Galdamez v. Allstate Insurance Company of Canada

Galdamez v. Allstate Insurance Company of Canada Collection Decisions of the Court of Appeal Date 2012-07-24 Neutral citation 2012 ONCA 508 Docket numbers C54231 Judges Laskin, John Ivan; Simmons, Janet M.; Epstein, Gloria Jean Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508 DATE: 20120724 DOCKET: C54231 Laskin, Simmons and Epstein JJ.A. BETWEEN Hayfa Galdamez Plaintiff (Appellant) and Allstate Insurance Company of Canada Defendant (Respondent) Jane L. Poproski, for the appellant Terrence H. Hill, for the respondent Heard: February 8, 2012 On appeal from the order of Justice James A. Ramsay of the Superior Court of Justice, dated July 28, 2011, with reasons reported at 2011 ONSC 2606, [2011] I.L.R. I-5176. Simmons J.A.: A. Introduction [1] The appellant was injured in a car accident, and applied for “non-earner benefits” under the Statutory Accident Benefits Schedule - Accidents on or After November 1, 1996, O. Reg. 403/96 (the “1996 SABS”). The main issue on appeal is whether the motion judge erred in holding that the appellant is ineligible for non-earner benefits under the 1996 SABS for the sole reason that she was working at the time she was injured in an accident. [2] Where an insured person “sustains an impairment” as a result of an accident, s. 12(1)(1) of the 1996 SABS sets out the eligibility requirements for obtaining a non-earner benefit. One of the eligibility requirements is that the insured person does not qualify for an income replacement benefit. [3] Under s. 4(1)(1) of the 1996 SABS, an insured person qualifies for an income replacement benefit where he or she was employed at the time of the accident and “as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.” [4] On a motion for summary judgment, Ramsay J. dismissed the appellant’s action for non-earner benefits. He concluded that because the appellant was employed at the time she was injured in an accident, she could not qualify for a non-earner benefit. [5] For the reasons that follow, I would allow the appeal, set aside the motion judge's order dismissing the action, and remit the matter to the trial court without prejudice to the respondent's right to renew the motion for summary judgment if so advised. B. Background (1) The Accident and its Impact [6] Hayfa Galdamez was injured on October 26, 2002 when a car ran over her foot. Prior to the accident, she worked at a Fortino’s supermarket. [7] According to Ms. Galdamez, she returned to work four days after the accident on modified duties and hours because she was unable to do any heavy lifting or complete her work-related tasks at her pre-accident levels. Ms. Galdamez says that she eventually left Fortino’s on January 19, 2004 and that she has not worked since that date. [8] Ms. Galdamez claims she is presently suffering from a number of physical symptoms: left hand pain; left arm pain; left arm numbness and tingling; knee pain; right foot pain; occasional swelling of the right foot; throbbing pain in toes; lower back pain; upper back pain; mid-back pain; right thigh pain; headaches and fatigue. [9] In addition to her physical symptoms, Ms. Galdamez says she is irritable and suffers from “pedestrian anxiety”. She describes a number of impacts on her life: alteration in housekeeping tasks; functional limitations; inability to go for daily walks as she did previously; difficulty standing for long periods of time, bending, and lifting; inability to bake; inability to lift her children; and inability to engage in recreation with her children in the same manner as prior to the accident. [10] In support of her claim, Ms. Galdamez relies in particular on a medical report dated July 9, 2011 in which the doctor opined that she sustained an impairment as a result of, and within 104 weeks of, the accident and that, in addition, she suffered a complete inability to carry on a normal life. (2) The Appellant's Applications for Accident Benefits [11] Ms. Galdamez applied to the driver’s insurer for statutory accident benefits on November 8, 2002. On January 7, 2003, the insurer advised her that she “may be eligible for more than one weekly benefit.” The insurer requested that she select which benefit she wished to receive by completing an Election of Benefits form. Ms. Galdamez completed the form on January 15, 2003, indicating she wished to receive an income replacement benefit. [12] On January 28, 2003, the insurer informed Ms. Galdamez she was not eligible for income replacement benefits. The insurer explained that the Employer’s Confirmation of Income form indicated that she only missed one day of work as a result of the accident, and that, under s. 5(2)(a) of the 1996 SABS, no benefit is payable for the first week of disability. The insurer also noted that because Ms. Galdamez had elected income replacement benefits, she was not entitled to non-earner benefits. [13] On February 25, 2005, the respondent, Allstate Insurance Company of Canada (“Allstate”), accepted responsibility as the priority insurer[1] and began managing Ms. Galdamez’s claim. [14] In a letter to Ms. Galdamez’s lawyer dated June 14, 2005, Allstate took the position that Ms. Galdamez did not qualify for an income replacement benefit for the following reasons: (i) a November 1, 2002 Disability Certificate “did not indicate a substantial inability [to perform the essential tasks of her employment]”; (ii) the Employer’s Confirmation of Income form indicated Ms. Galdamez missed a six-hour shift on the day of the accident; and (iii) the employer’s records confirmed that Ms. Galdamez worked continuously from the date of the accident until January 19, 2004, at which time she went on maternity leave. [15] After a failed attempt at mediation, Ms. Galdamez commenced an action against Allstate for breach of contract and failure to pay income replacement benefits. In its statement of defence, Allstate pleaded, among other things, that Ms. Galdamez did not, as a result of and within 104 weeks of the accident, suffer a substantial inability to perform the essential tasks of her employment. That action was scheduled for trial in November 2011. [16] In 2009, Ms. Galdamez wrote to Allstate and applied for a non-earner benefit arising from the 2002 accident. Allstate denied her request. [17] After a failed mediation on the issue of non-earner benefits, Ms. Galdamez started the present action on December 16, 2010. C. Relevant 1996 SABS Provisions[2] [18] Section 4 of the 1996 SABS provides for income replacement benefits, while s. 12 provides for non-earner benefits. As the interpretation of these sections is central to the issue on appeal, I will set out the full text of the relevant portions of these provisions. [19] Section 4(1)(1) of the 1996 SABS provides as follows: 4. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications: 1. The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment. [20] Section 12(1)(1) of the 1996 SABS states the following: 12. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications: 1. The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit. [21] “Impairment” is defined in s. 2 of the 1996 SABS as meaning “a loss or abnormality of a psychological, physiological or anatomical structure or function”. [22] Under s. 2(4) of the 1996 SABS, a person suffers a complete inability to carry on a normal life as a result of an accident “if, and only if, as a result of the accident, the person sustains an impairment that continuously prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident.” [23] Section 36(1) of the 1996 SABS stipulates that only one of the three benefits available under the 1996 SABS regime (an income replacement benefit, a non-earner benefit or a caregiver benefit) “may be paid to a person in respect of a period of time”. [24] Under s. 36(2), if a person’s application for 1996 SABS benefits indicates that he or she may qualify for more than one type of benefit, “the insurer shall notify the person that he or she must elect within 30 days after receiving the notice which benefit he or she wishes to receive.” [25] See Appendix I for the full text of all sections of the 1996 SABS referred to in these reasons. D. The Motion Judge's Reasons [26] The motion judge concluded that, because the appellant was employed at the time of the accident, she could not qualify for non-earner benefits regardless of whether or not she met the disability requirement. The crux of his analysis appears at paras. 9-12 of his reasons: On [the appellant’s] interpretation, the Regulation would mean that a person who was employed at the time of the accident can be entitled to non-earner benefits if he or she, although able to perform the essential tasks of his or her job, suffers a complete inability to carry on a normal life. In my view, a person who can work at his or her own job cannot be said to suffer a complete inability to carry on a normal life. Such a person has the ability to lead a normal life at least in part. I do not think that the interpretation proposed by the [appellant] makes sense of the legislation. It seems to me to be more consonant with the scheme of the legislation to interpret clause 12(1)1 to say that a person who was employed at the time of the accident does not qualify for non-earner benefits, whether he or she meets the disability requirement or not. This does not leave a gap. A person who was employed at the time of the accident is entitled to income replacement if a certain level of disability is established. A person who was not employed is entitled to non-earner benefits if a higher level of disability is established. There is no situation in which a person who was employed at the time of the accident could be so disabled as to qualify for non-earner benefits, but not income replacement benefits. It is not possible that the plaintiff could qualify for non-earner benefits. On the agreed facts, she qualifies for income replacement or nothing. [Italics in original; underlining added.] E. Analysis (1) Eligibility for Non-Earner Benefits [27] The issue of whether the motion judge was correct in holding that a claimant is ineligible for non-earner benefits for the sole reason that the claimant was employed at the time of being injured in an accident raises an issue of statutory interpretation – a question of law – which is reviewable on a correctness standard: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8-9. [28] The interpretation of the provisions of the 1996 SABS, as with other regulations under the Insurance Act, R.S.O. 1990, c. I.8, must be guided by Professor Elmer Driedger’s “modern approach” to statutory interpretation: Segnitz v. Royal & Sun Alliance Insurance Co. of Canada (2005), 76 O.R. (3d) 161 (C.A.), at para. 60. This approach requires that “the words of an Act be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: E.A. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87; see, e.g., Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26; R v. Tse, 2012 SCC 16, 280 C.C.C. (3d) 423, at para. 20. [29] In my view, it is clear from a plain reading of ss. 4 and 12 of the 1996 SABS that a claimant’s status as an employed person does not, in itself, establish that the claimant is ineligible for non-earner benefits. Moreover, I do not agree that the motion judge’s interpretation of these provisions is supported by the scheme of the 1996 SABS, or the purpose of these specific provisions. Instead, I conclude that such considerations support the opposite interpretation to the one he reached. [30] I will repeat ss. 4(1)(1) and 12(1)(1) of the 1996 SABS for ease of reference: 4. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications: 1. The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment. ... 12. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications: 1. The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit. [Emphasis added.] [31] The language of s. 12(1)(1) is clear: an individual can only qualify for a non-earner benefit if he or she does not qualify for an income replacement benefit. However, the language of s. 4(1)(1) is equally clear. Employment status at the time of an accident is only one part of the test for qualifying for an income replacement benefit; a claimant must also demonstrate that he or she meets the relevant disability standard – namely, a substantial inability to perform the essential tasks of his or her employment. [32] In its factum, Allstate relied on the following statement in Sutherland v. Singh, 2011 ONCA 470, 106 O.R. (3d) 553, at para. 6, as supporting the motion judge's interpretation: “[b]ecause [the claimant] was employed at the time of the accident, he was not eligible for a non-earner benefit.” [33] However, in Sutherland, the claimant’s entitlement to a non-earner benefit was not raised by either party. The parties agreed, for the purposes of the motion forming the subject of the appeal, that the claimant was eligible for both an income replacement benefit and a caregiver benefit. Moreover, the issues in that case related solely to income replacement benefits and caregiver benefits. The statement pointed to by Allstate was narrative only and had no effect on the ultimate holding in Sutherland. It is therefore clearly obiter. [34] In my view, the plain language of the relevant sections makes it clear that eligibility for an income replacement benefit is determined by a two-part test. A claimant is not to be barred from receiving a non-earner benefit solely because he or she meets one of the prongs of the two-part test for obtaining an income replacement benefit. [35] The motion judge set out two interrelated bases for interpreting ss. 4(1)(1) and 12(1)(1) of the 1996 SABS as meaning that a person who was working at the time he or she was injured in an accident is ineligible for a non-earner benefit. [36] On the one hand, he concluded, essentially as a matter of common sense, that a person who can work at his or her job following an accident cannot be said to suffer a complete inability to carry on a normal life. On the other hand, he determined that it is “more consonant” with the scheme of the legislation to interpret s. 12(1)(1) of the 1996 SABS as providing that a person who was employed at the time of an accident simply cannot qualify for non-earner benefits regardless of whether he or she meets the disability requirement. [37] I do not agree with either of these conclusions. [38] Concerning the first reason, the motion judge said: In my view, a person who can work at his or her own job cannot be said to suffer a complete inability to carry on a normal life. Such a person has the ability to lead a normal life at least in part. [Emphasis in original.] [39] However, s. 2(4) of the 1996 SABS stipulates that to qualify for a non-earner benefit, it is necessary only that a person be continuously prevented “from engaging in substantially all of the activities in which the person ordinarily engaged before the accident” (emphasis added). “Substantially all” does not mean all. [40] Moreover, in Heath v. Economical Mutual Insurance Co., 2009 ONCA 391, 95 O.R. (3d) 785, at para. 50, this court set out several “general principles as … part of a proper approach to the application of [the non-earner benefit eligibility requirements of the 1996 SABS]”. [41] The principles articulated in Heath include, among other things: · recognition that the starting point for the analysis of whether a claimant suffers a complete inability to carry on a normal life will generally involve comparing the claimant’s “activities and life circumstances” before the accident to his or her activities and life circumstances after – though there may be instances where a detailed comparison is not necessary because of the nature of the post-accident condition; · recognition that, in determining whether a claimant is able to engage in “substantially all” of his or her pre-accident activities, it may be necessary to assign greater weight to those activities which the claimant identifies as being important to his or her pre-accident life; · recognition that it is necessary to consider the manner in which the relevant activity is performed and the quality of the performance when assessing the claimant’s ability to “engage in” activities; and · if pain is a primary factor preventing the claimant from engaging in activities, recognition that the question is not whether the claimant can physically do the relevant activities, but rather whether the degree of pain experienced is such that the claimant is practically prevented from engaging in the activity. [42] In dismissing the possibility that an individual who is able to work may, nonetheless, suffer a complete inability to carry on a normal life, the motion judge did not avert to the language of s. 2(4) of the 1996 SABS or to the principles enunciated in Heath. In doing so, he failed to consider the meaning of the provisions at issue in the context of the SABS scheme, as a whole. [43] Although I consider it unlikely that persons who can work at their pre-accident jobs following an accident will often meet the disability standard for non-earner benefits, I do not rule out such a possibility. [44] For example, in jobs where mobility is not a requirement (e.g. department store greeter, telemarketer, etc.) and the job was not of great importance in the claimant's pre-accident life, it may be possible for a claimant who returns to his or her pre-accident employment following an accident to satisfy the test for non-earner benefits. [45] Accordingly, I do not agree with the first basis for the motion judge’s decision. [46] Turning to the second basis for the motion judge’s decision, he said: It seems to me to be more consonant with the scheme of the legislation to interpret clause 12(1)1 to say that a person who was employed at the time of the accident does not qualify for non-earner benefits, whether he or she meets the disability requirement or not. This does not leave a gap. A person who was employed at the time of the accident is entitled to income replacement if a certain level of disability is established. A person who was not employed is entitled to non-earner benefits if a higher level of disability is established. There is no situation in which a person who was employed at the time of the accident could be so disabled as to qualify for non-earner benefits, but not income replacement benefits. It is not possible that the plaintiff could qualify for non-earner benefits. On the agreed facts, she qualifies for income replacement or nothing. [Emphasis added.] [47] I disagree with this analysis for two reasons. First, it ignores the clear language of the 1996 SABS. As I have said, on a plain reading of ss. 4(1)(1) and 12(1)(1), a claimant can only qualify for non-earner benefit if he or she does not qualify for income replacement benefit. Employment status is only one part of the test for qualifying for an income replacement benefit; the claimant must also show that he or she meets the relevant disability standard. [48] Second, as I have already explained, in my view, the motion judge was wrong when he said there is “no situation” in which a person who was employed at the time of the accident could qualify for non-earner benefits, but not income replacement benefit. Although such situations may be rare, in my view, they could exist. The purpose of the legislation in these circumstances would be to provide compensation to persons who have suffered a severe diminution in their overall quality of life, even though they may be able to continue to work. [49] Thus, to foreclose the very possibility of recovery in such an instance would not be “consonant” with the purpose of the legislation, as the motion judge suggested; rather, it would undermine the purpose of the legislation. Contrary to the motion judge’s assertion, his interpretation would, in fact, leave a “gap” in the legislative scheme. [50] Based on the foregoing reasons, I conclude that the motion judge erred in holding that Ms. Galdamez is ineligible for 1996 SABS non-earner benefits for the sole reason that she was working at the time she was injured in an accident. (2) Other Issues [51] In oral argument on the appeal, counsel for Allstate acknowledged that the motion judge may well have been wrong in his interpretation of the eligibility requirements for a non-earner benefit. However, counsel asserted that, before the motion judge, Allstate did not take the position that Ms. Galdamez was ineligible for non-earner benefits because she was working at the time of the accident. Rather, Allstate’s position was that, on the evidence before the motion judge, Ms. Galdamez qualified for an income replacement benefit, but was not entitled to any payments. Having qualified for an income replacement benefit, Ms. Galdamez was therefore ineligible for non-earner benefits. [52] In this regard, Allstate relied on a Disability Certificate signed by Ms. Galdamez’s treating physician on November 30, 2005. In the Disability Certificate, the doctor ticked a box indicating that Ms. Galdamez met the disability requirement for income replacement benefits; he also ticked a box indicating she did not meet the disability requirement for non-earner benefits. [53] Allstate also argued that, while Ms. Galdamez qualified for an income replacement benefit, her entitlement was nil because (i) she was only off work for one day following the accident and (ii) any subsequent time out of the workforce within the 104 week period was due to her maternity leave. [54] According to Allstate, even if the trial judge erred in his interpretation of the eligibility requirement for a non-earner benefit, he was correct in granting Allstate’s motion for summary judgment and dismissing Ms. Galdamez’s action because the only medical evidence on the motion that addressed the question of eligibility for income replacement benefits demonstrated that Ms. Galdamez was eligible. [55] I would not accept this argument for two reasons. First, the trial judge neither addressed this argument nor made any findings about Ms. Galdamez’s eligibility or entitlement to an income replacement benefit. In particular, he made no findings about why she remained out of the work force after leaving Fortino’s. Moreover, the record before him relating to this issue was scant. [56] Second, Allstate’s evidence on the motion indicated that Ms. Galdamez’s action for income replacement benefits was proceeding to trial imminently. In that action, Allstate pleaded that Ms. Galdamez “is not entitled to income replacement benefits as she did not, as a result of and within 104 weeks following the accident, suffer a substantial inability to perform the essential tasks of her employment.” In my view, the fact that the income replacement benefit action was proceeding to trial parallel to the motion for summary judgment in this action demonstrates that a genuine issue for trial exists concerning Ms. Galdamez’s eligibility for income replacement benefits. [57] In oral argument, Allstate did not pursue two other arguments raised in its factum: (i) Ms. Galdamez elected to receive income replacement benefits and not non-earner benefits; and (ii) a limitation issue. As the motion judge made no findings in relation to either of these issues, I would not give effect to either argument. [58] Finally, I would simply observe that, apart from claiming that Ms. Galdamez qualified for an income replacement benefit, on the motion below Allstate did not join issue with her concerning whether she met the disability standard for obtaining a non-earner benefit. F. disposition [59] Based on the foregoing reasons, I would allow the appeal, set aside the motion judge's order dismissing the action, and remit the matter to the trial court without prejudice to the respondent's right to renew the motion for summary judgment if so advised. [60] I would award costs of the appeal to the appellant on a partial indemnity scale fixed in the amount of $6000.00, inclusive of disbursements and applicable taxes. I would set aside the motion judge’s costs order and award costs of the motion to the appellant on a partial indemnity scale fixed in the amount of $3500.00, inclusive of disbursements and applicable taxes. Signed: “J.M. Simmons J.A.” “I agree J.I. Laskin J.A.” “I agree G.J. Epstein J.A.” Released: “J.S.” July 24, 2012 APPENDIX I Statutory Accident Benefits Schedule - Accidents on or After November 1, 1996, O Reg 403/96 2. (1) In this Regulation, ... “impairment” means a loss or abnormality of a psychological, physiological or anatomical structure or function; ... (4) For the purpose of this Regulation, a person suffers a complete inability to carry on a normal life as a result of an accident if, and only if, as a result of the accident, the person sustains an impairment that continuously prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident. ... 4. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications: 1. The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment. ... 5. (1) Subject to subsection (2), an income replacement benefit is payable during the period that the insured person suffers a substantial inability to perform the essential tasks of the employment in respect of which he or she qualifies for the benefit under section 4. (2) The insurer is not required to pay an income replacement benefit, (a) for the first week of the disability; ... 12. (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications: 1. The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit. ... 36. (1) Only one of the following benefits may be paid to a person in respect of a period of time: 1. An income replacement benefit. 2. A non-earner benefit. 3. A caregiver benefit. (2) If a person’s application indicates that he or she may qualify for more than one of the benefits referred to in subsection (1), the insurer shall notify the person that he or she must elect within 30 days after receiving the notice which benefit he or she wishes to receive. (3) The insurer shall deliver the notice under subsection (2) within 10 business days after receiving the person’s application. [1] Allstate was the insurer of Ms. Galdamez’s estranged husband, Romeo Galdamez. [2] The sections referred to in these reasons are the sections that were in force at the time of the accident. Some of these sections were subsequently amended effective September 1, 2010.