Eve Niforos v. Allstate Insurance Company of Canada, 2015 ONFSCDRS 133

Financial Services Commission of Ontario Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 133

FSCO A13-007892

BETWEEN:

EVE NIFOROS

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Suesan Alves, Arbitrator

Heard: April 25, 2015 by teleconference call & written materials

Appearances: William Goldstein & Monica Pathak for Ms. Niforos

Monique Rae Bennett for Allstate Insurance Company of Canada

Issues:

The Applicant, Eve Niforos, was injured in a motor vehicle accident on March 1, 2010 and claimed non-earner benefits from Allstate Insurance Company of Canada. The preliminary issue to be determined is whether the Schedule¹ permits Allstate to deduct from Ms. Niforos’ non-earner benefits payable as a result of this accident, the amount of Ms. Niforos’ CPP disability pension benefits which she had been receiving for approximately sixteen years before this accident and which she continued to receive following the accident

The preliminary issues in this hearing are:

Does the Schedule permit Allstate to deduct the amount of Ms. Niforos’ CPP disability pension benefits which she was receiving before the accident, from her non-earner benefits payable as a result of the March 1, 2010 accident?
Which party should pay the other’s expenses?

Result:

The Schedule does not permit Allstate to deduct the amount of Ms. Niforos’ CPP disability pension benefits which she was receiving before the accident from her non-earner benefits payable as a result of this accident.
Allstate should pay Ms. Niforos’ expenses in respect of this hearing.

EVIDENCE AND ANALYSIS:

Background

Ms. Niforos claimed a non-earner benefit of $185 per week as a result of impairments she sustained in a motor vehicle accident on March 1, 2010. The parties agree that Ms. Niforos met the qualification for the non-earner benefit and that it is payable for 208 weeks.

At the time of the accident Ms. Niforos was already receiving Canada Pension Plan disability benefits for which she had qualified in or about 1994, approximately sixteen years earlier. Ms. Niforos continued to receive the CPP disability benefits following the motor vehicle accident.

The dispute to be resolved at this preliminary issue hearing is whether Allstate is permitted to deduct the amount of Ms. Niforos’ CPP disability benefits from her non-earner benefit. Allstate submits that it is permitted to deduct the benefit as an income continuation benefit plan. Ms. Niforos submits that the Schedule does not permit the deduction of her CPP disability pension benefits in the circumstances of her case.

Analysis

For the reasons which follow, I am not persuaded that the Schedule permits Allstate to deduct Ms. Niforos’ CPP disability pension benefits from the amount payable as her non-earner benefits.

The applicable provisions of the Schedule are subsections 2(9) and (10); 12(4) and section 60.

Subsections 2(9) and (10) of the Schedule state:

2(9) For the purpose of this Regulation, payments for loss of income under an income continuation benefit plan shall be deemed to include the following payments:

Payments of disability pension benefits under the Canada Pension Plan.

(10) Subsection (9) only applies in respect of accidents that occur on or after January 1, 2002. O. Reg. 482/01, s. 1.

By virtue of paragraph 1 of subsection 2(9) of the Schedule, the CPP disability pension benefits Ms. Niforos was receiving are deemed to be payments for loss of income under an income continuation benefit plan. Subsection 2(10) makes the deeming provision applicable to accidents which occur on are after January 1, 2002. As Ms. Niforos’ accident occurred on March 1, 2010, subsection 2(9) applies to Ms. Niforos’ CPP disability pension benefits.

Does subsection 12(4) of the Schedule permit the deduction?

Subsection 12(4) of the Schedule states:

(4) The insurer may deduct the following amounts from the amount payable to an insured person as a non-earner benefit:

Net weekly payments for loss of income that are being received by the insured person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan.[emphasis added]
Net weekly payments for loss of income that are not being received by the insured person but are available to the insured person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan, unless the insured person has applied to receive the payments for loss of income

I find that subsection 12(4) of the Schedule does not permit Allstate to deduct Ms. Niforos’ CPP benefits from her non earner benefit.

I find the phrase “as a result of the accident” modifies the words which follow it in paragraph 1, namely “under the laws of any jurisdiction or under any income continuation benefit plan.” The CPP benefits are payments for loss of income paid under an income continuation benefit plan by virtue of subsection 2(9) and (10) of the Schedule. However, in order to be deductible under paragraph 1 of subsection 12(4), the CPP payments must be received as a result of the 2010 accident. As Ms. Niforos began receiving CPP disability payments in or about 1994, well before the accident, I find that she was not receiving CPP disability benefits as a result of the accident. Thus, this subsection does not permit Allstate to deduct the CPP benefits from Ms. Niforos’ non-earner benefit.

Paragraph 2 of subsection 12(4) of the Schedule addresses the deduction of payments which a person is not receiving but which are available. I find that paragraph is of no application to this case, because Ms. Niforos was receiving the CPP disability benefit.

Does section 60 of the Schedule permit the deduction?

Section 60 of the Schedule states:

Other Collateral Benefits

(1) The insurer may deduct the following amounts from the amount payable to an insured person as an income replacement or non-earner benefit:
Any temporary disability benefits being received by the insured person in respect of a period following the accident and in respect of an impairment that occurred before the accident.
Any other periodic benefit being received by the insured person in respect of a period following the accident and in respect of an impairment that occurred before the accident, if the insured person was receiving the other periodic benefit at the time he or she first qualified for the income replacement or non-earner benefit, and, at that time, the other periodic benefit was a temporary disability benefit. O. Reg. 403/96, s. 60 (1). [emphasis added]

(2) Payment of a medical, rehabilitation or attendant care benefit or a benefit under Part VI is not required for that portion of an expense for which payment is reasonably available to the insured person under any insurance plan or law or under any other plan or law. O. Reg. 403/96, s. 60 (2).

(3) In this section,

“temporary disability benefit” means,

(a) an income replacement or non-earner benefit paid under this Regulation, unless the benefit is paid more than 104 weeks after the onset of the disability,

(b) a caregiver benefit paid under this Regulation,

(d) benefits paid under Part V of Ontario Regulation 776/93, unless the benefits have been paid for more than 104 weeks,

(e) benefits paid under Part IV of Regulation 672 of the Revised Regulations of Ontario, 1990, unless the benefits have been paid for more than 156 weeks,

(f) benefits paid under Part II of Subsection 2 of Schedule C to the Insurance Act as it existed before June 22, 1990, unless the benefits have been paid for more than 104 weeks, 1997

(g) benefits paid under section 37, subsection 43 (9) or subsection 147 (2) of the pre-1997 Act, as defined in Part IX of the Workplace Safety and Insurance Act, 1997, in respect of injuries that occurred before January 1, 1998, including benefits paid under those provisions as those provisions are deemed to have been amended by Part IX of the Workplace Safety and Insurance Act, 1997,

(g.1) benefits paid under subsection 43 (3) of the Workplace Safety and Insurance Act, 1997 in respect of injuries that occurred after December 31, 1997, or

(h) any other periodic temporary benefit paid under an income continuation benefit plan or law, other than,

(i) benefits under the Employment Insurance Act (Canada),

(ii) a non-earner benefit paid under this Regulation more than 104 weeks after the onset of the disability,

(iii) benefits paid under Part V of Ontario Regulation 776/93 for more than 104 weeks,

(iv) benefits paid under Part IV of Regulation 672 of the Revised Regulations of Ontario, 1990 for more than 156 weeks, or

(v) benefits paid under Part II of Subsection 2 of Schedule C to the Insurance Act as it existed before June 22, 1990 that have been paid for more than 104 weeks. O. Reg. 403/96, s. 60 (3); O. Reg. 462/96, s. 10; O. Reg. 281/03, s. 31

Section 60(1) of the Schedule specifies the benefits which an insurer is permitted to deduct from a non-earner benefit in paragraphs one and two. Both paragraphs address benefits received in respect of a period following the accident as a result of an impairment which occurred before the accident. Paragraph one addresses temporary disability benefits. While paragraph two addresses periodic benefits, it stipulates that the other periodic benefit, in this case, the CPP disability benefits, must have been a temporary disability benefit.

Subsection 60(3) the Schedule provides an extended definition of temporary disability benefits.

The question is whether Ms. Niforos’ CPP benefits are a temporary disability benefit within the meaning of the Schedule.

Based on the material before me, I find that the CPP disability benefit is not one of the benefits enumerated as a temporary disability benefit in subsection 60(3) (a)-(g.1) of the Schedule.

Subsection 60(h) further provides for the deduction of “any other periodic temporary benefit paid under an income continuation benefit plan or law, other than” the benefits listed in (i) –(v). I find that the CPP disability benefit is not one of the enumerated benefits in subsection 60(h).

The question then becomes whether the CPP disability benefit is nevertheless “a temporary benefit paid under an income continuation benefit plan or law.” I conclude that it is not. The legislation which creates the CPP disability benefit, Canada Pension Plan, R.S.C., 1985, c. C-8 as amended, prescribes the payment of the benefit to persons who are disabled, are not yet retired and have not yet reached the age of sixty-five. Subsection 42(2)(a) of that legislation states that “ a person shall be considered to be disabled only if he is determined in prescribed manner to have a severe and prolonged mental or physical disability,….. Paragraph (ii) of that subsection goes on to define prolonged disability for purposes of subsection 42(2)(a), as follows: (ii) a disability is prolonged only if it is determined in prescribed manner that the disability is likely to be long continued and of indefinite duration or is likely to result in death;”

The caselaw establishes that CPP disability benefits are benefits of long and indefinite duration, payable for prolonged disability and are not temporary disability benefits.² Further, Ms. Niforos had been receiving CPP disability benefits for sixteen years at the time of the accident. Thus, neither by their nature, nor by the duration of time over which Ms. Niforos has been receiving CPP disability benefits can they be regarded as temporary disability benefits.

For these reasons I conclude that the Schedule does not permit Allstate to deduct Ms. Niforos’ CPP disability benefits from her non-earner benefits.

If the parties are unable to resolve the remaining issues in dispute, they should contact the Case Administrator.

Expenses

I award Ms. Niforos her expenses of the preliminary issue hearing based on her success. If there is a dispute as to the amount of those expenses, the parties should request an assessment of expenses within 30 days and comply with the process set out in Rule 79 of the Dispute Resolution Practice Code, Fourth Edition, Updated January 2014.

June 23, 2015

Date

Suesan Alves, Arbitrator