L.M. v. The Co-operators General Insurance Company, 2020 CanLII 35481

Citation: L.M. vs. The Co-operators General Insurance Company, 2020 ONLAT 19-003485/AABS

Released Date: 04/30/2020

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:

[L.M.]

Applicant

and

The Co-operators General Insurance Company

Respondent

DECISION AND ORDER

ADJUDICATOR:

Patricia Conway

APPEARANCES:

For the Applicant:

[L.M.], Applicant

Piera A Segreto, Counsel

For the Respondent:

The Co-operators General Insurance Company, Claims Representative

Laura Emmett, Counsel

HEARD:

By way of written submissions

REASONS FOR DECISION AND ORDER

OVERVIEW

1The applicant’s brother was involved in an automobile accident on October 28, 2018, and the applicant sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The applicant sought coverage as a dependent under his mother’s insurance policy. The applicant was denied benefits by the respondent and applied to the Licence Application Tribunal - Automobile Accident Benefits Service (“Tribunal”).

PRELIMINARY ISSUE

2A preliminary question arose: is the applicant a “dependant” within the meaning of the Schedule, under his mother’s policy. The insurer says that he is not; the applicant states that he is.

RESULT.

3After considering the facts of this case as set out in the evidence before me and reading the law provided by counsel, I find that at the time of the accident, the applicant was a “dependant” of his mother as defined by the Schedule and is therefore entitled to coverage under her insurance policy. I order the insurer to process the applicant’s claims for benefits under that policy.

LAW

4The Schedule (Ontario Regulation 34/10 under the Insurance Act ) has an expansive definition of “insured person” in section 3(1). The courts have stated that this expanded definition is remedial, reflecting the consumer protection purpose of insurance. It is intended to broaden insurance coverage to include members of the “family unit” of the named insured.

5In this case, the claimant is a son of the insured. He was not involved in the accident, but he claims to have suffered mental or psychological injury as a result of the death of his brother in the accident. Section 3(1) says that he falls within the expanded definition of “insured person” if he is a dependant of the named insured.

6Section 3(7)(b) of the Schedule says that a “dependant” is a person who is “principally dependant for financial support or care” on the named insured or their spouse.

7The case law interpreting this phrase has developed some guidelines for making this determination if someone is “principally dependant for financial support or care”, among them the following:

a. In deciding if a person is principally dependant on another, one must consider the amount and duration of the financial or other dependency, the financial or other needs of the claimant, and the ability of the claimant to be self supporting (Miller v Safeco Insurance Company of America (1985), 1985 CanLII 2022 (ON CA), 50 O.R. (2d) 797 (CA), affirming (1984), 1984 CanLII 2019 (ON HCJ), 48 O.R. (2d) 451 (HCJ)).

b. The determination requires a “realistic assessment of the parties’ actual financial circumstances at the time of the accident” (Co-Operators General Insurance Co. v Halifax Insurance Company, 2002 CanLII 79675 (ON SC), [2002] OJ No 2459 (SCJ)).

c. In determining whether a son or daughter is independent of their parent, it is important to bear in mind that the change from dependant to independent is “more of a transition than an event”. Recognizing this, the decision maker must choose a time frame that “fairly reflects the status of the parties at the time of the accident” (State Farm Insurance Companies v Bunyan, 2013 ONSC 6670; Liberty Mutual Insurance Company v Federation Insurance Company of Canada, [2000] OJ No 1234 (CA), quoted in Oxford Mutual Insurance Company v Co-operators General Insurance Company, 2006 CanLII 37956 (ON CA))

d. One must consider not only the earnings of the claimant, but their capacity to earn. This is a factual issue. A person’s earning capacity is a product of education, talents, physical and mental abilities or disabilities, employment history and external factors such as the job market. (Gore Mutual Insurance Company v Co-Operators General Insurance Company, 2008 CanLII 46914 (ON SC), [2008] OJ No 3603 (SCJ))

e. “Principally” means more than 50%. If the claimant earns, or has the capacity to earn, enough to provide for more than 50% of their basis needs, they are not “principally dependant” on someone else for financial support. (Allstate Insurance Company v ING Insurance Company of Canada & Aviva Canada Inc., 2015 ONSC 4020).

f. Two approaches to determining whether a person can financially provide for their basic needs are used in the case law: the mathematical approach, which looks at the evidence available of what is actually spent to cover the claimant’s needs, and the statistical approach, which looks at what someone in the claimant’s circumstances needs to cover living expenses. The mathematical approach is generally considered unreliable because the documentary evidence of these expenditures is often scarce, and the claimant’s recollections are difficult to validate. The statistical approach, using the Market Basket Measure (MBM) is more satisfactory as it is a calculation of the basic needs of a family unit. (Allstate Insurance v ING Insurance Company of Canada & Aviva Canada Inc., supra).

g. However, one’s needs also include a care component. One must consider if the claimant has a need for care to ensure they are able to maintain a reasonable level of functioning in their daily life. Key factors to consider include social and emotional support, companionship, protection and services such as feeding, clothing, cleaning and transportation. (Oxford Mutual Insurance Company v Co-operators General Insurance Company, 2006 CanLII 37956 (ON CA).

h. The applicant has the burden of proving on the balance of probabilities that he was principally dependant on his mother at the time of the accident.

ISSUES

8These guidelines indicate that there are several issues to look at in determining whether the claimant was “principally dependant for financial support or care” on the named insured at the time of the accident.

a. What time frame should be used to arrive at a “reasonable assessment of actual financial circumstances at the time of the accident?

b. What was the applicant’s earning capacity during that time frame?

c. What were his needs for financial support or care during that time frame?

d. Was he providing, or was he able to provide, for more than 50% of his needs during that time frame?

EVIDENCE.

9The accident was on October 28, 2018. The applicant, [L.M.], was then 21 years old. He had a Grade 11 education. He had a full-time job as a construction labourer earning $15.00 or $16.00 an hour. He was living in an apartment with his younger brother, [E.M.], and [E.M.]’s girlfriend, [C].

10On October 28, 2018, [L.M.] had been employed for 2.5 months, since August 13, 2018. Before he secured employment, [L.M.] had been unemployed and living with his mother, stepfather and siblings for four months, starting around April 2018. Before April 2018, he was splitting his time between his mother’s home in [city 1] and living with his grandparents in [city 2]. [L.M.] was examined under oath by respondent counsel, who took the position during the examination that the period to consider in determining dependency is one year before the accident, October 2017. [L.M.]’s evidence was that he was living with his grandparents in October 2017. He had a “little job” with a company that makes and installs postholes and was giving his grandparents $300 per month for his room and board. He was fired after he hit his head while on the job. He then returned to [city 1] to live at home. The posthole job lasted less than 6 months. He could not recall anything about previous employment.

11The applicant’s mother, [C.M.], was also examined under oath by respondent counsel. Her recollection was that in the period before April 2018, the applicant was moving back and forth between [city 1] and his grandparents and was often home on weekends. She paid for his train tickets to come home and gave him money occasionally, when he asked for it. For example when he did not have any money to buy his lunch, he would text her and she would wire him $10.00.

12His evidence was that after he moved back home in April 2018, he paid no household expenses. His mother housed him, fed him, bought him cigarettes, did his laundry, and gave him spending money. He washed the dishes occasionally, and occasionally went out to eat with friends.

13On August 13, 2018, [L.M.] started working for [G.J.], who has his own business in [city 1]

14[G.J.] is the father of a friend. [L.M.] was averaging 35 hours a week as a general labourer. [G.J.] agreed to hire [L.M.]’s brother [E.M.] as well, for part time work. With the prospect of two incomes, [L.M.] and his brother found a 3-bedroom apartment for approximately $1200 a month plus hydro. Using [C.M.] as guarantor, they entered into a lease to rent it together with [E.M.]’s girlfriend [C]. The three together paid first and last months’ rent. The lease started September 1, 2018 but the apartment was unfurnished, so the brothers continued to live at home while they collected furniture from family, friends and others. They moved into the apartment around the end of September.

15[L.M.] was questioned during his examination regarding the expenses he paid while living in the apartment. He was not able to be specific about many of them, aside from the rent. He said [E.M.] paid for cable and [E.M.] and [C] paid for internet access and perhaps [C] paid for hydro. He was unclear whether he and [E.M.] were paying half of the rent, or whether the rent was being split evenly into thirds. His vagueness suggests to me that he had not yet grasped the responsibilities entailed in living independently. His mother paid his and [E.M.]’s share of the rent apart from first and last months. His mother bought the groceries for all three, and as well brought them meals and baking. She cleaned their apartment, she bought basics such as toilet paper. [L.M.] and [E.M.] often went back to their mother’s house for meals and stayed overnight. They brought their laundry home to be washed. Neither brother could drive or owned a car, so their mother would frequently drive them. [C.M.] also gave them cigarettes.

16[L.M.]’s bank statement for the time he was working, from August to the end of October, is in evidence. It indicates that he was paying for fast food, for beer and alcohol, for taxis, and occasional purchases at convenience stores. He testified that he bought his own shampoo as he is “picky”. He also occasionally bought “good” cigarettes, i.e. not cigarettes from the reserve, which is what [C.M.] gave him.

17[L.M.] explained that this continued reliance on [C.M.] after he moved into the apartment was a temporary thing, while he got back “on his feet”. During his period of unemployment, he had accumulated $3000 in credit card and loan debt. He was using his wages to pay back the money he owed and intended to start paying for living expenses once that was done. [C.M.] said that she was paying for virtually everything until they “got on their feet”. She said that [L.M.] in particular was “needy”. She implied that she expected [L.M.] would eventually come back home. Indeed, at the time of her examination, in May 2019, [L.M.] was back living at home and was not working.

18In her reply submissions, counsel for the respondent raised the issue that the Case Conference Order stipulated that the parties were to limit their submissions to 10 pages. The applicant’s submissions were 14 pages long. Counsel submitted that the “proper” thing to do was to disregard the last four pages of the applicant’s submissions.

19I had already read both parties’ submissions before reading the respondent’s reply submissions. I did return to the applicant’s submissions, noting for the first time that the pages were not numbered. If this was done intentionally to avoid making the failure to comply with the Order evident, I find it offensive. Applicant’s counsel should have asked for leave to submit longer submissions, on notice to the respondent, explaining the need to do so.

20I can perhaps understand why the applicant’s submissions were lengthy: the respondent’s submissions misstated an important piece of evidence, the length of time the applicant had been living in his apartment with his brother and her girlfriend at the time of the accident. This period of time was also important in the calculations the respondent offered of the applicant’s capacity to live independently. Refuting this was important to the applicant’s case. In addition, the respondent offered some 20 cases in support of its position, and these were important for the applicant to distinguish.

21I am not prepared to ignore the last four pages of the applicant’s submissions. It appears to me that this would result in unfairness to the applicant himself, rather than reprimanding counsel.

22The applicant’s counsel should bear in mind that adjudicators have disregarded submissions exceeding the stipulated length. The stipulation regarding length is made to encourage conciseness, and it is prima facie unfair to the other party if one party chooses to ignore the adjudicator’s order. In this case, however, the respondent did not suggest that there was any prejudice to it resulting from the additional length of the applicant’s submissions.

ANALYSIS

a. What time frame should be examined to “fairly reflect the status of the parties at the time of the accident”?

23The respondent argues that a time frame of either 1.9 months or 2.5 months is appropriate in this case to determine dependency. This would cover either the period of time [L.M.] was living in the apartment (in the respondent’s submission – the evidence was that [L.M.] was living there for a month only) or the length of time he was working at the time of the accident. The respondent has submitted an “expert” report prepared by the [accounting firm] that concludes that during either period of time proposed by the respondent, [L.M.] was making enough money from his job to be self-supporting.

24Applicant’s counsel argues for a longer period, a year, pointing out that the courts and private arbitrators have spoken of the danger of a “snap shot” approach. For example, in St. Paul’s Travelers vs York Fire & Casualty Company, Arbitrator Samis states:

It is often not useful, or even sometimes misleading, to look at circumstances in too narrow a time frame (often referred to as a “snapshot”). To arrive at an appropriate determination of dependency status, we have to look at the status of a person’s needs and resources over a time period.

25In my view, the respondent’s position assumes that we can state with confidence that [L.M.] had “found his way” and that he would continue working through the foreseeable future. Having looked at the evidence we have regarding [L.M.]’s modus operandi, I do not think that such confidence is warranted. [L.M.]’s recent history shows him unemployed for a period of time, and when employed, his employment being of a relatively short duration. He testified during his examination by respondent counsel that he couldn’t remember where else he had worked while living with his grandparents. Thus the only prior employment we know of is the less than six months with the posthole company. With such minimal employment history and little education, I believe it is risky to assert that [L.M.] was settled into a job and a new, independent way of living.

26Therefore, I prefer the applicant’s position that using the longer time-frame of a year will yield a more reliable assessment of [L.M.]’s dependence or independence at the time of the accident. That is the time frame I will use in approaching the issue of his financial needs and resources to determine his dependency status on the date of the accident.

b. Did [L.M.] have the capacity to be principally financially self-supporting at the time of the accident?

27Looking at [L.M.]’s activities over a year, from October 2017 until the accident, there is no evidence that he was ready or able to stick to a job and turn it into a living. While living with his grandparents, he was paying $300 per month for room and board when he was working. This is not evidence of being self-supporting in my view and the respondent did not rely on it as such. The applicant’s implied position is that in this period [L.M.] was not self-supporting, and I agree. Accommodation in [city 2] with board would have cost far more than $300 a month, or perhaps even $300. a week. I have taken judicial notice of this as is permitted under section 16 of the Statutory Powers Procedure Act, R.S.O. 1990, c..S.22. In addition, [C.M.]’s evidence when examined by respondent counsel was that during this period [L.M.] was coming home frequently, that she was paying his train fare, and that she was also giving him money when he asked for it, for example for lunch while he was working.

28After losing his job in [city 2], he returned home. [C.M.] was supporting him virtually totally, to the extent of not only providing necessities but also giving him pocket money. There is no evidence that he was actively seeking employment. After he became employed by a family friend in August and moved with [E.M.] into an apartment at the end of September, he still returned home frequently for food, laundry, accommodation and, I think, the companionship of his mother and his siblings. From looking over his expenditures during the period he was working, I conclude that [L.M.] had little concept of budgeting or putting aside money to pay for his living expenses. To me, the idea of “capacity to earn a living” involves not only the ability to hold a job that yields enough income to allow one to be self-supporting, but also the ability to manage one’s income so that one is able to pay for necessities. To be fair, [L.M.]’s evidence was that he had debts and was using his earnings to pay down these debts, and that he did this. But his bank statements show that he was spending his money on alcohol, beer, taxis and fast food. He had no clear idea of what it was costing for him to live in the apartment, for he was not paying any of it. Perhaps he would have started to pay his share of living expenses at some point in the future, but he was certainly not doing so at the time of the accident.

29The respondent relies on the [accounting firm] report as evidence that he was earning more than enough to support himself. That report concludes, looking at the 2.5 months before the accident (starting when [L.M.] started working) that he was earning enough to pay more than 50%, indeed, more than 100% of his living expenses. This assumes that [L.M.] was able to use his income to pay his living expenses and fails to take into account his debts. Debts exceeded more than half of the money he earned from August until the accident. As I noted earlier, perhaps he would have started to pay his living expenses if the accident had not occurred, if he had kept his job, if he was prepared to take responsibility for paying his own way. But the evidence is clear that at the time of the accident, he was not earning enough to pay off his debts and pay his living expenses.

c. What were his needs for financial support or care at the time of the accident?

30In my view, there is insufficient evidence to quantify with any degree of certainty what [L.M.]’s costs of living independently were at the time of the accident. The Tribunal has evidence about the rent and some approximation of the amount for hydro. There is no reliable evidence of the cost of food and other necessities. [C.M.]’s evidence was that she bought extra groceries for [L.M.] , [E.M.] and [C] on her weekly grocery shopping trips and paid about $50.00 for the extras. But she also brought them prepared meals, and the two brothers were able to go home to eat, sleep and do their laundry. I find compelling [C.M.]’s statement that essentially [L.M.] and [E.M.] were using the apartment so that they could have their own living space, privacy, no house rules and room to entertain their friends. Aside from this, nothing had really changed.

31The respondent’s experts offered the Market Basket Measure approach to assess the degree of financial dependence [L.M.] had on his mother at the time of the accident. Using the short time frame the respondent proposes, [L.M.] was making more than enough money at his job to pay his living expenses. Aside from the issue of his debts having to be paid, this may be mathematically correct. However, I do not find this approach helpful in trying to answer the question “what were [L.M.]’s needs for financial support or care”. [C.M.] described [L.M.] as “needy” in her evidence. I think this is a very important factor to consider in assessing [L.M.]’s needs for financial support or care. The evidence indicates that [L.M.] had always been dependent on his mother to a great extent, not only to provide the necessities of life, but to provide him with a financial and emotional safety net that he took for granted and had no discernible desire to change. Although the need for care cannot be determined with mathematical precision, it is apparent to me from [L.M.]’s casual approach to relying on his mother to be “there” for him that he needed and derived from her a sense of security that her help was always readily accessible to him. (See Oxford Mutual v Cooperators General, supra.)

d. At the time of the accident, was [L.M.] providing, or was he capable of providing for the majority of his financial and other needs?

32The evidence indicates that [L.M.] had always been dependent on his mother. Even when living with his grandparents he frequently came home, and his mother paid his train fare. From April until mid August, [L.M.] had no money and looked to his mother for everything, including pocket money. During the time he was working, his mother still gave him food, cleaned his apartment, and did his laundry. She even bought him a cell phone and paid for the cost of the plan.

33[L.M.] had had a girlfriend from whom he separated three or four years before the accident. They had a three-year-old child. [L.M.] left the relationship shortly after his daughter was born and has not supported the child with any regularity since her birth. His former girlfriend has custody, and she has married. [L.M.]’s evidence was that he tries to see his daughter once a month and brings something for her care such as diapers. He spends perhaps $200 a month on his daughter. When he does not have money, he asks his mother for money for his child, and she gives him money. He does not seem to feel a responsibility to manage his role as a father independently, nor indeed to take that role very seriously. From his evidence, it seems to me that [L.M.] makes very little distinction between his means and his mother’s. I see in his evidence and in his conduct over the year from October 2017 to October 2018 no indication that [L.M.] wanted or saw any need to achieve independence from his mother. At the time of the accident he was not living at home, but nothing else had changed. His mother was still cooking and cleaning, and doing laundry for him, and his bedroom was there for his use whenever he liked. He did go home frequently. I see in his conduct no evidence of or appetite for self-sufficiency and independence.

34His actions after the accident support this assessment. He stopped working immediately and essentially went to bed. He lived in the apartment, presumably until the lease expired or the landlord found other tenants, then he moved back home. From his evidence, he seems to me to be unable to help himself. He says he does not know what is wrong with him, but he has no interest in anything, no ambition, and no energy. Although I cannot look at the period after the accident in determining dependency for purposes of this decision, I find his conduct after the accident supports my assessment that [L.M.] was and is dependent on his mother for support, both emotional and financial. Notwithstanding his job and his apartment, he was not self-supporting .

CONCLUSION

35Accordingly, I have found that the applicant has met his burden of proof. At the time of the accident, the applicant was principally dependent on his mother for financial support and care. Once his debts were paid off, he may have become more financially independent over time if the accident had not occurred. But as of the date of the accident, the applicant is entitled to claim as a dependent of his mother, within the meaning of the Schedule.

36I therefore order the respondent to process the applicant’s claim for benefits under his mother’s insurance policy.

Released: April 30, 2020

_______________________

Patricia Conway

Adjudicator