J. U. v. Co-operators General Insurance Company, 2017 CanLII 59501

Date: 2017-09-07

Tribunal File Number: 17-000713/AABS

Case Name: 17-000713 v Co-operators General Insurance Company

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

J. U.

Applicant

and

Co-operators General Insurance Company

Respondent

DECISION

ADJUDICATOR: Thérèse Reilly

APPEARANCES:

For the Applicant: Alvine Avanessy, Counsel

For the Respondent: David Raposo, Counsel

Heard In Writing: June 14, 2017

REASONS FOR DECISION AND ORDER

OVERVIEW

1The applicant was injured in a motor vehicle accident on December 6, 2016 (“the accident”). On her way home on the second day of work, she was struck as a pedestrian while crossing at an intersection. She applied for benefits, including an income replacement benefit (“IRB”), pursuant to the Statutory Accident Benefits Service – Effective September 1, 2010¹ (the “Schedule”).

2Both parties agree the applicant is entitled to an IRB. This dispute involves the calculation of the IRB. By order dated May 1, 2017, a written hearing was scheduled to determine the weekly amount of the IRB the applicant is entitled to receive.

ISSUE

3What is the amount of the weekly IRB the applicant is entitled to receive?

RESULT

4The amount of the weekly IRB that the applicant is entitled to receive is $33.70.

BACKGROUND

5The applicant is 26 years old. She is a graduate of a program in Community and Justice Services completed at Centennial College on April 17, 2015. On December 5, 2016, a day before the accident, she began work in a new position. She was struck by a motor vehicle on her way home from work and was injured. She saw her family doctor on December 7, 2016 and she was advised she could not return to work as a result of her injuries.²

6In her application for benefits, the applicant claimed an IRB from December 6, 2016 to date and ongoing. The time period for the IRB is not in dispute.

7The applicant submitted an OCF-2 Employer’s confirmation form dated December 20, 2016. The applicant designated to have the IRB calculated based on the four weeks pre-accident. The OCF-2 confirms the first date of employment is December 5, 2016, one day before the accident. Her gross income earned on the first two days of work and, therefore, for the 4 weeks before the accident is $192.53.³

8On January 13, 2017 an OCF-3 Disability Certificate was filed on behalf of the applicant.

9Both parties agree the applicant has a substantial inability to perform the tasks of her pre-accident employment. There is no dispute that she had only one source of income.⁴

10On January 16, 2017 and following receipt of the OCF-2 and OCF-3, the respondent approved the applicant’s IRB claim and advised that the IRB was calculated at $33.70 per week.⁵

11The applicant questions the insurer’s calculation of the IRB and asks what is the correct method to calculate the IRB?⁶ The applicant takes issue with how the respondent calculated the IRB since it results in unfairness to the applicant.⁷

12The respondent explained in its submissions how it arrived at the sum of $33.70 per week for the IRB claim pursuant to sections 4 and 7 of the Schedule. The respondent stated that the gross weekly income is based on income earned as designated by the applicant in the four weeks before the accident being $48.14. Seventy-percent of that amount as specified and determined as per section 7(2)1 i is $33.70. Therefore, the IRB payable is $33.70.⁸

13The respondent submits that as the issue being considered is five months post-accident, section 7(2) 1 i of the Schedule applies. Accordingly the weekly amount is 70% of the applicant’s gross weekly employment income.⁹

14The respondent maintains that the applicant designated the four weeks prior to the accident, and, as per section 4(2) 1 i, the quantum of the employment income earned is the 4 weeks before the accident multiplied by 13.

15Under section 4(2), and in the case of a person under section 5(1), a person’s gross annual employment income is whichever of the following amounts the person designates:

(i) The person’s gross employment income for the four weeks before the accident, multiplied by 13.

(ii) The person’s gross employment income for the 52 weeks before the accident.

16In this case, the respondent explained that in the OCF-2 the stated income was $192.53. When that number is multiplied by 13, the total is $2,502.89. To then determine the gross weekly employment income, the annual income is then divided by 52 which in this case equals $48.13. In accordance with section 7(2) 1 i only 70% of the gross weekly income is payable. Therefore, 70 % of $48.10 is $33.70. The respondent paid the IRB at that rate.¹⁰

17The respondent maintains that even if one were to calculate the IRB based on the income in the prior 52 weeks, the total income pre accident for the 52 weeks is $192.53, the IRB rate would only be $2.59. The respondent states the applicant’s IRB is being calculated and paid on the highest IRB premium possible.¹¹

18The applicant had only one source of income for the 52 weeks prior to the accident. No evidence of other income in the prior 52 weeks other than the $192.53 was presented.¹²

19The applicant takes issue with the calculation of the IRB by the respondent. The applicant did not however provide any analysis or discussion of how the IRB is to be calculated in her submissions. She offered no alternative method or indication of how the quantum in her view is to be calculated and calculated correctly.

20The applicant submits that the Insurer’s interpretation of section 5 (1) 1 i is incorrect as it requires that the insured be employed for a minimum of four weeks at the time of the accident.¹³

21The applicant submits that it cannot be the intent of the legislature that an applicant in circumstances such as these would have to wait for a tort settlement or stay on social assistance if she is unable to return to work and had not worked four weeks by the time of the accident. She argues the timing of the accident was not in her control. The calculation of a weekly benefit of $33.70 does not fulfill the purpose of the Act and results in treating the applicant unfairly.¹⁴

22The applicant submits the Schedule is consumer protection legislation aimed to reduce economic hardship for accident victims. The Schedule is to be interpreted liberally and any ambiguity to be construed in favour of the applicant.¹⁵

23The respondent submits in response that its method of calculating the IRB is correct and consistent with section 4 and 7 of the Schedule. The respondent states that the applicant has confused the provisions of section 5(1) on entitlement with the provisions found in sections 4 and 7 on how to calculate quantum.¹⁶

THE LAW

Provisions for the IRB and Calculations

24Section 5(1) 1 of the Schedule sets out eligibility criteria for an IRB. The relevant portion of section 5(1) that applies reads as follows:

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 satisfied one or both of the following questions:

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…

25The respondent conceded the applicant qualified for the IRB.¹⁷

26The respondent calculated the applicant’s IRB as per the provisions of section 7 (2) 1 i in which the weekly amount of the IRB is 70% of the applicant’s gross weekly employment income.

27Pursuant to section 4(1), an insured person’s gross weekly employment income is the amount of the person’s gross annual income divided by 52. Section 4(2) states that the gross annual employment income of an insured person is determined by whichever of the following amounts the person designates for the purposes of a calculation:

i. The person’s gross employment income for the four weeks before the accident, multiplied by 13.

ii. The person’s gross employment income for the 52 weeks before the accident.

28The respondent sympathizes with the applicant’s position but states that quantum is addressed by the provisions of section 7 (2) i and the issue is not one of fairness. In fact, based on the method of calculation by the respondent, the applicant is receiving the highest amount possible for the IRB.¹⁸

ANALYSIS AND FINDINGS

29I agree with the respondent that the applicant’s interpretation confuses entitlement with how an IRB is to be calculated. Sections 4 and 7 are the applicable provisions on quantum. Both parties agree on entitlement and this was an unfortunate accident involving the applicant.

30Although the applicant stresses that the results of the calculation of the IRB claim are unfair in these circumstances, that is not a relevant consideration in the calculation of the IRB. The Schedule is consumer protection legislation, however the legislation provides clear instruction on how to determine the amount of the benefits payable.

31I do not accept the applicant’s position that the respondent’s calculations means one has to interpret section 5(1) 1 i as an insured must have been employed for a minimum of 4 weeks prior to the accident. This is not consistent with the wording of section 5 (1) 1 i and quantum as per sections 4 and 7.

32I accept the interpretation provided by the respondent based on a reading of the provisions of sections 4 and 7 of the Schedule and calculations. The applicant designated the IRB to be determined from the applicant’s income for the 4 weeks prior to the accident which is $192.53. The calculation is sound and consistent with the provisions of the Schedule.

33The applicant has offered no calculation or case law to support a different interpretation of sections 4 and 7 from the interpretation offered by the Insurer nor any arguments other than the one outlined above to refute the correctness of the calculation of the IRB by the respondent. While I sympathize with the applicant, there are no remedial provisions in the legislation that may be applied.

34The proper calculation of the IRB is $33.70 per week.

ORDER

35The applicant is entitled to receive a weekly income replacement benefit for $33.70.

Released: September 7, 2017

___________________________

Thérèse Reilly, Adjudicator

Footnotes

1. 1O. Reg. 34/10.
2. 2Applicant submissions, paragraph 6.
3. 3Respondent submissions, paragraph 5.
4. 4Ibid. Paragraph 6.
5. 5Ibid. Paragraph 11.
6. 6Applicant submissions, paragraph 14.
7. 7Ibid. paragraph 30.
8. 8Respondent submissions, paragraph 13.
9. 9Ibid. Paragraph 11.
10. 10Respondent submissions, paragraph 13.
11. 11Ibid. Paragraph 14.
12. 12Ibid. Paragraph 15.
13. 13Applicant submissions, paragraph 31.
14. 14Ibid. Paragraphs 25, 29 and 30.
15. 15Ibid. Paragraphs 18 to 21
16. 16Respondent submissions, paragraph 18.
17. 17Ibid. Paragraph 9.
18. 18Ibid. Paragraph 16.