ACCIDENT BENEFITS NEWSLETTER - JANUARY 2005

Catherine Zingg

Stewart and Liberty Mutual Insurance Company, A03-000833, November 16, 2004. Anna Pyles was killed in a motor vehicle accident on June 8, 1997. Liberty Mutual paid dependant death benefits of $20,000 to her one month old daughter Ashley and a further payment of $25,000 in lieu of a spousal death benefit, on the basis that Anna Pyles did not have a spouse at the time of the accident. She was insured with an auto policy issued by Liberty Mutual, to her father Franklin Pyles. Shannon Stewart applied to Liberty for a death benefit in January 2003 on the basis that he was Anna Pyles’ common law spouse at the time of the accident. Arbitrator Sapin awarded a death benefit of $50,000 under s.25(2)1.ii and a $25,000 special award.

Mr. Stewart and Ms. Pyles had cohabited in a common law relationship which began when they were students in Orillia, from September 1993 until the summer of 1996, when they lived in Fredericton, New Brunswick (p.3). In October 1996, Mrs. Pyles returned to Ontario and moved in with her parents. In March 1997 Mr. Stewart returned to Ontario and found employment in Barrie as a car salesman. Ashley was born on May 12, 1997.

The issue to be determined at the arbitration hearing was whether the couple could be said to “have cohabited in a relationship of some permanence” while they lived in separate towns. “Cohabitation” is not defined in the Insurance Act. In considering the issue of whether the couple were in a permanent relationship, the arbitrator noted that they were not big wage earners, and made life choices accordingly, such as putting up with unsatisfying jobs and choosing accommodations based on economic considerations (p.19). The case law is clear that relationships may go through “cooling off” periods and couples may spend extended periods of time apart as a result, ans still be found to have met the test of cohabitation (p.20). Reference was made to Labbe v. McCullough (1979), 23 O.R. (2nd) 536 in support of this reasoning. Ultimately, it was held that Mr. Steward qualified as a spouse:

Having considered the evidence as a whole, the comparatively low threshold for establishing a relationship of some permanence and the criteria set out in the jurisprudence, I find that Mr. Stewart and Ms. Pyles regularly spent time together in an affectionate, physical, and exclusive relationship, were both involved in the birth and care of their child, were mutually supportive of and emotionally dependent upon each other, and socialised as a couple. After Ashley was born, Mr. Stewart gave Ms. Pyles things for the baby and $200 in cash, with more likely to follow, presumably for Ms. Pyles to use as needed, either for herself or for the child. Although no one can predict with certainty where the relationship was headed at the time of the accident, there was no clear and convincing evidence that either party intended to permanently sever the relationship, and neither had taken concrete steps to do so (p.20).

Special Award

In making a special award, the arbitrator rejected Liberty’s submissions that, under the Priority Rules, it had no obligations to provide Mr. Stewart with application forms or even to inform him that he might be entitled to a benefit, because he was not “their insured”, and he ought to have applied to his own automobile insurance company for a spousal death benefit (p.22). It was found that Liberty, “at the very least, ought to have informed Mr. Stewart at the time it interviewed him that he might be entitled to claim a spousal death benefit, particularly as that was in fact the very reason it interviewed him, and it ought to have advised him about how to apply for the benefit, or to obtain independent advice. (p.22). Following the decision in Smith v. Cooperators General Insurance Company (2002) 2 S.C.R 129, Arbitrator Sapin found that the insurance company could not rely on time limits to restrict consumer access to benefits, where its conduct had contributed to the delay. It was found that Liberty’s refusal to acknowledge any responsibility to Mr. Stewart was contrary to the Priority Rules of the Insurance Act, which are designed to provide prompt delivery of benefits and prevent consumers from being bounced around between insurance companies in instances where coverage issues are not immediately straightforward. (p.22)

Digiovanni (Estate of) and Axa Insurance (Canada), P03-00034, December 1, 2004. On January 31, 2000, Francesca Digiovanni died from injures sustained in a motor vehicle accident. An arbitrator held that her death was not an impairment for the purpose of qualifying for caregiver benefits pursuant to s. 13 of the SABS /96. Director’s Delegate Evans dismissed the Estate’s appeal. He noted that the caregiver benefits specifically provides that the insurer “shall pay an insured person who sustains an impairment as a result of an accident a caregiver benefit” if the other criteria are met. The Estate’s demand for ongoing caregiver benefits was found to be without merit. In conclusion, it was found that there was no basis on which to treat caregiver benefits differently from income replacement, non-earner, medical, rehabilitation or attendant care benefits, all of which terminate on the insured person’s death.

Liang and Liberty Insurance Company of Canada, A03-001695, November 12, 2004. Mrs. Liang, who was 65 years old at the time of the accident, was struck by a motor vehicle while crossing the road. She suffered swollen hands and feet as well as a great deal of pain, especially in her lower back. She resided with her daughter and cared for her two grandsons while their mother worked. Liberty denied caregiver benefits on the basis that it required “legal documentation” confirming that Mrs. Liang was the “legal guardian of the child”. In addition, it relied on a report of Ms. Susan Bourbeau, an occupational therapist, who was of the opinion that while Mrs. Liang would benefit from temporary assistance with specific tasks, she was not substantially disabled and should be able to do her caregiving and housekeeping.

In awarding Mrs. Liang’s claims for caregiver benefits, housekeeping services, treatment plans and a s. 24 report, Arbitrator Killoran found her to be a straightforward and credible witness. Mr. Mo, who had been hired to assist her following the accident with her housekeeping and caregiving tasks, was also found to be a credible witness. Arbitrator Killoran preferred the report of Dr. S. W. Joseph Wong, a physiatrist, to that of the DAC assessors, including Dr. Barbuto, a chiropractor. It was found that Dr. Wong provided some valid criticism of the in home assessment and his testimony was found to be compelling when he related his physical findings with respect to Mrs. Liang to his conclusion that she was unable to perform her pre-accident caregiver and housekeeping tasks (p.11). Dr. Wong did not find Mrs. Liang’s symptoms abnormal as she was 63 years old with arthritis. He was of the opinion that it was to be expected that an older person, such as Mrs. Liang, would take a significant period of time to recover after being struck as a pedestrian by a motor vehicle (p.15). The arbitrator found that it was not appropriate that the DAC assessment commented on the reasonableness and necessity of treatment which had occurred up to five months previously.

Salihi and ING Insurance Company of Canada, A03-001654 and A03-001655, November 22, 2004. Mr. and Mrs. Salihi were in a motor vehicle accident on July 20, 2003. They applied for a mediation on September 3, 2003, without having submitted any claims for benefits that had been refused by ING or in respect of which the prescribed time period for ING to respond to the claims in question had expired. ING submitted that the mediator exceeded her jurisdiction when she issued the Report of Mediator on November 19, 2003 and submitted that the applicants should be barred from proceeding to arbitration. Arbitrator Miller found that the insureds were not precluded from proceeding to arbitration. The applicants did not comply with Rule 12.1 of the Dispute Resolution Practice Code, which states that an insured person or an insurer may apply for mediation of any dispute of any person’s entitlement to accident benefits or the amount of those benefits, where a claim had been denied or the prescribed time period for the insurer to respond to the claim has elapsed. It was submitted that the Dispute Resolution Practice Code, which sets out internal rules of procedure, can be waived in accordance with s.25.1 of the Statutory Powers Procedure Act. An arbitrator, however, dos not have jurisdiction to deviate from the requirements of the Statutes or Regulations. In her reasons, Arbitrator Miller stated:

While I am sympathetic to ING’s submission that Mr. and Mrs. Salihi did not make any effort to discuss and exchange relevant information in order to resolve any disputes before applying for mediation, I, nevertheless, find that when Mr. and Mrs, Salihi and ING attended at mediation on November 14, 2003, the preconditions of section 50 (a) had been met. All claims in dispute made to ING had been denied by the time the mediation was held. The mediation failed to resolve the issues in dispute. Accordingly, the conditions pursuant to subsection 281(2) of the Insurance Act had been met to permit the applicants to proceed to arbitration (p.12).