Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 157
FSCO A05-000781
BETWEEN:
DENNIS WARNER
Applicant
and
ING INSURANCE COMPANY OF CANADA
Insurer
DECISION ON A PRELIMINARY ISSUE
Before: Judith Killoran
Heard: Written submissions were received on October 21 and October 24, 2005.
Appearances:
Alan L. Rachlin for Mr. Warner
Chris T. J. Blom for ING Insurance Company of Canada
Issues:
The Applicant, Dennis Warner, was injured in a motor vehicle accident on June 21, 2002. He applied for and received statutory accident benefits from ING Insurance Company of Canada ('TNG"), payable under the Schedule.1 A pre-hearing discussion in this case was held on October 19, 2005, at 2:00 p.m., by telephone conference call arranged by the Financial Services Commission of Ontario.
Issues at the Arbitration Hearing:
The issues in dispute were identified and agreed to as follows:
Is Mr. Warner entitled to receive a rehabilitation benefit for the following: $4,424.24 annually for the increase in insurance premiums for his modified van, $19,700 for a CDI retraining course, $3,334.92 for a riding lawn mower and $1,379.98 for a snow blowing attachment, claimed pursuant to section 15 of the Schedule?
Is ING liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Warner?
Is ING liable to pay Mr. Warner's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Warner liable to pay ING's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Warner entitled to interest for the overdue payment of benefits pursuant to section 46(2) of the Schedule?
The parties agreed to file written submissions with respect to a preliminary issue. The preliminary issue is:
- Is Mr. Warner required to produce to ING his income tax summaries from Canada Customs and Revenue Agency for the years 1997 to 2002?
Result:
- Mr. Warner is not required to produce to ING his income tax summaries from Canada Customs and Revenue Agency for the years 1997 to 2002.
SUBMISSIONS:
Mr. Warner has made a rehabilitation claim of $19,700 for the tuition cost of a two-year medical laboratory technologist course at CDI Institute. ING submits that the hearing arbitrator should consider the potential income of a medical laboratory technologist to determine whether the claim for rehabilitation expenses is reasonable and necessary. ING relies on Correal v. Jevco Insurance Company2 where the insured was denied payment for a course to become a commercial airline pilot, when at the time of the accident, he was a truck driver. Correal can be distinguished from the circumstances in this case. Unlike Mr. Warner, the insured in Correal had his income replacement benefits determined based on his pre-accident earnings.
ING argues that pre-accident earnings are a consideration in determining whether the CDI Institute program is reasonable and necessary. It seeks to compare Mr. Warner's potential earnings as a medical laboratory technologist with his earnings prior to the accident, including the income he was to earn under a contract of employment dated May 21, 2002. Mr. Warner concedes that in most cases an applicant's pre-accident earning history is relevant to a request for retraining. However, he argues such a history is not relevant in the circumstances of this case. Mr. Warner has received an income replacement benefit pursuant to subsection 4(1)3 of the Schedule which calculates the benefit based on a written contract of employment. More specifically, Mr. Warner's income replacement benefit was calculated pursuant to an employment agreement dated May 21, 2002 between him and the High School Television Network Inc. A copy of that employment agreement was filed with me.
Mr. Warner argues that the quantum of the income replacement benefit in his situation is based upon a prospective anticipation of income at a particular level as opposed to a retrospective consideration of pre-accident earnings. Therefore, he submits that his pre-accident earning history, as set out in tax returns or otherwise, has no application. Further, he submits that the purpose of the rehabilitation benefit is to return him, as soon as possible, to his pre-accident circumstances, which is his earning capacity based upon his contract with the High School Television Network.
ANALYSIS:
Mr. Warner is seeking payment of the CDI training course under section 15 of the Schedule. Subsection 15(2) of the Schedule states:
The rehabilitation benefit shall pay for reasonable and necessary measures undertaken by an insured person to reduce or eliminate the effects of any disability resulting from the impairment or to facilitate the insured person's reintegration into his or her family, the rest of society and the labour market.
In order for me to order production of the Mr. Warner's income tax summaries, I must be satisfied that such documents are relevant. This test has not been met. I am not prepared to order disclosure of six years of Mr. Warner's income tax records based on the insurer's submissions. Mr. Warner's pre-accident position was that he was bound by a contract of employment with High School Television Network dated May 21, 2002 to work in a production of a television program. According to the terms of the contract, he was entitled to a salary of $600 per week. Mr. Warner received income replacement benefits calculated on the basis of this contract of employment.
In Mr. Warner's situation, the amount of his benefit was tied to his prospective anticipation of a particular amount of income. In other words, there was no retrospective consideration of his pre-accident earnings when his income replacement benefits were calculated. This restricts the insurer's entitlement to disclosure. I find that Mr. Warner's pre-accident earning history, as set out in tax returns or otherwise, is not relevant and has no application. Therefore, ING is not entitled to production of Mr. Warner's income tax summaries from Canada Customs and Revenue from 1997-2002.
November 4, 2005
Judith Killoran Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 157
FSCO A05-000781
BETWEEN:
DENNIS WARNER
Applicant
and
ING INSURANCE COMPANY OF CANADA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Warner is not required to produce to ING his income tax summaries from Canada Customs and Revenue Agency for the years 1997 to 2002.
November 4, 2005
Judith Killoran Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- FSCO A-001994, May 6, 1993