SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-13-476701
DATE: 20140325

RE: Co-operators General. Insurance Company, Applicant/Appellant in Appeal

AND:

TD Home & Auto Insurance Company, Respondent/Respondent in Appeal

BEFORE: Carole J. Brown J.

COUNSEL:
Helen D. K. Friedman, for the Applicant/Appellant in Appeal

Pamela A. Brownlee, for the Respondent/Respondent in Appeal

HEARD: February 25, 2014

reasons for decision

The Appeal

[1] This is a priority dispute between the parties to determine which insurer is obligated to pay statutory accident benefits to JW. The applicant, appellant in this appeal, Co-operators General Insurance Company ("Co-operators") appeals, by way of application, and seeks to set aside the private arbitration award of Lee Samis dated February 26, 2013, which found that JW was not principally dependent for care pursuant to s.2(6) of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, as amended (the "Schedule"), at the time of a February 23, 2007 pedestrian/motor vehicle accident (the "Accident") on CA and TA, the insureds of TD Home & Auto Insurance Company ("TD").

Overview

[2] On February 23, 2007, JW was involved in a motor vehicle accident while a pedestrian. He was struck by a third party vehicle insured under a policy of insurance with Co-operators. At that time, JW, who is 17 years of age, was residing with CA, who is insured by TD. JW applied for accident benefits from TD. By way of Notice To Applicants of Dispute Between Insurers, TD put Co-operators on notice that they were disputing the priority of payment for accident benefits to JW.

[3] Pursuant to the provisions of the Statutory Accident Benefits Schedule, TD paid and continues to pay statutory accident benefits ("SABs") to JW pending the outcome of the priority dispute.

[4] It is the position of Co-operators that JW was a dependent of CA within the meaning of s.2(6) of the Statutory Accident Benefits Schedule at the time of the accident and that TD was liable to payment of accident benefits to JW as a result. Arbitrator Samis rejected that argument both as regards financial dependency and dependency for care. Co-operators does not appeal the arbitration award as regards the finding that JW was not principally dependent financially on CA. However, as regards dependency for care, it does appeal the decision of Arbitrator Samis.

The Facts

[5] The following are the facts submitted to Arbitrator Samis.

[6] JW was, at the time of the accident, 17 years old, and a grade 12 student at Newmarket High School. He was not employed outside school. At the time of the accident, February 23, 2007, he had resided for approximately 4 months at the residence of CA and TA, and paid them $340 a month for room and board from the social assistance payments he received.

[7] His parents had been separated for 17 years. He had not seen his mother since the age of 11, she had not exercised her access to him, he could not remember when they had last spoken, and did not know how to contact her. JW had, after the separation, resided with his father, who is described as abusive and alcoholic. The abuse was detailed in hospital records in evidence before the arbitrator and before this Court. Approximately one year before being able to leave his father's home, JW had contacted welfare authorities to advise that he was being physically abused. He wanted to leave home as soon as he could secure accommodations. While at his father's home, he began to have "issues": his school performance began to deteriorate, he did not have proper clothing, and was undernourished.

[8] He received help from his high school Vice Principal to remove himself from his father's home, and through the school secretary, who was TA's mother, found housing with CA and TA. The Vice Principal assisted in securing an Ontario Student Welfare Benefit for JW, once he was removed from his father's home, and agreed to act as JW's trustee for receipt of the student social assistance. On the application for social assistance (category "Under 18 – Cannot Return Home"), the assistant Vice Principal was listed as his "next of kin" and she signed the application on his behalf.

[9] Upon being removed from his father's home, he requested start up assistance, as he had very few clothes, no furniture or household goods and required assistance to purchase a bed, winter clothes, and school supplies, as well as a bus pass to get to and from school and activities.

[10] The Vice President deposited the monthly social assistance benefits received into a bank account for JW, from which JW withdrew monies. JW received $534 a month, from which he paid $340 on a monthly basis to CA and TA for food and housing. He used the balance of the funds to pay for his clothing, cigarettes, snacks, cell phone and other incidentals. CA and TA did not give JW any cash prior to the accident. CA did not act as a legal guardian for JW and had no authority to sign any documentation on his behalf or on behalf of JW's parents. CA did not pay for bus tickets, taxi rides, cigarettes, sports equipment, admission to hockey, entertainment events, amusement parks or concerts. There is evidence that CA took JW to a movie from time to time.

[11] JW had his own bedroom and bathroom at the home of CA and TA, use of a television, computer, cable and Internet. He did his own laundry and cleaned his room. He had breakfast and dinner at the home of CA and TA, and lunch at school. He was provided food vouchers and bus passes by the school. CA drove him to school in the morning and he came home by bus in the evening. He participated in some social and family events with CA and TA.

[12] CA and TA had no children. They worked full-time. They had taken in boarders previously, but always adults. They had previously taken in others in need. CA was a drug counselor and sometimes gave JW advice about what to do in certain situations, peer pressure, insight into avoiding drugs and addiction, although JW said he had no trouble in this regard. He considered JW a paying tenant, although the evidence indicates that they included him in some social and familial activities. He returned to the home of CA and TA following the accident.

[13] The evidence was that he intended to stay at the home of CA and TA until he went to college or university.

[14] His school performance improved after he removed himself from the abusive situation of his father's home. There is no evidence to indicate that JW was assisted in his homework by CA or TA and he indicates that he does not remember their helping him. His health and nourishment improved and he secured proper clothing with the social assistance benefits he received once he moved from the previous abusive atmosphere.

The Legislative Structure

[15] A dependent is defined in s.2(6) of the Schedule as a person who is:

"principally dependent for financial support or care on the other person or the other person's spouse".

[16] In the event that JW is found to be dependent for care on CA and TA, TD will be responsible for payment of statutory accident benefits (SABs) and, if JW is not found dependent, and the arbitration award is upheld, Co-operators will be responsible for payment of SABs.

The Arbitration Award

[17] With respect to the priority dispute, the parties entered into an Arbitration Agreement. The arbitration was to be conducted in accordance with the terms of the Arbitration Act 1991 and the Arbitration Agreement. The parties reserved the right to appeal any decision on any question of law or mixed fact and law, without leave.

[18] The timeframe for examining the nature of the dependency relationships, as determined by Arbitrator Samis was from November 14, 2006, when JW began residing with CA and TA, until the time of the accident on February 23, 2007. This is not disputed between the parties.

[19] Arbitrator Samis carefully reviewed all of the evidence before him, as evidenced in his award. He found as follows:

In my view, it is likely that JW benefited from a financial point of view and from an emotional point of view by being placed in this household. The extent of that benefit is questionable. Hence the dispute here.

With respect to the care argument, it is my view that the relationship between JW and CA and TA is not a relationship where they were providing "care" for JW. He had moved into their home. They were providing him with shelter and many meals. He was regularly getting a ride to school from TA.

He participated in some of their family functions and met other members of their extended family. JW and CA had conversations which could be characterized as providing guidance to a young person at a difficult time in life.

I do not accept that this relationship can be construed as one of providing "care" for JW and certainly cannot envisage this as being a situation where JW was principally dependent on CA or TA for his care. He was an able bodied young man. He was able to get around on his own using transportation. He was able to attend school. He was able to deal with his own banking. He simply wasn't in such a position of vulnerability that he required "care" to the extent that one could say he was principally dependent on CA and/or TA for care. At its highest, this case is analogous to the decision of Dominion of Canada v Motor Vehicle Accident Claims Fund dated November 10, 1997. In that case, I concluded that the SABs claimant benefited from the care provided by family members, but this was not the predominant source of his care, as contrasted with the home he lived in and the care he provided for himself. In JW's case, he provided for his care almost entirely on his own. In my view, it cannot possibly be established on the record before me that JW was principally dependent for care upon CA or TA.

The Issue

[20] The appellant does not appeal the Arbitrator's Award regarding the finding of financial dependence as regards JW. The only issue on appeal is whether Arbitrator Samis erred in determining that JW was not principally dependent for care on CA and TA at the time of the accident.

The Law

The Standard of Care

[21] The appellant argues that the applicable standard of care for the determination of "dependency" under the Insurance Act and regulations, which it argues is a question of law alone, is "correctness" as opposed to "reasonableness". The appellant relies on the cases of Dunsmuir v New Brunswick, (2008) SCJ 9 and Rogers Communications Inc. v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35 ("SOCAN") for the proposition that the standard of correctness is applicable and that where the statutory scheme gives jurisdiction to interpret a statute and a legal question such as " dependency", to both an agency/tribunal and a court, the applicable standard should be one of correctness to avoid inconsistency in the test to be applied in defining "dependency" and that no deference should be accorded to the agency/tribunal.

[22] The respondents submit that the applicable standard in this case, a priority dispute between insurers in an accident benefits claim, is reasonableness, as the issue is not one of law, but one of mixed fact and law. The respondent relies on the cases of Dunsmuir v New Brunswick, supra and Oxford Mutual v Co-operators (2006), 2006 121 (ON SC), O.J. No. 45. It is the position of the respondent that the issue of dependency must be determined on the facts of each individual case and, therefore the issue is one of mixed fact and law. Thus, the standard is reasonableness. In Oxford Mutual, supra, the Court of Appeal for Ontario ruled that an arbitrator deciding a priority dispute between insurers in an accident benefits claim is entitled to deference in respect of its findings and that when determining the dependency issue, the question was one of mixed fact and law, with a heavy factual component.

[23] I am of the view that the standard of reasonableness is applicable in determining whether JW, based on all of the facts before the arbitrator, could be considered to be dependent for care on CA and TA. The Arbitration Agreement provided for an appeal on matters of law and mixed fact and law. I find that the issues before the arbitrator and on appeal before this Court, are issues of mixed fact and law. Accordingly, on this appeal, this Court accords deference to the Award of the Arbitrator, Lee Samis, and applies the standard of reasonablenes.

The Issue of Dependency for Care

[24] It is the position of the appellant that Arbitrator Samis erred in his findings, as set forth above in paragraph 20, and failed to appreciate the nature and scope of JW's care needs, his lack of ability to provide for those needs himself, the nature and scope of the care provided by CA and TA, and how the care provided impacted JW's ability to function. The appellant submits that the arbitrator failed to give sufficient consideration to the emotional support and provision of a safe and secure environment for JW, which they allege enabled him to function in a manner and succeed in a way that he was unable to do prior to receiving such care. They submit that the arbitrator failed to apply a qualitative and quantitative analysis to the facts before him.

[25] It is the position of the respondent that the court must consider the ability of the individual to be self-supporting, the degree of care provided and the individual's need for care. Care includes such things as feeding, cleaning, transporting, helping and protecting another person. They submit that care entails attending to both the physical and emotional well-being of another person, usually in circumstances where the individual cared for lacks the ability or resources to attend to their own needs: Giroux v Co-operators General Insurance Company and Motor Vehicle Accident Claims Fund, 1997-11-06, OIC A95-000203.

[26] The determination of whether a person is principally dependent on another for care cannot be made with the same mathematical certainty as the determination of whether a person is principally dependent on another for financial support. In considering whether a claimant is principally dependent on his or her spouse for care, the legislative intent… should be kept in mind as well as matters such as the nature of the emotional and physical care provided, and whether in fact the claimant was principally dependent on the insured for care, having regard to the amount and duration of the dependency for care, the needs of the claimant and the ability of the claimant to be self-supporting: Weiler v Personal Insurance Company of Canada 1996-04-01 A95-000259; Miller v Safeco Insurance Co. of America (1984), 48. O.R. (2d) 451.

[27] A determination of "principally dependent for care" requires a finding that an individual received more care from the one on whom he or she depends than what was available from his or her own and other resources, including an analysis of the ability of the alleged dependent to be self-supporting: Dominion v MVACF, November 10, 1997; Co-operators and Halifax, December 14, 2001. Accordingly, when examining the role of the care provided by CA and/or TA, one should measure that care against the care that was provided to JW by other sources and by himself.

[28] The focus of the analysis on dependency for care must be on what the insured's physical, emotional and social needs are, and the extent to which the person in question provides for these needs. A finding of dependency for care generally requires the existence of a vulnerability or physical/mental disability: eg. Echelon General Insurance Co. v State Farm Mutual Automobile Insurance Co., July 13, 2011, S. L. Novick, Arbitrator; Pereira v Pilot Insurance Company and Canadian General Insurance Company, 1996-09-04 (A-953564).

Analysis

[29] As stated above, the issue is whether the arbitrator erred in finding that JW was not principally dependent on CA and TA for his care. Can it be said, based on all of the facts before the arbitrator, which are also before this Court, that JW was principally dependent for his care on CA and TA?

[30] Based on all the facts, JW cannot be said to have been "financially dependent" on CA and TA, as found by the arbitrator. This finding of the arbitrator has not been appealed and is not in issue before this Court. JW received Ontario Student Assistance Benefits, after moving out of his father's home, of $534 per month, which monies were paid to his Trustee, the Vice President of the High School, who deposited the funds into a bank account from which JW withdrew money. He paid CA and TA $340 per month for room and board, and had his own bedroom and bathroom. He did his own laundry, cleaned his room, paid for his own snacks, cell phone, clothes and cigarettes from the amounts in his bank account. He was provided vouchers for school lunches and bus transportation. CA drove him to school in the morning and he took the bus back at the end of the school day. CA described him as a paying tenant. CA and TA tried to give him support and guidance, given the background from which he had come and his poor school performance.

[31] The appellant maintained that JW was unable to care for himself, feed himself, lacked clothing while living with his abusive, alcoholic father and that this evidenced his inability to care for himself, and his dependency on others, in this case CA and TA when he began to reside with them. However, it is unclear, based on the evidence, whether this may have been due to his having no money to purchase food and clothing at his father's home. The evidence indicates that his father rarely gave him an allowance. It was not until he moved out of his father's home, with the help of his school, and was eligible to receive Ontario Student Welfare Benefits, that he was able to pay for his room, board, clothing and incidentals, while residing with CA and TA. He was also able to manage his finances without assistance.

[32] Because of his previous circumstances with his abusive father, JW's school performance was poor. After he left his father's home and moved away from the physical and emotional abuse he had sustained, into a more normal environment, in the home of CA and TA as their boarder, his attendance and performance at school began to show improvement. It is of note that proof of attendance at school was required for him to continue receiving his student welfare payments, and this may also have influenced his improved attendance.

[33] The appellant submits, based on evidence given by CA that he did not care about JW's money or if he paid the rent in full, but rather cared about providing JW a place to be safe. He distinguished JW from the "independent adults" who had stayed with them in the past. The issue is whether this elevates the relationship to one where it can be said that JW was principally dependent on CA and TA for care pursuant to the Statutory Accident Benefits Schedule, s. 2 (6).

[34] CA and TA appeared, based on the evidence, to be caring people. They had taken in boarders over the years, including, from time to time, others in need and, while they worked full-time, appear to have included JW in some of their social and family activities. The evidence indicates that JW discussed things from time to time with CA. He ate breakfast and dinner with them as a boarder and rode to school in the morning with CA. He felt more secure living out of his abusive father's home and in a normal environment at CA and TA's home. JW does not recall receiving assistance with homework from CA or TA during the four months he rented a room from them.

[35] Neither CA nor TA acted as his trustee or legal guardian. They had no authority to make any decisions on behalf of JW's parents or JW. He was not listed on CA's medical insurance policy.

[36] Does any of the above relegate the relationship to one where it can be said that JW was principally dependent on CA and TA for care pursuant to the Statutory Accident Benefits Schedule, s. 2(6). Does any of the above amount to principal dependence for care pursuant to s.2(6) of the Statutory Accident Benefits Schedule? Did the arbitrator err in his findings that JW was not principally dependent for care on CA and TA? I do not find, based on the foregoing, that the evidence before the arbitrator, as reviewed above, is such that JW can be found to have lacked the ability to attend, physically or emotionally, to his own needs, once out of the abusive environment. I do not find there to be any error on the part of Arbitrator Samis.

[37] While JW improved in terms of physical improvement in school performance and while TA and CA provided meals and shelter in return for payment, and included him in their home activities, they described him as a paying tenant. They indicated that they wanted to help him due to his past situation. I do not find this raised the relationship to one of principle dependency for care by JW on CA or TA pursuant to the Statutory Accident Benefits Schedule, s.2(6).

[38] I do not find any error on the part of Arbitrator Samis.

[39] Accordingly, I uphold the Arbitrator’s Award dated February 26, 2013 and dismiss this appeal.

Costs

[40] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.

Carole J. Brown J.

Date: March 25, 2014