An Hue Khuu v. Economical Mutual Insurance Company, 2005 ONFSCDRS 2

Financial Services Commission of Ontario

Neutral Citation: 2005 ONFSCDRS 2 FSCO A04-000847

BETWEEN:

AN HUE KHUU Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Rosemary Muzzi

Heard: October 15, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: An Hue Khuu, self-represented Judy Beckett for Economical Mutual Insurance Company

Issues:

An Hue Khuu, the Applicant, was injured in a motor vehicle accident on November 25, 1996. She was a passenger in a vehicle that was transporting her to her workplace. Mrs. Khuu did not have her own automobile insurance so she applied for statutory accident benefits ("SABs"), payable under the Schedule¹, from Economical Mutual Insurance Company ("Economical"), the insurer of the vehicle in which she was a passenger. From the very beginning, Mrs. Khuu and Economical have disagreed about who should be paying Mrs. Khuu's benefits.

Initially, Economical did pay Mrs. Khuu a minimal amount of attendant care benefits, as well as prescription expenses, transportation to her medical appointments and income replacement benefits. All the while, however, Economical maintained that Mrs. Khuu was entitled to workers' compensation benefits from the Workplace Safety and Insurance Board ("WSIB") and therefore, pursuant to section 59 of the Schedule, was not entitled to SABs. Mrs. Khuu insisted that she is not entitled to workers' compensation benefits and that Economical owes her benefits. Consequently, Mrs. Khuu pursued her claims in two venues: 1) she issued a Statement of Claim in the (then) Ontario Superior Court of Justice in 1998 against the driver of the vehicle, the owner of the vehicle, and Economical (which is still outstanding); and, 2) she is also pursuing her claims for SABs at the Financial Services Commission of Ontario (FSCO).

The parties were unable to resolve the dispute at FSCO through mediation, several sessions of which occurred from 1996 to 1999. Mrs. Khuu applied for arbitration at FSCO under the Insurance Act, R.S.O. 1990, c.I.8, as amended, on April 20, 2004.

Prior to filing her Application for Arbitration, Mrs. Khuu appeared at a hearing before the Workplace Safety and Insurance Appeals Tribunal ("WSIAT") on December 3, 2003 to determine whether she had right to pursue the civil action commenced in 1998. This matter was brought before WSIAT on application by Economical under section 31 of the Workplace Safety and Insurance Act, 1997.² Section 31 states that a party to an action or an insurer from whom statutory accident benefits are claimed under section 268 of the Insurance Act may apply to WSIAT to determine whether, because of this Act,

• the right to commence an action is taken away
• the amount that a person may be liable to pay in an action is limited
• the plaintiff is entitled to claim benefits under the WSIB insurance plan

The WSIAT Vice-Chair released a decision dated December 12, 2003.³ In that decision, the Vice-Chair outlined the provisions of the Workers' Compensation Act⁴ and the WSIB policies that are applicable to Mrs. Khuu's case. The Vice-Chair noted that section 4(1) states that where in any employment, personal injury by accident arising out of and in the course of employment is caused to a worker, the worker and the worker's dependants are entitled to benefits in the manner and to the extent provided under the Act (my emphasis).⁵ Furthermore, the Vice-Chair noted that subsection 10(9) of the Act provides, in part, that no employer in Schedule 1 (of the Act) and no worker of an employer in Schedule 1 has a right of action for damages against any employer in Schedule 1 or any worker of such employer, for an injury for which benefits are payable under the Act. The Vice-Chair went on to make several significant conclusions

• the driver of the vehicle was a Schedule 1 employer
• Mrs. Khuu was an employee of the driver of the vehicle
• Mrs. Khuu was in the course of her employment at the time of the accident on November 25, 1996
• Mrs. Khuu has no right of action against her employer, the driver of the vehicle
• Mrs. Khuu had no right of action against the owner of the vehicle either

On June 10, 2004, a pre-hearing to deal with the SABs claims was held at FSCO. Again, Economical raised the issue of Mrs. Khuu's entitlement to WSIB benefits rather than SABs, pursuant to section 59 of the Schedule. Mrs. Khuu continued to dispute that issue. The pre-hearing arbitrator decided that the issue of Mrs. Khuu's entitlement to workers' compensation benefits should be dealt with by way of a preliminary issue hearing and stated the preliminary issue as:

Whether FSCO has jurisdiction to determine Mrs. Khuu's accident benefits under the Schedule?

Result

As WSIAT has determined that Mrs. Khuu is entitled to receive workers' compensation benefits, Economical is not required to pay accident benefits under subsection 59(1) of the Schedule.

Legislation

Subsection 59(1) of the Schedule states

The insurer is not required to pay benefits under this Regulation in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any worker's compensation law or plan.

The exception to subsection 59(1) is subsection 59(2)

which states Subsection (1) does not apply in respect of an insured person who elects to bring an action referred to in section 30 of the Workplace Safety and Insurance Act, 1997 so long as the election is not made primarily for the purpose of claiming benefits under this Regulation.

The exception is not applicable in the circumstances of Mrs. Khuu's case.

Economical's position

Economical's view, very simply, is that this dispute was settled by the decision of WSIAT dated December 12, 2003. In that decision, the Vice-Chair concluded that Mrs. Khuu was in the course of her employment at the time of the accident, with the result that she is precluded from suing the driver of the vehicle (who is her employer), the owner of the vehicle, or Economical. Counsel explained that Economical maintained its obligations under the Schedule and paid Mrs. Khuu her benefits until the issue of her entitlement to those benefits was finally resolved by WSIAT.

Applicant's position

Mrs. Khuu argues that her accident was not work-related and that Economical is responsible for paying her benefits. She insists that justice is only forthcoming in her case if she is allowed to proceed with her claims against the insurance company. She urged me to conclude that she could pursue her benefits claims against Economical.

In summary, she said that her accident could not be work-related when

• the accident occurred at 6:00 a..m., before the commencement of her regular work day
• she did not get paid before 7:00 a..m.
• the accident happened on the highway before she had arrived at her place of work
• and, most significantly, that the driver of the vehicle, her employer, admitted to the Vice-Chair at the hearing before WSIAT that he did not contribute to the workers' compensation insurance scheme

Mrs. Khuu testified that she feels forced by Economical and WSIB officials to seek WSIB benefits rather than SABs. She questions how Economical can claim that it has no responsibility to pay when Economical has been paying her benefits for all these years. She indicated that her husband and her son made general inquiries at the WSIB office in London and were told that an employee could not collect benefits if their employer had not paid into the plan.⁶

Mrs. Khuu reiterates that as far as she is concerned she is pursuing the matter according to the rules. She does not want to ask the government for money that she believes the insurance company owes her.

Mrs. Khuu provided no information on the current status of her court action.

Mr. Tieu, Mrs. Khuu's husband, also testified. He reiterated his wife's view that Economical must pay her benefits and does not understand why these payments have now been stopped. Mr. Tieu is convinced that his wife's case has proceeded in this manner because officials have been bribed.

EVIDENCE AND ANALYSIS:

The general rule enunciated in section 59 of the Schedule is that automobile insurers are not required to pay SABs if the insured person is entitled to workers' compensation benefits consistent with the overall scheme that SABs is the insurance of last resort.

The question of Mrs. Khuu's entitlement to workers' compensation benefits is easily answered in this case because the body with the authority to make this decision has already made a final decision.⁷ Mrs. Khuu adamantly denies that she is entitled to workers' compensation benefits on the basis of the particular circumstances of her accident and on the basis of her desire to sue the insurance company for her compensation. All of the facts to which Mrs. Khuu referred me were also considered by WSIAT as is evident from the reasons. Notwithstanding WSIAT's consideration of her case, Mrs. Khuu asked me to consider those same factors and render a decision allowing her to pursue her claims against Economical.⁸

I have no authority to question the decision of WSIAT, or make my own decision about the issue of Mrs. Khuu's entitlement to workers' compensation benefits.

This case is not the first in which this issue has been explored. The issue of entitlement to SABs where there is entitlement to benefits under any workers' compensation law has been explored by FSCO arbitrators in numerous cases. The general consensus is that arbitrators at FSCO are not in the best position, nor are they even authorized, to make the determination about entitlement to workers' compensation benefits. Where that issue arises, FSCO arbitrators have deferred to the jurisdiction of WSIAT.

For example, in the case of Falahi and ING Halifax Insurance Company, (FSCO A01-000103, February 5, 2002), Arbitrator Blackman declined to find that the applicant in that case was entitled to workers' compensation benefits. In his decision, the arbitrator commented on the issue of jurisdiction. He noted in particular that WSIAT has exclusive jurisdiction to determine the issue pursuant to section 30 of the Workplace Safety and Insurance Act. In fact, his decision ultimately was to adjourn the proceeding before him in order to allow an application to go to WSIAT for this determination.

In the case of Pavkovic and AXXA Insurance (Canada), (OIC A-007529, December 13, 1995), an early case dealing with the Workers' Compensation Act, the predecessor to the Workplace Safety and Insurance Act, Arbitrator Jones found that once the Workers' Compensation Board had made a decision on the question of entitlement to workers' compensation benefits, then he had no jurisdiction to go behind its decision. He relied on several court cases and other FSCO cases confirming the same principle.

I follow the principles that have been set down by these cases. I have before me evidence to show that the issue of Mrs. Khuu's entitlement to workers' compensation benefits has been finally determined by WSIAT. It is clear from the WSIAT decision that Mrs. Khuu is barred from suing her employer (who was the driver of the vehicle), the owner of the vehicle, or Economical. It is also clear from the decision that the applicable provisions of the Workers' Compensation Act entitle her to benefits in the manner and to the extent provided under the Workers' Compensation Act. In other words, whereas she has no right of action against her employer, the owner of the vehicle, or Economical, Mrs. Khuu is entitled to receive workers' compensation benefits because she suffered personal injury by accident arising in the course of her employment.

Consequently, pursuant to subsection 59(1) of the Schedule, Economical is not required to pay benefits under this Regulation.

EXPENSES:

The parties should attempt to resolve their claims for the expenses of this arbitration process by reviewing Rules 75 to 79 of the Dispute Resolution Practice Code. If the parties are unable to resolve the issue of expenses, either party may request an appointment before an arbitrator to determine expenses in accordance with Rule 79.

January 7, 2005

Rosemary Muzzi Arbitrator

Date

Neutral Citation: 2005 ONFSCDRS 2 FSCO A04-000847

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

AN HUE KHUU Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY Insurer

ARBITRATION ORDER

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

1. As WSIAT has determined that Mrs. Khuu is entitled to receive workers' compensation benefits, Economical is not required to pay accident benefits under subsection 59(1) of the Schedule.

January 7, 2005

Rosemary Muzzi Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2S.O. 1997, C. 16, Sched. A
3. 3See Exhibit 1, tab 1 - Decision No. 1052/02 of the Workplace Safety and Insurance Appeals Tribunal
4. 4R.S.O. 1990, C. W.11, as amended. (This Act was repealed effective January 1, 1998.)
5. 5See Exhibit 1, tab 1, page 7 of the Decision No. 1052/02
6. 6See Exhibit 1, tab 1 where, at page 10, the matter of Mrs. Khuu's employer's failure to contribute to the insurance plan was specifically considered by the Vice-Chair. She noted that: "In Decision No 2287/01 the labour broker was registered with the Board. The Board classified the business as the supply of non-clerical labour. I have reviewed Regulation 1102 and agree that is the appropriate classification for businesses such as [Mrs. Khuu's employer's]. That classification is subject to mandatory coverage. The fact that [Mrs. Khuu's employer] did not register with the Board is a matter to be resolved between [Mrs. Khuu's employer] and the Board."
7. 7See Exhibit 1, tab 1. See also Exhibit 1, Tab 2, where a Request for Reconsideration of the decision was denied.
8. 8In this regard, see also Exhibits 3, 4, 5, 6 which comprise Mrs. Khuu's documentary evidence.