Licence Appeal Tribunal File Number: 24-000844/AABS
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:
Mahmoud Abu-Ain
Applicant
and
Security National Insurance Company
Respondent
DECISION
VICE-CHAIR: Tyler Moore
APPEARANCES:
For the Applicant: Mohamed Elbassiouni, Counsel
For the Respondent: Loretta De Thomasis, Counsel Matthew Samuels, Counsel
HEARD: By Way of Written Submissions
OVERVIEW
1Mahmoud Abu-Ain, the applicant, was involved in an automobile accident on August 2, 2021, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, Security National Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE
2The issue in dispute is:
i. Is the applicant an “insured person” as defined in section 3(1) of the Schedule?
RESULT
3I find that the applicant is not an “insured person” for the purposes of s. 3(1) of the Schedule.
PROCEDURAL ISSUES
4The applicant submitted a Notice of Motion on October 3, 2024 seeking leave from the Tribunal to file additional preliminary issue sur-reply submissions.
5The applicant submits that the respondent made misleading statements and misinterpreted the law in its reply submissions. Specifically, the respondent submitted that the applicant’s argument and evidence has been improperly put before the Tribunal, as he filed evidence with the Tribunal in relation to a priority dispute. The applicant also submits that the respondent has misinterpreted and misapplied the implied undertaking rule.
6The respondent opposes the applicant’s motion for leave to file sur-reply submissions and asks the Tribunal to dismiss the motion with costs. The respondent submits that leave for sur-reply submissions should only be granted in exceptional circumstances where a party has raised a new issue with new evidence that does not respond to the previous submissions. The issue must be critical to the determination of the issue in dispute, which is not the case here. The respondent also submits that the applicant has not alleged that it introduced any new evidence in its reply submissions. The respondent relies on E.L. v Wawanesa Mutual Insurance Company, 2020 CanLII 42668 (ON LAT) and Nadarajah v Aviva General Insurance Company, 2021 CanLII 111143 (ON LAT) to support its position.
7I agree with the respondent that granting leave from the Tribunal to file sur-reply submissions should only be granted in truly exceptional circumstances where a new issue is being raised with new evidence. I find that this is not the case here.
8I dismiss the applicant’s motion and find that the respondent is not entitled to costs. I have addressed the admissibility of the EUOs related to the priority dispute and the applicability of the deemed undertaking rule below.
9The applicant also argues that the preliminary issue hearing is premature and should not be heard while a priority dispute remains unresolved. While the respondent did not provide specific submissions related to the applicant’s argument, I find that the priority dispute is not before the Tribunal and the outcome of the priority dispute has no impact on whether the applicant meets the definition of an “insured person” pursuant to s. 3(1) of the Schedule. As such, I am proceeding with the preliminary issue hearing.
ANALYSIS
The Law
10Section 2(4) of the Schedule provides that benefits are payable to “insured persons”.
11The definition of an “insured person” in s. 3(1)(a)(ii) of the Schedule includes a dependent of the named insured, who was not involved in an accident, but who suffers psychological or mental injuries as a result of an accident that resulted in a physical injury to their child.
12Section 3(7)(b) further states that a person is a dependent of an individual if the person is principally dependent for financial support or care on the individual or individual’s spouse.
13Both parties agree that “dependency” is further assessed according to the following four criteria, citing the Ontario Court of Appeal decision Miller v. Safeco Insurance Co. of America, (1984) 1984 CanLII 2019 (ON HCJ), 48 O.R. (2d) 451 (H.C.J.), affirmed 1985 CanLII 2022 (ON CA), 1985 50 O.R. (2d) 797, RBA and State Farm v. Bunyan, 2013 ONSC 6670:
i. Amount of dependency;
ii. Duration of dependency;
iii. Financial or other needs of the alleged dependent; and
iv. The ability of the alleged dependent to be self-supporting.
14Also applicable in this case is the case of Allstate Insurance v ING Insurance et al, 2015 ONSC 4020 (“Allstate”). Allstate addressed situations of dependency where the person is dependent on multiple sources. In Allstate, the Court clarified that not only must a dependent be unable to provide for more than 50% of their own needs, but another person must provide more for the dependent than the dependent provides for themselves. It further states that “if several people each provide a small amount to assist the claimant, it is unlikely that (they) will be found to be dependent on any of the providers.”
Background and Parties’ Positions
15The applicant submits that the respondent has waived its right and is estopped from raising this preliminary issue as it has already accepted the application for accident benefits and that the applicant sustained a catastrophic impairment on June 7, 2022. Furthermore, the respondent has paid accident benefits in the amount of $468,551.76.
16The applicant also submits that the respondent did not notify him in correspondence dated September 15, 2022, March 6, 2023, or March 22, 2023 that he was not an insured person as per s. 3 of the Schedule. The applicant argues that the respondent’s conduct, the priority dispute, and the continuation of accident benefit payments, caused him to believe that the respondent was not disputing he was an insured person. The applicant further submits that he has complied with the Tribunal’s previous Orders and made best efforts to provide documents, including financial records, to the respondent.
17According to the applicant, the evidence demonstrates that he was employed for a few months before the accident and was receiving financial assistance from his uncle and uncle’s spouse, who is the named insured. Again, the applicant relies on the EUOs from his mother and the named insured to support a finding that he was financially dependent on the named insured for a long time before the accident, and that his uncle, the spouse of the named insured, is a father figure. The applicant submits that the evidence leaves no doubt that he is not self-supporting, given that he was only 19 years old at the time of the accident, he lacked experience, and that he has a limited employment history.
18The respondent submits that the applicant does not meet the definition of an insured person for the purposes of entitlement to benefits because there is no nexus between he and the named insured, Sireena Rahhal. Specifically, the applicant was not the spouse or a specified driver on the policy of the named insured prior to the accident.
19The respondent also submits that it requested the applicant’s bank account information, income tax returns, notices of assessment, T4s, employment insurance, and Service Canada files on September 15, 2022, March 6, 2023, and again on March 22, 2023, but the applicant failed to produce any of the requested documentation until August 9, 2024. The respondent argues that the applicant provided income tax returns and notices of assessment for 2020 and 2023, and T4s from 2021, but he did not provide any employment or bank records. The only financial records that were provided show the applicant’s reported income of $1.00 in 2020, no reported income in 2021, and several T4s totalling $11,066.00. According to the respondent, this has made it impossible to develop a full picture of the applicant’s financial situation around the time of the accident.
20The respondent argues that the applicant’s primary residence has been Cartmer Way, in Milton, Ontario has been the same since in or around 2020, according to the applicant’s income tax documents. The named insured and her spouse, however, reside elsewhere at Hatt Court in Milton, Ontario. Although a lease agreement for Cartmer Way, in the amount of $2,550.00 per month lists the named insured and the applicant’s mother as tenants, the respondent submits that the named insured does not reside at the address, and never has.
21The respondent acknowledges that the applicant provided bank records from his mother, Layla Hamad (“Ms. Hamad”), between December 2019 and July 2024. None of those bank records, however, show monthly transactions in the amount of $2,550.00 that would have covered the monthly lease for Cartmer Way. According to those bank records, Ms. Hamad had average monthly expenses of approximately $5,475.31 during the twelve months leading up to the accident, and she received an average of $4,153.43 from government assistance sources. The respondent argues that there is no evidence that $2,550.00 in monthly lease expenses are included in those monthly expenses. The respondent also submits that the bank records show a number of pre-accident e-transfers, but the sources of those transfers are not identified.
22The respondent argues further that without any banking information for the applicant himself, it is impossible to determine his expenses in the year prior to the accident. This has prejudiced the respondent by preventing it from determining the applicant’s level of dependency on the named insured or her spouse. According to the respondent, the applicant was either wholly independent or dependent on Ms. Hamad. The respondent argues further that the evidence submitted by the applicant does not show that his financial needs are being met by the named insured or her spouse, and no banking information has been provided from the named insured or her spouse to corroborate the applicant’s claim.
23The respondent submits that it was obligated to accept the applicant’s application, but that does not imply or deem its acceptance that the applicant was a dependent of the named insured.
Admissibility of EUO transcripts
24Both parties have argued about the admissibility of the EUO transcripts of Ms. Hamad dated April 5, 2022, the spouse of the named insured dated May 24, 2023, and the named insured dated May 24, 2023, that were gathered in the priority dispute.
25The respondent submits that the deemed undertaking rule applies, which prohibits the applicant from making use of materials gathered in the context of a priority dispute, for the adjudication of an accident benefits matter. The respondent relies on the Divisional Court’s decision in The Personal Insurance Company v. Jia, 2020 ONSC 6361 which ruled on the deemed undertaking rule as it applies to documents before the Tribunal. The respondent argues that in that case the respondent’s counsel successfully argued that the insurer was not permitted to use in the benefits dispute, evidence compelled in the priority dispute, and the filing of the priority evidence was a breach of the applicable statutory scheme. Specifically, the Divisional Court wrote:
“requirements set out in s. 33 of the SABS Schedule cannot be circumvented by reliance on a transcript obtained during a priority dispute. Otherwise, the procedural protections afforded to an insured in the SABS Schedule would be frustrated…The Vice-Chair found that the specific protections provided in the SABS Schedule cannot be avoided by the general discretion granted to an Adjudicator under s. 15 of the SPPA. Otherwise, the protections enacted in s. 33 of the SABS would be largely illusory.”
26The applicant submits that the respondent has misinterpreted and misapplied the implied undertaking rule, and that the EUO transcripts of the named insured have been admitted into evidence properly. The applicant also submits that the only party that can invoke the implied undertaking rule is the named insured and not the respondent.
27The applicant argues that the respondent has misinterpreted the Jia decision. The Court found in Jia that the use of the transcripts was improper because the party that provided the evidence did not consent to the disclosure of same. In this case, however, the party that underwent the EUO provided consent for the use of the transcripts.
28I am persuaded by the applicant’s submissions and have admitted the EUOs for consideration. I agree that the circumstances in this case differ from Jia, and the exception to the deemed undertaking rule, consent, has been met. In considering the EUOs, however, I find that while they provide contextual narrative, concrete evidence that would satisfy the applicant’s alleged dependency on the named insured or her spouse as set out in Miller and Allstate is still lacking.
29For example, the EUO from Ms. Hamad reflects that her address at time of the accident was Cartmer Way. She testified that she had been living at that address along with her five children, including the applicant, since 2020. Ms. Hamad testified that her brother, the spouse of the named insured, was a member of her household as well and would stay at Cartmer two to three nights per week as would the named insured and their three children. Ms. Hamad testified that the primary residence of the named insured and her spouse was Hatt Court.
30Ms. Hamad also testified that she has not worked since coming to Canada in 2015 and has had no other income besides government assistance that included Ontario Works and child assistance, which amounted to approximately $3,200.00 per month, in the twelve months leading up to the accident. According to Ms. Hamad, the spouse of the named insured, who is her brother, would help her financially, giving her cash amounts each month averaging $2,000.00 to help with lease payments and items for her children. She confirmed that there was no electronic record of that financial support, and that her average monthly expenses in the year leading up to the accident were approximately $5,500.00.
31Ms. Hamad confirmed that the applicant was working in a restaurant at the time of accident as well as doing some factory work packaging products, and that he did not open a bank account until shortly before the accident. Based on her testimony, the named insured’s spouse covered many of applicant’s expenses that Ms. Hamad could not. She also testified that the applicant did not contribute to the lease payments at Cartmer Way or to buying groceries. According to Ms. Hamad, she used some of the money given to her by the named insured’s spouse to buy the applicant clothes and other items.
32The EUO of the spouse of the named insured, Mohamed Abeldalhamad, also confirms that the applicant was living with Ms. Hamad and his sisters at Cartmer Way leading up to the accident. The spouse of the named insured testified that he was like a father figure to the applicant and that he would stay with Ms. Hamad and her family, including the applicant, at Cartmer Way one or two nights per week to help her because she was a single mother. Mr. Abeldalhamad also testified that he helped Ms. Hamad financially by giving her cash amounts to assist with bills, lease payments, and family expenses. He could only estimate, however, that this amounted to $1,500.00 to $2,000.00 per month. Mr. Abeldalhamad also testified that he would give the applicant small amounts of money when he needed something, but he could not provide an exact amount.
33Finally, the EUO of the named insured confirms that she was listed on the lease agreement for Cartmer Way so that Ms. Hamad could get a place to live with her family. According to the named insured, in the year leading up to the accident, her three children would go to Cartmer Way during the day so that Ms. Hamad could look after them while she was at work. She also confirmed that any financial assistance given to Ms. Hamad or the applicant was by way of cash and that there was no paper trail to confirm any amounts. The named insured estimated that she and her spouse were giving Ms. Hamad around $1,500.00 each month for her lease in the year leading up to the accident.
34The named insured testified that the applicant has always lived with Ms. Hamad, and that the named insured was not personally supporting him in the year leading up to the accident. She also testified that her husband supported the applicant quite a bit financially and in terms of care by spending time with him and acting as a surety which was part of the applicant’s conditional bail release in early 2020. According to her EUO, the named insured might have personally given Ms. Hamad $200.00 per month, but there were no bills for Cartmer Way in the named insured’s name or that were jointly named with Ms. Hamad.
The applicant has not established that he was principally dependent on the named insured or her spouse
35I find that when considering Miller and Allstate and applying a holistic 12-month period of analysis, the EUO evidence does not show that the applicant was principally dependent on the named insured or her spouse for financial support or care.
36While I accept that the applicant did not open a bank account until the months preceding the accident, I find that the limited documentary financial evidence from the applicant, the named insured, and her spouse, is not persuasive in corroborating the EUO testimony.
37I also agree with the respondent that the applicant’s financial evidence cannot accurately be used to determine if his income was sufficient to meet 50% or more of his financial needs in the 12-months preceding the accident, which is why I have also considered and assessed the applicant’s financial and care dependency on the named insured or her spouse using a holistic or “big picture” approach.
38Even if I accept the evidence contained in the EUOs at face value, I find that the applicant has not met his onus of establishing dependence on the named insured or her spouse. The reported financial support from the named insured and her spouse are approximations, and with some discrepancies, and Ms. Hamad’s bank statements neither confirm nor deny any financial dependence on the named insured or her spouse.
39In terms of dependency for care, I accept that the named insured’s spouse, the applicant’s uncle, provided guidance to the applicant in the absence of a father at home, but given that the applicant was 19 years of age at the time of the accident, he was working, and he resided with his sisters and Ms. Hamad at Cartmer Way, I do not find that the applicant was principally dependent on the named insured’s spouse for care.
ORDER
40The applicant has not established that he was a dependant of the named insured or her spouse at the time of the accident. The applicant is not an “insured person” for the purposes of s. 3(1) of the Schedule.
41The application is dismissed.
Released: January 13, 2025
Tyler Moore
Vice-Chair