K.J. v. Aviva Insurance Canada, 2019 CanLII 72225

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:

K.J.

Appellant(s)

and

Aviva Insurance Canada

Respondent

DECISION

ADJUDICATOR:

Thérèse Reilly

Appearances:

For the Appellant:

Jessica MacInnes, Counsel

For the Respondent:

Alex Robineau, Counsel

Heard: In Writing Hearing:

May 8, 2019

OVERVIEW

1The applicant’s father died as a result of a motor vehicle accident that occurred on November 18, 2017. 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 claims she is a dependent of her father and therefore entitled to the payment of the death benefit. The respondent denied the claim on the basis that the applicant is not a dependent and is therefore not entitled to payment of the death benefit.

3I find the applicant is not entitled to the death benefit in the amount of $10,000.

ISSUES

4Is the applicant entitled to a death benefit in the amount of $10,000.00?

5Is the applicant entitled to interest on any overdue payment of benefits?

RESULT

6The applicant is not entitled to the death benefit in the amount of $10,000. The claim for interest is dismissed.

THE LAW

7Section 26(2) of the Schedule provides that an insurer shall pay a death benefit in the amount of $10,000.00 to each of an insured person’s “dependents.” In turn, s. 3(7)(b) defines an individual’s dependent as someone who is “principally dependent for financial support or care on the individual, or the individual’s spouse”.

8A number of factors that must be considered to determine whether someone is a dependent for the purposes of s. 26(2).¹ The factors to be considered in determining dependency, include:

a. the amount and duration of financial dependency;

b. the financial or other needs of the applicant;

c. the ability to be self–supporting. ²

9Being principally dependent for financial support requires more than some financial dependence. It requires “principal” dependence.

10To determine dependency, the courts have applied the 51% rule, which requires an analysis to determine if a claimant is able to meet at least 51% of her financial needs over the relevant time period.³ More than 50% of the individual’s expenses to be covered must be covered solely by the person on whom that individual is alleged to be dependent. If the applicant has sufficient funds to fund 51% of her financial needs, she is not considered a dependent.

11The applicant bears the burden of showing that she had financial need and the amount of that need.

12The relevant time period to evaluate dependency should fairly reflect the status of the parties, at the time of the accident. ⁴ A claimant’s particular circumstances in their entirety at the time of the accident have to be assessed. The claimant’s position cannot be determined solely by a single snapshot of his or her circumstances at that date.

13There are two generally accepted methods for determining the financial needs of an applicant by the courts: a) a calculation of the actual needs through financial records or b) an examination of the Low-Income Cut Off (“LICO”) data applicable to the applicant. ⁵

14The applicant maintains she was not financially independent of her parents at the time of the accident, and was reliant on her parents for food, shelter, tuition and the majority of her living expenses. In addition to financial support, she relied on her parents for emotional care, companionship, guidance and advice.⁶

15The respondent argues the applicant was not principally dependent on her father for financial support at the time of the accident. The respondent obtained two reports from the firm of Matson, Driscoll and Damico (the “MDD Reports”) ⁷ which it relies on to support its position that the applicant was not dependent on her father as alleged.

THE EVIDENCE

16The applicant lived at home at the time of the accident without having to pay for rent, utilities, food, household expenses and cell phone expenses.⁸

17The applicant is also a graduate from the University of Guelph, receiving a degree in Applied Science on June 12, 2017. Her parents paid her school and living expenses during the four years at university. She also received student loans and grants. With the help of her parents, she was able to pay off her student loans in full.⁹

18The respondent accepts that, during her studies, the applicant depended on her parents in order to meet her financial needs and focus on her education. However, by May 1, 2017, it states the applicant had transitioned from being a student to having steady employment at a well-paying job in her field. Following graduation, she returned to live at home and, from May 1, 2017 to the date of the accident, she worked full-time at a local hospital as a food service worker and diet technician. ¹⁰ By the date of the accident, the applicant had been working full-time hours for seven months. Her 2017 tax return shows she earned approximately $30,708 in income for that year. Her pay stubs indicate that by November 2017 she had earned $26,602.¹¹

19Other sources of income for the applicant include working part-time during university and afterwards, and at least until July 2017, where the applicant held several part-time jobs.¹² She also had investment income. With the financial help from her parents, the applicant also purchased a house in October 2015 and rented it out. The rental income was used to cover the mortgage payments, insurance and operating costs. The cost of the rental was not included in the calculations by the respondent as it is investment income.

20After the accident, the applicant was accepted into a Dietetic Education and Practical Training Program at Brescia University College and was expected to graduate from that program in April 2019. ¹³

21The parties differ on the relevant time period to determine whether the applicant is a dependent and can or cannot meet her financial needs.

22The applicant claims the relevant time period to assess dependency is November 2016 to November 2017.¹⁴ She always intended after high school to obtain a specialty diploma as a dietary technician and secure employment in that field. She states she was in the process of achieving this at the time of the accident. She explained that in the two years prior to the accident she had been a university student and in the two years after the accident she had another year of education to complete before entering the workforce.¹⁵ After the accident, she continued her studies to complete her dietetic education and practical training. She maintains further that working at the local hospital as a food service worker is not working in her field of study.

23The respondent argues the appropriate time period for the analysis of dependency is the period of May 1 (after graduation) to November 17, 2017 (the date of loss). The respondent claims that, during that period, the applicant had the ability to meet 51% of her financial needs.

24It relies on the MDD reports which concluded based on four different calculations that the applicant can meet the 51% test, explained below, which allows her to pay for her financial needs. The report concludes she was therefore not principally dependent for financial support on her father at the relevant time. The reports also determined the financial need of the applicant by looking at LICO showing that the LICO for the area in which the family residence was located was $25,036.14. The respondent argues that regardless of whether it is average household/LICO data or the applicant’s expenses that are examined, the applicant had the ability to meet 51% of her financial needs at the time of the accident.

25Alternatively, the respondent argues that, even if the one-year time period proposed by the applicant could be considered, she has failed to satisfy her burden of proof. It refers to errors made by her accountant, [PB], in his calculations.

ANALYSIS

26I find the relevant time period to consider dependency in the circumstances is from the applicant’s return to her parents’ home on May 1, 2017 following her graduation to the date of the accident.

27Beginning May 1, 2017, the applicant’s life changed and she entered a transition phase. She was a graduate of a university program. She began work full-time in her field of study at the local hospital. She worked as a food service worker but then also worked as a Dietary Technician, which is her field of study. She subsequently continued further studies where she was accepted into a Dietetic Education and Practical Training Program at Brescia University College.

28The applicant claims that her schooling after the accident was to “complete her dietetic education and practical training”. I disagree with this characterization in that 1) she was working at the local hospital as a dietary technician at the time of the accident and 2) even if the applicant applied for further studies on November 7, 2017, at that time, only an application was submitted, and she had not been accepted into the program. There is also no evidence before this Tribunal as to the length of the program, the applicant’s planned living arrangements, or whether she intended to work during her further studies.

29I also disagree with the statement that the applicant had yet to enter the professional world. The evidence indicates that at the time of the accident she had commenced work full-time in her field of study at the hospital.

30I find the one-year time frame proposed by the applicant also does not account for the transition in the applicant’s life and as such does not accurately reflect the applicant’s status at the time of the accident.

31From May 2017 to November 2017 the applicant was working full-time and had transitioned to this full-time work post-graduation. By May 1, 2017, her four year studies had finished. She had transitioned to living at home and working in her field of study. Although she lived at home and had her expenses paid, the MDD reports indicate the applicant was financially independent as she was able to meet the financial test. Had she been required to pay her living expenses she could have. I find she was financially independent.

32In Intact Insurance Co. v. Allstate Insurance Co. of Canada¹⁶ the Court of Appeal for Ontario found that it was a seven-week period that most accurately reflected the claimant’s status at the time of the accident. I find the seven month time period from May 1, 2017 to November 2017 is an accurate reflection of the applicant’s status at the time of the accident.

33The applicant admits she benefitted from her parents’ generosity and, in her submissions, states it was her parents’ obligation to provide her with financial resources.¹⁷ No evidence was presented to substantiate this obligation. The applicant’s parents wanted to ensure she was at university with no financial difficulties. That is not the same as having a financial need that can’t be met due to your restraints in your financial resources.

Financial Needs

34The applicant is obliged to present evidence of financial needs. I find she has not done so.

35The applicant submitted evidence of financial need outlined in the affidavit from her accountant, [PB], dated November 9, 2018. I find the analysis of her financial needs has limited value in that the analysis is based on the time period of November 2016 to November 2017, which I find is not the appropriate time period for consideration. It also includes four to six months of expenses while the applicant attended school at Guelph University. It also fails to include amounts received for scholarships and grants which would offset the tuition costs and lower the amount of financial needs.

36Moreover, a review of [PB]’s calculations also reveals some inconsistencies and errors with the calculations. First, he used the sum of $28,292 as her 2017 income. Yet the 2017 tax return filed with Revenue Canada shows employment income of $30,708 and the applicant gave evidence that her income to November 2017 was in fact $26,602. I also agree with the respondent that [PB] erred in his report by including the full amount of the car payment in the calculation of needs as this inflated the calculation of total expenses for the year Nov. 2016 to Nov. 2017 at $52,581. The sum of $18,118.79 was included in his calculation of needs which was the total amount paid to pay off the car loan and does not reflect the monthly payment of $89 a month. That monthly car payment would be the proper amount to use in calculating a monthly amount for expenses and not the $18,118.79.

37As to the financial needs calculation, I prefer the MDD reports, which are detailed in their calculations. The reports summarize four different scenarios and conclude in each that the applicant’s ability to cover her own financial needs ranged among 106%, 93%, 69% and 204%. In one report, the time period used was between May 1, 2017 and November 17, 2017. The March 2018 report used a time frame January 30, 2017 to January 29, 2018, which would include some of the time when the applicant would have returned to school.

38The applicant benefitted from the generosity of her parents, who allowed her to live at home without paying rent, and other living expenses. But this generosity does not mean she was financially dependent on her father. At the relevant time, she had a secure job working full-time hours and was self-supporting. Even if she had been required to pay her own rent and living expenses, I find based on the calculations of financial needs in the MDD reports, she would have been able to pay for these and thus not be financially dependent of her father.

39I find that the applicant has not met the requirements to satisfy any dependency, financial as set out in the Schedule.

CONCLUSION

40For the reasons given above, the applicant is not entitled to the death benefit of $10,000. The claim for interest is dismissed.

Released: June 12, 2019

___________________________

Thérèse Reilly

Adjudicator

Footnotes

1. 1Miller v. Safeco Insurance Co. of America 1984 Canlii 2019 (ON SCC), affirmed 1985 Canlii 2022 (ONCA)
2. 2Mark v. Dominion of Canada General Insurance Co. (January 27, 1999), FSCO A96-000341 at paragraph37, Book of Authorities of the Respondent, Tab 1.
3. 3Co-operators General Insurance Co. v. Royal & Sunalliance Insurance Co. (May 16, 2017), 2017 CarswellOnt 7984 at paragraph 35, written submissions of the respondent, paragraph 26.
4. 4See also S.J. v. Aviva Insurance Canada (January 25, 2018), 17-002899 at para. 8 (Watt), 2018 CanLII 83513, Book of Authorities of the Respondent, Tab 3; Co-operators General Insurance Co. v. Royal & Sunalliance Insurance Co. (May 16, 2017), 2017 CarswellOnt 7984 at paragraph 44, Book of Authorities of the Respondent, Tab 2, written submissions of the respondent, paragraph 27.
5. 5Miller v. Safeco Insurance, 1984 CanLII 2019 (ONSC
6. 6Affidavit of the applicant, November 5, 2018, paragraph 44. Written submissions of the applicant, paragraph 8.
7. 7Matson, Driscoll and Damico reports, Joint Document Brief, Tabs 22 and 23A. Written submissions of the respondent, paragraphs 19 and 20.
8. 8Written submissions of the applicant, paragraph 13.
9. 9Affidavit of the applicant, dated November 5, 2018, paragraphs 13 and 39.
10. 10Written submissions of the applicant, paragraph 14.
11. 11Affidavit of the applicant, paragraph 13.
12. 12Affidavit of the applicant, dated November 5, 2018, paragraphs 7 to 13.
13. 13Affidavit of the applicant, dated November 5, 2018, paragraph 4.
14. 14Written submissions of the applicant, paragraph 29.
15. 15Written submissions of the applicant, paragraph 30.
16. 16Intact Insurance Co. v. Allstate Insurance Co. of Canada, 2016 ONCA 609.
17. 17Written submissions of the applicant, paragraph 9.