D.M. v. Aviva Insurance Canada, 2019 CanLII 94040

Tribunals Ontario Safety, Licensing Appeals and Standards Division 77 Wellesley Street West, Box 250 Toronto ON M7A 1N3 Tel: 1-844-242-0608 Fax: 416-327-6379 Website: www.slasto-tsapno.gov.on.ca

Tribunaux décisionnels Ontario Division de la sécurité des appels en matière de permis et des normes 77 rue Wellesley Ouest, Boîte no 250 Toronto ON M7A 1N3 Tél. : 1-844-242-0608 Téléc. : 416-327-6379 Site Web : www.slasto-tsapno.gov.on.ca

AMENDED RECONSIDERATION DECISION

Before: Susan Mather, Vice-Chair

Date: July 11, 2019

File: 17-006525/AABS

Case Name: D.M. v. Aviva Insurance Canada

Written Submissions By:

For the Applicant: Charles Thompson, Counsel

For the Respondent: James M. Brown, Counsel Alex Robineau, Counsel

OVERVIEW

1The applicant was injured in an automobile accident on January 4, 2013 and sought benefits pursuant to the Statutory Accidents Benefits Schedule – Effective September 1, 2010 (the “Schedule”).

2At the time of the accident, the applicant was employed at a [restaurant.] Her mother was the sole shareholder of [(“the Corporation”)], which owned the restaurant.

3Following the accident, the Corporation continued to make bi-weekly payments to the applicant as well as some periodic lump sum payments. The bi-weekly payments were paid in the same manner as the applicant’s salary was paid prior to the accident.

4The monies paid were recorded on T4 slips issued to the applicant for the 2015 and 2016 taxation years. The applicant reported the monies as income for tax purposes and paid the applicable income tax. Premiums for Employment Insurance (“EI”) and Canada Pension Plan were deducted from source on the monies she received.

5The parties agreed that the applicant was entitled to an Income Replacement Benefit (“IRB”) but did not agree on how to calculate the benefit payable.

6The only dispute between the parties to be decided at the hearing was whether the payments made to the applicant by the Corporation after the accident should be deducted in calculating the applicant’s IRB.

7The parties agreed that if the payments were deductible, no IRBs were owing to the applicant.

8Following a two day in-person hearing, the Tribunal found that the payments the applicant received from the Corporation were gifts that were not deductible in calculating the IRB¹.

9The result of this finding was that the applicant was entitled to receive a weekly IRB in the amount of $400.00 per week for the period March 10, 2015 to December 17, 2017.

10Aviva requested a reconsideration of the decision on the basis that the Tribunal made significant errors of fact and law such that the Tribunal would likely have reached a different conclusion had the error not been made.

11This ground is a criterion set out in Rule 18.2(b) of the Licence Appeal Tribunal (LAT) Rules of Practice and Procedure, Version 1(April 2016) (the “LAT Rules”) which are the Rules applicable to this reconsideration.

12The applicant opposes this request for reconsideration. She argues that the decision was correct on the merits, transparent, and justified by the facts. She argues that the decision falls within a realm of possible acceptable outcomes given the fact and law and that there are no grounds for reconsidering the decision.

13Aviva asks for an order setting aside the decision and replacing it with a new decision that the monies the applicant received from the Corporation are deductible from the IRB.²

14In the alternative, Aviva asks for a re-hearing of the application before a different adjudicator. Aviva asks that the re-hearing be held in writing based on the evidentiary record from the first hearing together with written submissions to be provided by the parties.

15Pursuant to s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009³, I have been delegated responsibility to decide this matter in accordance with the applicable LAT Rules.

RESULT

16The request for reconsideration is granted. For the reasons provided below, I find that the matter should be referred back to Adjudicator S. Johal for a rehearing on the terms set out below.

ERRORS OF FACT AND LAW

17The only issue at the hearing was how the payments the applicant received from the Corporation following the accident should be treated in calculating the amount of the IRB benefit the applicant was entitled to.

18Aviva argued that the payments the applicant received from the Corporation were either gross employment income or income replacement assistance⁴.

19The applicant argued that the payments were a gift. The parties agree that if the payments are a gift, they are not deductible in calculating the IRB.

20In its request for reconsideration, Aviva argues that the adjudicator made the following errors of law in interpreting the Schedule:⁵

a) The adjudicator failed to correctly apply the legal presumption that the salary payments were income;

b) The adjudicator abdicated his role as trier of fact and law and unduly relied upon the evidence of expert witnesses;

c) The adjudicator considered irrelevant evidence and disregarded relevant and material evidence;

d) The adjudicator misinterpreted the Schedule, and incorrectly found a requirement for active participation for post-accident income;

e) The adjudicator misinterpreted the requirements for a legally valid “gift”, including the requirement for a contemporaneous intention and the absence of a corresponding benefit to the donor;

f) The adjudicator misinterpreted the Schedule, and incorrectly concluded that an “income continuation benefit plan” could only constitute CPP disability or insurance payments; and

g) The adjudicator failed to consider or address the arguments raised by Aviva, and instead considered arguments that were not being advanced.

21Aviva argues that errors of law include but are not limited to the following:⁶

(a) The erroneous interpretation or application of the law or the Schedule;

(b) Findings of fact based on conjecture or that arise from a misapprehension of the evidence caused by a misdirection of legal principle;

(c) The failure to provide adequate reasons for a decision; and

(d) The abdication of the role of decision maker to expert witnesses.

22I have reviewed the written decision and parts of the transcripts of the oral evidence and the full transcripts of the parties’ submissions at the hearing. I find that the written reasons are inadequate and for that reason, there has been a denial of natural justice.

23Without adequate written reasons, I am unable to determine if the adjudicator made an error of law such that the Tribunal would likely have reached a difference conclusion.

24In Kanareitsev v. TTC Insurance Company Limited (“Kanareitsev”),⁷ the Financial Services Commission of Ontario (“FSCO”), Director’s Delegate overturned a decision of an arbitrator and sent the matter to a re-hearing because the written reasons for the decision of the arbitrator were inadequate. The Divisional Court reviewed the written reasons and concluded they were sufficient and overturned the decision of the Director’s Delegate.

25In Kanareitsev, the Divisional Court looked to the Supreme Court of Canada decision in Baker v. Canada (Ministry of Citizenship and Immigration)⁸ (“Baker”). The Baker case confirms an administrative decisions maker’s duty to provide reasons for a decision. In Baker, the Supreme Court of Canada found that the importance of a person understanding why a decision is reached is an integral part of the duty of fairness.

26In reviewing the Kanareitsev decision, the Divisional Court held that the essential question in determining whether the written reasons are adequate is whether they provide the basis for a meaningful judicial review.

27The Divisional Court summarized the factors to be considered in determining the adequacy of reasons as follows:

i. The adjudicator must set out the findings of fact and the principal evidence upon which those findings are based;

ii. The reasons must address the major points in issue;

iii. It is insufficient for the decision maker to summarize the parties’ positions and “baldly state its conclusions”; and

iv. The reasoning process must be set out and reflect consideration of the main relevant factors.

28I recognize that an adjudicator is not required to respond to each and every argument or recognize every piece of evidence. I have considered the factors set out in Kanaeitsev and for the reasons provided below I find the written decision is inadequate. The decision does not allow the reader to understand why the decision was reached and does not provide the basis for a meaningful reconsideration.

i. The adjudicator incorrectly summarized the positions of the parties

29The adjudicator sets out the positions of the parties at the start of the decision⁹. In the section of the decision entitled “Parties Positions”, he failed to recognize that Aviva took the position at the hearing that if the payments were not deductible as gross employment income then they were deductible as “income replacement assistance”. This issue is not properly addressed anywhere in the decision.

30In paragraph 25 of the decision, the adjudicator states that he disagreed with Aviva’s position that the payments received were a temporary disability payment in accordance with s. 47 of the Schedule.

31Aviva did not take the position at the hearing that the payments are temporary disability benefits.¹⁰ The adjudicator mistook the opinion provided by Aviva’s accountant with respect to the application of s. 47 of the Schedule as a position being put forth by Aviva.

ii. The adjudicator failed to address the major points in issue

32The adjudicator failed to address several major points in issue.

Gross Employment Income

33The adjudicator did not interpret the meaning of “gross employment income” as defined in s. 4(1) of the Schedule. He did not properly address the issue of active participation with respect to gross employment income.

34The adjudicator accepted the applicant’s argument that case law that interprets s. 7(3)(b) of the Schedule is not applicable to cases where the income is not from self-employment. He, however, provided no explanation as to why the distinctions between ss. 7(3(a) and 7(3)(b) of the Schedule lead to a different result.

Gift

35The adjudicator failed to address Aviva’s argument that for a legally valid gift, there must be an intention to make a gift on the part of the donor without consideration, expectation or remuneration.

36The adjudicator also did not address Aviva’s argument that the gift was vitiated by the benefit received by the Corporation. Aviva argued that in tax law, the receipt of a benefit from any source is sufficient to vitiate a gift. Aviva relied on the case of Kossow v. The Queen to support this position.¹¹

37In her reconsideration submissions, the applicant states that it was open to the adjudicator not to follow the Kossow case argued by Aviva at the hearing.

38The difficulty is that nowhere in the written reasons does the adjudicator state that he considered Aviva’s argument or provide reasons for not following the Kossow case. The reconsideration submissions by the applicant on this issue confirm that this was an issue to be addressed.

Other Income Assistance

39I am unable to find anywhere in the decision where the adjudicator determined the meaning of “other income assistance” and analyzed the evidence to reach a conclusion on the issue.

40While the adjudicator mentions in paragraphs 33 and 34 of his decision that the applicant’s accountant did not consider the benefits to be other income assistance, he does not indicate his own conclusions on the issue.

41He only decides that the payments were not temporary disability payments, an issue that was not argued before him.

iii. The adjudicator “baldy” stated conclusions

42In paragraph 36 of the decision, the adjudicator “baldly” states:

“I refer back to the Court of Appeal case in McNamee and the elements of a gift and in my opinion all three of the requirements in order to be considered a gift have been met”.

43I find this to be a “bald” statement because the written reasons provide no indication that the adjudicator considered when the intent to give the “gift” arose or whether the gift was vitiated by any potential benefit the Corporation received.

iv. The adjudicator’s reasoning process is not set out and the reasons do not reflect consideration of the major relevant factors.

44The adjudicator’s reasoning process is not set out in the decision and as I have already determined does not reflect consideration of the major relevant factors.

45He appears to have relied on the interpretations of the Schedule provided by the two accountants who testified without undertaking his own analysis of the evidence and the application of the Schedule.

REHEARING

46For the reasons provided above, I order that this application be reheard by Adjudicator S. Johal on the terms set out in my order below.

47Aviva requested that this matter be reheard by a different adjudicator on the same evidentiary record. I am sending the matter back before Adjudicator Johal for a rehearing because he has the advantage of having heard the oral evidence of the parties and this advantage should not be lost because the written reasons are inadequate.¹²

48In Kanareitsev, the Divisional Court stressed the distinctive advantage of the first-instance decision-maker’s assessment of the evidence.

49I allow the reconsideration submissions of the parties to be considered by the adjudicator in the rehearing for the reason that they shed light on the evidence to be weighed and the issues to be determined.

50For the reasons provide above, I Order that:

1. The decision of Adjudicator Johal released on August 13, 2018 is cancelled.

2. This application shall be reheard in writing by Adjudicator S. Johal.

3. The evidence for the written rehearing shall consist of the Joint Document Book filed by the parties for the original hearing and the transcripts of the oral evidence from the original hearing.

4. The submissions of the parties shall be the submissions found in the transcripts from the original hearing and the submissions of the parties on this reconsideration request.

5. The parties shall re-file copies of their reconsideration submissions and the transcripts of the oral evidence and submissions with the Tribunal within thirty-one days of the release of this decision.

6. The re-hearing shall be scheduled by the Tribunal to take place on a day that is at least thirty-one days after the day this decision is released.

Susan Mather Vice-Chair Tribunals Ontario – Safety, Licensing Appeals and Standards Division

Footnotes

1. 117-006525 v Aviva Insurance Canada, 2018 CanLII 141002 (ON LAT)
2. 2The parties agree that if the monies received by the applicant are deductible in the calculation of the IRB, then no IRB is payable to the applicant.
3. 3S.O. 2009, c. 33, Sched. 5.
4. 4Transcript of Aviva’s submissions at the hearing, page 59, lines 12-16
5. 5Aviva’s Reconsideration Submissions, Paragraph 25
6. 6Aviva’s Reconsideration Submissions, Paragraph 28
7. 72008 CanLII 26262 (ON SCDC) at paras. 24 to 29
8. 81999 CanLII 699 (SCC), [1999] 2 S.C.R. 817
9. 917-006525 v Aviva Insurance Canada, paras. 8-11
10. 10Transcript of Aviva’s submissions at the hearing, page 59, lines 12-16
11. 112012 TCC 325, 2012 T.C.C. 325 (Tax Ct. of Cda.)
12. 12Kanareitsev, 2008 CarswellONT 3154 (Div. Ct.) at paragraph 29