weeks a year. All employees are entitled to at least the vacation entitlement set out in the Employment Standards Act or the Canada Labour Code, and many enjoy more generous vacation entitlements. The legislature's failure to define "full-time" probably reflects its intent to set out flexible rules that allow an insured person to claim benefits that, to some extent, are tailored to her circumstances.

This brings me to the second possible explanation for the legislature's decision to prescribe a working year of 52 weeks. While the s. 86 formula addresses variation in the insured person's hourly rate and the number of hours in a regular work week, variation in the number of work weeks in the year is dealt with elsewhere, under s. 7 of the SABS-1994, which allowed Ms. Moncur to elect a 4-week, 52-week or 156-week earnings period, and s. 9, which sets out the extrapolation rules. These provisions are intended to ameliorate the arbitrariness of the "fixed window" approach to determining pre-accident income, and to ensure that income replacement benefits provide fair and reasonable compensation for a disabled employee's lost income.

It is not clear how s. 29 is to be read in the context of the IRB determination rules set out in sections 7 and 9. Subsection 29(1) states that the PEC of an insured person who was employed at the time of the accident "shall be deemed to be the person's net weekly income from employment used in section 10 in determining the amount of weekly income replacement benefits immediately before payment of the weekly loss of earning capacity benefits begins, converted to a full-time net weekly income in accordance with section 86, if section 86 applies" [emphasis added]. These words suggest a conversion based on the net weekly income used in fixing the IRB rate. The legislature may have chosen to prescribe a 52-week year in s. 86 because it assumed that variations in the insured person's pre-accident earnings history have already been addressed in the determination of "net weekly income from employment used in section 10 in determining the amount of weekly income replacement benefits immediately before payment of the weekly loss of earning capacity benefits begins."

However, the formula set out in s. 86(2) seems to require an altogether different calculation of gross annual income, based on the insured person's hourly rate, the number of hours in a regular work week, and 52 weeks a year, without any reference to the net weekly income figure used for purposes of determining the IRB rate. This may have been an oversight, but I think it more likely that the legislature intended the part-time/full-time conversion to provide a "rough justice" measure of pre-accident earning capacity without the complexities that sections 7 and 9 bring to the IRB calculation.

ING argues this results in a windfall for Ms. Moncur, in that her PEC will be based on a gross annual income that is substantially higher than the income of a first-year full-time teacher. The Insurer submits its approach to s. 86 is more consistent with the legislative objective underlying s. 29(1). Apart from the part-time/full-time conversion rule at issue in this appeal, s. 29(1) reflects the legislature's intention that an employee's pre-accident earning capacity is based on "past performance - it is a measure of demonstrated capacity, not theoretical capacity."¹⁰

In contrast, s. 29(2) requires a broader enquiry in the case of self-employed persons. A self-employed person's PEC is "the net weekly income determined in accordance with section 81 or 82 using the gross annual income from employment that the person could reasonably have earned at the time of the accident, having regard to the person's personal and vocational characteristics at that time." Under s. 29(3), the same rule applies to persons who are entitled to receive IRBs under s. 7(1)2 [not employed at the time of the accident but employed at some point in the previous 156 weeks], and 7(1)5 [received caregiver benefits and had previous employment history], persons entitled to weekly caregiver benefits under Part IV of the SABS-1994, and non-earners who are entitled to weekly disability benefits under Part V].

A broader enquiry is required in these cases because the claimant's work history makes it more difficult to ascertain pre-accident earning capacity. Arbitration and appeal decisions considering s. 29(2) and 29(3) have endorsed a flexible and reasonable approach that allows "a fair comparison" between the insured person's pre-accident earnings capacity at the time of the accident and his or her residual earning capacity.¹¹ In contrast, the pre-accident earning capacity of an insured person who was employed at the time of the accident is based on his or her actual earnings, subject to the part-time/full-time conversion. ING focuses on this distinction, and it was the statutory context for the Arbitrator's interpretation of the "reasonable method" rule under paragraph 86(4)5.

The Arbitrator's approach was aimed at reaching an outcome that, to him, seemed reasonable and just. But even if I accepted that s. 86 could be read in the way the Insurer proposes, I am not persuaded ING's interpretation is closer to the legislature's purpose than Ms. Moncur's approach.

As has been often noted, loss of earning capacity benefits formed part of a "trade-off" between damages and accident benefits. They were introduced in the SABS-1994 as part of a package of Insurance Act amendments that included eliminating the right to sue for economic loss.¹² As part of this "notional exchange," insured persons were granted enhanced accident benefits, including LECBs for those who suffer long-term economic loss as a result of more serious injuries. That is the policy context for the legislature's decision to allow part-time income to be converted to full-time, rather than determining the pre-accident earning capacity of a part-time employee on the basis of her pre-accident income, as is done for most other employees under s. 29(1).

Section 86 may result in an especially generous PEC in Ms. Moncur's case, because her work was both part-time and seasonal, but this will be an unusual outcome. In most cases, the legislature's decision to prescribe a 52-week work year will result in a plausible, if generous, estimate of what the insured person would likely have earned in the near future as a full-time employee if not for the accident. The words of the regulation cannot be ignored because they result in an unusually low or high award in any particular case. In addition, it is important to note that pre-accident earning capacity will very often exceed pre-accident earnings.

The part-time/full-time conversion is intended to produce a PEC that exceeds the net weekly income,¹³ in recognition of the loss of earning capacity suffered by these insured persons, who are often at the beginning of their careers. The provision is worded broadly, in keeping with its remedial intent. I agree with Arbitrator Baltman, who made the following comments about s. 86 in Kennelly and Wawanesa:

Numerous Commission cases have pointed out that the Schedule is remedial legislation and should be interpreted in a broad and liberal manner. I find that the language in paragraph 86(b) is also broad and liberal — it says that part-time income "shall" be converted to full-time income if an applicant "would" have worked on a full-time basis "at some point" after the accident. It does not specify how soon after the accident the full-time employment would have occurred, or for how long it would have lasted. The relaxed language in this provision suggests that it is to be interpreted in a manner consistent with the broad purposes of the Schedule. Had the legislators wished to impose stricter guidelines, they could have done so.

Future prospects are, by their nature, hard to determine with much certainty. The legislative goal of compensating these eventualities would be defeated if arbitrators applied a rigid or exacting standard.¹⁴

Legislative intent is difficult to discern, and the Courts have stressed the need for caution in considering apparent gaps and oversights in legislation and regulation. A recent example is Beattie v. National Frontier Insurance Company, 2003 CanLII 2715 (ON CA), [2003] O.J. No. 4258, in which the Court of Appeal held that s. 30(4) of the SABS-1996, the criminal conviction exclusion, applies only to accident benefits payable between when the insured person is charged and when he is convicted. The Court accepted that the apparent legislative objective underlying s. 30, considered as a whole, was to exclude insured persons from all weekly benefits claimed in relation to the accident, but it was not persuaded that the under-inclusiveness of s. 30(4) results in an absurdity or ambiguity that could be resolved by way of statutory interpretation. It found the textual meaning of s. 30(4) "plain and clear." Beattie effectively overrules my decision in McDonald and Guarantee Company of North America, (FSCO P01-00047, July 5, 2002), in which I reversed Arbitrator Evans,¹⁵ whose approach was closer to that of the Court of Appeal.¹⁶

Section 86 of the SABS-1996 is not silent on the issue in dispute. It requires the conversion to be based on a 52-week year. Reading it carefully, and in the context of the scheme as a whole, I conclude the legislature intended this rough justice measure to err on the side of over-compensation rather than under-compensation. If I am wrong in this, it may be that s. 86, as drafted, fails to achieve the legislature's objective, like the provision considered in Beattie. In any event, I am not persuaded the Arbitrator had authority to disregard the words of the regulation to achieve what he considered a fairer result. In disregarding the formula set out in s. 86, he erred in law.

IV. EXPENSES

Ms. Moncur succeeded in her appeal, and there is no reason to deny appeal expenses. The parties agreed to fix appeal expenses at $1,000. ING shall pay her accordingly.

January 15, 2004

Nancy Makepeace Director's Delegate

Date

(a) employment history, (b) education and training, (c) vocational interests and aptitudes, (d) vocational skills, (e) physical abilities, (f) cognitive abilities, and (g) language abilities.

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended.
2. 2Ms. Moncur's IRB of $192.86 was 90 percent of her net weekly income of $214.29, based on her gross weekly income of $261.39. (Agreed Statement of Facts: Arbitration Exhibit 3).
3. 3For ease of reference, I will call this figure "net weekly income." Subsection 29(1) applies to persons entitled to receive IRBs under paragraph 1 of s. 7(1) [employed at the time of the accident], paragraph 3 [entitled to start work within one year under an employment contract], paragraph 4 [on strike or lock-out, or on layoff with recall rights] or paragraph 6 [on pregnancy, parental or unpaid leave]. What these persons share is that their pre-accident earning capacity is relatively easy to ascertain, based on pre-accident circumstances.
4. 4Defined in s. 1 to include,
5. 5The school year is prescribed in Ms. Moncur's collective agreements governing her employment, and in regulations under the Education Act, R.S.O. 1990, c. E.2.
6. 61997 CanLII 6320 (ON CA), [1997] O.J. No. 5055, 36 O.R. (3d) 616. The issue in that case was whether s. 12(4)(b) of the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 allows an insurer to deduct the gross (before-tax) amount of the disability income payments Mr. Bapoo received under a group disability plan, or the after-tax amount; the provision was silent on the point. The Court of Appeal upheld the finding of the motions judge that the insurer could only deduct the net amounts.
7. 7Repeated here for convenience: "For the purpose of subsection (2), the number of hours in a regular work week for a person employed on a full-time basis in the employment designated under subsection (3) shall bedetermined in accordance with the following rules: . . . ."
8. 8Ruth Sullivan, Statutory Interpretation [QL]/Textual Analysis/Ejusdem Generis.
9. 9See, for example, Kennelly and Wawanesa Mutual Insurance Company, (FSCO A99-000139, January 21, 2000), in which Arbitrator Baltman held that the insured person was entitled to have the benefit of the part-time/full-time conversion because there was "at least a real or serious possibility" that she would have worked full-time as a university teacher after the accident. It appears there was no dispute that working the school year is full-time work for a teacher. Indeed, ING did not dispute that point in this appeal either.
10. 10Appeal decision in Lehman and GAN Canada Insurance Company, (FSCO P97-00064, August 10, 1998), p. 15.
11. 11The leading case is Lehman and GAN Canada Insurance Company, (OIC A96-001417, October 27, 1997), confirmed on appeal on this point, (FSCO P97-00064, August 10, 1998). See also Angolano and Liberty Mutual Insurance Company, (FSCO P99-00043, March 20, 2000), at p. 7, confirming (FSCO A97-001613, August 6, 1999); Ironside and Royal Insurance Company of Canada, (FSCO A97-001143, January 19, 1999), confirmed by (FSCO P99-00011, November 30, 1999); and Tustin and Canadian General Insurance Company, (FSCO A97-001209, December 30, 1998), appeal allowed in part on other grounds, (FSCO P99-00004, August 13, 1999).
12. 12Insurance Act, s. 267.1
13. 13Subsection 29(4)(a) ensures it will not be less.
14. 14At p. 7. See also Armstrong and Guardian Insurance Company of Canada, (FSCO P00-00037, September 23, 2003). Delegate McMahon rejected the insurer's argument that the conversion was not available to an insured person who was employed full-time at the time of the accident: "a plain reading of the provision indicates that it is available if the insured was employed part-time 'at some point during the period.'" (p. 8) Relying on Kennelly, the Delegate adopted a "real and cogent possibility" test for the second criterion (the insured person would have worked full-time at some time after the accident) and agreed with the Arbitrator that this "involves some degree of conjecture."
15. 15(FSCO A00-000399, October 30, 2001).
16. 16A number of recent decisions coming out of the Court of Appeal have taken the same conservative approach. See, for example, Chilton v. Co-Operators General Insurance Company, 1997 CanLII 765 (ON CA), [1997] O.J. No. 579, 32 O.R. (3d) 161; Hope v. Canadian General Insurance, 2002 CanLII 44899 (ON CA), [2002] O.J. No. 1643; and Fraczek v. Pascual, 2003 CanLII 21215 (ON CA), [2003] O.J. No. 1402.