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

Neutral Citation: 2016 ONFSCDRS 333

FSCO A15-005331

BETWEEN:

SONJA SCHUURMAN

Applicant

and

GORE MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Isabel Stramwasser

Heard: Written submissions were received on July 11, 2016.

Appearances: David Burton for Sonja Schuurman

Robert Ledgley for Gore Mutual Insurance Company

Issues:

The Applicant, Sonja Schuurman, was injured in a motor vehicle accident on September 23, 2014. She applied for statutory accident benefits from Gore Mutual Insurance Company, payable under the Schedule.¹ Disputes arose concerning her entitlement to benefits. The parties were unable to resolve their disputes through mediation and, in May 2015, Ms. Schuurman applied for arbitration at the Financial Services Commission of Ontario (“FSCO”), under the Insurance Act.²

The issue I must decide is the following:

1. Is Ms. Schuurman eligible to claim income replacement benefits under section 5 of the Schedule?

Result:

1. Ms. Schuurman is not eligible to claim income replacement benefits under section 5 of the Schedule.

EVIDENCE AND ANALYSIS:

What is Ms. Schuurman’s Burden of Proof?

In order to show that she is eligible to claim income replacement benefits, Ms. Schuurman must prove that it is more likely than not that she meets the eligibility criteria in section 5 of the Schedule. These criteria provide that an adult may receive benefits if he or she is unable to work and was employed, self-employed or in receipt of employment insurance at the time of the accident or meets the criteria for 26 out of the 52 weeks before the accident:

5(1) The insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies one or both of the following conditions:

1. The insured person,

i. was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment, or

ii. was not employed at the time of the accident but,

A. was employed for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident,

B. was at least 16 years old or was excused from attending school under the Education Act at the time of the accident, and

C. as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment in which the insured person spent the most time during the 52 weeks before the accident.

2. The insured person,

i. was a self-employed person at the time of the accident, and

ii. suffers, as a result of and within 104 weeks after the accident, a substantial inability to perform the essential tasks of his or her self-employment.

Ms. Schuurman advances arguments under every ground, saying that she was effectively employed, self-employed and in receipt of employment insurance at the time of the accident and that she meets the criteria for the 52 weeks before the accident. I address each argument, in turn. Notably, the terms “employed” and “employment” are not defined in the Schedule.

Was Ms. Schuurman employed at the time of the accident?

Ms. Schuurman argues that she ought to be deemed employed at the time of the accident because she was receiving monies from the Second Career Program of the Ontario Ministry of Training, Colleges and Universities at the time. The Agreed Statement of Facts in these proceedings describes this government program as one that “pays for the training or education that Ontarians require to get a better job” and “provides financial help up to $28,000 or more in some cases” in order to pay for tuition, living expenses, healthcare reports, travel, transportation, and other living and training costs. Ms. Schuurman’s Second Career Program was called “B-Pro Dog Grooming Academy.” According to the Second Career Participant Agreement, Ms. Schuurman’s “assistance period” was from August 4, 2014 to April 12, 2015 and she was granted $26,848.00. The Agreed Statement of Facts breaks this down as follows:

• $7,200.00 tuition

• $14,400.00 basic living allowance

• $250.00 fees/instructional costs

• $575.00 transportation

• $120.00 supplies

• $4,302.00 hardship requests

Did Ms. Schuurman have Employment Income?

It is Ms. Schuurman’s position that the monies she received from the Ontario government dog grooming training program constitute employment income. First, she points out that she received $416.00 per week from the program and says that this is “very much akin to income in the traditional sense.” She adds that she valued those government monies and relied on them. Yet, she provides no reason why valuing money, receiving it weekly and relying on it should make it employment income.

Second, Ms. Schuurman points out that she had a contract with the Ontario government, which, she argues, was analogous to an employment contract. The only reason she gives to support this argument is that her contract with the Second Career Program includes a section titled, “Responsibilities and Obligations.” As every contract imposes responsibilities and obligations on the contracting parties, Ms. Schuurman gives me no reason to narrow the category of her contract to that of an employment contract.

If I accepted Ms. Schuurman’s argument that her receipt of funds from the Ontario government constitutes employment income, then any kind of public or private financial assistance, bursaries, loans, lottery winnings, trust fund monies or investment income could be deemed employment income. An individual may well value and rely on funds from any of these sources, as well as receive them on a weekly basis pursuant to a contract. In the absence of persuasive arguments to support Ms. Schuurman’s view, I see no justification for extending the meaning of employment under section 5 in the manner she suggests.

Is it relevant that the Ontario monies were taxable?

Ms. Schuurman points out that all the income she received for her dog grooming training was taxable. However, that point does not assist me in deciding whether she had employment income. Not all taxable income is employment income. Consequently, Ms. Schuurman has not given me reason to narrow the category of her taxable income to employment income.

Is it relevant that she claimed the monies as employment income on her tax return?

Ms. Schuurman also seems to argue that, because she declared some of the dog academy monies as employment income on her tax return, she should be deemed to be employed in these proceedings. I reject that argument. Firstly, the evidence does not support a proposition that monies from the Second Career Program are employment income under the Income Tax Act or any other piece of legislation. Secondly, Ms. Schuurman has given me no compelling reason to import the provisions or definitions of another act into the Schedule, other than in sections where doing so is specifically contemplated. Consequently, the mere fact that Ms. Schuurman called it employment income on a tax return does not make it so under the Insurance Act.

Was Ms. Schuurman Self-Employed at the Time of the Accident?

I also reject Ms. Schuurman’s argument that her farming activities constitute “self-employment” under section 5 of the Schedule. The main problem with this argument is that the evidence does not support that it is more likely than not that Ms. Schuurman was engaged in any farming activities at the time of the accident. Ms. Schuurman did not provide sufficient or clear evidence in this regard.

First, Ms. Schuurman swore an affidavit describing her intentions to carry on farming activities. She deposed that, at the time that she and her partner purchased a 100-acre farm in March 2010, it was her intention to reside on the property and use it to generate revenue by boarding horses, selling wood from bush-lots, earning rental income and “carrying on various other farming activities.” She added in her sworn statement that it was also her intention to develop the property with a view to realizing a capital gain. Intention is not enough to establish that someone is carrying on self-employment.

Second, Ms. Schuurman deposed that, in year one of owning the property, she purchased a flock of 30 sheep and, due to a coyote problem, sold the surviving sheep in year two. This leads me to conclude that she did engage in some farming activities in 2010, 2011 and/or 2012. However, the accident took place in 2014 and so this evidence about activities in previous years is not relevant.

Next, Ms. Schuurman gave vague evidence about tenants moving out, but this does not indicate that she was carrying on farming activities at the relevant time. Specifically, she deposed that the farm was put up for sale shortly after a judicial order for partition and sale on August 6, 2014. She swore that, within 60 days of the order, the tenants moved out and there were no new tenants since. However, I am unable to deduce from that vague evidence that there were tenants at the time of the accident, which took place 48 days after the order.

Ms. Schuurman also deposed that no wood was harvested and no horses boarded since the order. The accident occurred after the order for partition and sale. Consequently, she was not conducting those farming activities at the time of the accident.

The whole of the evidence leads me to conclude that Ms. Schuurman was likely studying at the dog grooming academy at the time of the accident and not engaged in any self-employment activities. While she provided a tax return summary for 2014 showing amounts for gross and net farming income, this claim speaks to the whole tax year and not to the specific time of the accident. Notably, in Ms. Schuurman’s 2015 report to Dr. Kurzman, neuropsycholgist, she did not mention being employed or self-employed at the time of the accident - rather, the report says simply that she was going to dog grooming school at the time.

Was Ms. Schuurman Receiving Employment Insurance at the Time of the Accident?

Ms. Schuurman argues that I ought to deem her to be in receipt of employment insurance at the time of the accident because Second Career Program benefits are analogous to EI benefits.

Is it relevant that both Employment Insurance and Second Career Program benefits result in a T4E?

Ms. Schuurman submits that, because both employment insurance and monies from the Second Career Program result in a T4E, I should consider those benefits analogous in these proceedings. A T4E is a form from the Canada Revenue Agency that assists with reporting “employment insurance and other benefits” on an income tax return. Ms. Schuurman has given me no reason to support her contention that the manner in which Canada Revenue Agency categorizes Ontario government benefits should be relevant in these proceedings. As above, I decline to import the provisions or definitions of another act into the Schedule, other than in sections where doing so is specifically contemplated.

Does the Statute Support Ms. Schuurman’s Position?

To interpret the statute as Ms. Schuurman suggests would be to read in words that broaden the criteria for receiving benefits. I reject this argument. If the legislators had intended for the Second Career Program to count as employment insurance, they would have so specified.

While Ms. Schuurman correctly points out that insurance legislation must be given a broad interpretation in favour of the insured, there is no justification for reading in words here. The doctrine of reading in may only be used where there is ambiguity in the statute. I see no such ambiguity, nor has Ms. Schuurman advanced an argument that the wording in the section is unclear. Consequently, there is no justification for extending the criteria for income replacement benefits beyond what was agreed in the legislature.

Does Ms. Schuurman meet the Criteria for the 52 Weeks Before the Accident?

Ms. Schuurman argues that there is nothing in the Schedule to indicate that receipt of EI cannot count towards the 26-week threshold under subsection 5(1)1(ii)(A). In the Agreed Statement of Facts, she worked more than four weeks as a court reporter in the year before the accident but not at the time of the accident; she received EI benefits for 22 weeks in the year before the accident, but none at the time; and, she was receiving Second Career Program benefits for over 7 weeks at the time of the accident. According to Ms. Schuurman, this means that she was effectively employed more than 26 weeks in the 52 weeks before the accident.

Does the Statute Support Ms. Schuurman’s Position?

As above, given that there is no uncertainty in the statute, I see no justification for reading anything in.

Moreover, I reject this argument because it is unsupported by a plain language reading. The subsection provides that benefits are payable when an insured person “was employed for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident.” The conjunction “or” separates these two ideas. Either the person was employed before the accident or the person was receiving EI at the time of the accident. In my view, it does not make grammatical sense to interpret the statute otherwise.

Had the legislators intended to count Employment Insurance toward the 26-week threshold, they would have so stated. The section would have read something like this: the person “was employed or receiving EI for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident.” The reference to EI would have been placed before the conjunction “or.” That way, in my view, the ideas on either side of the conjunction would remain separate.

Does the Case Law support Ms. Schuurman’s Position?

Ms. Schuurman cites three cases in support of her claim for income replacement benefits.

Longworth and Economical

In Longworth and Economical Mutual Insurance Company,³ Arbitrator Blackman found that the purpose of the subsection “is to provide a measure of compensation for individuals who meet the minimum requisite connection with the work force.” He added that it “is to be interpreted in a purposive, remedial manner and given a large and liberal construction that best attains its purpose.” He cautioned, however, that the section “does not create a windfall.”

Mr. Longworth was a union member who was not actively employed for the full 26 out of 52 weeks before the accident. Nonetheless, Arbitrator Blackman considered him continually employed for the requisite period because he had made himself available for work that was available; he had consistent earnings for a number of years; he relied on this income for his support; periods without work were common in the industry; he had an ongoing relationship with the union, a member list and the companies themselves; and, membership in the union guaranteed future assignments.

In the case before me, there is no evidence that Ms. Schuurman was making herself available for work at the time of the accident or that any work was available. The evidence before me does not suggest that Ms. Schuurman had consistent earnings in any one industry or that she had any ongoing relationship with a union, member list, company, client or employer. While she had worked as a court reporter for nearly five weeks in the year before the accident, there is no suggestion that had made herself available for that kind of work thereafter or that she had or maintained a longstanding relationship with that employer or any other. Furthermore, the evidence does not indicate that Ms. Schuurman had any guarantee of future work. Rather, she was enrolled in a dog training academy and planned to continue those studies for another seven months.

Joyce and Co-Operators

Ms. Schuurman also cites Joyce and Co-Operators General Insurance Co.,⁴ which was an appeal before Director’s Delegate Naylor regarding whether a registered nurse was employed at the time of the accident. The Director’s Delegate found that the applicant provided nursing services through two agencies; she had made herself available for any work that was offered; she had worked for both agencies for a number of years; her annual earnings were constant; and, she relied on this employment to earn her livelihood. As a result, the Director’s Delegate was not persuaded that her employment relationship was severed every time she completed an assignment and had no immediate work to follow. Rather, the evidence supported the conclusion that the nurse continued in an employment relationship at the time of the accident, even though she did not actually have a case-assignment at that time.

As above, I find that the facts in Ms. Schuurman’s case are distinct. There is no suggestion that Ms. Schuurman had any ongoing employment relationship with an employer or client. The evidence does not suggest that she was making herself available for work at the time of the accident.

Butts and Pembridge

Ms. Schuurman also cites Butts and Pembridge Insurance Co.,⁵ a FSCO decision in which Arbitrator Kominar found that the applicant was self-employed at the time of the accident as a result of her activities as a foster parent. The arbitrator’s decision was based on findings that the applicant and her spouse had acted as foster parents for many years before the accident. They were engaged in foster parenting for profit and actually generated a profit on which they relied. Lastly, the arbitrator found that foster parenting stipends were not a direct function of any specific expenses.

Again, this case is distinct. Ms. Schuurman was receiving monies for training. The evidence does not support that she generated any profit from it. The Second Career Program funding was a direct function of specific expenses, as listed above, for living allowance, tuition, fees, transportation, supplies and hardship requests.

Conclusion

Ms. Schuurman does not meet the threshold criteria for income replacement benefits under section 5 of the Schedule. The evidence leads me to conclude that she was neither employed, self-employed nor in receipt of employment insurance at the time of the accident and that she does not meet the criteria for 26 out of 52 weeks before the accident. Consequently, it is not necessary for me to consider the argument that she is unable to work.

EXPENSES:

I leave the expenses of this preliminary issue hearing in the discretion of the hearing arbitrator.

December 13, 2016

Isabel Stramwasser Arbitrator

Date

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

Neutral Citation: 2016 ONFSCDRS 333

FSCO A15-005331

BETWEEN:

SONJA SCHUURMAN

Applicant

and

GORE MUTUAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, as amended, it is ordered that:

1. Ms. Schuurman’s claim for income replacement benefits is dismissed.

2. The expenses of this preliminary issue hearing are in the discretion of the hearing arbitrator.

December 13, 2016

Isabel Stramwasser Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2R.S.O. 1990, c.I.8, as amended.
3. 3(FSCO A05-001539, May 18, 2006)
4. 4(FSCO P96-000014, March 4, 1997), upheld on judicial review: [1998] O.J. No. 6557 (Ont. Div. Ct.)
5. 5(FSCO A05-002829, December 18, 2006)