S.J. v. Aviva Insurance Canada, 2018 CanLII 83513

Licence Appeal Tribunal

Date: 2018-01-25

Tribunal File Number: 17-002899/AABS

Case Name: 17-002899 v Aviva Insurance Canada

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.J.

Applicant

and

Aviva Insurance Canada

Respondent

DECISION

ADJUDICATOR: Robert Watt

APPEARANCES:

Counsel for the applicant: Naphtali Silverman

Counsel for the Respondent: Thomas Hughes

HEARD: IN Person Hearing October 26, 2017

OVERVIEW

1The applicant’s Mother died as a result of an automobile accident that occurred on October 23, 2016. The applicant applied for death benefits pursuant to the Statutory Accident Benefits Schedule- Effective September 1, 2010¹ (the “Schedule”), which were denied by the respondent.

2The applicant submitted an application for dispute resolution services to the Licence Appeal Tribunal-Automobile Accident Benefits Service (the “Tribunal”).

3The parties participated in settlement discussions at the case conference held on June 29, 2017, but were unable to resolve all of the issues in dispute.

ISSUES IN DISPUTE

4The case conference order dated July 26, 2017 indicated that the following issues were in dispute:

(a) Is the applicant entitled to death benefits in the amount of $10,000 as submitted on June 19, 2014, and denied on March 1, 2017?

(b) Is the applicant entitled to interest on the overdue payment of benefits?

RESULT

5I find that the applicant is not entitled to a death benefit in the amount of $10,000 and as a result, the applicant is not entitled to interest as there are no overdue payments of benefits.

THE LAW

6Section 26(2)2(i) of the Schedule provides that the insurer pay a death benefit in respect of an insured person who dies as a result of an accident in the amount of $10,000 to each of the insured person’s dependents. Section 3(7)(b) of the Schedule defines a person as being a dependent of an individual “if the person is principally dependent for financial support or care on the individual, or the individual’s spouse”.

7In Miller v. Safeco Insurance,² the Ontario Superior Court set out the factors that must be considered in determining dependency:

a. the amount and duration of financial dependency;

b. the financial or other needs of the claimant;

c. the ability to be self–supporting.

8The courts have held that the time period for any evaluation should fairly reflect the status of the parties, at the time of the accident³ and that on the issue of dependency, the tribunal must assess if the applicant was able to meet at least 51% of her financial needs over the relevant time period.⁴

9The applicant must show that he or she had a need and what the amount of the need was.⁵ Financial contribution is an important factor in relation to the issue of dependency, but is not the only consideration.⁶

10The courts have held that for an individual to be dependent on another person, more than 50% of the individual’s expenses must be covered solely by that person on whom that individual is alleged to be dependent on.⁷ This means that the applicant must show that more than 50% of her expenses were being paid by her Mother.

EVIDENCE

11The applicant was living at home at the time of the accident. She was also employed for 12 months prior to the accident. The applicant’s life during this time was quite stable, therefore this would be the relevant time period to look at to decide whether she is entitled to any benefit under the Schedule.

12The evidence of the applicant was that she worked full-time for the Dufferin Peel Catholic School Board and earned $37,891.00 in 2016, as shown on her tax return.

13At the time of the accident, the applicant had $40,000 in savings and owned her own car, valued at $4000. The applicant was hoping to become financially independent.

14The applicant had gone back to school while working full-time to do a Master’s in Education. She graduated in June 2017. The applicant’s debt with student loans averaged about $15,000.

15The applicant lived at home but did not pay towards any of the household expenses, including food.

16The applicant had a close relationship with her Mother. The Mother did all of the cleaning, cooking at home, shopping for groceries, laundry and was there to assist the applicant while she was working full-time and also attending school.

17A Report from BDO Canada LLP (the “BDO Report”) dated October 18, 2017, by Janet Olsen analysing the issues of financial dependency by the applicant and submitted by the Respondent, shows that the applicant can meet the 50 + 1% test to pay for her financial needs and was not principally dependent for financial support on her Mother, or her spouse at the material time.

18The BDO Report determined the financial need of the applicant by looking at the low–income cut off level (“LICO”) for her geographic region. The BDO Report indicated that the LICO, where the family residence was located, was $25, 036.14. The information was adjusted for inflation and calculated for the demographics of [their location].

19The evidence of the Mother’s earnings were that she earned $44,195.90 in the ten months prior to the accident as shown on her 2016 Tax Return Summary. She operated a child care service.

ANALYSIS

20There are two generally accepted methods for determining the financial needs of the applicant by the courts: a) an investigation and calculation of the actual needs through financial records; or b) an examination of the LICO.

21The respondent’s position is that the LICO approach as set out in the BDO report is the correct method of analysis, and is supported by the court in Miller. The respondent submits that the BDO Report clearly indicates that the applicant was earning enough in 2016 to cover her needs and was not dependent on her Mother.

22The applicant’s position is that the applicant has significant debt and was not financially independent at the time of the accident, relying on her deceased Mother for financial support and emotional care.

23The applicant’s position is that the BDO report is flawed as it does not take into account maturity, age, family background, duration of employment, or other subjective factors, such as determining whether or not a child has transitioned into adulthood. The applicant’s submits that the method of using the LICO focuses on the incurred expenses, and not on the value of the goods and services provided, and therefore this type of analysis should not be used.

24The applicant cites the example of the mortgage-free family residence, arguing that if she was not living there, she would have to pay rent for other accommodation, moving expenses, furnishings, out of pocket expenses etc. The applicant points out that these costs are not reflected in the analysis of the BDO Report, using the LICO method, and should be. The applicant argues that a holistic assessment approach should be taken, which is a broader approach, and would increase the level of household expenses to show actual needs.

25There are no court decisions taking this broad approach to date. The courts are currently taking the approach that the financial contribution is an important factor, but not the only consideration

26What were the financial needs and care of the applicant at the date of death of her Mother? There is no evidence before the tribunal indicating what the applicant’s financial needs were. In the absence of this evidence, it is difficult to determine whether her financial needs were greater than 51% of her earnings. It is the applicant’s burden to show that she had a need and what the amount of that need was.

27On her salary, the Mother would not have been able to meet the required 51% of the applicant’s needs. The household expenses for 2016 show a total amount of $31,877.27. If each of the five members (three children, the Mother and her husband) received equal benefit, that amount would be $6,375.45 for the applicant. This would mean that the mother was not providing 51% of the applicant’s needs. Even if the Mother applied the full household expense to the benefit of the applicant, this would not show that the applicant’s financial needs were greater than 51% of her earnings.

28The applicant was earning full-time income, which is sufficient income to be self-supporting. I therefore also find that she has the ability to be self-supporting. I find that the applicant has not met her burden to prove that she was financially dependent on her mother, and what the amount of her need was.

29I also agree with the respondent that the BDO Report uses the method endorsed by the courts. I accept the findings of that report that the applicant was earning enough income in 2016 to meet her financial needs.

30The applicant had a close relationship with her Mother, with her Mother preparing her meals etc. and having the normal Mother daughter relationship. There was no evidence however put before me, showing that the applicant was principally dependent for care on the Mother.

31I find that the applicant has not met the burden to prove that she was dependent on her Mother and therefore has not proven what the amount of her need was. I find that the applicant has not met the requirements to satisfy any dependency, financial or otherwise, as set out in the Schedule and as further defined by the courts.

ORDER

32For the reasons given above, I find that the applicant is not entitled to a death benefit in the amount of $10,000 and is not entitled to interest as there are no overdue payments of benefits.

Released: January 25, 2018

___________________________

Robert Watt, Adjudicator

Footnotes

1. 1O. Reg 34/10.
2. 21984 CanLII 2019 (ONSC).
3. 3Federation Insurance Co. v. Liberty Mutual Insurance Co. (FSCO Arb. Dec. May 7, 1999).
4. 4Dominion of Canada General Insurance Company v. Her Majesty the Queen in Right of Ontario as represented by the Minister of Finance (Motor Vehicle Accident Claims Fund), 2013 ONSC 4717.
5. 5Federation v. Liberty ibid 3
6. 6Allstate Insurance Co. of Canada v ING Insurance Co. of Canada, 2015 ONSC 4020, [2015] O.J. No. 3282.
7. 7Security National v. Belair (FSCO Arb. Dec. July 14, 2016).