L.A. v. Wawanesa Mutual Insurance Company, 2020 CanLII 72503

L.A. v. Wawanesa Mutual Insurance Company

Citation: L.A. vs. Wawanesa Mutual Insurance Company, 2020 ONLAT 19-007357/AABS

Released Date: 08/27/2020

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.A.

Applicant

And

Wawanesa Mutual Insurance Company

Respondent

PRELIMINARY ISSUE DECISION AND ORDER

ADJUDICATOR: Sandeep Johal

APPEARANCES:

Counsel for the Applicant: Jeffrey J. Moorley Counsel for the Respondent: Paul C. Omeziri

Heard: By way of written submissions

OVERVIEW

1The applicant was injured in an automobile accident on July 8, 2018 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant was unemployed at the time of the accident and was receiving Employment Insurance (“EI”) benefits and therefore he takes the position that he is eligible for an IRB in accordance with s. 5(1) 1. ii. A. of the Schedule.

3The applicant applied for an income replacement benefit (“IRB”) that was denied by the respondent on the basis that the applicant was not entitled to an EI benefit at the time of the accident and therefore, not eligible for an IRB. The applicant disagreed with that decision and submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”).

4The respondent raised a preliminary issue at the case conference that the applicant is not eligible for an IRB as his EI benefit expired on June 30, 2018, which was prior to the accident.

ISSUES TO BE DECIDED

5The preliminary issue in dispute was identified and agreed to as follows:

i. Was the applicant receiving benefits under the Employment Insurance Act at the time of the accident for the purposes of section 5(1) of the Schedule?

RESULT

6The applicant was not receiving an EI benefit under the Employment Insurance Act (Canada) at the time of the accident and he is therefore not eligible for an IRB. The Tribunal application is dismissed.

ANALYSIS

7The relevant portion of s. 5(1) of the Schedule that is applicable to this case reads as follows:

5. (1) The insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies one or both of the following conditions:

6. The insured person,

ii. was not employed at the time of the accident but,

A. was employed at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act² (Canada) at the time of the accident.

8The applicant’s position is that on July 9, 2017 his EI benefit period started and it ended on June 30, 2018. The accident occurred on July 8, 2018 and the next day Service Canada processed his last payment covering the period of June 24, 2018 to June 30, 2018 and he received his last EI benefit payment on July 11, 2018.

9As a result, the applicant submits he was receiving EI benefits at the time of the accident and therefore he is eligible for an IRB in accordance with s. 5(1) 1.ii.A.

10The applicant further relies upon the Ontario Court of Appeal decision in Tomec v Economical Mutual Insurance Company,³ in support of his position that the Schedule is remedial consumer protection legislation and it is to be read in its entire context and in its ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the of the legislature. The goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims.

11Furthermore, that statutes must not be construed in such a way that defeats its object and intent, which is providing coverage to the insured person.⁴ According to the applicant, the Schedule must be interpreted broadly and liberally and the doctrine of contra proferentum provides that an ambiguity must be resolved in favour of the applicant.

12The applicant relies upon the Financial Services Commission of Ontario (“FSCO”) case of Kazimierczuk v. Pembridge Insurance Co.⁵ in support of his position that the phrase “was receiving benefits” refers to an event that occurred in the past and in order to receive an IRB, the applicant had to have been in receipt of benefits under the EI Act.

13The applicant takes the position that he was in receipt of benefits at the time of the accident as the accident occurred on July 8, 2018 and he received an EI benefit payment eleven days before the accident and three days after the accident. As a result, he was in receipt of benefits in the days before the accident and after to constitute “receiving benefits” and that makes him eligible for an IRB.

14The respondent’s position is that the applicant’s EI benefit period ended at the end of June 2018 and the accident occurred after the applicant’s EI benefit period had ended and the payment he received on July 11, 2018 (three days after the accident) was for the period that ended on June 30, 2018. As a result, the respondent’s position is that the applicant’s EI benefit period ended on June 30, 2018 which was before the subject accident so therefore the applicant cannot claim an IRB.

15The respondent relies upon an accounting opinion by Janet Olsen at BDO Canada LLP and her report dated January 24, 2020.⁶ In her report, Janet Olsen opines that the applicant’s claim period for EI benefits ended on June 30, 2018. In order to be eligible for an EI benefit the applicant must file a claim report with Service Canada every two weeks to show they are indeed eligible for the benefit. In addition, Service Canada requires that such earnings be reported to them in the weeks during which they are earned, not when they were paid. As such, Ms. Olsen opines that EI payments are always processed and paid after the end of the period to which they pertain.⁷

16Ms. Olsen goes onto opine that there can be a considerable lag between a “Report Week” for EI purposes and the date a claim payment is “Processed” by Service Canada for that week. She provides an example that in the applicant’s case his EI benefit commenced on July 16, 2017 (taking into account the one-week withholding period) to September 9, 2017 and he did not receive a payment for that benefit period until October 23, 2017. According to Ms. Olsen, if the accident had occurred, for example, on September 2, 2017, (during his EI benefit period) she would have concluded that he was “receiving” benefits under the EI Act (Canada) at the time of the accident, even though the benefit for that date was not paid to the applicant until October 23, 2017.⁸

17The respondent also relies upon the EI Act and the applicable Guidelines in support of its position that EI benefits would be “received”, “paid” and are “payable” only during the EI benefit period. Section. 9 of the EI Act provides that “When an insured person who qualifies under section 7 or 7.1 makes an initial claim for benefits, a benefit period shall be established and, once it is established, benefits are payable to the person in accordance with this part for each week of unemployment that falls in the benefit period.” (emphasis mine).

18The respondent also relies upon the wording of s. 12 of the EI Act, that once a benefit period has been established, benefits may be paid for each week of unemployment that falls in the benefit period. Also on s. 13 where it states that a claimant is not entitled to be paid benefits in a benefit period until, after the beginning of the benefit period, the claimant has served a waiting period of one week of unemployment for which benefits would otherwise be payable.

19The respondent further relies upon the Government of Canada Digest of Benefit Entitlement Principles,⁹ in support of its position that a benefit is “deemed paid” during the week of entitlement.¹⁰ Furthermore, that a person is only entitled to “receive” Employment Insurance Benefits during the period of entitlement.¹¹

20The respondent also relies upon the Kazimierczuk case from FSCO and submits that in Kazimierczuk it was held that an applicant would not be entitled to an IRB when the accident occurred during the two week statutory waiting period after the end of employment and before the EI benefits were payable. According to the respondent, this case supports its position that an applicant is not entitled to an IRB when the accident occurs outside the EI benefit period because he was not “receiving” benefits during this time.

21It is the respondent’s position that if the applicant’s interpretation is accepted, it would create an indefinite rolling period during which the applicant would still be “receiving” EI benefits. Furthermore, according to the respondent, if by some reason the applicant’s EI benefit payment was delayed at the beginning of the benefit period and the accident occurred prior to the applicant’s receipt of the payment, the applicant may not be entitled to an IRB even if the accident occurred during the EI benefit period.

22Further, Ms. Olsen’s forensic accountant report also supports its position that the fact that the applicant did not physically receive an EI payment for the last week of his claim period after his accident is of no relevance, as EI payments are always processed and paid after the end of the period to which they pertain and the funds are deposited two to three days after the applicant files his Employment Insurance Reports.

23I agree with the respondent. The wording in s. 5(1) ii.A. must be read in totality rather by focusing on certain individual words. The key sentence from the section is, was the applicant receiving benefits under the Employment Insurance Act (Canada) at the time of the accident. (emphasis mine).

24In order to understand if the applicant was “receiving benefits” one must look at the EI Act (Canada). Although “receiving benefits” is not a defined term within the Schedule or the EI Act, the EI Act does provide for when an applicant qualifies for an EI benefit. S. 9 of the EI Act provides that “When an insured person who qualifies under s. 7 or 7.1 makes an initial claim for benefits, a benefit period shall be established and, once it is established, benefits are payable to the person in accordance with this Part for each week of unemployment that falls in the benefit period.”¹² (emphasis mine)

25Section 12 of the EI Act states that “If a benefit period had been established for a claimant, benefits may be paid to the claimant for each week of unemployment that falls in the benefit period, subject to the maximums established by this section.” (emphasis mine).

26In my view, an applicant cannot “receive benefits” and cannot be paid under the EI Act unless a benefit period has been established. Any receipt of payments must be in accordance with a benefit period.

27With respect to the present case, the applicant’s benefit period was established to be July 16, 2017 (taking into account the one week waiting period) to June 30, 2018. As of June 30, 2018 the applicant’s benefit period was at an end, and in my view, the applicant was no longer “receiving benefits” after June 30, 2018 in accordance with the EI Act and therefore he is not eligible for an IRB.

28The applicant relies upon statutory interpretation and that an ambiguity must be resolved in favour of the applicant as the Schedule is remedial in nature and insurance coverage must be interpreted broadly and exclusions narrowly. However, in my view, there is no ambiguity in s. 5(1) ii. A. The applicant must be receiving benefits under the EI Act in order to be eligible for an IRB. EI benefits are payable and determined in accordance with a benefit period. In the applicant’s case, his benefit period ended on June 30, 2018. When the applicant physically received the payment in his bank account for the qualifying benefit period is not relevant. If it were, it would lead to uncertainty, because of payment delays and potentially manipulation, as a payment cannot be made until the applicant files a claim report.

29The applicant also relies upon the doctrine of contra proferentum where if an agreement is ambiguous the ambiguity is resolved in favour of the other party and not the party that drafted the agreement. However, in my view, doctrine of contra proferentum does not apply to the Schedule as the Schedule is not a private contractual agreement between the parties and it was not drafted by the respondent.

30Both parties rely on the FSCO case of Kazimierczuk to support their positions. The applicant relies upon paragraph 28 in Kazimierczuk where the Arbitrator found that in order for the applicant to receive IRBs he had to have been receiving, i.e., was in receipt of benefits under the EI Act.¹³

31Although I am not bound by FSCO case law and it is not binding on me, however, the entire context of the decision needs to be looked at in order to understand paragraph 28 that the applicant relies upon. Paragraph 28 cannot be read in isolation. In Kazimierczuk the accident took place during the two-week waiting period and it was found that the applicant was not entitled to an IRB because he was not eligible to receive an EI benefit until he served a two week waiting period. In essence, Kazimierczuk was only entitled to receive EI benefits after the expiry of the statutory two-week waiting period and he was therefore not receiving EI benefits during this time.

32I agree with the premise from Kazimierczuk that an applicant is only entitled to an IRB if a benefit period has been established for an EI benefit and once a benefit period is established, only then can an applicant “receive benefits” under the EI Act.

33In the present case, the applicant’s benefit period under the EI Act expired on June 30, 2018 and in order to “receive benefits” it must be in accordance with the benefit period as required under the EI Act.

34As a result of the above, I find that the applicant was not receiving benefits under the EI Act at the time of the accident and he is therefore, not entitled to an IRB.

ORDER

35The applicant is not entitled to an IRB in accordance with s. 5(1) ii. A. and the claim for an IRB is dismissed.

36As there are no outstanding benefits, there is no need to address the substantive issues of an IRB, interest or an award and the applicant’s Tribunal application is hereby dismissed.

Footnotes

1. 1O. Reg. 34/10.
2. 2S.C. 1996, c. 23. (“EI Act”)
3. 32019 ONCA 882 at para. 42.
4. 4Amos v. Insurance Corporation of British Columbia, [1995] SCR 405 at para. 17.
5. 5[2016] OFSD No. 202 at para. 27-28. (“Kazimierczuk”)
6. 6Written Submissions of the Respondent at Tab 19.
7. 7Ibid at para. 5.6.
8. 8Ibid at para. 5.7.
9. 9Written Submissions of the Respondent at Tab 22.
10. 10Ibid at section 1.9.5.
11. 11Ibid at section 1.4.2.
12. 12Section 9, EI Act.
13. 13Kazimierczuk at para. 28.