Citation: Manuel vs. Certas Direct Insurance Company, 2021 ONLAT 19-008341/AABS

Released Date: 01/15/2021

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:

Mary Manuel

Applicant

and

Certas Direct Insurance Company

Respondent

DECISION

ADJUDICATOR:

Derek Grant

APPEARANCES:

For the Applicant:

Mary Manuel, Applicant

Cary Schneider, Counsel

For the Respondent:

Certas Direct Insurance Company, Representative

Jasvinder Singh, Counsel

HEARD:

By way of written submissions

OVERVIEW

1M.M. was injured in a motor vehicle accident on March 4, 2019. She applied to Certas for income replacement benefits (“IRB”) and other medical benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).¹

2M.M. went on maternity leave shortly after the accident. She was receiving Employment Insurance (EI) maternity leave benefits. Certas concedes that M.M.’s impairments meet the test for an IRB, meaning that the focus of this dispute is on the right of Certas to deduct the EI benefits and employer top up from M.M.’s IRB payments.

3Certas also submits that M.M. had available to her, but failed to apply for, a top-up benefit through her employer. Certas takes the position that M.M. was obliged to apply for that benefit and that it is entitled to deduct 70% of the amount she would have received had she applied.

4Although it argues that such benefits may have been payable had M.M. applied for them, Certas did not provide me with submissions or evidence regarding the quantum of the benefits in question, whether they were available to M.M. while on maternity leave, or whether her circumstances met the qualifying conditions for entitlement.

ISSUES

5The issues in dispute are as follows:

a. Is Certas entitled to deduct EI Maternity benefits and employer top-up benefits from IRB?

b. Is the applicant entitled to a medical benefit in the amount of $3,039.96 for physiotherapy treatment recommended by Fairview Wellness Centre in a treatment plan (OCF-18) submitted on May 7, 2019 and denied on May 11, 2019?

c. Is the applicant entitled to a medical benefit in the amount of $2,200.00 for physiotherapy treatment recommended by Fairview Wellness Centre in a treatment plan (OCF-18) submitted on October 1, 2019 and denied on October 11, 2019?

d. Is M.M. entitled to interest on any overdue payment of benefits?

e. Is M.M. entitled to an award under Regulation 664 because Certas unreasonably withheld or delayed the payment of benefits?

6In their submissions, the parties advised that issues b. and c. have been resolved. As such, my decision will focus on the remaining issues of IRB quantum, interest and the award.

7Certas concedes that M.M. is entitled to an IRB. Thus, the issue is narrowed to focus on whether Certas is entitled to deduct EI maternity benefits and employer top-up benefits from any amount of the payable IRB.

8As previously stated, M.M. went on maternity leave shortly after the accident. Although she had the employer top-up benefit available to her, she did not apply for it. Certas’ position is that regardless of whether or not M.M. applied for the top-up benefit, it is entitled to deduct 70% of “gross employment income” from any amounts that M.M. may otherwise be entitled to, which include the EI maternity benefits and the employer top-up.

FINDING

9Based on a review of the evidence, I find the following:

a. Certas is entitled to deducted EI maternity benefits and the employer top-up amount from IRBs for any period that IRB was payable;

b. M.M. is entitled to interest on any IRBs owed; and,

c. M.M. is not entitled to an award.

ANALYSIS

Entitlement to IRB

10Certas claims that IRB quantum cannot be calculated because of M.M.’s failure to produce the employment file and the complete EI benefits file. Certas submits that on May 18, 2019, it inquired as to whether M.M. suffered a wage loss as a result of the accident. Certas’ position is that it did not receive a response, therefore, without the benefit of the employment and EI benefit files, it was unable to determine what weekly amount M.M. continues to receive or may be entitled to receive.

11M.M. is responsible for providing the necessary requested documentation to prove her ongoing entitlement and the amount of entitlement. I agree with Certas that M.M. has failed to produce the requested documents and that Certas would be within its rights to deny the IRB on the basis of non-compliance with s. 33.

12I note that there is no evidence of a denial of IRB. In fact, Certas agrees that the IRB has not been denied, yet no IRB payment was made. I find this is an error on Certas’ part. Certas was aware that M.M. was receiving EI maternity benefits in the amount of $407.00 per week from April 8, 2019 (the start date of her maternity leave) until August 2019. It is not in dispute that M.M. meets the test for entitlement to an IRB from one-week post accident, that is from March 11, 2019, but suffered no loss of pay because she was on vacation until the start of her maternity leave. From April 8, 2019 and the ongoing period of eligibility, Certas asserts that it is entitled to deduct 70% of her EI maternity benefit and employer top-up. I agree.

13Based on this information, Certas was liable to pay M.M. IRBs from March 11, 2019 and ongoing, less any amounts to be deducted under the Schedule.

Deductibility of Maternity Leave Benefits

14The basis of the dispute between the parties is the characterization of maternity benefits. Certas submits that maternity benefits are part of the definition of “gross employment income,” and that it may deduct 70% as a result. M.M. asserts that maternity benefits fall within the definition of either a “temporary disability benefit” or “other income replacement assistance” and Certas is not entitled to deduct the EI maternity benefit, as it is specifically excluded by the wording of the Schedule.

15Entitlement to an IRB is set out in s. 5 of the Schedule. Section 7(3) sets out the requirement that the insurer pay an insured an IRB in the amount of 70% of the gross weekly employment income up to a maximum of $400/week if the insured suffered a substantial inability to perform the essential tasks of their employment as a result of the accident. Certas concedes that M.M. meets the substantial inability test for the time period in dispute. The question is what amounts Certas may deduct from the IRB payment for the duration of the period of entitlement.

16M.M stopped working in March 2019, using up four weeks of vacation time. She received EI maternity benefits on April 8, 2019. She was paid $407.00 per week in EI. Thereafter, subject to Certas’ position that she should have applied for employer top-up payments, she received only EI. If Certas may deduct 70% of $407.00 and any eligible employer top-up from her IRB, she would be left with a small weekly entitlement.

17Under Section 7(3) of the Schedule the insurer can deduct 70% of gross employment income from the amount to be paid for an IRB. Gross employment income is defined in s. 4(1) as: “salary, wages and other remuneration from employment, including … benefits received under the Employment Insurance Act S.C. 1996, c. 23.” Maternity benefits and employer top-up under the Employment Insurance Act are captured in this definition. On this basis, I find maternity leave benefits and employer top-up are payments under the Employment Insurance Act.

18M.M. relies on additional wording in s. 7(3) to support her position that her EI maternity benefit and any top-up are not deductible. The section requires that the gross employment income is received “as a result of being employed after the accident and during the period in which he or she is eligible to receive an IRB.” M.M. argues that the Schedule does not contemplate a difference in the type of EI benefits, only that such benefits are not deductible from the calculation of IRB. I disagree.

19M.M. submits that s. 47(3) prevents the deduction of EI maternity benefits from IRBs. Section 47(1) allows an insurer to deduct any “temporary disability benefit” in respect of “an impairment” sustained before the accident. Section 47(3) defines a “temporary disability benefit” and specifically excludes disability income received under the Employment Insurance Act for pre-accident impairments.

20Pursuant to s. 3 of the Schedule, “impairment” is defined as “a loss or abnormality of a psychological, physiological or anatomical structure or function.” Therefore, a temporary disability benefit is a benefit that is payable because of the loss of a psychological, physiological or anatomical structure or function. For M.M. to be successful in this proceeding, I must find that EI for childrearing is a temporary disability benefit paid because childrearing is an impairment. On a plain reading of the Schedule, I do not find that was the intent of the wording in the regulation.

21Certas relies on two cases from the Financial Services Commission of Ontario (“FSCO”) in support of its position that it may deduct EI from an IRB: Nelson v. State Farm Mutual Automobile Insurance Co.² and Veeran v. State Farm Mutual Automobile Insurance Co.³ as well as a recent Tribunal decision, which I found persuasive, S.W. v. Certas Insurance Company of Canada.⁴ M.M. argues that these cases are wrongly decided because they do not consider the impact of s. 47(3).

22M.M. further submits that Nelson, Veeran and S.W. are distinguishable as those applicants were all on maternity leave at the time of the accident when they were receiving EI benefits. I find that this is a distinction without a difference as the issue in M.M.’s case is the deductibility of EI benefits and employer top-up while on maternity leave. Without getting into the specifics of Nelson and Veeran, I will focus on S.W., as I find Vice Chair Flude’s consideration of the FSCO case law on whether EI maternity benefits are deductible from IRBs compelling.

23VC Flude agreed with Arbitrator Conroy’s acceptance in Nelson, of State Farm’s position that maternity leave is not unemployment and therefore EI maternity benefits and employer top-up fall within the definition of “gross employment income”. I also agree with this interpretation.

24I am persuaded by the analysis in S.W. as far as it relates to EI maternity benefits. As VC Flude states in paragraph 23, “It is the only analysis that ensures that each reference to EI in the Schedule addresses a specific entitlement without rendering the other references inapplicable or superfluous.” EI maternity benefits fall within the definition of gross employment income, that is: “salary, wages and other remuneration from employment, including fees and other remuneration for holding office, and any benefits received under the Employment Insurance Act (Canada)”. As such, EI benefits that cover disability or sickness are not deductible from an IRB because they have been specifically excluded by s. 4(1) and s. 47(3).

25M.M. is obligated to apply for any available collateral benefits before relying on the benefits available to her through Certas because the insurer is the payor of last resort. This is in accordance with s. 4(1)(b) and elsewhere in the Schedule. The weekly IRB rate is calculated by deducting M.M.’s net weekly amount “less all other income replacement assistance”. Under s. 4(1)(b), other income replacement assistance is defined as:

(b) the amount of any gross weekly payment for loss of income, other than a benefit or payment described in subclauses (a) (i) to (iii) that may be available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan but is not being received by the person and for which the person has not made an application.

26I find the intent of this section is clear. If there is entitlement to collateral benefits, M.M. is obligated to apply for it. Failure to apply for a benefit does not preclude Certas from deducting as though she was in receipt of the benefit. The relevant sections of the Schedule are explicit: that where there are benefits available, but an insured fails to apply for them, the insurer is entitled to deduct those benefits from any payable IRBs.

27For these reasons, I find that Certas is entitled to deduct the EI maternity benefits and employer top-up for the duration of the period that M.M. is entitled to IRBs being March 11, 2019 ongoing.

AWARD

28Section 10 of Regulation 664 permits the Tribunal to award a lump sum of up to 50% of the amount to which the insured person was entitled at the time of the award together with interest on all amounts then owing (including unpaid interest) if it finds that that an insurer has “unreasonably” withheld or delayed payments. I find no grounds to grant an award.

29The prerequisite to relief under s. 10 is that the respondent has unreasonably withheld or delayed payments. Although it is undisputed that M.M. met the test for entitlement to an IRB, Certas requested documentation to calculate the quantum of her entitlement. The documentation was not provided and the basis for Certas’ non-payment was M.M.’s non-compliance with the request. It was M.M.’s obligation to prove her claim and any delay in calculating entitlement is a result of her own inaction.

30M.M. also claims an award relating to the two OCF-18s not presently in dispute, on the basis that Certas did not remove the $3,500 coverage limit for minor injuries and pay the OCF-18s until after receipt of the Tribunal application. Certas claims that despite agreeing in July 2019 that M.M.’s injuries were no longer subject to the MIG limit, M.M. had not exhausted the limit until October 2019. Certas submits that there was no delay in M.M. receiving treatment.

31I do not find that Certas unreasonably withheld payment of the OCF-18s. Certas requested and was provided with additional medical evidence, and I am persuaded by the evidence that the subsequent removal of the limit and approval of the OCF-18s was done in a reasonable amount of time. Further, M.M. continued to have access to collateral benefits.

32For these reasons, M.M. is not entitled to an award under section 10 of O. Reg. 664 for any unreasonable withholding of payment regarding IRBs or the OCF-18s.

ORDER

33M.M. is entitled to IRBs for the period of March 11, 2019 ongoing, plus applicable interest pursuant to s. 51 of the Schedule, subject to deduction of EI maternity benefits and employer top-up.

34M.M. is not entitled to an award.

Footnotes

1. 1O. Reg. 34/10
2. 2Nelson v. State Farm Mutual Automobile Insurance Co., 2015 CarswellOnt 11170
3. 3Veeran v. State Farm Mutual Automobile Insurance Co., 2016 CarswellOnt 10005
4. 417-005302 v Aviva Insurance Company of Canada, 2018 CanLII 83535 (ON LAT)