Ruth Gonzalez-Izquieta v. RBC General Insurance Company, 2017 ONFSCDRS 326

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2017 ONFSCDRS 326

Appeal P16-00015

OFFICE OF THE DIRECTOR OF ARBITRATIONS

RUTH GONZALEZ-IZQUIETA

Appellant

and

RBC GENERAL INSURANCE COMPANY

Respondent

BEFORE:

David Evans

REPRESENTATIVES:

Robert Zigler, agent for James Klein, for Ms. Ruth Gonzalez-Izquieta

Robert Bowman for RBC General Insurance Company

HEARING DATE:

May 11, 2017

APPEAL ORDER

Under section 283 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, R.R.O. 1990, as amended, it is ordered that:

1. The appeal is dismissed and the Arbitrator’s order of February 1, 2016 is affirmed.

2. If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 6, 2017

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Ms. Gonzalez-Izquieta appeals the order of Arbitrator Shapiro dated February 1, 2016, in which he found she could not claim statutory accident benefits from RBC General Insurance Company because she was a TTC bus passenger at the time of the incident under dispute, and the bus did not collide with anything.

Ms. Gonzalez-Izquieta submits that, while she cannot claim statutory accident benefits from the TTC, she can do so from the insurer of any other vehicle involved in the incident.

However, the law is clear and unambiguous that, in the circumstances of this incident, no statutory accident benefits are payable. The appeal is therefore dismissed.

II. BACKGROUND

On May 13, 2013, Ms. Gonzalez-Izquieta was an occupant in a TTC bus, a “public transit vehicle” or PTV, when it swerved and avoided a collision with another vehicle being driven by Evon Kassabian.

During the avoidance maneuver, Ms. Gonzalez-Izquieta fell and injured herself. She wished to obtain statutory accident benefits pursuant to the SABS–2010.¹ However, she could not claim them from the TTC because of s. 268(1.1) of the Insurance Act. Section 268(1.1)² entered into force on May 12, 2011 and provides that, in respect of an incident from that date onwards, “no statutory accident benefits are payable in respect of an occupant of a public transit vehicle” if the PTV did not collide with any other automobile or object in the incident. Ms. Gonzalez-Izquieta was an occupant of the PTV and it did not collide with any other automobile or object in the incident.

With no motor vehicle insurance of her own, Ms. Gonzalez-Izquieta applied for accident benefits from the other driver’s insurer, RBC. RBC denied benefits. RBC contended that, in such a non-collision incident on a PTV, s. 268(1.1) not only bars TTC passengers’ claims for statutory accident benefits from the TTC – which the parties agreed is the case – but also from any other source. Ms. Gonzalez-Izquieta argued that she can claim accident benefits from private insurers such as RBC, notwithstanding.

To put s. 268(1.1) into context, it acts as an exception to s. 268(1), the requirement that every motor vehicle policy shall be deemed to provide for the statutory accident benefits in any relevant Statutory Accident Benefits Schedule. The full text of s. 268(1.1) reads as follows:

Exception, public transit vehicles

(1.1) Despite subsection 268 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.

At the same time s. 268(1.1) removed rights to accident benefits, s. 267.5(6.1) enhanced rights to tort claims against public transit authorities like the TTC. For instance, it removed their previous designation as “protected defendants,” and removed the tort threshold:

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).

As the Arbitrator noted, Ms. Gonzalez-Izquieta submitted that this legislative change eliminated or reversed the “grand bargain” described in Meyer v. Bright, (1992) 1992 CanLII 7648 (ON CTGD), 9 O.R. (3d) 225 (SCO), which granted accident benefits but reduced tort rights.

The heart of Ms. Gonzalez-Izquieta’s argument before the Arbitrator was that there was no concomitant enhancement to tort claims against owners or drivers of other vehicles. Thus, while she gained tort rights against the TTC, she did not gain any corresponding tort rights against the driver Kassabian. She submitted that the differential treatment of the TTC and Kassabian, without reason, is absurd. Therefore, to prevent absurdity, s. 268(1.1) can only apply to the TTC and cannot protect RBC.

The Arbitrator rejected Ms. Gonzalez-Izquieta’s submissions. He noted that it is difficult to interpret the statute as providing anything other than a complete bar to statutory accident benefits from any source.

The Arbitrator held that the absurdity principle only comes into play where a provision is open to two or more interpretations. He found there was only one interpretation, and further the result was not absurd.

The Arbitrator noted that the focus of the statute is on the passenger involved in a particular type of incident. He found that Ms. Gonzalez-Izquieta’s attempt to focus instead on the party against whom statutory accident benefits might be sought was trying to read in an ambiguity that is not in the statute’s words.

The Arbitrator also noted that the interpretation of s. 268(1.1) as a complete bar to claiming statutory accident benefits from any source was supported by several persuasive authorities, including Commission Bulletin number A-03/11. In that Bulletin, the Commission interpreted s. 268(1.1) as meaning no statutory benefits are payable from “any source.” The Arbitrator found that the Commission was not adding words into the statute or expanding its reach, but simply describing the effect of the statute in different words.

While the Arbitrator agreed it was not obvious why the legislature did not provide for the enhancement of tort rights against private insurers, he did not agree that the statute was unclear or that this was an “unintended legislative result” that he had 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. Third, tort rights still exist against the private vehicle, albeit subject to certain restrictions. [Footnote omitted.]

Accordingly, he found the statutory scheme clear, and did not find jurisdictional or interpretive grounds to alter the clear words of the statute. He found that s. 268(1.1) bars statutory accident benefits for passengers on a public transit vehicle involved in a non-collision incident from all sources.

III. ANALYSIS

On appeal, Ms. Gonzalez-Izquieta largely repeats the arguments that she made before the Arbitrator. Mainly, she submits that the purpose of the amendments in Bill 173 was to protect public transit authorities like the TTC, so the expansion of the protection to private insurers does not meet that purpose nor the consumer protection purpose of the SABS in general. Further, she submits that the text is ambiguous, as the Arbitrator effectively read in “from any source” to make it clear.

However, there is no ambiguity in the law. It simply states that in particular circumstances with respect to bus passengers “no statutory accident benefits are payable.” The Arbitrator did not have to read in the words “from any source” to interpret that section, nor did he fetter his discretion by considering such sources as the Commission Bulletin.

As the Arbitrator correctly stated, the absurdity principle only comes into play where a provision is open to two or more interpretations. He correctly rejected Ms. Gonzalez-Izquieta’s attempt to create ambiguity by looking at how the legislation possibly fails to meet its purpose. If the legislation is clear, then even an absurd result must be applied.

Thus, in Beattie v. National Frontier Insurance Co., 2003 CanLII 2715, Borins J.A., writing for the Court of Appeal, discussed at para. 10 a clause in the Statutory Accident Benefits Schedule –Accidents on or After November 1, 1996, O Reg 403/96, that excluded the insurer “from its obligation to pay SABS to a person convicted of a criminal offence only for the period from when the person is charged until he or she is convicted, with the result that such person is entitled to the payment of SABS subsequent to conviction, and for whatever period he or she qualifies to receive payments.” At para. 13, he pointed out that “principles of [statutory] interpretation may be used to resolve an absurd interpretation” but first there must be a provision whose words “are reasonably capable of more than one meaning.” The Court of Appeal held that while this erroneously drafted exclusion clause did not conform to its purpose, it was clear and unambiguous and gave rise to but one meaning.

Similarly, as the Arbitrator found, the phrase “no statutory accident benefits are payable” gives rise to but one meaning.

Ms. Gonzalez-Izquieta submits that the Arbitrator failed to consider the budgetary nature of Bill 173. However, she cites no authority that says budgetary legislation cannot provide relief to a private stakeholder.

Ms. Gonzalez-Izquieta also submits that the Arbitrator failed to consider the consumer protection nature of the SABS. However, he did outline that nature at pages 6 and 7 of the decision. Nonetheless, as he correctly found, that nature cannot override the clarity of the legislation.

Accordingly, the appeal is dismissed, and the Arbitrator’s order of February 1, 2016 is affirmed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 6, 2017

David Evans Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Introduced by Ontario’s Bill 173: Better Tomorrow for Ontario Act (Budget Measures).