S. H. v. Northbridge Personal Insurance Corporation, 2017 CanLII 62158

Date: 2017-10-03

Tribunal File Number: 16-000915/AABS

Case Name: 16-000915 v Northbridge Personal Insurance Corporation

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:

S. H.

Applicant

and

Northbridge Personal Insurance Corporation

Respondent

AMENDED DECISION

ADJUDICATOR: D. Gregory Flude

APPEARANCES:

For the Applicants: S. H. and H. S. Ryan Breedon and Kristofer Angle, counsel

For the Respondent: Penelope Taylor, Claims Representative and Whitney Goodfellow, Senior Technical Specialist Daniel M. Himelfarb, counsel

HEARD: in Toronto: May 24 and 25, 2017

REASONS FOR DECISION AND ORDER

1There are two applications before the Tribunal: Tribunal file numbers 17-000915/AABS and 17-001133/AABS. Both share identical facts and legal issues. There are some minor variances in the status of the treatment of the two applicants’ Workplace Safety Insurance Act¹ (“WSIA”) claims, but they are not material. The two matters were heard together and this decision addresses both applications.

2In the early morning hours of July 12, 2013, the lives of two young men were dramatically altered when the tractor trailer they were operating was involved in an accident. H. S. was driving. S. H. was asleep in the bunk behind the driver. H. S. testified that he swerved to avoid a moose on the highway. He lost control of the vehicle and his next memory was waking up in hospital. S. H. remembers waking up on the roadway being attended by a passerby who had pulled him from the vehicle. As a result of the accident, neither of these young men will walk again.

3The nature of this accident triggers potential recovery under one of two no fault insurance compensation schemes that provide compensation for, among other things, loss of income and medical and rehabilitation benefits. Since the accident occurred during the course of their employment, the applicants may seek compensation under the WSIA. Since it was a motor vehicle accident, the applicants may also seek recovery under the no-fault Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).²

4The legislation makes a claim under the WSIA the primary source of compensation, rather than a lawsuit or an application for no-fault accident benefits under the Schedule. A consequence of receiving benefits under the WSIA is that the applicants forego the right to sue in a court action the person or entity who may have been responsible for their injuries. In certain limited circumstances, an injured worker may elect to commence a law suit to recover compensation.

5In the current case, the applicants elected to join a class action lawsuit. As part of the election process, they were entitled to apply for no-fault benefits from the respondent under the Schedule, which they received. When the class action was dismissed and an appeal of that dismissal was unsuccessful, the respondent took the position that the applicants were no longer eligible for no-fault benefits because they had no valid court action. They were therefore required to seek compensation under the WSIA. It is the applicant’s position that the statutory test requires me to examine whether the decision to sue was made in good faith and not simply for the purpose of seeking benefits under the Schedule. Therefore, the time to determine eligibility under the Schedule is when the decision to sue is made. In the applicants’ view, the ultimate outcome of the litigation is an irrelevant consideration.

6To determine this matter I must examine the applicants’ election not to seek compensation under the WSIA but to join the class action law suit. Should I find that the election passes the legislative primary purpose test, I must then consider whether the outcome of the litigation can nullify that election and require the applicants to seek compensation under the WSIA scheme.

7Having weighed all of the evidence and submissions of the parties, I can find no support in the legislation for the respondent’s position. The applicants elected to join a court action; they did so after consulting with a lawyer and the legal advice they acted on suggest a good likelihood of success. The legislation does not import a retroactive component. It focusses solely on the period when the election to sue is made and does not contemplate a retroactive impact of the final result of the court action.

ISSUE

8The issue identified in the case conference order is:

(i) What is the impact of s.61 of the Schedule on the Applicant’s entitlement to accident benefits under the Schedule?

ANALYSIS

Legislative Framework

9The interplay between the WSIA and the Schedule is set out in s. 30 of the WSIA and s. 61 of the Schedule. The WSIA generally prohibits injured workers from suing co-workers and Ontario-based employers for damages arising out of workplace injuries. There are exceptions; particularly where the potential wrongdoer is outside of the Province of Ontario.³ Where a worker has a right to sue, s. 30(2) of the WSIA provides that an injured worker must elect to receive compensation under the WSIA or elect to seek compensation through legal action and advise the Workplace Safety Insurance Board (“WSIB”) of the election.

10In s. 61, the Schedule addresses the interplay between it and the WSIA system. The starting point in s. 61(1) is that the applicants should seek recovery under the WSIA scheme. In this case, the applicants made an election under s. 30 of the WSIA and s. 61(2) provides that they may claim benefits under the Schedule provided that: “the election is not made primarily for the purpose of claiming benefits under this Regulation.”

11Since s. 61(2) directs me to question the primary purpose for making the election to opt out, I must consider whether the election was reasonable. In determining what is reasonable, I am of the view that there must be a reasonable expectation of success at the time the election was made. The respondent submits that I must also weigh the ultimate outcome of the personal injury litigation. I am of the view that this is a mistaken approach to the analysis.

Decision to Opt Out

12The applicants were seriously injured on the night of July 12, 2013 in Newfoundland. They were taken from the accident scene to a first response hospital and then airlifted to St. John’s. After a number of weeks in hospital in St. John’s, they were airlifted back to Ontario and began rehabilitation.

13The applicants were angry about their fate. They wanted to hold someone responsible. A friend of one of them recommended a lawyer who had previously helped that friend in a personal injury matter, Joseph Romano. The applicants contacted Mr. Romano and asked him to meet with them.

14In his testimony, Mr. Romano stated that he researched moose/vehicle collisions in Newfoundland prior to his first meeting with the applicants. He discovered that a class action suit was then underway in that Province seeking to hold the Province liable for failure to take adequate measures to ensure moose did not get on to the highways and cause accidents.

15Armed with his research, Mr. Romano met with the applicants at the rehabilitation hospital. His recollection is that the meeting took place on September 30, 2013. The applicants were more vague about the date of the meeting. He asked the applicants what they wanted to do and described them both as angry and wanting to take steps to ensure someone was held responsible for what had happened to them. They felt that no-one else should suffer their fate.

16While there is some disagreement in the evidence about the scope of the discussions on September 30th and subsequently and the instructions given to Mr. Romano, I accept his version of events. Neither applicant speaks English at a functional level. Mr. Romano had a junior lawyer with him who speaks Urdu who attended all meetings between the applicants and Mr. Romano and who handled other communications with the applicants. Neither applicant is highly educated, certainly not to the point where they might understand the nuances of the legal system and their abilities to make claims through various claims mechanisms. Both applicants were coming to terms with a major life altering event, treatment, pain medication and rehabilitation. Mr. Romano, on the other hand, was well versed in all aspects of personal injury law, dispassionate and objective.

17Mr. Romano stated that he discussed the WSIA system with the applicants. He advised them that they could not sue each other. This brought the applicants some relief. He advised them that they could not sue their employer. He covered the benefits that might be available to them under the WSIA system. I take particular note of Mr. Romano’s statements concerning the comparison between the WSIA system and Schedule benefits. In general, the two systems are similar in addressing a range of medical and rehabilitation needs. The WSIA system provides greater compensation because it lacks some of the limits on compensation for loss of income and for medical benefits in the Schedule. Mr. Romano stated that he would never advise a client to forego WSIA benefits simply to gain access to benefits under the Schedule.

18Mr. Romano also advised the applicants about opting out of the WSIA system and commencing a law suit against the Province of Newfoundland and Labrador. In his view, given the nature of the applicants’ injuries and their comparative youth, they would likely recover in the upper end of the range for non-pecuniary damages and would recover substantial loss of future earnings and future medical care damages.

19The applicants advised Mr. Romano that they wanted to sue. He discussed the options of trying to join the class action suit or commencing an action on their own. He pointed out that, as members of the class, their exposure to legal fees and costs would be minimal. In his view the most advantageous course was to see if the applicants could join the class action law suit and he so advised the applicants.

20While both applicants testified that they instructed Mr. Romano to join the class action law suit at that first meeting, I accept Mr. Romano’s evidence that he undertook to research the issue further, contact the Newfoundland lawyer handling the case and report back to them on the possibility of joining the suit.

21The lawyer handling the class action law suit was Ches Crosby; Q.C. Mr. Romano looked him up in the Martindale and Hubble legal directory and noted he had a high rating. He contacted Mr. Crosby and discussed the suit. Mr. Crosby advised him of the status of the law suit and his expectations of either settlement or success. They reviewed the theories of the case for liability against the Province and the possibilities of the applicants being made members of the class despite the fact that the class had been defined in 2011. As a result of the discussions, Mr. Romano felt that the class action suit was viable with a high likelihood of success and was being handled by a lawyer of some standing and ability.

22After he had communicated his discussions to the applicants, Mr. Romano advised them that they would have to retain Mr. Crosby to represent them in Newfoundland if they wished to proceed with the class action option. Mr. Romano’s role, or more properly the role of his office, was to ensure the flow of information between the applicants and Mr. Crosby and to manage the applicants’ claims under the Schedule. The applicants then retained Mr. Crosby to act on their behalf in Newfoundland. Mr. Romano represented them in Ontario. The applicants were successfully admitted as a supplementary class in the Newfoundland class action suit.

Termination of Benefits

23Part of the process for making a claim from the respondent under the Schedule was for the applicants to file an assignment of benefits with the WSIB and get the assignment approved. Once these formalities were completed, the respondent began paying the applicants benefits and continued to do so until the class action law suit had run its course. The suit was dismissed at trial and an appeal was unsuccessful.

24Following the dismissal of the appeal, the respondent wrote to the applicants and advised them that since they no longer had a viable court action, they were not entitled to benefits under the Schedule and must apply to the WSIB. The respondent terminated the Schedule benefits.

Primary Purpose Analysis

25The applicants argue that they made their decision to opt out of the WSIA scheme based on sound legal advice. The respondent takes the position that H.S. was not being truthful when he stated that he swerved to avoid a moose on the highway. The respondent argues that the existence of a moose is central to H. S.’s case and in the absence of evidence that there was a moose on the highway, any law suit for damages was lacking in good faith. The respondent also points to answers given by S. H. in an examination under oath that he had an antipathy to the WSIA system that coloured his decision to sue making it primarily for the purpose of getting benefits under the Schedule.

26I accept the applicants’ position. It is clear that the decision to opt out of the WSIA scheme was a considered one and made after consulting counsel. The range of potential compensation from a successful law suit exceeded the compensation available to the applicant’s by continuing to receive WSIA compensation. It includes damages for losses not covered by the WSIA, such a loss of enjoyment of life and pain and suffering. A successful lawsuit also results in a lump sum payment of losses rather than periodic payments for lost income from the WSIA scheme. In serious cases, the recovery can be millions of dollars.

27Notwithstanding S. H.’s stated antipathy to the WSIA scheme, he did not rush headlong into a decision. He took his time and sought legal advice before he acted. His evidence concerning the source of his antipathy was from discussions with co-workers in the construction industry. By the time he made his decision, he had had the benefit of an explanation of WSIA by Mr. Romano and the ability to weigh the potential results from a law suit and application under the Schedule with benefits from the WSIA scheme. I can find no basis to conclude that his decision to make the election was primarily for the purpose of getting benefits under the Schedule.

28With respect to the question of whether there was or was not a moose on the highway, the respondent is incorrect in the assertion that there is no evidence of a moose. There is the evidence of H. S. In substance, the respondent is arguing that I should give no weight to H. S.’s evidence because of his self-interest. I am not prepared to do so. This is not a case where I have competing versions of events. I have only one. The respondent chose to call no oral evidence. Nor do I find the possibility of H. S. swerving to avoid a moose so unlikely that it should be discounted entirely. I am prepared to accept H. S.’s evidence that he swerved to avoid a moose.

29In light of the above, I find that the decision to elect to join the class action law suit was not made primarily for the purpose of claiming benefits under the Schedule.

Retroactive Impact of Dismissal of Law suit

30The respondent argues that the election to commence a law suit and collect benefits, even if it may have been made for a proper purpose, is only valid as long as there is a law suit underway. Its position is that as soon as the litigation was finally dismissed then its obligation to pay benefits under the Schedule expired and the applicants were obliged to seek a remedy under the WSIA. The respondent argued that this position may be gleaned by the whole legislative intent in the WSIA and the Schedule but did not point me to any specific legislative provision to support that position. I too have been unable to find any specific provision.

31In reviewing s. 30(2) of the WSIA, I note that it requires a worker to make an election. The language speaks of election in the singular and in the present tense. It does not contemplate revisiting that election as future events unfold. Section 61(2) of the Schedule then asks me to consider the primary purpose of that election. Having found that the primary purpose was to pursue a civil claim and not to claim benefits under the Schedule, I can find no authority that permits me to vary my determination of the primary purpose because of the ultimate outcome of the litigation. The focus of the legislative scheme is the good faith of the election at the time it was made, not at some future date.

ORDER

32Having considered the evidence and submissions of the parties, I find that the applicants have been entitled to receive benefits under the Schedule since they made their election. The outcome of the litigation in Newfoundland has no impact on that entitlement.

Footnotes

1. 1Workplace Safety and Insurance Act, 1997 S.O. 1997, CHAPTER 16 SCHEDULE A.
2. 2O/Reg. 34/10
3. 3I recognize that there are finer distinctions in the WSIA scheme, but it is unnecessary for our current purposes for them to be outlined more specifically.