ACCIDENT BENEFITS NEWSLETTER - FEBRUARY 2005

Catherine Zingg

Clement and ING Insurance Company of Canada, A03-001764, November 18, 2004. In a tragic accident on October 26, 2001, Mrs. Clements’ husband Jim and her son Ryan died by electrocution when the crane that Jim Clement was operating struck overhead power lines. Arbitrator Rogers held that the mobile crane was not an “automobile” for the purpose of s.2 of the Schedule. “Automobile” is not defined in the SABS /96. The arbitrator referred to the definition in s.224 of the Insurance Act which states:

“automobile” includes a motor vehicle required under any Act to be insured under a motor vehicle liability policy

At the time of the accident, the crane was insured by ING under a valid commercial general liability policy. The arbitrator also referred to the Compulsory Automobile Insurance Act and the Highway Traffic Act in order to determine whether the vehicle was required to be insured under a “contract of automobile insurance”. He concluded that the crane was not required to be insured under a motor vehicle policy, given the definition of “motor vehicle” in the Highway Traffic Act, R.S.O, 1990, c.H.8 which states:

“motor vehicle” includes an automobile, motorcycle, motor assisted bicycle unless otherwise indicated in this Act, and any other vehicle propelled or driven otherwise than by muscular power, but does not include a street car, or other motor vehicles running only upon rails or a motorized snow vehicle, traction engine, farm tractor, self propelled implement of husbandry or road-building machine within the meaning of this Act. [emphasis added].

Following the reasons in Regele v. Slusarczyk (1997) O.J. No. 1849 (C.A.) and Morton v. Rabito (1997) O.J. No. 1849 (C.A.), Arbitrator Rogers followed the two step analysis in which it is first determined whether the vehicle is an “automobile” in ordinary parlance and then whether the vehicle qualifies as an “automobile” under the expanded definition in s.224 of the Insurance Act, or an expanded definition in the policy. Arbitrator Rogers rejected the submission that as the crane was not carrying a load at the time of the incident and did into have its outriggers extended, that it was not being operated as a crane. He remarked that that approach would lead to the absurd result that the crane changes character from minute to minute, as it moves from one place to another within the construction site (p.9). Mrs. Clement was not entitled to death benefits because her husband was not injured in an automobile accident as defined in s.2 of the Schedule.

Willard v. Zurich Insurance Company (2004) O.J. 4388, O.S.C. - Leonard Willard was killed in a car accident on August 31, 1999. His son, Skeet Willard, was born on September 23, 1999. Zurich denied death benefits to the child on the basis that since the boy was not born at the time of his father’s death, he was not a person and could not therefore be “principally dependent for financial support or care” on either his mother or his father (p.2). Judge Gauthier extensively reviewed the case law in the area, in particular the decision of the Supreme Court of Canada in Montreal Tramways Co. v. Leveille, 1933 S.C.R 456, in which the Court found that a child who suffers injury while en ventre sa mere, has the right, after birth to recover damages for the injuries sustained by it in its pre-natal state (p.2). The Court made the following comments:

The purpose of the death benefit is intended to provide “modest but not insignificant, short term financial assistance” to those persons who lose their principal source of financial support or care. See Fraczek et al v. Pascual, 64 O.R. 3d, 437.

By virtue of the legal fiction, Skeet Willard is deemed to have been born at the time of his father’s death. He is clearly then a dependant in accordance with s.2(6) of the SABS and is entitled to the death benefit.

Such a conclusion is consistent with the principle of enabling the unborn child, subsequently born alive, to take a benefit which it would be entitled to if born alive. I do not see how the entitlement to death benefits for the death of a child’s father differs from the entitlement of a child born alive to recover for injuries sustained by it, in utero, as a result of wrong doing by a third party. Nor do I see how the entitlement to the death benefit differs from the entitlement of a child born alive to recover pursuant to s.61 of the Family Law Act for the death of a relative, which death occurred while the child was en ventre sa mere (p.7).

K and Liberty Insurance Company of Canada, A02-000780, January 6, 2005. On November 6, 2000, Mr. K was struck by a car while a pedestrian. Liberty paid income replacement benefits until February 1, 2001 at which point it discontinued them, upon learning that Mr. K was hospitalized with a psychiatric condition from which he suffered for over ten years (p.3). At the arbitration, it was argued on behalf of Mr. K that either his condition was aggravated by the motor vehicle accident or that he suffered a head injury which caused cognitive impairment (p.3). The medical evidence indicated that Mr. K had had psychiatric problems since 1989. The consensus of medical opinion was that he suffered from a schizoaffective disorder (p.5). In addition, he suffered serious side effects from the medications.

Arbitrator Renahan observed that Mr. K was very slow to respond to questions at the hearing. He would also appear “dopey, tired or confused”. Mr. K testified and reported to others that after the accident his concentration and memory were worse. However, in light of the evidence, the Arbitrator could not see how Mr. K’s post accident complaints of memory and concentration problems were different from the memory and concentration complaints recorded in his pre-accident medical records (p.7). Mr. K was awarded income replacement benefits from February 1, 2001 to August 28, 2001. He was hospitalized on January 31, 2001, discharged on May 28, 2001 and then lived in a half-way house. In concluding that Mr. K was disabled from working until August 28, 2001, the arbitrator stated:

Based on his history of hospitalizations, Mr. K was getting close to another hospitalization. However, if specific stressors can trigger an episode, it is likely that the trauma surrounding the accident and the inability to return to work immediately after the accident, at a time when Mr. K had no social support, likely made a significant contribution to the onset of his illness. I find that the symptoms of disorganized thought and inability to control himself gradually increased over three months until he came to the attention of the police in Hamilton. I therefore find the motor vehicle accident triggered the onset of a schizoaffective episode and significantly contributed to Mr. K’s inability to perform the essential tasks of his employment (he cleaned cars for automobile dealers at the time of the accident) at least until his discharge from hospital on May 28, 2001.

Although, I heard no evidence that Mr. K went to a half-way house after his discharge from hospital, Dr. Finch testified that Mr. K would live in a half-way house for several months following his discharge from hospital. I therefore find that the trauma of the motor vehicle accident and loss of employment significantly contributed to an episode of schizoaffective disorder which disabled Mr. K from working for several months, until August 28, 2001 (pp.15-16).

s.24 - Examinations

An award of $875.00 was made for the first functional capacity evaluation. The in-home assessment took place just after Liberty had completed an assessment. As there was no evidence that the Liberty assessment was inadequate or required a response from Mr. K the claim was not allowed. Several of the claims for medical reports were denied. Many of the examinations were scheduled after the application for mediation was filed, leading the arbitrator to find that they were intended to be used at the arbitration hearing and not for the purpose of persuading Liberty to pay benefits. A psychological assessment report in which, “the author was unable to detect any hint of Mr. K’s extensive and turbulent psychiatric history” was found to be of “no value to anyone” and was not allowed.

Khuu and Economical Mutual Insurance Company, A04-000847, January 7, 2005 - On November 25, 1996, Mrs. Khuu was injured in a motor vehicle accident while a passenger in her employer’s vehicle. A Statement of Claim was issued on behalf of Mrs. Khuu in the Ontario Superior Court in 1998 against the driver of the vehicle, the owner of the vehicle, and Economical. Arbitration at the Financial Services Commission of Ontario was also advanced. On December 3, 2003 there was a hearing before the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”) pursuant to s.31 of the Workplace Safety and Insurance Act, 1997. Section 31 provides that a party to an action or an insurer from whom statutory accident benefits are claimed under s.268 of the Insurance Act, may apply to WSIAT for a determination as to whether the plaintiff’s right to commence an action is taken away (p.2). The Tribunal held that Mrs. Khuu was in the course of her employment at the time of the accident and that she had no right of action against her employer, who was the driver of the vehicle, nor did she have a right of action against the owner of the vehicle. In a preliminary issue hearing, Arbitrator Muzzi held that Economical was not required to pay accident benefits pursuant to s.59(1) of the Schedule. The arbitrator remarked that where a determination about entitlement to workers’ compensation benefits arises, FSCO arbitrators have deferred to the jurisdiction of WSIAT. Once WSIAT has made a decision with respect to the question of entitlement to worker’s compensation benefits, a FSCO arbitrator does not have jurisdiction to go behind its decision (p.7).

Plummer and Farmer’s Mutual Insurance Company, A04-001327, January 19, 2005 - Arbitrator Ashby ruled that the insurer was not entitled to production of the transcript of the applicant’s examination for discovery in the related tort action. She reasoned that to order the production of the discovery transcript would give Farmer’s Mutual and unfair advantage by effectively importing the discovery process into the FSCO proceedings, something which is not available pursuant to the Insurance Act (p.4).