Security National Insurance Co. v. The Wawanesa Mutual Insurance Company

[Indexed as: Security National Insurance Co. v. Wawanesa Mutual Insurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

E.M. Morgan J.

December 9, 2013

118 O.R. (3d) 341 | 2013 ONSC 7589

Case Summary

Insurance — Automobile insurance — Statutory accident benefits — "Dependent" — Elderly retired engineer from Bangladesh injured in motor vehicle accident while on extended visit to his family in Canada — Victim making no financial contribution to family in Canada and unable to work while on visitor's visa — Arbitrator finding that victim was "dependent" of his family in Canada so that he had to claim statutory accident benefits from his family's automobile insurer — Arbitrator focusing on victim's immigration status in Canada and ignoring his considerable assets in Bangladesh — Arbitrator erring in law in failing to consider voluntary nature of victim's dependency.

K, an 81-year-old retired engineer from Bangladesh, was injured when he was struck by a motor vehicle while on an extended visit to his son and daughter-in-law in Canada. K had no automobile insurance. A private arbitrator found that K was a "dependent" of his Canadian family, so that he had to claim statutory accident benefits from his family's automobile insurer rather than the insurer of the driver who struck him. The insurer appealed.

Held, the appeal should be allowed.

The arbitrator did not err in finding that K made no financial contributions to his family in Canada and that they supported him in all respects. However, the arbitrator erred in focusing on K's immigration status in Canada (K was unable to work as he was on a visitor's visa) while ignoring K's considerable assets in Bangladesh. K's stay in Canada was a personal choice. But for his voluntary visit to Canada, K was not dependent on his son and daughter-in-law for financial support. The arbitrator's failure to account for the voluntary nature of K's dependency on his son and daughter-in-law amounted to an error of law.

Liberty Mutual Insurance Co. v. Federation Insurance Co. of Canada, [2000] O.J. No. 1234 (C.A.), affg May 7, 1999 (Arb. Samis); Miller v. Safeco Insurance Co. of America (1985), 1985 2022 (ON CA), 50 O.R. (2d) 797, [1985] O.J. No. 2742, 13 C.C.L.I. 31, [1985] I.L.R. Â1-1949 at 7486, 32 A.C.W.S. (2d) 70 (C.A.), affg (1984), 1984 2019 (ON SC), 48 O.R. (2d) 451, [1984] O.J. No. 3383, 9 C.C.L.I. 1, [1984] I.L.R. Â1-1848 at 7091, 28 A.C.W.S. (2d) 290 (H.C.J.), consd [page342]

Other cases referred to

2747-3174 Québec Inc. v. Québec (Régie des permis d'alcool), 1996 153 (SCC), [1996] 3 S.C.R. 919, [1996] S.C.J. No. 112, 140 D.L.R. (4th) 577, 205 N.R. 1, J.E. 96-2212, 42 Admin. L.R. (2d) 1, 66 A.C.W.S. (3d) 1012; Aviva Insurance Co. of Canada v. Royal & Sunalliance Insurance Co., 2008 41817 (ON SC), [2008] O.J. No. 3240, [2008] I.L.R. I-4726, 66 C.C.L.I. (4th) 262, 2008 CarswellOnt 4894, 169 A.C.W.S. (3d) 640 (S.C.J.); Barnard v. Safeco Insurance Co. of America (1986), 1986 2522 (ON SC), 57 O.R. (2d) 558, [1987] O.J. 1212, 23 C.C.L.I. 279, [1987] I.L.R. Â1-2146 at 8294, 2 A.C.W.S. (3d) 87 (H.C.J.); Co-Operators General Insurance Co. v. Halifax Insurance Co., 2002 79675 (ON SC), [2002] O.J. No. 2459, [2002] O.T.C. 418, 39 C.C.L.I. (3d) 250 (S.C.J.); Dominion of Canada General Insurance Co. v. Ontario (Minister of Finance), 2013 ONSC 4717 (S.C.J.); Echelon General Insurance Co. v. Wawanesa Mutual Insurance Co., November 4, 2008 (Arb. Bialkowski); Gore Mutual Insurance Co. v. Co-Operators General Insurance Co. (2008), 93 O.R. (3d) 234, [2008] O.J. No. 3603, 68 C.C.L.I. (4th) 258, 2008 46914, 171 A.C.W.S. (3d) 179 (S.C.J.); Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317, 204 D.L.R. (4th) 721, 149 O.A.C. 172, 32 C.C.L.I. (3d) 1, 107 A.C.W.S. (3d) 482 (C.A.); Insurance Corp. of British Columbia v. Federated Insurance Co. of Canada, July 2009 (Arb. Samis); Oxford Mutual Insurance Co. v. Co-operators General Insurance Co. (2006), 2006 37956 (ON CA), 83 O.R. (3d) 591, [2006] O.J. No. 4518, 43 C.C.L.I. (4th) 199, [2007] I.L.R. I-4564, 40 M.V.R. (5th) 1, 152 A.C.W.S. (3d) 912 (C.A.); Security National Insurance Co. v. Personal Insurance Co., [2011] O.J. No. 6020, 2011 ONSC 7576, [2012] I.L.R. I-5234 (S.C.J.); TTC Insurance Co. v. The Co-Operators, July 23, 2007 (Arb. Samis); Wawanesa Mutual Insurance Co. v. Underwriters, Lloyd's of London (2004), 2004 22694 (ON SC), 72 O.R. (3d) 762, [2004] O.J. No. 3661, [2004] O.T.C. 790, 16 C.C.L.I. (4th) 133, 17 M.V.R. (5th) 317, 133 A.C.W.S. (3d) 537 (S.C.J.); Zurich Insurance Co. v. Ontario (Human Rights Commission), 1992 67 (SCC), [1992] 2 S.C.R. 321, [1992] S.C.J. No. 63, 93 D.L.R. (4th) 346, 138 N.R. 1, J.E. 92-947, 55 O.A.C. 81, 12 C.C.L.I. (2d) 206, [1992] I.L.R. Â1-2848 at 1879, 39 M.V.R. (2d) 1, 34 A.C.W.S. (3d) 665

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, s. 268(2)(2)(ii), (3), (5) [as am.]

Rules and regulations referred to

O. Reg. 35/10 (Insurance Act)

Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96 [as am. by O. Reg. 35/10 (Insurance Act)], s. 2(6) [as am.]

APPEAL from a decision of an arbitrator.

J. Jason M. Kerr, for appellant.

Kevin D.H. Mitchell, for respondent.

[1] E.M. MORGAN J.: — Is an 81-year-old retiree visiting from Bangladesh, who is self-supporting in his native country but who is unable to work while visiting his son and daughter-in-law in Canada, "dependent" on his Canadian family?

[2] In this contest between two insurance companies, that is the question that the Insurance Act, R.S.O. 1990, c. I.8, s. 268(5) and Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96, as amended by O. Reg. 35/10 ("SABS") [page343] requires answered. An uninsured victim can claim accident benefits from the insurer of the driver that struck him, whereas a victim who is a "dependant" of an insured person must claim accident benefits from that person's insurer.

[3] On March 29, 2008, Mr. Golam Kibria, a visitor to Canada, was struck by an automobile. Although Mr. Kibria was uninsured, the driver of the vehicle was insured by the respondent and Mr. Kibria's son and daughter-in-law, with whom he was living while in Canada, were insured by the appellant. He was therefore entitled to accident benefits under the Insurance Act and SABS from one or the other of the two insurers.

[4] On April 30, 2012, a private arbitrator, Bruce R. Robinson, determined that Mr. Kibria is "principally dependent for financial support" on his son and daughter-in-law in Canada. As a consequence, the arbitrator held that priority for accident benefit payments lies with the appellant.

[5] The arbitration agreement between the parties provides for an appeal on errors of law and errors of mixed fact and law, without leave of the court. The appellant submits that the learned arbitrator erred in law by failing to apply the test for dependency set out in Miller v. Safeco Insurance Co. of America (1984), 1984 2019 (ON SC), 48 O.R. (2d) 451, [1984] O.J. No. 3383 (H.C.J.), affd (1985), 1985 2022 (ON CA), 50 O.R. (2d) 797, [1985] O.J. No. 2742 (C.A.) and Liberty Mutual Insurance Co. v. Federation Insurance Co. of Canada, Arbitrator Lee Samis, May 7, 1999, affd [2000] O.J. No. 1234 (C.A.). For the reasons that follow, I agree with the appellant.

I. Accident Benefit Priorities

[6] It is axiomatic that the court's interpretation of the Insurance Act and the SABS, as with any other statutory instrument, "should comply with the legislative text, promote the legislative purpose, reflect the Legislature's intent and produce a reasonable and just meaning" (Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317 (C.A.), at para. 19). This applies to the entirety of these instruments, including the priority sections that address a contest between two insurers as to which one is responsible for an injured person's accident benefits.

[7] Priority between insurers for payment of accident benefits is addressed in a number of sections of the governing statute and regulations. First, s. 268(2)(2)(ii) of the Insurance Act provides that a person who, like Mr. Kibria, is injured as a pedestrian without their own insurance coverage, can seek accident benefits from the "insurer of the automobile that struck" him. In keeping with this right of the claimant, s. 268(3) makes [page344] it clear that "[a]n insurer against whom a person has recourse for the payment of statutory accident benefits is liable to pay the benefits".

[8] These sections are then accompanied by s. 268(5), which requires that "if a person is a named insured under a contract evidenced by a motor vehicle liability policy or the person is the spouse or a dependant, as defined in the Statutory Accident Benefits Schedule, of a named insured, the person shall claim statutory accident benefits against the insurer under that policy". Since Mr. Kibria's son and daughter-in-law are named insureds under a policy issued by the appellant, while the driver that struck him is insured under a policy issued by the respondent, the question of who covers Mr. Kibria's accident benefits turns on the definition of "dependant". If Mr. Kibria is a "dependant" of his son and daughter-in-law, then the appellant is liable for payment of accident benefits to him, whereas if he is not their "dependant", then the respondent is liable for payment of his accident benefits.

[9] For greater certainty, counsel for both parties have made it clear that the financial result to Mr. Kibria will be the same regardless of which of the two insurance companies is liable for his benefits. The only question before Arbitrator Robinson, and the only one on that will be answered by the conclusion of this appeal, is "who pays?" and not "how much?"

[10] The SABS contains its own definition of "dependant" for the purposes of the priority issue here. The definition, however, is drafted in terms that are circular and highly generalized. In fact, one can safely say that the definition does little more than to introduce, rather than to resolve, the question of interpretation it is meant to address. Section 2(6) of the SABS provides:

2(6) For the purposes of this Regulation, a person is a dependant of another person if the person is principally dependent for financial support or care on the other person or the other person's spouse.

[11] Courts and arbitrators have struggled over the years to flesh out the language of the SABS in order to come up with a workable definition of "dependant".

[12] In his 1999 decision in Liberty Mutual, supra, Arbitrator Lee Samis concluded that an injured person "can only be considered principally dependent for financial support on someone else if the cost of meeting [the injured person's] needs is more than twice [his] resources". In the dozen or so years since the Liberty Mutual decision, the "50 per cent+1" test embraced there has become a prevalent standard by which insurance companies measure the dependency of accident victims in allocating priority under the SABS. [page345]

[13] Counsel for the appellant submits in his factum that,

To satisfy this test, the arbitrator must first find the cost of meeting the claimant's basic needs and then compare that with the claimant's resources. If, and only if, the claimant's resources are less than 50 per cent of the cost of meeting the basic needs, not including lifestyle expenses, do we look further for possible dependence on others by looking at Miller v. Safeco factors.

[14] Applying this test to an injured person's actual circumstances is not nearly as mathematically precise as it sounds. Although the question of financial dependence is more susceptible to mathematical calculation than questions of care and other forms of dependency (Wawanesa Mutual Insurance Co. v. Underwriters, Lloyd's of London (2004), 2004 22694 (ON SC), 72 O.R. (3d) 762, [2004] O.J. No. 3661 (S.C.J.), at para. 17), assessing a person's realistic financial needs is not an entirely mechanical exercise.

[15] Perhaps more importantly, the appellant's view is contrary to the Court of Appeal's approach in Liberty Mutual itself. In Liberty Mutual, the Court of Appeal recognized, in the first sentence of what was in total a four sentence judgment, that the "50 per cent+1" formula articulated by Arbitrator Samis was itself but a specific application of the more generalized test that had been in existence since the decision 15 years earlier in Miller v. Safeco.

[16] In Miller v. Safeco, the court examined a variety of factors in assessing the alleged dependency of accident victims. These included (a) the amount of the supposed dependency; (b) the duration of the supposed dependency; (c) the financial needs of the alleged dependant; and (d) the ability of the alleged dependant to be self-supporting. These factors remain relevant in the first instance to an assessment of dependency under the SABS, and have not been relegated by the Court of Appeal to secondary or alternative factors.

[17] In Liberty Mutual, the court noted that Miller v. Safeco was decided under legislation that preceded the present Insurance Act and SABS, but then opined, at para. 2 (C.A.), that "[t]here is nothing in the language of the present legislation that would dictate a different approach to the measuring of dependency". On the merits of the Liberty Mutual approach itself, the court, at para. 3, said merely that "[t]he application raised a factual issue and we see no error".

[18] Accordingly, on any reading of the Court of Appeal's limited jurisprudence on the subject, it is the broader set of questions employed in Miller v. Safeco that continues to guide interpretation of the dependency question under the SABS. The seemingly mathematical formula which Liberty Mutual is taken to have introduced may work in some circumstances but may be [page346] inadequate in addressing the question in other circumstances. Whether or not an accident victim is a "dependant" of a named insured must be analyzed in a holistic fashion, and cannot be addressed strictly by adding up the expenses covered by the insured and comparing them with those covered (or even those which could have been covered) by the victim.

[19] That said, I do understand why counsel have tended to gravitate toward the Liberty Mutual formula. In the face of legislation and regulations that give precious little in the way of interpretive or policy-oriented guideposts, it is difficult to know how to resolve any ambiguity in applying the Miller v. Safeco factors.

[20] I note that at an earlier stage of the Miller case itself, (H.C.J.), supra, O'Brien J. attempted to articulate the policy orientation of the predecessor to the current legislation. He concluded, at para. 7, that "it would be preferable to approach the question of this interpretation on the basis the legislation was of a remedial nature, intended to broaden insurance coverage to include members of family units as persons insured under the policy".

[21] That remedial posture may be the general policy objective of the present legislation as well. Understanding that overall policy, however, is not helpful when it comes to a priority contest such as that spawned by s. 268(5) of the Insurance Act and s. 2(6) of the SABS.

[22] While one might find comfort in erring to the side most generous to the accident victim if the question were one of insurance coverage vs. no coverage, the question here is as between two insurers. The victim will receive his benefits one way or the other. It is not a question of remediation and the broadening of coverage. See Dominion of Canada General Insurance Co. v. Ontario (Minister of Finance), 2013 ONSC 4717 (S.C.J.), at para. 19.

[23] No one appears to have a policy rationale that explains why the question of priority as between the driver's insurer and the victim's family members' insurer turns on the question of dependency where, as here, the alleged dependant only arrived on the scene after his family members' insurance was in place. In Insurance Act terms, Mr. Kibria's arrival in Canada was a fortuitous event; from the insurer's point of view, it is difficult to factor into any risk assessment, and from the legislature's point of view it is difficult to factor into any social policy goal.

[24] In the absence of any coherent policy rationale, the most that can be said is that some line had to be drawn between two potentially applicable insurance policies. The victim's level of [page347] dependency on his insured family members is simply the place where the legislature has decided to draw that line.

[25] Needless to say, a statutorily mandated test for which one cannot articulate a clear policy rationale provides little in the way of guidance where a controversy or ambiguity arises during the course of its interpretation. While, as indicated above, exercises in statutory interpretation should generally be engaged "in order to correctly identify the legislature's objective" (2747-3174 Québec Inc. v. Québec (Régie des permis d'alcool), 1996 153 (SCC), [1996] 3 S.C.R. 919, [1996] S.C.J. No. 112, at p. 1001 S.C.R.), the absence of a discernable policy objective in resolving a priority contest such as the one here makes the exercise particularly difficult.

II. The Contentious Issues

[26] Although there are numerous detailed issues over which the parties disagree, the debate between them can be divided into three primary areas. In the first place, the parties disagree over whether, as the arbitrator found, Mr. Kibria was actually dependent on his son and daughter-in-law. Secondly, there is a debate as to the imputed value of the services Mr. Kibria provided to his family in Canada, which the arbitrator found to be nil. Finally, the parties are at odds over the significance of what the arbitrator found to be the crucial question of Mr. Kibria's status as a visitor to Canada.

[27] Each of the contentious issues will be addressed in turn.

a. Financial dependence at the time of the accident

[28] The parties agree that Mr. Kibria was a retired engineer from Bangladesh who had sufficient funds to pay for his own ticket to Canada in 2006. The parties also agree that he had no source of income in Canada, and that the pension income he received in Bangladesh was no longer received once he came to Canada.

[29] The arbitrator specifically found that Mr. Kibria "had no independent means whatsoever to be self-sufficient or to supply himself with the normal necessities of life were he not living with his son and daughter-in-law". The appellant takes issue with this finding, and submits that it was made in the absence of any evidentiary basis and therefore amounts to a reversible error of law or mixed fact and law.

[30] More specifically, the appellant disputes the arbitrator's finding that while staying with his son and daughter-in-law, "Mr. Kibria did not contribute to any of the house expenses". Counsel for the appellant submits that "[t] here is no evidence to support the Arbitrator's statement", and points to a number of [page348] places in the transcript of Mr. Kibria's son's testimony in an effort to establish the error of this statement. Thus, for example, while it is clear that Mr. Kibria came to Canada to be with his grandchildren, that he lived in the house with his son and daughter-in-law and was a part of their family, the appellant insists that on occasion Mr. Kibria would buy groceries for the household.

[31] The following exchange is specifically referenced in the appellant's factum:

335. Q. and you say he used some of his own money from what he brought with him to periodically buy things like groceries, the odd thing that you would need to supplement if you would run out or something like that, fair?

A. Yes

and further:

315. Q. All right. Now, of the cash that you say he brought with him, did he give you any of that money?

A. He used to sometimes.

316. Q. and how much and how often?

A. No, not how much. You can say, yeah, how often. He -- sometime for, like, you know, small things like groceries and all of those things.

317. Q. Okay so he might --

A. Whenever he used to feel, you know?

318. Q. So he might, on an ad hoc basis, go to the local supermarket or something and pick up a couple of groceries items, pay for them himself, and then just put them in the fridge.

A. Yah, he didn't used to ask, "Okay, give me money, I will buy something. You need this in the household," so --

319. Q. and when he did that he used those savings that you say he came to Canada with?

A. I believe so. Yeah.

320. Q. But he didn't give you cash to say, "here's some money for the phone bill," or, "here's money for the heating or hydro," or anything like that?

A. For utilities, no[.]

[32] None of this evidence speaks to an error made by the arbitrator. Indeed, the contrary is true.

[33] The arbitrator found that Mr. Kibria had a strong attachment to his grandchildren, especially his eldest grandson, that he stayed in his son and daughter-in-law's home and was included in their household in every respect, that he occasionally cleaned up and did some housework as a member of that household. The arbitrator also found that Mr. Kibria babysat his [page349] grandchildren, and that there was no monetary exchange for any of these things. The fact that he made the occasional trip to the grocery store and on occasion might, "on an ad hoc basis, go to the local supermarket or something and pick up a couple of groceries items, pay for them himself, and then just put them in the fridge" in no way changes that conclusion.

[34] In any case, these are all findings of fact, not law or mixed fact and law. The purpose of the Miller v. Safeco test is to determine the real relationship between the accident victim and his or her family on whom the victim is alleged to be dependent. This is to be done in a "big picture" sense, without allowing de minimis factors to obscure the view of the larger relationship. See Echelon General Insurance Co v. Wawanesa Mutual Insurance Co., Arbitrator Kenneth Bialkowski, November 4, 2008, at 5-6.

[35] The arbitrator concluded that the fact that Mr. Kibria bought the occasional groceries did not run counter to the overriding proposition that he was fully supported by his son and daughter-in-law while residing in their house as a member of their household. That is neither a misapprehension of the evidence nor an ignoring of the evidence, as the appellant argues; rather, it simply illustrates that this determination is for the most part a factual issue. See Co-Operators General Insurance Co. v. Halifax Insurance Co., 2002 79675 (ON SC), [2002] O.J. No. 2459, [2002] O.T.C. 418 (S.C.J.), at para. 14.

[36] To his credit, Arbitrator Robinson assessed the evidence with a healthy dose of realism. He did not do a mechanical tallying of Mr. Kibria's ad hoc grocery purchases since to do so would be a waste of time and effort. The son could not say with certainty how often Mr. Kibria paid for groceries, but it was evident that one could not and should not try to elevate those occasional purchases over the ongoing and consistent economic reality of Mr. Kibria's visit.

[37] Just as "a person's earning capacity is not simply demonstrated by a past occasion or series of occasions where the person earned money" (Gore Mutual Insurance Co. v. Co-Operators General Insurance Co. (2008), 93 O.R. (3d) 234, [2008] O.J. No. 3603, 2008 46914 (S.C.J.), at para. 21), so too a person's dependency on his family is not demonstrated by a past occasion or series of occasions where the person spent money. The analysis of dependency entails a broad-based assessment of a person's earnings, resources and needs.

[38] In concluding that Mr. Kibria's son and daughter-in-law supported him "in all respects" while in Canada, the arbitrator [page350] did nothing more than to refuse to miss the forest for the trees. He was correct in doing so.

b. The imputed value of services

[39] The fact that Mr. Kibria was in fact supported by his son and daughter-in-law does not, however, end the analysis of dependency. The relevant question is not only whether the alleged dependant is in fact dependent on his or her family but whether he needs to be so dependent. The arbitrator in Liberty Mutual made this point succinctly in the decision that was ultimately approved by the Court of Appeal:

"Dependency" implies something more than receipt of a financial benefit. It requires some kind of need on the part of the person alleged to be a dependent. A very wealthy person might receive food, shelter and other financial benefits from a family, but this would not support a conclusion that the person is principally dependent upon the family structure.

[40] The majority of cases dealing with dependency involve children living with their parents, as opposed to the present case which involves a parent living with his child. The question in all such cases, however, is not whether the alleged dependant receives more than half of his or her support from the family but whether he or she needs the family for more than 50 per cent of his or her financial support. See Insurance Corp. of British Columbia v. Federated Insurance Co. of Canada, Arbitrator Lee Samis, July 2009.

[41] By way of illustration, a child accident victim may be a youngster who is in school all day, in which case he or she would be entirely dependent on the parents; conversely, a child accident victim may be a qualified neurosurgeon who chooses to live in the family's basement and play video games all day, in which case he or she would be deemed not to be dependent on the parents. The essential question is whether or not the alleged dependant "had the financial ability to provide for her own needs" (emphasis added) (TTC Insurance Co. v. The Co-Operators, Arbitrator Lee Samis, July 23, 2007).

[42] With this in mind, the parties each produced reports by experts who opined on the notional value of services otherwise provided free of charge by Mr. Kibria. Specifically, the experts debated the value of the babysitting that Mr. Kibria provided on a routine basis for his grandchildren while staying in his son and daughter-in-law's home.

[43] There is precedent for this exercise. The arbitral case law shows that "money's worth" is on occasion attributed to tasks performed by an alleged dependant, particularly where the services are part of an identifiable bargain or exchange of support [page351] for needed services. As Perell J. noted in Gore Mutual, supra, at para. 21, citing Co-Operators General Insurance Co. v. Halifax Insurance Co., supra, and Oxford Mutual Insurance Co. v. Co-operators General Insurance Co. (2006), 2006 37956 (ON CA), 83 O.R. (3d) 591, [2006] O.J. No. 4518 (C.A.), at para. 22, "the determination of dependency is essentially a factual issue and each case must be analyzed based on its own particular facts and the applicable law".

[44] Arbitrator Robinson found as a matter of fact that the nature of the relationship between Mr. Kibria's babysitting services and the accommodation provided to him by his son and daughter-in-law was entirely familial, not commercial. As the arbitrator put it, "[t]here was no requirement of Mr. Kibria that he would only be accepted into their house if he agreed to look after the grandchildren".

[45] The arbitrator also found that when Mr. Kibria's son estimated in his testimony that Mr. Kibria spent 30 to 35 hours per week supervising the children of the household, this included a large component of time spent playing with his grandchildren. Given this finding, the learned arbitrator came to the natural and logical conclusion that, much as this arrangement may have been helpful to Mr. Kibria's son and daughter-in-law in their busy lives, there was no bargain or barter exchange to be imputed into this state of affairs.

[46] Despite the self-evident family relationships at issue, the parties produced expert reports in an effort to quantify the money's worth of Mr. Kibria's babysitting services. The appellant retained Dr. James E. Pesando, an economist at the University of Toronto, in order to provide an expert opinion as to the market value of child care services in the Toronto area, and to compare the value of those services with Mr. Kibria's share of the household expenses in his son and daughter-in-law's home.

[47] Dr. Pesando opined that the value of the child care services performed by Mr. Kibria in the months preceding his injuries potentially ranged from $8 per hour (Ontario's minimum wage in 2008) to a potential $11.91 per hour (the Toronto average hourly childcare service wage in 2008). Using an estimated $10.22 per hour, which he gleaned by comparing a number of different wage scenarios, Dr. Pesando calculated that the value of Mr. Kibria's child care services was between $13,285 and $17,271 on an annualized basis.

[48] Dr. Pesando further calculated that Mr. Kibria consumed roughly 20 per cent of his son and daughter-in-law's household expenses during the time he stayed with them, which amounted to an annualized total of $8,484. Accordingly, he concluded that [page352] Mr. Kibria's contribution to the household was, when monetized, substantially more than 51 per cent of his needs.

[49] For its part, the respondent produced a report by an accountant, Melissa Joynt, who took issue with Dr. Pesando's figures. Ms. Joynt opined that the replacement costs for Mr. Kibria's services were substantially lower than the Toronto average child care wage estimated by Dr. Pesando, resulting in an annualized value in the range of $11,000 rather than $13,000 to $17,000.

[50] In fairness to the respondent, Ms. Joynt's report was submitted to the arbitrator as an alternative approach in order to counter what the respondent perceived to be the unduly high figures arrived at by Dr. Pesando. Ms. Joynt took issue with the approach to market value taken by Dr. Pesando in averaging the fees charged by babysitters and live-in child care givers in Toronto, and put forward the view that the cost of a drop-off type of daycare represents a more likely replacement arrangement by Mr. Kibria's son and daughter-in-law. She therefore opined that the lower cost of drop-off daycare provides a more appropriate point of comparison for an economic analysis of Mr. Kibria's contribution to the household expenses.

[51] Arbitrator Robinson came to the conclusion that neither of the experts produced figures which were relevant to his task. Indeed, he found as a fact that Mr. Kibria did not have "any marketable skills outside of the unique confines of the family situation with his son and daughter-in-law".

[52] In my view, it is difficult to dispute this finding by the arbitrator. Mr. Kibria is an 81-year-old retired engineer, who spent his entire life in Bangladesh up until his visit to Canada in 2006. Neither side says that there is an actual market for his babysitting services for any child in the Greater Toronto Area other than his own grandchildren. One can surmise that this absence is not accidental; there is no such market.

[53] In Co-Operators General Insurance Co. v. Halifax Insurance Co., supra, para. 14, E. Macdonald J. admonished that dependency must be "based on a realistic assessment of the parties actual financial circumstances". Far from being a "realistic assessment", the experts' estimates of the value of Mr. Kibria's services are hypothetical and artificial. The entire exercise is reminiscent of the old parable about how an economist can open a tin of tuna with his or her bare hands, by first assuming a can opener.

[54] With due respect to both experts, the economic analyses submitted to the arbitrator appear to have lost sight of the decision that he was required to make. The applicable definition in [page353] s. 2(6) of the SABS asks whether Mr. Kibria, as the purported dependant, is "principally dependent for financial support or care on the other person or the other person's spouse" -- i.e., on his son and/or daughter-in-law as persons insured by the appellant. It does not ask whether the son and/or daughter-in-law are financially dependent on him.

[55] Accordingly, the relevant question regarding his unpaid babysitting services is not the amount that this saves the son and daughter-in-law, but the amount that Mr. Kibria has forgone by not selling his services elsewhere. If, as found by the arbitrator, there is no market for his services, then it does not matter how much it would cost to replace them. He has forgone no income.

[56] As Arbitrator Robinson put it, Mr. Kibria "possessed no unique skills, apart from being a loving grandfather, which would allow him to enter into a position as a nanny or caregiver". He would be equally dependent on his son and daughter-in-law if he ceased babysitting his grandchildren and "sold" his services for their sellable value -- i.e., $0 -- in the (non-existent) market. The arbitrator was therefore correct in imputing no income to those childcare services.

c. The victim's status in Canada

[57] Counsel for the respondent submits in his factum that the issue that distinguishes the present case from all other dependency cases is that "Mr. Kibria was in Canada on a visitor's visa and, as such, was prohibited from being employed and was legally dependent on his sponsors". The arbitrator concluded that, in view of the legally compelled unemployment in Canada, Mr. Kibria "had no source of income whatsoever".

[58] In Dominion of Canada General Insurance Co. v. Ontario, supra, at para. 31, Stinson J. expressed the view that under the SABS the task "is to 'choose a timeframe that most fairly reflects the true status of the claimant on the date of the accident'" (citation omitted). Arbitrator Robinson found the appropriate timeframe for assessing dependency to be "from October 2006, when Mr. Kibria came to Canada to the date of the accident on March 29th, 2008".

[59] This determination reflected the arbitrator's view that he must avoid a brief "snap shot" of the claimant's circumstances (Liberty Mutual (Arb.), supra, at para. 5). It also took into account Mr. Kibria's son's testimony that he wanted his father to "stay full-time with his family and not return to Bangladesh".

[60] Most importantly, the arbitrator based his conclusion as to Mr. Kibria's needs on the fact that during his stay in Canada [page354] "he could not and would not work". In concluding that he was 100 per cent dependent on his son and daughter-in-law, the arbitrator leaned heavily on the fact that Mr. Kibria's extended visit to Canada represented the appropriate timeframe for assessing his financial situation, and that in the absence of permanent resident status or a Canadian employment visa his dependency on family members was complete.

[61] The evidence, however, was to the contrary once one looks behind the visit to Canada and examines Mr. Kibria's life and assets in his native Bangladesh. Prior to his departure in 2006, he had been retired for eight to ten years. He lived in a house that he owned without a mortgage or other encumbrance. He had a live-in servant, a government of Bangladesh pension as a retired engineer and a 50-acre parcel of farm land which was 80 per cent leased out to tenant farmers for an undertermined amount of rent.

[62] Mr. Kibria's son testified that in Bangladesh Mr. Kibria lived a comfortable lifestyle, and had a level of wealth that by local standards would have been considered "above average" or "upper middle". Most importantly, Mr. Kibria's son confirmed in his testimony that his father did not require any financial support whatsoever while living in Bangladesh. All of his assets, including the house and the farm property, were still owned by Mr. Kibria when he departed for Canada; those assets were apparently entrusted to Mr. Kibria's brother, and the income therefrom would presumably be available to him again were he to return.

[63] Mr. Kibria's son was specifically asked why his father left Bangladesh for Canada. The answer was not only logical and credible, it left no doubt that the arrangement was voluntary:

104. Q. What was the reason for his coming to Canada?

A. Visit here, number one, and also to take care of my children.

[64] It is evident that Mr. Kibria's stay in Canada was a matter of personal choice. It was a visit, with the temporary, albeit renewable visitor's visa appropriate to that status. Its purpose was for the pleasure, and not the mandatory work, of staying with his grandchildren. In emphasizing Mr. Kibria's lack of employability under a visitor's visa, and in restricting his gaze to the period of Mr. Kibria's visit to Canada, the arbitrator failed to give effect to the holistic perception of dependency mandated in Miller v. Safeco, supra, at para. 4.

[65] It cannot be the case that an injured person's visa status is the beginning and end of the dependency analysis. All foreigners who come to Canada on a visitor's visa are prohibited from [page355] working while in the country. That fact alone would not make a visiting billionaire a dependent of his Canadian hosts, even if his fortune were in foreign government bonds, or in foreign resource investments, that were not accessible here. If the visitor is here by choice, then any resulting dependency is ipso facto by choice.

[66] But for his voluntary visit to Canada, Mr. Kibria was not dependent on his son and daughter-in-law for financial support. In his home in Bangladesh, Mr. Kibria had the resources to be entirely self-supportive.

[67] In Security National Insurance Co. v. Personal Insurance Co., [2011] O.J. No. 6020, 2011 ONSC 7576 (S.C.J.), at para. 12, O'Marra J. observed that "[t]he Arbitrator erred in law when he made a critical factual determination on this issue without any evidentiary basis". That observation applies equally to the present case. In concluding that Mr. Kibria had no means of support, the arbitrator reached a crucial determination without having an evidentiary basis. Failing to advert to Mr. Kibria's ability to support himself in Bangladesh amounted to an ignoring of one of the critical Miller v. Safeco criteria for dependency, and was an error of law. See Barnard v. Safeco Insurance Co. of America (1986), 1986 2522 (ON SC), 57 O.R. (2d) 558, [1987] O.J. No. 1212 (H.C.J.).

[68] Indeed, not only was this conclusion incorrect, it was unreasonable. The insurance industry is concerned primarily with the management and allocation of risk. See Zurich Insurance Co. v. Ontario (Human Rights Commission), 1992 67 (SCC), [1992] 2 S.C.R. 321, [1992] S.C.J. No. 63, at paras. 26-28. In holding that a visitor to Canada is a "dependant" of his insured Canadian family simply because of his visitor status, the arbitrator effectively exposed Canadian insurers to incalculable risks.

[69] The allocation of risk entailed in the priority regime under the Insurance Act and SABS works for known and statistically predictable dependants of insured parties. Foreigners on a visitor's visa who stay with their Canadian relatives, by contrast, are unknowable in advance and so are far removed from this allocation. Insurance companies are not expected to simply guess at the risk they carry (Zurich, supra, at para. 40). To interpret the Insurance Act and SABS as requiring them to do so is unreasonable and wrong.

[70] The standard of review in an appeal of an arbitrator's determination of dependency under the SABS will depend on whether the issue is the formulation of the legal test by the arbitrator or the application of the legal test by the arbitrator. See Dominion, supra, at paras. 13-17. On a question of law, the standard is correctness [page356] (Aviva Insurance Co. of Canada v. Royal & Sunalliance Insurance Co., 2008 41817 (ON SC), [2008] O.J. No. 3240, 2008 CarswellOnt 4894 (S.C.J.), at para. 7), while on a question of mixed fact and law the standard is reasonableness (Oxford Mutual Insurance Co. v. Co-operators, supra).

[71] As indicated above, the failure to account for the voluntary nature of Mr. Kibria's dependency on his son and daughter-in-law amounts to an error of law. The accident victim's visa status in Canada is not a new and definitive criterion to be added to the Miller v. Safeco list, and to treat it that way was a legal error. However, even if it is seen as an error in the application rather than the formulation of the Liberty Mutual and Miller v. Safeco test, and thus one of mixed fact and law, it is an unreasonable interpretation and application of the Insurance Act and SABS that is reversible on appeal.

III. Disposition

[72] Although the arbitrator was correct in his decision on two out of the three contentious issues in this dispute, his error on the third issue is determinative of the appeal.

[73] The award of the arbitrator dated April 30, 2012 is hereby set aside. The respondent is the priority insurer responsible to pay the statutory accident benefits arising out of the motor vehicle accident on March 29, 2008 to Mr. Golan Kibria.

[74] If the parties cannot agree on costs, they may make written submissions and send them directly to me, starting with the appellant within ten days of the date of this judgment and the respondent within ten days thereafter.

Appeal allowed.

End of Document