Tribunal File Number: 18-001020/AABS
Case Name: 18-001020 v Wawanesa Mutual Insurance Company
In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.
Between:
K.D.
Applicant
and
Wawanesa Mutual Insurance Company
Respondent
DECISION
ADJUDICATOR:
APPEARANCES:
Maureen Helt
For the Applicant:
Wendy Sokoloff, Counsel
For the Respondent:
Stephen B. Macaulay, Counsel
Heard In Writing:
July 03, 2018
OVERVIEW
1The applicant’s mother was involved in an automobile accident on August 27, 2002. At the time of the accident the applicant was five years old. He is now 21 years of age and is seeking benefits from the respondent under the Statutory Accident Benefits Schedule -Accidents on or after November 1, 1996 (the ''Schedule'').
2The driver of the vehicle was a named insured under a policy with the respondent. The applicant’s mother was a passenger in the vehicle and she had no insurance of her own. The mother suffered a catastrophic impairment as a result of the accident and was paid benefits by the respondent.
3The applicant was not involved in the accident.
4This hearing was scheduled as a result of the respondent raising two preliminary issues concerning this application.
PRELIMINARY ISSUES
5The preliminary issues were identified and agreed to as follows:
i. Does the applicant qualify as an “insured person”, as defined in the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the Schedule) , under the respondent insurer policy?
ii. Is the applicant’s claim for statutory accident benefits statute barred because of the delay in making his application?
RESULT
6I find that the applicant is not an “insured person” for the purpose of being entitled to statutory accident benefits. As such, I do not need to make a finding with respect to issue (ii) above.
ANALYSIS
Background Facts
7The relevant facts are not in dispute. The applicant was five years old when his mother was a passenger in a vehicle that was involved in a motor vehicle accident.
8As a result of the accident, the applicant’s mother suffered catastrophic injuries. She applied for and received accident benefits from the respondent as the insurer of the driver of the vehicle. Neither the applicant nor his mother have a familial or financial dependency relationship with the driver of the motor vehicle.
9On April 5, 2016 the applicant completed an Application for Accident Benefits (OCF-1) which was submitted to the respondent.
10Subsequent to receiving the applicant’s claim for benefits the respondent took certain steps including requesting a Disability Certificate with respect to entitlement to non-earner benefits in order to process the claim. The respondent also requested that the applicant attend an Examination under Oath.
11An Examination under Oath was conducted on August 25, 2016. The applicant also underwent a psychological assessment with Dr. Balmer on August 31, 2016 (following the respondent’s request for a disability certificate). The respondent denied benefits and on January 25, 2018 the applicant filed its application with the Tribunal.
12Dr. Balmer subsequently prepared a report dated January 26, 2018. A disability certificate was prepared by Dr. Balmer dated February 20, 2018 and was forwarded to the respondent on February 21, 2018.
13Dr. Balmer also prepared a treatment plan recommending psychological counselling dated February 14, 2018 which was forwarded to the respondent.
14On March 2, 2018 the respondent informed the applicant that it was taking the position that the applicant was not eligible for accident benefits.
Positions of the Parties
15The respondent takes the position that the applicant is not an “insured person”, as defined in the Schedule and is therefore not entitled to receive statutory accident benefits from the respondent.
16In support of its position the respondent relies on the language set out in section 268 of the Insurance Act and section 2 of the Schedule, specifically the definition of an “insured person”.
s. 268(1) Every contract evidenced by a motor vehicle liability policy, including such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.
17The definition of “insured person” is found at section 2 (1) of the Schedule:
2(1) “insured person”, in respect of a particular motor vehicle liability policy, means,
(a) the named insured, any person specified in the policy as a driver of the insured automobile, the spouse of the named insured and any dependent of the named insured or spouse, if the named insured, specified driver, spouse or dependant,
i. is involved in an accident in or outside Ontario that involves the insured automobile or another automobile, or
ii. Is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant.
(b) in respect of accidents in Ontario, a person who is involved in an accident involving the insured automobile, and
(c) in respect of accidents outside Ontario, a person who is an occupant of the insured automobile and who is resident of Ontario or was a resident of Ontario at some point during the 60 days before the accident.
18The respondent submits that the applicant is not an insured person because he is not a named insured, a dependent of the named insured, and is not a dependent of the spouse of the named insured.
19In the alternative, the respondent submits that the applicant’s claims for statutory accident benefits are statute barred for failure to comply with the time limit set out in the Schedule.
20The applicant sets out several arguments in response to the respondent’s position, including:
i. the Tribunal does not have jurisdiction to decide if the applicant is an “insured person”;
ii. the issue is not whether the applicant is an “insured person” but rather the issue is really one of priority between the respondent and the MVACF; and, lastly,
iii. that the respondent is estopped from arguing that the applicant is not an “insured person” as the respondent itself has accepted, through its actions, that the question of the applicant’s benefits ought to be the subject of a priority dispute.
21I turn now to a consideration of the arguments.
Jurisdiction
22I find that the Tribunal does have the jurisdiction to determine whether a person is an “insured person” for the purpose of being entitled to statutory accident benefits.
23The applicant submits that this Tribunal does not have the jurisdiction to consider whether or not the applicant is an insured person under the respondent policy arguing that the issue is one which falls under the jurisdiction of an arbitrator appointed to address the dispute between the insurers.
24The applicant does not set out any argument to support his position that the Tribunal lacks jurisdiction.
25In considering the applicant’s submission I have reviewed the Insurance Act and note that sections 280 of the Insurance Act provides the Tribunal with the sole jurisdiction over statutory accident benefits (SABS) disputes:
Resolution of Disputes
26280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. 2014, c. 9, Sched. 3, s. 14.
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1). 2014, c. 9, Sched. 3, s. 14.
(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule. 2014, c. 9, Sched. 3, s. 14.
27The above section makes it clear that the Tribunal has jurisdiction over the resolution of disputes and that disputes are resolved in accordance with the Schedule.
28The Schedule clearly sets out the definition of an “insured person”. There is nothing in either the Insurance Act or the Schedule which would limit the Tribunal’s jurisdiction in determining who is an “insured person” for the purpose of entitlement to statutory accident benefits. I therefore find that the Tribunal does have jurisdiction to determine who qualifies as an “insured person” for the purpose of entitlement to benefits.
Definition of an Insured Person
29The respondent submits that the applicant is not an “insured person” for the purpose of entitlement to statutory accident benefits.
30The applicant submits that the question is not whether he is an insured person but rather whether the respondent must respond to his claim for benefits.
31The applicant’s submissions focus on the issue of priority and the “pay now dispute later” principle, arguing that where there is a sufficient nexus between the applicant and the insurer, the insurer receiving the initial application is obliged to accept it and pay benefits, even when it takes the position that it is not the priority insurer.
32I take no issue with the applicant’s submission concerning priority disputes; however, in order for a priority issue to exist between insurers, or in this case between the respondent and MVACF, there must be an entitlement to benefits which only arises if an applicant meets the definition of “insured person” as set out in the Insurance Act and the Schedule.
33The respondent argues that the language of the Insurance Act and Schedule clearly sets out who is entitled to statutory accident benefits and that a claimant must be an “insured person” to qualify.
34As set out above, the definition of “insured person” is found at section 2 (1) of the Schedule.
35The respondent submits that the applicant does not fall within any of the categories listed in section 2(1) of the Schedule. I agree.
36In my opinion this is a question of statutory interpretation which is well established, namely, the words of an Act are to be read in their 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.
37I find that the words of section 2(1) of the Schedule clearly set out who is entitled to statutory accident benefits and it does not provide benefits for everyone.
38The applicant in this case:
i. Is not the named insured;
ii. Is not the spouse of the named insured;
iii. Is not any dependent of the named insured or spouse, if the named insured; specified driver, spouse or dependant; and,
iv. Was not involved in the accident.
39While I recognize there may be a perceived unfairness to a potential applicant not fitting within the definition of an insured person, the Insurance Act and the Schedule do not provide unlimited benefits to everyone. A plain reading of the Schedule makes it clear that, while it is established that the Schedule is consumer protection legislation, the legislature specifically opted to provide an entitlement to benefits to some and not to others.
40In support of this interpretation I refer to the cases relied upon by the respondent.
41The first case involved a private arbitration decision in Wawanesa v. Her Majesty the Queen and Allstate Insurance.1 The applicant was the mother of a boy who was involved in a motor vehicle accident. The son was a passenger in his father’s car which was insured by Wawanesa. Following the accident the mother applied for benefits relating to psychological injury as a result of physical injuries to her son.
42At the time of the accident the mother was separated from her son’s father. As such, the mother was not a named insured, spouse of a named insured or dependent of the named insured or spouse.
43The Arbitrator found that the mother was not a named insured and not entitled to benefits. In reaching this decision the arbitrator refers to the Director Delegate’s decision in Areal v. Liberty Insurance Co of Canada2.
The Director Delegate at para 22 of the Areal case states, with respect to the Schedule:
I expect the intent was to limit the scope of coverage and ensure against unlimited liability. I find that the purpose of s. 2 (1) (a) (ii) is specifically to recognize the psychological problems family members may have when someone is physically injured in an accident. It is the accident benefit analog to tort damages that may be available for “mental shock” when a family member observes an accident, comes upon the scene or hears the news.
44I agree with the applicant that the Areal decision could be distinguishable based on the fact in that it considers a situation in which the mother of the injured person was seeking accident benefits relating to physical injuries sustained in her care of the injured person. However, I find that the care principle in the case, which is that the definition of an insured person should be construed in a manner that is specific in scope, is correct.
45The applicant refers to section 224 of the Insurance Act which states, in part, that:
“insured” means a person insured by a contract whether named or not and includes every person who is entitled to statutory accident benefits under the contract whether or not described therein as an insured person;
46I believe that in referring to section 224 the applicant is arguing that it is not an “insured person” but “every person” who is entitled to statutory accident benefits and can make a claim under an insurance contract whether described as an insured person or not.
47I do not find this argument compelling as the qualification is that a person must have an entitlement to benefits and not every person is entitled to benefits.
48The applicant also refers to Regulation 283/95 made under the Insurance Act which governs priority disputes and section 268(2) of the Insurance Act. The Regulation sets out the priority of insurers for payment of statutory accident benefits and specifically, section 268 (2) (2) which deals with persons who are not occupants and the priority regime that follows.
49In reading the sections of the Insurance Act, the Schedule, and Regulation 283/95 it is my opinion that a claimant must first meet the definition of an “insured person” in the Schedule in order to be entitled to statutory accident benefits.
50In support of this finding I refer to the 2007 decision Kingsway General Insurance v. Ontario, relied on by the applicant. In Kingsway the Ontario Court of Appeal noted that the purpose of section 2 of Regulation 283/95 is for the timely delivery of benefits to victims of car accidents.
51Only once entitlement has been established does the issue of priority arise.
52In conclusion, I find that the definition of “insured person” in the Schedule, in its grammatical and ordinary sense, is clear and unambiguous and that the applicant does not fall within the definition. As such the applicant is not entitled to statutory accident benefits.
53The Schedule does not provide benefits for everyone. I find that the limitations of the definitions of an “insured person” as set out in the Schedule are consistent with the Insurance Act.
54I also do not find that the words are inconsistent with legislative purpose of consumer protection legislation.
55As I have found that the applicant is not an insured person, there is no need to consider the argument of priority put forward by the applicant.
56The only remaining argument to be addressed is that of estoppel.
Estoppel
57The applicant submits that the respondent should not be allowed to raise the argument that the applicant is not an insured person at this late stage of the application as the respondent first responded to the applicant’s claim in 2016 and did so in a manner that was consistent with accepting the applicant’s possible entitlement to benefits.
58To support his position the applicant relies on the Supreme Court of Canada decision in Ryan v. Moore 2005 SCC 38, [2005] 2 S.C.R. 53, that outlines three criteria for the application of estoppel by convention: the parties dealings must have been based on a shared assumption of fact or law; a party must have conducted itself in reliance on such shared assumption and it must also be unjust or unfair to allow one of the parties to resile or depart from the common assumption.
59In support of this submission the applicant notes that upon receiving the application the respondent requested documentation from the applicant and that the applicant attend an examination under oath.
60The applicant argues that the respondent was well aware of the applicant’s mother’s claim and the circumstances which led to that claim being made against the respondent policy. However, the respondent did not raise any suggestion as to the applicant not being an insured person under its policy until March 2018.
61The respondent requested various documents and arranged an Examination under Oath. The respondent also forwarded a Notice of Dispute between Insurers to the Fund.
62The applicant argues that in reliance on the respondent’s acceptance of its obligation to pay accident benefits, he sought a medical report and treatment. With respect, based on the evidence, I do not accept that the respondent ever acknowledged an entitlement to benefits or an obligation to pay.
63The respondent takes the position that estoppel is not applicable at the Tribunal.
64At para 22 of its submissions the respondent refers to a Decision of the Tribunal in JT v. Aviva (16-003674). In that case the Adjudicator found that the Tribunal does not have jurisdiction to provide equitable remedies including estoppel. This was confirmed on reconsideration wherein the Executive Chair stated:
Likewise, the facts of this case do not require the exercise of equitable jurisdiction because it is an established principle in accident benefits dispute that the onus rests with the applicant to prove that he or she meets the definition of “accident” under the Schedule. Aviva’s initial payment of benefits to the applicant does not override the applicant’s obligation to prove that the Schedule applies to this case in that the incident qualifies as an accident.
65The respondent argues, at para 24 of its submissions, that “applying estoppel in the circumstance would undermine the very purpose of the Schedule to provide accident benefits coverage only to those who are “insured persons”. In other words, estoppel cannot be applied to create insurance coverage where none exists.
66Based on the facts in this case, I find that, similar to the finding in J.T. v. Aviva, that there is an established principle in accident benefits dispute resolution that the onus rests on the claimant to establish an entitlement to benefits. If there is no such entitlement then there can be no remedy of estoppel.
67In conclusion, I find that the applicant does not meet the definition of “insured person” as set out in the Schedule and is therefore not entitled to statutory accident benefits. Further, the argument of estoppel is not applicable. As such, it is not necessary to consider preliminary issue (ii) with respect to the claim being statute barred.
68As I have found that the applicant does not meet the definition of an “insured person” under the Insurance Act and the Schedule, there is no need to address the respondent’s argument that the application should be statute barred as a result of the delay in filing the application.
ORDER
69For the reasons set out above, the applicant’s claim is dismissed and the date set for the resumption of the case conference, August 23, 2018, and the dates scheduled for the hearing, October 24 & 25, 2018, are vacated.
Released: August 15, 2018
Maureen Helt, Adjudicator