Licence Appeal Tribunal File Number: 24-015482/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:
Joseph Gelua
Applicant
and
Northbridge General Insurance Company
Respondent
DECISION
ADJUDICATOR: Melanie Malach
APPEARANCES:
For the Applicant: Gail Wong, Counsel
For the Respondent: Farid Mahdi, Counsel Kevin Adams, Counsel
HEARD: By way of written submissions
OVERVIEW
1Norma Gelua passed away as a result of a motor vehicle accident that occurred on March 7, 2024. Ms. Gelua’s son, Joseph Gelua, the applicant, 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, Northbridge General Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
ISSUES
2The issues in dispute are:
i. Is the applicant entitled to a death benefit in the amount of $35,000.00?
ii. Is the respondent liable to pay an award under s. 10 of Reg. 664 because it unreasonably withheld or delayed payments to the applicant?
iii. Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
3I find that the applicant is not entitled to a Death Benefit, interest or an award.
ANALYSIS
Background
4On March 7, 2024, a school bus insured by the respondent struck Norma Gelua as she was crossing an intersection. She succumbed to her injuries on March 9, 2024. At the time of the accident, Ms. Gelua was nearly 88 years old.
5On May 22, 2024, an Application for Accident Benefits (“OCF-1”) was submitted on behalf of Ms. Gelua’s estate. The submitted OCF-1 was signed by the executor of the estate, the deceased’s daughter Ana Maria Rumion. A copy of Ms. Gelua’s Last Will and Testament was attached appointing Ms. Rumion as her sole Executrix and Trustee of her will.
6On June 25, 2024, a Death and Funeral Benefits Application (“OCF-4”) was submitted. Ms. Rumion and the applicant, Joseph Gelua, were noted as applicants on the OCF-4. The OCF-4 claimed death benefits for Ms. Rumion and the applicant and funeral expenses. The applicant submits that Ms. Rumion’s only claim was for the funeral expenses which were paid by the respondent on August 9, 2024. The applicant’s claim was for Death Benefits in the amount of $35,000.00 pursuant to sections 26 and 51 of the Schedule.
7By Explanation of Benefits (“OCF-9”) dated September 23, 2024, the respondent denied the death benefit claimed in the amount of $35,000.00 based on the applicant not being principally dependent on his mother at the time of the loss.
The Law
8Section 26(1) of the Schedule provides that an insurer shall pay a death benefit in respect of an insured who dies as a result of an accident. Pursuant to s. 26(2), the death benefit shall provide a payment to the insured’s spouse of $25,000.00 and a payment to each of the insured person’s dependants of $10,000.00. Under s. 26(3), if no payment is required to the insured’s spouse, an additional payment of $25,000.00 is to be made to the insured person’s dependants
9Pursuant to s. 3(7)(b) of the Schedule, a person is a dependant of an individual if the person is “principally dependent” for financial support or care on the individual or the individual’s spouse.
10The leading case on the definition of “principally dependent” is Miller v. Safeco Insurance Co. of America, 1985 CanLII 2022 (ONCA) (“Miller”), where the Ontario Court of Appeal confirmed the criteria to be considered when determining whether someone is a dependent: the amount of the dependency; the duration of dependency; the financial and other needs of the alleged dependent; and the ability of the alleged dependent to be self-supporting.
11In Allstate Insurance Company of Canada v. Intact Insurance Company, 2016 ONSC 5443 (“Allstate v. Intact”), the Divisional Court provides that the assessment of whether someone is “principally dependent for financial support” on another person does not turn on the mathematical analysis of whether a person provides more than 50% of the needs of another but rather requires a broader consideration of the various factors approved by the Court of Appeal in Miller.
12However, in Economical Insurance Group v. Desjardins Insurance, 2020 ONSC 1363, (“Economical v. Desjardins”), the Court held that the “big picture” approach urged by the applicant is derived from cases where there is insufficient evidence to apply a 50% + 1 analysis or where it is too arbitrary and nuanced a cut-off when viewed in the overall circumstances. While acknowledging that a strict mathematical approach is seldom conclusive, the Court reasoned that if most of a person’s needs can be met from their own resources, then they are not “principally dependent” on the other person.
Parties Submissions
13The applicant submits that he was principally dependent for financial support on his mother prior to the accident and he meets the criteria for being a dependent. He states that he was 65 years old at the time of his mother’s death. On August 24, 2024, he gave evidence at his Examination Under Oath (“EUO”) that for several years before the accident, he was dependent on his mother for financial support for his basic living needs (mainly shelter) and had been living permanently in his mother’s house in Marmora, rent free and expense free. He submits that he did not contribute to any of the household expenses, including mortgage, property tax, hydro, internet, cable, and the bulk of the groceries.
14The applicant submits that it is established law that financial dependency does not require total reliance, rather the test is whether his mother provided more than half of his financial needs. The applicant refers to the decision in Miller which established the 51% financial support test. The applicant relies upon his 2023 Notice of Assessment which confirms $1,496.08 per month in income and a total yearly income of $17,953.00. He also relies upon his 2023 bank statements which list his monthly spending on his own personal expenses and support that he was not self-sufficient in securing the fundamental necessities of life such as household food and shelter. He claims that the cost of a one-bedroom apartment in Marmora is approximately $1,500.00 per month which he mostly exhausted with his personal expenses. The applicant argues that the regular provision of basic necessities constitutes support sufficient to establish dependency, even where he had some independent means to cover personal expenses. (See: Bolte v. McDonald, et al 2022 ONSC 192 (“Bolte”).
15The applicant argues that by confirming that his mother covered all household bills and sustenance, which is equivalent to more than 51% of his financial needs, and which he could not afford alone on his $1,496.08 pension, the evidence clearly proves that he was “principally dependent” for financial support on his mother and meets the definition of “dependent” under s. 3(7)(b) of the Schedule.
16The respondent submits that the applicant was not “principally dependent” on his mother for financial support at the time of the accident. The respondent submits that several different approaches have been applied for the determination of financial dependency which include the “mathematical approach”, the “statistical approach” and the “big picture approach”.
17The respondent submits that in this matter, applying the “mathematical approach”, the analysis should not be on whether the applicant’s mother paid for her housing expenses, but whether the applicant with his annual income of $18,000.00 could cover 50+1% of his needs. (See: Economical v. Desjardins). The respondent submits that although the applicant may have benefitted from his mother’s generosity, by living with her without paying rent, this generosity does not make him “principally dependent” financially on his mother. The respondent argues that the applicant’s monthly income nearly matched his mother’s monthly income. It further argues that since the applicant would have been able to pay for rent and household expenses, he was not financially dependent on his mother. While the list of the applicant’s expenditures show that he spent much of his income on fast food establishments, the respondent notes that the applicant chose to spend his resources on fast food and otherwise would have been able to support more than half of his financial needs.
18The respondent submits that applying the “statistical approach”, as set out in Allstate v. Intact, the Superior Court endorsed the use of Low-Income Cut-Off (LICO) statistics, issued by Statistics Canada. According to Statistics Canada, the LICO for a 1-person household in 2023 in an area with a population of under 30,000.00 (Marmora) was $18,938.00 (net) annually. With inflation, this figure increases to approximately $19,307.93 in 2024 (the year of loss). The respondent argues that to not be “principally dependent”, the applicant must be able to cover half of this amount which would be $9,653.97. Given the applicant’s annual earnings of $18,000.00, he is not “principally dependent” in accordance with the LICO approach.
19The respondent submits that the “big picture” approach derives from case law in which either there was insufficient evidence to apply a 50%+1% mathematical analysis, or it simply appeared to be too arbitrary and nuanced a cut-off when viewed against the overall circumstances or the “big picture”. The respondent argues as the applicant is a 66-year-old adult with five children and is capable of being self-supporting, the “big picture” approach is not appropriate.
20The respondent further submits that the applicant has not proven that he permanently resided in Marmora with his mother at the time of the accident. The respondent notes the applicant’s driver’s licence which was issued on August 17, 2023, lists his daughter’s address in Oakville. The Oakville address was further cited as the applicant’s address in the OCF-4 signed on March 11, 2024. In addition, the applicant’s telephone number bears an area code of (289) reserved for cities neighbouring Lake Ontario including Oakville, as opposed to (613) for Marmora (Eastern Ontario).
21The respondent further notes that the applicant’s bank transactions reveal that the majority of the establishments he visited in 2023, are situated in the Greater Toronto Area (“GTA”). The respondent submits that considering the frequency of visits to the establishments in the GTA and the sporadic nature of these visits, it is clear that the applicant was not permanently residing in Marmora prior to the accident.
Dependency
22I find that the issue before me is whether the applicant was “principally dependent” for financial support on his mother at the time of the accident pursuant to s. 3(7)(b) of the Schedule. The applicant has not made any submissions that he was “principally dependent” for care on his mother.
23Applying the criteria in Miller, I find that the applicant has not provided persuasive evidence to show what his financial needs were at the time of the accident or the amount of that need. I find that the applicant has not provided the Tribunal with any particulars of the “amount of the dependency” except to submit that his mother paid for all household expenses, including mortgage, property tax, hydro, internet, cable and the bulk of the groceries. He relies on his mother’s bank statements attached as evidence. In addition, while he claims that he had significant personal expenses, he has not provided a monthly calculation of these expenses or details as to what type of expenses he had, instead attaching a copy of his 2023 bank statements as evidence. His submission that his shelter costs would have been $1,500.00 per month, is based on an attached listing from a one-bedroom apartment in Marmora.
24I agree with the respondent that a critical component of the analysis of dependency, is the appropriate time frame for analysis. I accept the respondent’s submission that the one-year period leading up to the accident is an appropriate time period for this analysis. This is supported by the fact the applicant only provided bank statements for 2023, a year before the accident.
25With respect to the applicant’s ability to be self-supporting, I find that the applicant’s income in the year preceding the accident based on his 2023 Notice of Assessment was a total income of $17,953.00 or $1,496.08 per month. He claims that when valuing shelter using the local market rate of $1,500.00 per month, that his monthly income is insufficient to afford shelter alone, without even considering the other necessary living expenses.
26I find that the applicant has only made submissions on the “mathematical approach” and submits that the test is whether his mother provided more than half of his financial needs. In applying the “mathematical approach”, it must be determined that if, over the relevant time period, at least 51% of the individual’s expenses are paid by another person, making the individual principally financially dependent on that person. If the applicant has sufficient means to fund 51% of their financial needs, they are not considered a dependent within the meaning of the legislation. If the majority of a person’s financial needs could not be met by their available resources at the time of the accident, then that person is “principally dependent” on the other person. (See Economical v. Desjardins at para 24).
27I find that the analysis is whether the applicant relied on his mother to pay 51% of his expenses. There have been no submissions as to what the applicant’s specific financial needs were at the time of the accident to make this calculation. In addition, there is no evidence of the total costs paid by the applicant’s mother to live in her house. I therefore find that based on a “mathematical approach”, the applicant has not proved that his mother paid 51% of his expenses.
28The applicant submits that he could not have afforded to rent his own apartment. Even if I were to accept that it would have cost him $1,500.00 per month to rent an apartment, 51% of this amount would be $765.00 per month. While the applicant submits that his other necessary living expenses were high, I agree with the respondent that the majority of the expenses in his bank records were for fast food which is not a necessity of life, but a choice the applicant made to spend his money on. I therefore find that based on a “mathematical approach”, if I take into account the proposed rental cost of an apartment the applicant had sufficient means to fund 51% of his financial needs at the time of the accident.
29I further agree with the respondent that in applying the “statistical approach”, if I accept that the LICO for a 1-person household in Marmora would be $18,939.00 net annually or with inflation $19,307.93 in 2024, the applicant would have been able to cover 51% of this amount based on his annual income of over $18,000.00.
30In terms of the “big picture” approach, the applicant has not made any submissions that this test should be considered. However, analysing the facts and evidence before me, I find that while the applicant may have benefitted from his mother’s generosity in paying for the housing expenses and allowing the applicant to live in the house rent free, this does not make him “principally dependent” financially on his mother. I am not persuaded by the evidence provided that the applicant’s mother was paying 51% of his expenses.
31As I have found that the applicant was not “principally dependent” for financial support on his mother, there is no need for me to address the respondent’s arguments as to whether the applicant has proven that he permanently resided with his mother at the time of the accident.
32For the reasons outlined above, I find that the applicant was not principally dependent on his mother for financial support at the time of the accident.
Compliance with s. 36(4)(b) of the Schedule
33Section 36(4)(b) of the Schedule, provides that within 10 business days after the insurer receives the application and completed disability certificate, the insurer shall, give the applicant a notice explaining the medical and any other reasons why the insurer does not believe the applicant is entitled to the specified benefit and, if the insurer requires an examination under section 44 relating to the specified benefit, advising the applicant of the requirement for an examination.
34The applicant submits that the respondent’s denial letter failed to provide adequate reasons, as required by s. 36(4)(b) of the Schedule, in that it did not clearly explain how it determined that the applicant was not “principally dependent” for financial support or care on his mother, nor did it reference or apply the established legal precedent for dependency under the Schedule and case law.
35I find that section 36 of the Schedule governs specified benefits. “Specified benefit” means income replacement benefits, non-earner benefits, caregiver benefits, or a payment for housekeeping and home maintenance services. I find that a death benefit is not a specified benefit and therefore s. 36 is inapplicable to this matter.
Compliance with s. 43(1) of the Schedule
36Section 43(1) of the Schedule provides that if a person is entitled to a death benefit, a funeral benefit or a benefit under Part IV, the insurer shall pay the benefit within 30 days after the insurer receives an application for the benefit. Pursuant to subsection (2), if the insurer refuses to pay a benefit referred to in subsection (1), the insurer shall give the person a notice of the refusal and the medical and any other reasons for the refusal within 30 days after the insurer receives the application for the benefit.
37The applicant did not provide submissions on the issue of section 43(1) in his initial submissions. In reply to the respondent’s submissions, he states that the respondent’s position that s. 36 of the Schedule is inapplicable is irrelevant. He then argues that s. 43(1) obligates the payment of death benefits within 30 days of receiving a complete application. He submits that the OCF-4 was submitted on June 25, 2024 which was sufficient to trigger that duty. If particulars were required, the respondent was obligated to promptly request them, rather than using a blanket denial only stating statutory wording. He further submits that pursuant to s. 43(2), an insurer who refuses to pay a benefit must provide reasons for the refusal within 30 days.
38The respondent submits that the OCF-4 was submitted on June 25, 2024, indicating that the applicant and his sister were Applicants for the benefit. No OCF-1 had been submitted by the applicant by this date as the only OCF-1 that had been submitted was on behalf of the estate. Therefore, the respondent was not provided with any information with respect to the applicant’s dependence on his mother beyond the “parent” box being checked in Part 2 of the OCF-4. The applicant only provided information to determine his entitlement to a death benefit when he submitted to his EUO and productions were provided in the course of the proceeding. The respondent further argues that it denied the death benefit on September 23, 2024, within 45 days of the EUO on August 21, 2024. Therefore, even it breached s. 43, which is denied, s. 43 does not provide for any consequences for failing to comply.
39I agree with the respondent that there are no remedies or consequences for failing to comply with s. 43 of the Schedule. I find that the applicant has not pointed or directed the Tribunal to any authority that non-compliance with s. 43 results in the benefit being paid
Interest
40Interest applies on the payment of any overdue benefits pursuant to s. 51 of the Schedule. As I have found that no benefits are payable, no interest applies.
Award
41The applicant sought an award under s. 10 of Reg. 664. Under s. 10, the Tribunal may grant an award of up to 50 percent of the total benefits payable if it finds that an insurer unreasonably withheld or delayed the payment of benefits.
42The applicant submits that the respondent acted in an unreasonable manner by withholding the death benefits owed to him.
43As I have found that the applicant is not entitled to a death benefit, I find that the there is no evidence that that the respondent unreasonably withheld or delayed the payment of benefits, and no award is payable.
ORDER
44For the reasons outlined above, I find that the applicant is not entitled to a Death Benefit, interest or an award.
Released: April 20, 2026
Melanie Malach
Adjudicator