Tribunal File Number: 17-002841/AABS
Case Name: 17-002841 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:
N.J.
Applicant
and
Aviva Insurance Canada
Respondent
DECISION
ADJUDICATOR: Robert Watt
APPEARANCES:
For the Applicant: Naphtali Silverman, Counsel
For the Respondent: Thomas Hughes, Counsel
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 a death benefit pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”), which was 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, 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 an evaluation should fairly reflect the status of the parties at the time of the accident 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.
9The applicant must show that they had a need and what the amount of the need was. Financial contribution is an important factor in relation to the issue of dependency, but is not the only consideration.
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. This means that the applicant must show that more than 50% of her expenses were being paid by her Mother.
EVIDENCE
11The applicant testified that she was living at home for at least 12 months prior to the accident and 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 proper time period to look at to decide whether she is entitled to any benefit under the Schedule.
12The evidence of the applicant indicates that she was earning $44,036.49 in 2016, working part time as a registered nurse while looking for full-time work.
13At the time of the accident, the applicant had $20,000 in savings as an emergency fund. She was going to use this money to pay off her student loan. She had incurred a student loan in the amount of $26,524.06 and owed $32,000 on her SUV.
14During her first two years of college, the applicant lived in residence, which her parents paid for. She lived at home during the last two years of her college courses (2013-2015). While living at home, the applicant did not pay towards any of the household expenses.
15After the applicant graduated in April 2015, she looked for full-time employment. She found part-time employment as a registered nurse at a mental health and addiction facility.
16The applicant testified that she had a close relationship with her Mother. Her Mother did all of the cleaning and cooking at home, shopping for groceries, laundry and was there to assist the applicant in her transition from a student to an employee.
17A Report from BDO Canada LLP (the “BDO Report”) dated October 18, 2017 by Janet Olsen, analysing the issue 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 annual LICO [for the applicant’s region], where the family residence was located, was $25,036.14. The information was adjusted for inflation and calculated for the demographics of Brampton.
19The evidence of the Mother’s earnings was that she earned $44,195.90 in the 10 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 she has significant debt and was not financially independent at the time of the accident, relying on her Mother for financial support and emotional care. The applicant submits 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. Further, the applicant submits that the LICO method 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.
23The 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 accommodations, 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.
24There 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.
25What were the financial needs and care of the applicant at the date of death of her Mother? There is no evidence before the tribunal as to what the applicant’s financial needs and care were at the time. 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.
26Looking at the Mother’s salary, the applicant’s 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 of the family (three children, the applicant’s Mother and the deceased’s husband) received equal benefit, the applicant’s share of the amount would be $6,375.45. This calculation proves that the mother was not providing 51% of the applicant’s needs. Even if the Mother applied all of the household expenses to the benefit of the applicant, this would still not show that the applicant’s financial needs were greater than 51% of her earnings.
27The applicant was also earning part-time income, which is sufficient income to be self-supporting. I therefore also find that she has the ability to be self-supporting and was not dependant on the Mother.
28I 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
29The 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.
30I find that the applicant has not met her 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
31For 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