Court File and Parties

Citation: Ontario Disability Support Program v. Passaro, 2010 ONSC 3322 Court File No.: DC-09-00000097-0000 Date: 2010-07-20 Superior Court of Justice – Ontario Divisional Court

Re: Director of the Ontario Disability Support Program - and - Mario Passaro

Before: Jennings, Wilton-Siegel and Koke JJ.

Counsel: Geoffrey Baker, for the Appellant Gregory P. McKenna, for the Respondent

Heard: June 1, 2010

Endorsement

THE COURT

[1] The Appellant, the Director of the Ontario Disability Support Program (the "Program"), appeals a decision of the Social Benefits Tribunal (the "Tribunal") dated September 23, 2008 affirmed on an application for reconsideration by letter of the Tribunal dated December 16, 2008 (collectively, the "Decision").

Background

[2] The respondent was granted income support under the Ontario Disability Support Program Act, 1997, R.S.O. 1997, c. 25, as amended (the "Act"), effective January 1, 2005. On March 1, 2006, he sustained personal injuries in a car accident. As a result of the accident, he was entitled to claim, and did receive from his insurer, non-earner benefits ("NEB") under section 12 of the Statutory Accident Benefits Schedule ("SAAB") of the Insurance Act, R.S.O. 1990, c. I-8, as amended, at the rate of $185 per month for the period August 2006 to February, 2008. The respondent advised the Program of his receipt of such benefits on July 13, 2007. On July 31, 2007, the Director of the Program notified the respondent that the Program would reduce the on-going support payments under the Program to him by the amount of any NEBs received and that an overpayment of support payments in the amount of $7,585 had been assessed, representing the total of NEBs paid to that date. This decision was affirmed on an internal review on September 13, 2007.

[3] On appeal to the Tribunal, the Director's decision was set aside by the Tribunal in its decision dated September 23, 2008. The Director of the Program requested a reconsideration of the Tribunal's decision which was denied. He then commenced this appeal.

[4] The appeal proceeds under section 31(1) of the Act which grants a right of appeal from a decision of the Tribunal on a question of law. The standard of review is therefore one of correctness.

The Issue

[5] The issue on this appeal is whether NEBs are deductible from income under paragraph 43(1)4(i) of the General Regulation made under the Act, Ontario Regulation 222/98, as amended, (the "General Registration") for the purposes of determining the respondent's eligibility for income support under section 5 of the Act. Paragraph 43(1)4(i) provides for a deduction from income for "an amount received as damages or compensation for pain and suffering as a result of injury to … a member of a benefit unit". The Appellant says that the Tribunal erred in law by misinterpreting paragraph 43(1)4(i) in finding that NEBs were described by that provision and, accordingly, were a deduction from income for purposes of the Act.

Analysis and Conclusions

[6] The Act provides in section 37 of the General Regulation that income shall be determined by adding the amount of all payments of any nature paid to every member of a benefit unit during the relevant period. It is agreed that NEBs are payments that must be included in the calculation of income under section 37. In sections 42 and 43 of the General Regulation, the Regulation also sets out an extensive list of payments that shall not be included in income. We are of the opinion that NEBs do not qualify as a deduction from income under paragraph 43(1)(4(i) for the following reasons.

[7] First, the extent and particularity of the lengthy list of exemptions set out in sections 42 and 43 of the General Regulation reflects a legislative intention that any particular payment must fit squarely within the words of a specific exemption to be exempt. Such an approach is consistent with a statute that provides for an income support plan. Because such a plan necessarily involves the enforcement of threshold levels of support, the Act must also address circumstances in which the financial receipts of entitled persons would exceed such threshold levels. The most effective means of doing so, which the Legislature adopted with a view to ensuring the integrity of the income support plan, both financial and otherwise, was to require that any particular payment fall within one of the very specific but numerous exemptions.

[8] NEBs do not satisfy the requirements of paragraph 43(1)4(i) described above. The respondent has not received an award that is specifically designated as an award for pain and suffering nor has he received an award in a tort action that would be characterized as an award for pain and suffering. The payments also cannot be characterized as "part and parcel" of an actual award of damages for pain and suffering in the manner that the award for prejudgment interest was treated in Mule v. Ontario Director, Disability Support Program, 2007 ONSC 82788, [2007] O.J. No. 5322.

[9] Second, as a related matter, we note that the Act was enacted well after the Insurance Act was amended to incorporate NEBs. Unlike numerous other examples of particular statutory awards that are specifically described in the General Regulation as exemptions, the Legislature chose not to set out a specific exemption for NEBs. Given the structure of the exemptions under the Act, this omission is further evidence of a legislative intent not to permit a deduction for NEBs.

[10] Third, we do not find the decision of the Court of Appeal in Walker v. Ritchie, 2005 ONCA 13776, [2005] O.J. No. 1600, upon which the respondent relies, to be of assistance on the issue in this appeal. In that decision, at para. 29, the Court of Appeal endorsed the trial judge's determination that NEBs are not an income replacement benefit. The Court of Appeal went on to find at para. 87 that "if NEB's are akin to any head of damages, it is non-pecuniary or general damages".

[11] However, the Court of Appeal did not find that NEB's are amounts paid as damages, much less that NEB's are amounts paid as damages or compensation for pain and suffering for the purposes of section 43 of the General Regulation. In Walker, the Court of Appeal addressed a very different issue of the deductibility of benefits under section 267.8(7) of the Insurance Act, for which it was only necessary to identify a category of damages which NEB's more closely resembled for the purpose of that statute. Given the structure and purposes of the Act, that is not sufficient to find that NEB's are exempt under section 43 of the General Regulation. In addition, and more generally, it does not necessarily follow that because a payment is not in respect of a loss of income or a loss of income earning capacity that it must be an award for pain and suffering.

[12] Fourth, similarly, because all payments of any nature are included as income under the Act unless specifically exempted, even items that might not be treated as income under other statutes would not be deductible under the Act for lack of a specific exemption. Accordingly, the fact that the Court of Appeal may have considered NEBs to be akin to capital rather than income payments for purposes of another statute is not dispositive of the issue in this proceeding of the treatment of such payments under section 43 of the General Regulation.

[13] Fifth, moreover, from the perspective of the Act, and the income support plan established under it, NEB's appear to be at least as much "akin" to reimbursement for expenses as to an award for pain and suffering for at least three reasons. NEBs are paid on an on-going basis for the duration of the disability, i.e., as long as the insured person suffers a complete inability to carry on a normal life, as contrasted with awards for pain and suffering which typically take the form of a lump sum. In addition, section 12(4) of the SAAB provides that any NEB otherwise payable is reduced by any payments for loss of income received or available as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan. further, it should be noted that, by virtue of the provisions of section 36(1) of the SAAB, not all persons who suffer the same impairment as that suffered by the respondent would be entitled to the NEB received by him. Such persons could, instead, be entitled to other payments intended to compensate them for either loss of income or the cost of caregiver services. This lack of universality casts serious doubt on the characterization of the NEBs as damages or compensation for pain and suffering.

[14] More generally, "pain and suffering" is a concept known in the specific context of tort law. It does not follow that because a payment is made under a statue as a consequence of an impairment, and without regard to a loss of income, that such payment must be characterized as damages or compensation for "pain and suffering" as a result of such impairment. Instead, because "pain and suffering" is not a concept recognized outside of tort law, and is certainly not a concept used elsewhere in the Act, the use of that term is strong evidence that the exemption in paragraph 43(1)4(i) should be restricted to tort awards for pain and suffering.

[15] Lastly, this approach is also consistent with a balancing of the purposes of the Act, as contemplated by the preamble to the Act, which was not a consideration in Walker v. Ritchie. On the one hand, as McMurtry C.J.O. stated at para. 9 of Gray v. Ontario (Director, Disability Support Program), 2002 ONCA 7805, [2002] O.J. No. 1531, the Act should be interpreted broadly and liberally in accordance with its purpose of providing support to persons with disabilities. On the other hand, the Act also contemplates that the Program must be accountable to taxpayers. Such a balancing of objectives is not mandated by the Insurance Act and therefore was not considered by the Court of Appeal in its interpretation of the Act in arriving at its decision in Walker v. Ritchie.

[16] On the basis of the foregoing, we find that the Tribunal erred in law in its interpretation of paragraph 43(1)4(i) of the General Regulation and, accordingly, the Decision must be set aside. As the Tribunal does not seek its costs of this appeal, no costs are awarded.

Jennings J.

Wilton-Siegel J.

Koke J.

Date: July 20, 2010