Ming Guo v. State Farm Mutual Automobile Insurance Company, 2014 ONFSCDRS 51

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 51

FSCO A12-005562

BETWEEN:

MING GUO

Applicant

and

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: James Robinson

Heard: January 27 and 28, 2014 at the Offices of the Financial Services

Commission of Ontario, in Toronto

Appearances: Barjinder Kalsi and Mr. Yousef Jabbour, legal counsel, for the Applicant Ming Guo

Jonathan Schrieder, legal counsel, for the Respondent State Farm Mutual Automobile Insurance Company

Introduction

The applicant, Ming Guo, was injured in a motor vehicle accident on August 18, 2011. She applied for statutory accident benefits from the insurer, State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ State Farm disputed the applicant’s entitlement to attendant care benefits on the bases that she did not receive the services and that they did not constitute “incurred expenses” within the meaning of section 3(7)(e) of the Schedule. The parties were unable to resolve their disputes through mediation, and Ms. Guo applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the commencement of the hearing, counsel advised that they had reached an agreement with respect to the quantum to be paid in the event that the Commission found that the applicant had received attendant care services and that such services were “incurred expenses” within the meaning of subsection 3(7)(e) of the Schedule.

The issues in this hearing are:

Did the applicant receive attendant care services from August 18, 2011 and ongoing?
If she did, do those services constitute “incurred expenses” within the meaning of subsection 3(7)(e) of the Schedule?
Is State Farm liable to pay Ms. Guo a Special Award because it unreasonably withheld or delayed payments to Ms. Guo?
Is State Farm liable to pay Ms. Guo’s expenses with respect to this arbitration?
Is Ms. Guo liable to pay State Farm’s expenses with respect to this arbitration?

Result:

Ms. Guo received attendant care services from August 18, 2011 and ongoing.
The attendant care services received by Ms. Guo were “incurred expenses” within the meaning of subsection 3(7)(e) of the Schedule.
Ms. Guo shall be paid attendant care benefits by State Farm in such amount as the parties may mutually have agreed.
State Farm did not unreasonably withhold or delay payments to Ms. Guo.
Ms. Guo shall not be paid a Special Award.
State Farm is liable to pay Ms. Guo’s expenses with respect to this arbitration.

EVIDENCE AND ANALYSIS:

The hearing in this matter proceeded before me on January 27and January 28, 2014. The evidence before me disclosed that the applicant received attendant care services from her daughters Jianping Xie and Jian Lan Xie.

The applicant’s circumstances are unusual. She is a citizen of the Republic of China as are the applicant’s husband and her daughters Jianping Xie and Jian Lan Xie. The applicant, her husband, and her daughters Jianping and Jian Lian came to Canada in April, 2010. The ostensible purpose of the trip was twofold. The testimony of the applicant, corroborated by her two daughters, was that the applicant’s husband was investigating the possibility of investing in the Canadian wine industry. The secondary purpose of the trip was to do some sight-seeing and to afford their two younger daughters the opportunity to improve their English-language skills.

Be that as it may, the applicant’s husband left Canada for China in late 2010. In or about the month of July 2011 the applicant purchased her return ticket to China with a scheduled departure date of September 26, 2011.

Neither Jianping Xie nor Jian Lan Xie had purchased airfare to China at any time in 2011 or thereafter although it was their testimony throughout that they intended at all times to return to China in late 2011.

On August 18, 2011, more than one month prior to her scheduled return to China, the applicant was injured in the motor vehicle accident which has given rise to the present proceeding. As a result of her serious injuries she found herself incapable of leaving Canada and commenced a lengthy recuperative period.

Issue 1 – Did the applicant receive attendant care services?

I am satisfied on the basis of the available evidence, including the credible and consistent testimony of the applicant and of her daughters Jianping Xie and Jian Lan Xie, that attendant services were in fact provided to the applicant by those daughters. I am also satisfied that such attendant care was provided on a continuing basis for a period of not less than two years after the accident from August 18, 2011 and that there was a promise to pay for such care extended by the applicant to those daughters. Therefore, I find that the requirements of clauses 3(7)(e)(i) and 3(7)(e)(ii) of subsection 3(7)(e) of the Schedule are met in this case.

Issue 2 – Were the attendant care expenses incurred?

By prior agreement of the parties, the primary issue before me concerns the entitlement, if any, of the applicant to attendant care benefits under section 19 of the Schedule. If, and only if, I were to find entitlement to attendant benefits, the further issue would arise as to whether the applicant should receive a Special Award by virtue of the failure of the respondent to pay those benefits to the applicant in a timely manner or at all.

The respondent disputes the applicant’s entitlement to attendant care benefits on the basis that they were not “incurred” within the meaning of subsection 3(7)(e) of the Schedule, the relevant portion of which provides as follows:

(e) …an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,

(i) the insured person has received the goods or services to which the expense relates,

(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense; and

(iii) the person who provided the goods or services,

(A) did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or

(B) sustained an economic loss as a result of providing the goods or services to the insured person;

The matter of principal concern remains the question of whether or not the applicant’s daughters, in providing such attendant care, suffered an “economic loss” within the meaning of the Schedule.

Applicant’s counsel raised three arguments in support of his position that there had been such economic loss.

Counsel’s first argument was that Jianping Xie and Jian Lan Xie had suffered economic loss because each had been prevented from returning to employment awaiting them in China. There, each of the daughters could live rent-free with her parents while earning purely discretionary income for herself. Jianping Xie testified that she would be returning to a position as a sales clerk in a jewellery store. Jian Lan Xie was to return to work as an assistant to her father in his wholly-owned business.

The second argument raised by applicant’s counsel was that Jianping Xie and Jian Lan Xie had suffered economic loss because each had been compelled to forego income from employment while here in Canada.

The evidence at the hearing disclosed that Jianping Xie and Jian Lan Xie had each applied for and been granted a student visa to permit them to remain in Canada and that they were not authorized to work. Having sought and received the protection of subsection 5(2) of the Canada Evidence Act R.S.C. 1985, c. C-5, Jianping Xie credibly testified that she had worked on a part-time basis at a nail salon and was paid in cash by her employer. She also testified that she had been compelled to work fewer hours than she might otherwise have done because of her need to provide attendant care to her mother.

Having sought and received the protection of subsection 5(2) of the Canada Evidence Act, Jian Lan Xie credibly testified that she too had worked on a part-time basis at a nail salon and was also paid in cash by her employer. She credibly testified that she had been compelled to work fewer hours because of her need to provide attendant care to her mother, and that she had in fact resigned her employment for a period of time before resuming new employment, again because of her need to provide attendant care to her mother.

The third argument raised by applicant’s counsel was that Jianping Xie and Jian Lan Xie had suffered economic loss because they had incurred expenditure by providing an apartment and maintaining a household in order to support their mother while she recovered from her injuries.

In the view I take of this matter, it is the last of these three arguments that must succeed, for reasons which I will outline below.

Applicant’s counsel argued, and I accept, that it was only incumbent upon the applicant to succeed upon any one of his three arguments in order to meet the requirements of the Schedule. Insofar as I am satisfied that the applicant must succeed on the basis of counsel’s third argument, I make no specific finding with respect to the first two.

A brief review of the applicant’s domestic circumstances in the post-accident period will be necessary.

Prior to the accident, the applicant had lived in a rented apartment in Toronto in which she lived with her daughters while visiting the city. This was a short-term rental arrangement with a termination date of September 2011 by which time she had expected to have departed for China. Then, as a result of her injuries, she was compelled to leave the apartment and her daughters rented a basement apartment in Toronto where they cared for the applicant. The evidence of the applicant and of her two daughters was that Jianping Xie and Jian Lan Xie were the tenants of that apartment and that they paid the rent and for all household expenses including telephone, cable, utilities and groceries while they lived there.

The evidence of Jianping Xie and Jian Lan Xie was that they were compelled in the interests of the applicant’s health and speedy recovery to move from the basement apartment to a new above-ground rental unit where they now reside. Again, the evidence of Jianping Xie and Jian Lan Xie was consistent, credible and uncontradicted that Jian Lan Xie was the tenant of this new apartment and that she and her sister together paid the rent and for all household expenses including telephone, cable, utilities and groceries while they lived there.

The applicant adduced in evidence three rent receipts for the rental unit issued to “Xie Jian Lan” for the months of December 2011, January 2012 and February 2012 respectively, each in the amount of $1,150.00. These receipts were issued by a named landlord and bear both his signature and his telephone number.

I find these receipts to be wholly corroborative of the testimony of the witnesses that it was Jianping Xie and Jian Lan Xie who supported their mother by providing an apartment, food, and all the other amenities of a household during her post-accident convalescence.

It was evident from the available testimony that the applicant’s husband is a well-to-do businessman. In her testimony the applicant refused to agree that her husband was wealthy, preferring to say that the family circumstances were “so-so.”

Nonetheless, as has already been noted, the applicant’s husband owns a cement plant in China which employed 100 people in 2011. The applicant and her daughters testified that they had been advised by their father that he had suffered business losses in 2012 which had led to lay-offs.

The testimony of the daughters was that they had no knowledge of whether their father had sent money to their mother during her convalescence in Canada. Each testified that their parents’ dealings with money were confidential and undisclosed to them.

Throughout the hearing the affect of the applicant, who testified through a Mandarin interpreter, was relatively flat as she gave her testimony. The sole material exception to that tone occurred when she gave evidence that her husband sent money to her on only one occasion throughout her convalescence, in or about the month of March 2012. The manner and tone of the applicant in the giving of that specific testimony was resentful and angry. Notwithstanding the expressed reservations of respondent’s counsel about the accuracy or neutrality of the interpreter, there was no mistaking the applicant’s emotions with respect to this issue. I am satisfied on the basis of the available evidence that the applicant’s husband provided little material support to the applicant throughout her post-accident convalescence and that the applicant’s daughters incurred an “economic loss” by supporting the applicant.

There is no question that this was a sticking point for the respondent in this case. The position of respondent’s counsel was that the proximate cause of the economic loss suffered by the applicant’s daughters was the failure of their wealthy father to provide financial support to the applicant. The implicit concern of respondent’s counsel, although never expressed in precisely these terms, was that the economic loss here was an artificial one, manufactured by the neglect or wilful refusal of the applicant’s wealthy husband to support the applicant.

The applicant and her daughters testified that it was their understanding that the business of the applicant’s husband had taken a turn for the worse in 2012 and that he had become financially incapable of assisting the applicant. That evidence was of course hearsay since neither the applicant nor her daughters, living in Canada as they were, could have any direct knowledge of the truth of these allegations.

What is crucial here is that the test set forth in subsection 3(7)(e) does not remit us to an inquiry about whether an economic loss could have been prevented. We are only authorized to determine whether or not it in fact occurred. In this case I am satisfied on the basis of the available evidence and beyond the balance of probabilities that such an economic loss did in fact occur.

I therefore find that the applicant has met all requirements set forth in subsection 3(7)(e) of the Schedule and is entitled to be paid for attendant care.

Insofar as the parties, by consent, removed the issue of quantum from consideration by this tribunal, it is not open to me, as urged by respondent’s counsel, to give consideration to the issue of proportionality set forth in the Commission’s decision in Simser and Aviva Canada Inc.²

Issue 3 – Is the applicant entitled to a special award?

The applicant also claimed a Special Award against the respondent insurer pursuant to subsection 282(10) of the Insurance Act. In the circumstances of this case it is unnecessary to engage in a lengthy analysis of the authorities. The leading decision and current authority upon the issue is Persofsky and Liberty Mutual Insurance Company,³ a decision of Director’s Delegate Draper.

It is of the essence of a claim for a special award that the insurer’s decision to deny a benefit must be “unreasonable.” I am not satisfied on the basis of the available evidence that the insurer acted unreasonably in this case. The issue of whether or not the applicant’s daughters did in fact suffer “economic loss” within the meaning of subsection 3(7)(e) of the Schedule was a justiciable issue which raised clear issues of credibility. Success was not a foregone conclusion. I am not prepared to accept that the insurer acted unreasonably in requiring that the applicant’s case be proven before the Commission. The applicant accordingly does not succeed in her claim for a special award against the insurer.

EXPENSES:

If the parties are unable to agree on the legal expenses of this proceeding, an expense hearing shall be requested within sixty days of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as written submissions regarding entitlement to or the quantum of these expenses, or both, as are in dispute.

March 26, 2014

James L. Robinson

Arbitrator

Date