Adele Lutzer v. Guarantee Company of North America, 2018 ONFSCDRS 16

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2018 ONFSCDRS 16

FSCO A13-007981

BETWEEN:

ADELE LUTZER

Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Anne Sone

Heard: By written submissions and telephone conference call on October 30, 2017

Appearances: Jordan Palmer for Ms. Lutzer

Kerry Figliomeni for Guarantee Company of North America

Issues:

The Applicant, Adele Lutzer, was injured in a motor vehicle accident on August 15, 2011. She applied for statutory accident benefits from Guarantee Company of North America (“Guarantee”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Lutzer applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

1. Is section 12(5) of the Schedule insulated from review under the Human Rights Code?

2. Are either Ms. Lutzer or Guarantee entitled to expenses relating to this preliminary issue hearing?

Ms. Lutzer has served a Notice of Constitutional Question regarding the application of the Human Rights Code (“Code”)² and section 15(1) of the Charter of Rights and Freedoms (“Charter”). In paragraph 22 of her Reply Submissions, Ms. Lutzer confirmed that she is not advancing the issue of Charter compliance as part of this preliminary issue hearing.

Result:

1. Section 12(5) of the Schedule is insulated from review under the Human Rights Code.

2. The parties shall bear their own expenses of this preliminary issue hearing.

Overview:

Both parties agree that Ms. Lutzer was involved in a car accident on August 15, 2011, and was over the age of 65 at that time.

One of the issues in the main arbitration hearing of this matter is whether Ms. Lutzer is entitled to receive a non-earner benefit (“NEB”). This preliminary issue hearing deals with the impact of the Code on the amount of Ms. Lutzer’s potential NEB.

Statutory Framework:

Sections 8 and 9 of the Schedule set out the rules for calculating an income replacement benefit (“IRB”) if an insured person is entitled to receive an IRB on or after his or her 65th birthday.

Section 8 reduces the amount of the IRB for an insured person who is receiving an IRB immediately before their 65th birthday. Section 9 outlines the rules for the reduction of the IRB for those persons who become entitled to the IRB after their 65th birthday.

Subsection 47(2) of the Code states that where a provision of a regulation purports to authorize conduct that is a contravention of the Code, the Code prevails unless the regulation specifically provides that it is to apply despite the Code.

Section 10 of the Schedule refers to the age distinctions contained in sections 8 and 9 and shelters them from review under the Code. It states:

The age distinctions in sections 8 and 9 apply despite the Human Rights Code.

Subsection 12(5) of the Schedule states that sections 8 and 9 apply with necessary modifications for the purposes of determining the amount of a NEB.

Section 1 of the Code provides that every person has a right to equal treatment without discrimination because of age (among other categories).

Section 3 of the Code provides that every person has a right to contract on equal terms without discrimination because of age (among other categories).

Under section 22 of the Code, the right to equal treatment without discrimination because of age is not infringed where a contract of automobile insurance between an insurer and a person makes an exclusion on reasonable and bona fide grounds because of age.

Principles of Statutory Interpretation:

In cases such as Bell ExpressVu Limited Partnership v. Rex,³ the Supreme Court of Canada cited Elmer Driedger’s modern approach to statutory interpretation as set out in his book, Construction of Statutes:⁴

Today there is only one principle or approach, namely the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

In Bell ExpressVu, the Court also noted that “Drieger’s modern approach has been repeatedly cited by this Court as the preferred approach to statutory interpretation across a wide range of interpretive settings.⁵

With regard to human rights legislation, Professor Ruth Sullivan states in Sullivan on the Construction of Statutes⁶ that “the special status of human rights legislation derives from the fundamental character of the values it expresses and the goals it pursues. These constitute a blueprint of the society that all branches of government should seek to promote and preserve.” Further, she says, “[t]he courts are also slow to accept exemptions from human rights legislation.”

In Canada (House of Commons) v. Vaid,⁷ the Supreme Court of Canada stated that the Canadian Human Rights Act is a quasi-constitutional document and that any exemption from its provisions must be clearly stated.

Ms. Lutzer’s Submissions:

Ms. Lutzer submits the following:

• Section 10 of the Schedule only insulates sections 8 and 9 pertaining to an IRB from review under the Code.

• Exemptions to human rights legislation must be clearly stated.

• Based on the modern approach to statutory interpretation, subsection 12(5) of the Schedule was not intended to be immune from the anti-discrimination provisions of the Code.

• Section 22 of the Code does not protect age discrimination in insurance contracts in this case.

Guarantee’s Submissions:

Guarantee submits the following:

• Section 10 of the Schedule insulates subsection 12(5) from review under the Code.

• Section 22 of the Code insulates section 12(5) of the Schedule from review under the Code.

Analysis and Conclusions:

Ms. Lutzer submits that the wording of section 10 of the Schedule is ambiguous because it does not refer specifically to subsection 12(5) of the Schedule. I disagree. I find that by specifically referring to sections 8 and 9 (relating to an IRB) in subsection 12(5), the Legislature intended that subsection 12(5) (relating to an NEB) be also governed by section 10 of the Schedule. In other words, through a combination of these sections, I find it sufficiently clear that the Legislature intended that the age distinctions set out in sections 8 and 9 also apply to a NEB.

The language of subsection 12(5) could have been made clearer by specific reference to section 10 of the Schedule. However, I find that the comments of the Ontario court of Appeal in Hope v. Canadian General Insurance⁸ are applicable:

Ambiguity cannot be determined by examining words in isolation from the text in which they appear. Nor is ambiguity established by demonstrating that if the legislature had intended a particular meaning, it could have used different language that would have expressed that meaning more clearly. Not all language that falls short of crystal clarity is properly labelled ambiguous.

In Driedger’s Construction of Statutes,⁹ he states that “where there is no ambiguity in statutory language and legislative meaning is not obscure, that meaning must prevail even where it leads to an anomalous or discriminatory result. The mere fact that a result appears to be anomalous is no justification for departing from the clear meaning.” Since I have found that it is sufficiently clear that the Legislature intended that subsection 12(5) be also governed by section 10 of the Schedule, I find that meaning must prevail.

Ms. Lutzer submits that the Schedule is benefit-conferring legislation, and therefore “ought to be interpreted in a broad and generous manner. Any doubt arising from difficulties of language should be resolved in favour of the claimant.”¹⁰ However, in this case, I have not found any doubt arising from difficulties of language, so this principle does not apply here.

Ms. Lutzer argues that Drieger’s modern approach to statutory interpretation is not limited to cases where there is an ambiguity in the text. She also submits that in every interpretative exercise, a court or tribunal must take into account the scheme and object of the provision as well as the legislative intent.

When originally passed, the original Ontario Motorist Protection Plan,¹¹ did not have an age distinction for IRBs. In 1993, the Ontario government introduced the age 65 restriction. In 2006, Ontario Regulation 536/06 amended Ontario Regulation 403/96 to provide as follows:

10.1 The age distinctions in sections 9 and 10 apply despite the Human Rights Code.

This provision clearly shows the Legislature’s intention to limit IRBs, presumably in an effort to reduce automobile insurance rates.¹²

In addition, Ms. Lutzer submits that section 22 of the Code does not shield subsection 12(5) of the Schedule. However, in interpreting legislation, it may be presumed that the legislature does not intend unjust or inequitable results to follow from the enactments.¹³ Furthermore, in Zurich Insurance Company v. Ontario (Human Rights Commission),¹⁴ the Supreme Court of Canada stated that:

The determination of insurance rates and benefits does not fit easily within traditional human rights concepts.

Accordingly, I find that in this case, under section 22 of the Code, the right to equal treatment without discrimination because of age is not infringed because a contract of automobile insurance between an insurer and a person makes an exclusion on reasonable and bona fide grounds because of age, and has done so here.

As a result, I find that subsection 12(5) of the Schedule is insulated from review under the Human Rights Code.

EXPENSES:

Guarantee has claimed expenses in the amount of $588.70 in respect of this preliminary issue hearing. Ms. Lutzer has requested that both sides bear their own expenses.

Rule 75.2 of the Dispute Resolution Practice Code (“Practice Code”) sets out the criteria that I may consider in an award of expenses. Guarantee has submitted that this aspect of the proceeding was improper, vexatious or unnecessary.¹⁵ Although Guarantee was successful in this preliminary issue hearing,¹⁶ I would not go so far as to find that this aspect of the proceeding was improper, vexatious or unnecessary.

In addition, Ms. Lutzer did raise novel issues.¹⁷ Accordingly, I find that each party shall bear their own incurred expenses of this preliminary issue hearing.

January 17, 2018

Anne Sone

Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2018 ONFSCDRS 16

FSCO A13-007981

BETWEEN:

ADELE LUTZER

Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA

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. Section 12(5) of the Schedule is insulated from review under the Human Rights Code.

2. The parties shall bear their own expenses of this preliminary issue hearing.

January 17, 2018

Anne Sone

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. H.19
3. 32002 SCC 42, [2002] 2 S.C.R. 559 at paragraphs 26-27.
4. 42nd edition (Toronto: Butterworths, 1983).
5. 5In addition, in Wawanesa Mutual Insurance Co. v. AXA Insurance (Canada) (2012), 112 O.R. (3d) 354, [2012] O.J. No. 4196, 2012 ONCA 592, the Ontario Court of Appeal cites this quote from Drieger’s Construction of Statutes with approval.
6. 66th edition (Markham: LexisNexis 2014).
7. 72005 SCC 30, [2005] 1 S.C.R. 667 at paragraph 81.
8. 82002 CanLII 44899 (ON CA), [2002] O.J. No. 1643.
9. 9At page 31.
10. 10Re Rizzo & Rizzo Shoes Ltd. 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27 at paragraph 36.
11. 11Insurance Statute Law Amendment Act, 1990, SO 1990, c 2
12. 12For example, a recent Act to amend various statutes, pertaining to automobile insurance is entitled Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, Regulation 664, as amended, S.O. 2017, c.9 – Bill 15.
13. 13Ontario v. Canadian Pacific Ltd. 1995 CanLII 112 (SCC), [1995] 2 S.C.R. 1031 at paragraph 65.
14. 141992 CanLII 67 (SCC), [1992] 2 S.C.R. 321 at paragraph 17.
15. 15Rule 75.2(e) of the Practice Code.
16. 16Rule 75.2(a) of the Practice Code.
17. 17Rule 75.2(c) of the Practice Code.