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

Neutral Citation: 2016 ONFSCDRS 40

FSCO A14-008055

BETWEEN:

RUTH GONZALEZ-IZQUIETA

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

Before: Arbitrator Jeffrey Shapiro

Heard: By written submissions due October 23, 2015

Appearances: Mr. James Klein for Ms. Ruth Gonzalez-Izquieta Mr. Robert Bowman for RBC General Insurance Company

Issues:

The Applicant, Ms. Ruth Gonzalez-Izquieta, was injured in a motor vehicle accident on May 13, 2013 and sought accident benefits from RBC General Insurance Company (“RBC”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Ruth Gonzalez-Izquieta, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Preliminary Issue Hearing are:

Is the Applicant's Application for Arbitration barred by operation of s. 268(1.1) of the Insurance Act?
Is either party entitled to its expenses of this Preliminary Issue Hearing?

Result:

The Applicant's Application for Arbitration is barred by operation of s. 268(1.1) of the Insurance Act.
If the parties are unable to agree on the entitlement to, or quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

EVIDENCE AND ANALYSIS:

Overview

For purposes of this Preliminary Issue Hearing, the parties are in agreement that the Applicant was an occupant in a “public transit vehicle” (i.e. a TTC bus) when it swerved to avoid - and did avoid - a collision with another vehicle, but which resulted in the Applicant falling inside the bus and sustaining injuries. The Applicant applied for accident benefits from RBC, the Insurer of the vehicle that the TTC bus driver swerved to avoid, but RBC denied benefits based on operation of s. 268(1.1) of the Insurance Act (the “Act”). Section 268(1.1) was introduced by Ontario's Bill 173: Better Tomorrow for Ontario Act (Budget Measures), entered into force on May 12, 2011.

RBC contends that this new provision prevents passengers on a public transit vehicle from claiming accident benefits from any source where there is no collision between a public transit vehicle and another vehicle or object. The Applicant agrees that the new legislation does act as a bar to claims for statutory accident benefits against the TTC, but argues that the new legislation does not act as a bar for such claims against a private Insurer, such as RBC in this matter. The parties have agreed to this Preliminary Issue Hearing to determine whether this new provision - i.e., s. 268(1.1) - acts as a bar to the Applicant’s claims in this Arbitration.

Agreed Statement of the Facts

The parties agreed to a Statement of Facts, relevant parts of which are reproduced below:²

The Applicant, Ruth Elizabeth Gonzalez-Izquieta ("Gonzalez"), […] was a passenger on a Toronto Transit Commission bus #7234 ("TTC bus") involved in an incident on May 13, 2013.
The incident was a sudden emergency stop by the driver of the TTC bus, Gabor Mezo, to avoid an impact with another vehicle being driven by Evon Kassabian ("Kassabian Vehicle"). The Kassabian Vehicle was insured by RBC General Insurance Company ("RBC") under policy number […].
The Kassabian Vehicle was travelling eastbound in the left lane on Wilson Avenue at its intersection near Haymarket Road, when it made a turn into the right lane of traffic in front of the TTC bus, causing the TTC bus to brake hard to avoid an impact with the Kassabian Vehicle. (See Exhibit 1 - Motor Vehicle Accident Report)
The TTC bus avoided a collision with the Kassabian Vehicle. The TTC bus did not collide with any other vehicle or object at any time.
At the material time of the accident, Gonzalez was not covered under any policy of motor vehicle insurance of her own. Gonzalez elected to submit her claim for statutory accident benefits to RBC, the Insurer of the Kassabian Vehicle. Gonzalez was not an occupant of the Kassabian Vehicle at the time of the accident; she was a passenger on the TTC bus.
Gonzalez, as a result of the sudden brake application in an emergency stop by the TTC bus driver, was forced forward and struck her head against the stanchion bar.
Gonzalez applied to RBC for benefits pursuant to the Statutory Accidents Benefits Schedule - Effective September 1, 2010. By letter, dated July 18th, 2013, Gonzalez was informed that RBC had denied entitlement to statutory accident benefits following the incident. (See Exhibit 2 - Correspondence dated July 18, 2013)
Gonzalez seeks the following benefits in the current Application for Arbitration:

a. $2,881.00 for services by Dr. Miriam Grushka, per OCF-18 submitted September 23, 2014;

b. $1,816.82 for services by Alexander Ryzhykh, per OCF-18 submitted September 26, 2014;

c. $2,250.00 for Chiropractic, Physiotherapy and Dentistry services;³ and

d. Income Replacement Benefits in the amount of $400.00 per week from May 20, 2013 to October 1, 2013.

Position of the Insurer

The Insurer contends that Bill 173: Better Tomorrow for Ontario Act (Budget Measures), which received Royal Assent on May 12, 2011, introduced, among other changes, s. 268(1.1) to the Act. Section 268(1.1) created an exception to the general accident benefit scheme for public transit vehicle (“PTV”) passengers that are involved in a particular type of motor vehicle incident - i.e., one where the PTV does not actually collide with another vehicle or object. RBC contends the exception operates such that passengers are now completely barred from receiving statutory accident benefits—from any source, whether the public transit authority (“PTA”) or any insurer.

The Insurer also contends that while barring accident benefits claims by such passengers, the new legislation permitted negligence claims against the TTC, removed PTAs’ previous designation as “protected defendants,” removed the tort threshold (a $30,000 deductible), and discounted income loss. In this sense, the new legislation removed these passengers from the statutory accident benefits no-fault scheme, but granted further rights under the tort-based “fault” scheme.

Of importance, RBC submits, s. 268(1.1) does not differentiate between potential sources of accident benefits. It simply states that “no statutory accident benefits are payable.” RBC contends that it “appears difficult to interpret s. 268(1.1) of the Insurance Act in any other manner…” In support of its interpretation, RBC cites a FSCO Bulletin, two FSCO decisions,⁴ the record of the legislative debate, and various ‘non-binding’ ‘publications’ – essentially lawyers’ blogs. All generally interpret s. 268(1.1) as acting as a complete bar to statutory accident benefits.

Therefore, as applies to the matter at hand, RBC concludes that because there is no dispute that the Applicant was a passenger in the type of accident specified by s. 268(1.1), that section acts as a complete bar to the Applicant’s claim for accident benefits from the TTC, RBC or any other party.

Position of the Applicant

The Applicant agrees that s. 268(1.1) acts as a bar to recovery of accident benefits from a “public transit authority,” but contends that the section cannot have been meant to be a bar to accident benefits from private Insurers such as RBC. In reaching that conclusion, she relies on a number of statutory interpretation principles, such as:

The consumer protection nature of the Schedule and Act require that “Any reasonable interpretation of the Act that is consistent with providing insureds with the benefit of the Act should be preferred over an interpretation that deprives the consumer of the benefit;”⁵
“The words of a legislative text must be read to promote the purpose of the legislation and avoid unintended consequences;”⁶
“... One method of avoiding absurdity is through the strict interpretation of general words ...where a provision is open to two or more interpretations, the absurdity principle may be employed to reject interpretations which lead to negative consequences, as such consequences are presumed to have been unintended by the legislature;”⁷ and
“A proposed interpretation is likely to be labelled absurd if it would result in persons receiving different treatment for inadequate reasons or for no reason at all.”⁸

Thus, Ms. Gonzalez-Izquieta argues:⁹

…the legal maxim Expressio unius est exclusio alterius, which translates to the expression of one specific thing is to the exclusion of a more general thing. Applied to the legislation at hand, the specific mention of public transit vehicles in the legislation (section 267.5(6.1) Insurance Act) is intended to exclude any other defendant or participant in the incident as a protected defendant. Therefore the SAB exclusion in section 268(1.1) Insurance Act was intended to apply only to public transit vehicles.

The Insured's interpretation is buttressed by the fact that section 267.5(6.1) only removes the public transit authority as a "protected defendant". The section makes no mention of any other vehicle involved in the accident. If the SAB protection of section 268 (1.1) was to apply to a non public transit authority then it would have stipulated same in section 267.5 (6.1). Accordingly, by looking at the Act as a whole the most reasonable interpretation is that the SABs are payable from sources other than the TTC. This would also be consistent with consumer protection.

In other words, the Applicant’s argument is that the RBC’s interpretation creates an absurd result in a case such as this, where there are two potential tort defendants – i.e., the TTC (a PTA) and the driver of the Kassabian Vehicle (the private vehicle the TTC swerved to avoid). Regarding the TTC, the Applicant loses her right to accident benefits from the TTC, but gains tort rights. The Applicant describes this legislative change as eliminating or reversing the “grand bargain” described in Meyer v. Bright, 1992 CanLII 7648 (ON CTGD), [1992] 9 O.R. 225 (SCO), which granted accident benefits but reduced tort rights.

Yet, in contrast, the Applicant argues, regarding the Kassabian Vehicle, the Applicant also loses her right to accident benefits from that vehicle, but does not gain any corresponding tort rights against that driver. Therefore, the Applicant claims that the fact the two defendants are treated so differently, without reason, is an absurd result. For one defendant, the “grand bargain” is completely reversed, but for the other defendant, it is not.

Finally, the Applicant asserts that none of RBC’s cited authorities are binding or on point, and some are irrelevant.

The Provisions of the Act

As noted above, the central provision of the Act at issue is s. 268(1.1). For context, that section, together with ss. 267.5(6.1) and 268.(1) of the Act, are set forth below:

Statutory accident benefits

(1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule. 1993, c. 10, s. 26 (1).

Exception, public transit vehicles

(1.1) Despite subsection (1) and the Statutory Accident Benefits Schedule, no statutory accident benefits are payable in respect of an occupant of a public transit vehicle, in respect of an incident that occurs on or after the date this subsection comes into force, if the public transit vehicle did not collide with another automobile or any other object in the incident. 2011, c. 9, Sched. 21, s. 4.

Same, public transit vehicles

267.5 (6.1) In respect of an incident that occurs on or after the date this subsection comes into force, subsections (1), (3) and (5) do not protect the owner or driver of a public transit vehicle if it did not collide with another automobile or any other object in the incident. 2011, c. 9, Sched. 21, s. 3 (4).

Analysis and Decision

While I appreciate the creativity of the Applicant’s attempt to read “absurdity” into the statute, I agree with the Insurer’s observation that it is difficult to interpret the statute as providing anything other than as a complete bar to statutory accident benefits – from any source. First, the fallacy in the Applicant’s argument is that the absurdity principle, and the other similar interpretive arguments, only come into play “where a provision is open to two or more interpretations.” I don’t see the statute as being open to two or more interpretations. Second, I do not find the result absurd.

How the statute is written is of particular importance. It focuses on a certain class of persons (a passenger on a bus) involved in a certain type of situation (an injury on a bus where there is no collision with another object) and then defines a result that occurs to that person (i.e., that class of persons is barred from receiving statutory accident benefits – period). This section is not written with any reference to the party against whom statutory benefits might be sought. Rather, its focus is on the passenger involved in a particular type of incident/accident. Thus, the Applicant’s attempt to focus instead on the party against whom statutory accident benefits might be sought is trying to read in an ambiguity that is not in the statute’s words— a potential ambiguity that the statute avoids by focusing its provisions, tests and results on the injured party, not the potential defendant.

I also note that this interpretation of s. 268(1.1) – i.e., it is a complete bar to statutory accident benefits from any source – is supported by several persuasive authorities, the most relevant of which are as follows:

The Commission, in Bulletin number A-03/11, interpreted that the section “… [n]ow provides that no statutory accident benefits are payable from any source to an occupant of a public transit vehicle public transit vehicle if the public transit vehicle did not collide with another automobile or object.” [Emphasis added] While I agree that s. 268(1.1) does not use the words “any source,” I do not find that the Commission was adding words into the statute or expanding its reach, but simply describing the effect of the statute in different words.
In Cusido and TTC (FSCO A13-012727, September 1, 2015), Arbitrator Winer concluded that Ms. Cusido’s collision with an interior stanchion could not be considered a “collision” contemplated in the statute. In reaching this conclusion, the Arbitrator considered that the purpose of the statute is to “to bar accident benefits for passengers in a public transit vehicle such as a bus, except where the bus collides with another vehicle or any other object.” While this case is distinguishable as it considers a claim for statutory accident benefits against a PTA, not a private Insurer, it still provides persuasive insight in to the purpose of the section in question.

The parties agree that sections 268(1.1) and 267.5(6.1) work harmoniously together regarding injuries sustained by passengers in public transit vehicles in a non-collision incident. Thus, their disagreement lies with the fact that while s. 268(1.1) also eliminated statutory accident benefits, even against private vehicles and their Insurers, there is no corresponding section 267.5(6.1) (which restored tort rights against PTAs) that applies to private vehicles and their Insurers. RBC, in essence, contends that does not change the clarity with which s. 268(1.1) is written, while the Applicant contends that differing treatment provides a basis for me to grant her a right to statutory accident benefits.

While I agree that the legislature’s reason for not making the corresponding change – enhancement of tort rights – respecting private insurers is less obvious, I do not agree that the statute is unclear or that this is an “unintended legislative result” that I have jurisdiction to or should repair, for several reasons.

First, the clarity with which s. 268(1.1) is written points to this being an intended result, without regard to the type of potential defendant. Second, reading s. 268(1.1) as only applying to a PTV, but not to private vehicles, would basically render s. 268(1.1) meaningless because rather than eliminating statutory accident benefits for PTV riders in non-collision incidents from any source, in most cases, it would simply shift the burden for the accident benefits from the PTV to a private vehicle – itself an absurd result.¹⁰ Third, tort rights still exist against the private vehicle, albeit subject to certain restrictions.

In any event, I find the statutory scheme clear, and do not find jurisdictional or interpretive grounds to alter the clear words of the statute. I conclude s. 268(1.1) bars statutory accident benefits for passengers on a public transit vehicle involved in a non-collision accident from all sources.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice.

February 1, 2016

Jeffrey Shapiro Arbitrator

Date