Security National Insurance Co./Monnex Insurance Mgmt. Inc. v. Balendra, 2011 ONFSCDRS 75

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2011 ONFSCDRS 75

Appeal P10-00011

OFFICE OF THE DIRECTOR OF ARBITRATIONS

SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC.

Appellant

and

BRUNARAJAN BALENDRA

Respondent

BEFORE:

David Evans

REPRESENTATIVES:

Amanda Lennox for Security National Insurance Co./Monnex Insurance Mgmt. Inc. (“Security National”)

Seth Kadish for Mr. Balendra

HEARING DATE:

February 11, 2011

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 of the Arbitrator’s order dated May 13, 2010 is allowed. Paragraph 1 of the Arbitrator’s order is revoked, and the following substituted:

2. Mr. Balendra’s claims for statutory accident benefits are precluded from proceeding to an arbitration hearing.

3. An appeal legal expense hearing shall be requested within thirty days of the date of this decision, accompanied by a Bill of Costs and written submissions, as set out below.

September 2, 2011

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Security National appeals the Arbitrator’s order that Mr. Brunarajan Balendra, despite being allegedly injured on the job, is not precluded from receiving statutory accident benefits.

II. BACKGROUND

On August 16, 2007, Mr. Balendra was working as a parking lot attendant when a car hit his booth. Since s. 13(1) of the WSIA¹ provides that a worker who “sustains a personal injury by accident arising out of and in the course of his or her employment is entitled to benefits under the [worker’s compensation] insurance plan,” Mr. Balendra applied for workers’ compensation benefits to the Workplace Safety and Insurance Board, claiming personal injury.

The Board opened a claim file and investigated. However, the Board adjudicator wrote to Mr. Balendra on October 31, 2007, disallowing his claim because she had no medical documentation showing he sustained a personal injury in the accident. She was prepared to review any additional information he wished to file and make another decision regarding entitlement, and noted he had six months to advise her if he wished to appeal the decision.

Mr. Balendra took no further steps to claim workers’ compensation benefits, but at the same time that he had applied for them, he had also applied for statutory accident benefits from his automobile insurer, Security National. However, it denied the claim because under s. 59(1) of the SABS–1996,² the insurer is not required to pay benefits where as a result of the accident the insured “is entitled to receive benefits under any workers’ compensation law or plan.” (Mr. Balendra has not pursued a tort claim that under s. 59(2) would have enabled him nonetheless to claim accident benefits.)

The Arbitrator stated that Security National’s position was that until Mr. Balendra took further steps to claim workers’ compensation benefits, such as providing additional information, no final decision had been made by the Board, so the issue of his entitlement to them was still open.

The Arbitrator found that the October 31, 2007 letter was “a final appealable order denying Mr. Balendra’s entitlement to workers’ compensation benefits.” Accordingly, s. 59(1) of the SABS did not apply, and he could claim statutory accident benefits from Security National.

III. ANALYSIS

If Mr. Balendra had turned to the Commission after failing to prove an impairment in the courts, his arbitration proceeding would have been dismissed forthwith. I see no reason to treat this case any differently. Not only did Mr. Balendra commence multiple proceedings without an explanation, but now, having failed to prove he sustained a personal injury before the Board, Mr. Balendra wishes to prove he suffered an impairment before this Commission. One of the fundamental criteria for refusing dual proceedings between the courts and the Commission is the risk of inconsistent results – which is exactly what Mr. Balendra seeks. The case is even stronger between the Commission and the Board: As has been stated in many cases, the Board and its Appeals Tribunal have exclusive jurisdiction over a worker’s entitlement to compensation under the WSIA.³

Turning to the fundamental issue in this case, the Arbitrator erred at law in failing to consider the meaning of “entitlement” as defined in s. 13(1) of the WSIA, quoted above. To reiterate, entitlement to workers’ compensation benefits turns on whether a worker “sustains a personal injury by accident arising out of and in the course of his or her employment.” What matters is the circumstance of the accident, not the degree of resulting personal injury, so Mr. Balendra qualified for workers’ compensation benefits or nothing. Mr. Balendra argues that, now that the Board has found he is not entitled to workers’ compensation benefits because he failed to prove he sustained any personal injury, he is now entitled to claim statutory accident benefits because he sustained an impairment. I disagree. Subject to the tort exception mentioned above, insureds who are in a work-related accident do not qualify for statutory accident benefits, whether or not they meet the disability requirement in s. 13(1) of the WSIA. Indeed, insureds can only recover statutory accident benefits if they sustained an impairment.⁴ Mr. Balendra could not possibly have sustained an impairment but no personal injury. The Board decided that Mr. Balendra sustained no personal injury, which leaves nothing for this tribunal to decide. Regardless, from the moment of the accident, which it is agreed occurred during the course of Mr. Balendra’s employment, the Board had exclusive jurisdiction.

To find otherwise would lead to patent absurdities. Mr. Balendra submits that Security National should have followed the appeal procedures set out in the WSIA: Under s. 31(1)(c), an insurer can appeal to the Appeals Tribunal to determine “whether the plaintiff is entitled to claim benefits under the insurance plan.” However, since the only issue is whether or not Mr. Balendra sustained a personal injury and not whether the alleged injury arose out of employment, Security National would be forced to try to prove that Mr. Balendra did indeed sustain a personal injury. This would be like bringing Mr. Balendra’s own appeal for him.

This conclusion is also consistent with case law at the Commission. For instance, as stated in cases such as Sumal and American Home Assurance Company, (FSCO P07-00029, June 25, 2008), the general legislative intent is that payments emanate from only one system, and that the no-fault insurer is the payer of last resort. Furthermore, the fact that certain benefits are not provided does not negate the workers’ general entitlement to workers’ compensation. In Graham and State Farm Mutual Automobile Insurance Company, (FSCO P97‑00044, October 16, 1998), the insured unsuccessfully argued that he could claim any benefits that might be available to him under the SABS that he was unable to obtain from the Board. However, what mattered was that the Board had accepted that the accident occurred in the course of employment, thus entitling him to workers’ compensation. I see no difference in principle in this case where the Board also accepted that the accident occurred in the course of employment, but due to Mr. Balendra’s failure to prove his case, no benefits were provided. What matters is his general entitlement to workers’ compensation.

This conclusion is also consistent with cases such as Davis and Pafco Insurance Company Limited, (OIC P97-00010, July 22, 1997). The implicit finding in Davis is that coverage disputes relate to the circumstances of the accident, not the extent of personal injury. That case turned on the duty of an insurer to pay benefits pending the resolution of a dispute under the equivalent of s. 59(5), which provides interim benefits until workers’ compensation coverage is determined. However, as the Director’s Delegate noted, that subsection requires automobile insurers neither to pay particular benefits not available under the WSIA nor those refused by the Board. In Davis, the applicant “clearly was entitled to receive workers’ compensation benefits. He received them for seven months and did not contact Pafco until after they were cancelled. The reason for the cancellation was not related to any coverage dispute, but because the [Board] found that his accident-related injuries had resolved.” [Emphasis added.] The only difference here is that Mr. Balendra was denied entitlement because the Board found he had no accident-related personal injury. In principle, therefore, there is no difference between the situation of Mr. Davis and that of Mr. Balendra. There was no coverage dispute regarding Mr. Davis, so he could not obtain statutory accident benefits. There was and is no coverage dispute regarding Mr. Balendra, so likewise he is barred from seeking statutory accident benefits.

The Arbitrator erred in equating “entitlement” with Mr. Balendra’s actually qualifying for a specific workers’ compensation benefit – or any benefits at all. The appeal is allowed. Mr. Balendra is precluded from proceeding to arbitration.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an appeal legal expense hearing shall be requested within 30 days of the date of this decision in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – August 2011).

The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as submissions regarding entitlement to and/or the quantum of such expenses.

September 2, 2011

David Evans Director’s Delegate

Date

Footnotes

1. 1Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A.
2. 2The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
3. 3See ss. 118(1) and 123(1) of the WSIA.
4. 4Defined in s. 2(1) of the SABS as “a loss or abnormality of a psychological, physiological or anatomical structure or function.” The definition of “impairment” in s. 2(1) of the WSIA is “a physical or functional abnormality or loss (including disfigurement) which results from an injury and any psychological damage arising from the abnormality or loss.”