Is a person entitled to payment of a SABS death benefit in respect of his 'aunt'?

26. (1) The insurer shall pay a death benefit in respect of an insured person who dies as result of an accident...

(2) The death benefit shall provide the following payments:

1...

2. A payment to each of the insured person’s dependants and to each person to whom the insured person had an obligation at the time of the accident to provide support under a domestic contract or court order of...

3...

4. ...

5. A payment of $10,000 to,

i. a person in respect of whom the insured person was a dependant at the time of the accident,

ii. the spouse of a person in respect of whom the insured person was a dependant at the time of the accident, if the spouse was the insured person’s primary caregiver at the time of the accident and the person in respect of whom the insured person was a dependant at the time of the accident dies before the insured person or within 30 days after the insured person, or

iii. the dependants of a person in respect of whom the insured person was a dependant at the time of the accident, if no payment is required by subparagraph i or ii, to be divided equally among the persons entitled. O. Reg. 34/10, s. 26 (2).

(5) If at the time of the accident the insured person was a dependant in respect of more than one person who is entitled to a payment under this section, the payment shall be divided equally among the persons in respect of whom the insured person was a dependant. O. Reg. 34/10, s. 26 (5).

(6) If requested by the insurer, a person who conducts an autopsy of the insured person shall provide a copy of his or her report to the insurer. O. Reg. 34/10, s. 26 (6).

Definitions and interpretation

(7) For the purposes of this Regulation,

(a) ...

(b) a person is a dependant of an individual if the person is principally dependent for financial support or care on the individual or the individual’s spouse;

Obviously, cases of this kind will be approached on their own particular facts. In my view, however, in considering who is an "insured person", the legislative intent should be kept in mind and, in addition, matters such as the amount and duration of the financial or other dependency, the financial or other needs of the claimant, the ability of the claimant to be self- supporting, and the general standard of living within the family unit should be considered.

[14] For Mr Bunyan to be insured under his mother’s policy, he has to meet the definition of “insured person”, which means “the named insured, any person specified in the policy as a driver of the insured automobile, the spouse of the named insured, and any dependant of the named insured or spouse, if the named insured, specified driver, spouse or dependant, is involved in an accident in or outside Ontario that involves the insured automobile or another automobile.”[1]

[15] A person is “dependant” on another, in this context, if that person is “principally dependant for financial support or care on the other person or the person’s spouse”.[2]

[16] Although developed under prior iterations of this legislation, “dependency” continues to be assessed through the lens of the following criteria:

(i) amount of dependency;

(ii) duration of dependency;

(iii) financial or other needs of the alleged dependant; and

(iv) the ability of the alleged dependant to be self-supporting.[3]

[17] The analysis of “dependence” is a practical and functional one. The individual’s ability to be self-supporting is assessed, and not just his earnings.[4] And support in the form of “money’s worth”, and not just “money” is taken into account. Thus, in this case, I note that Mr Bunyan held down two jobs in Ontario in the 2006-2007 period. His earnings were lower than they ought to have been because one of his employers failed to pay his wages. Mr Bunyan’s mother and grandmother provided significant money’s worth for Mr Bunyan during that year: free room and board. We do not really know what Mr Bunyan did with his earnings, but it seems that most of them went into alcohol, cigarettes, perhaps drugs, and other items of personal amusement, and perhaps some savings towards the car he bought before leaving for Alberta.

[...]

[19] Some of the cases emphasize the extent of financial contribution. “Principally dependant” has been taken, in some of them, to refer to meeting more than 50% of the costs of living, whether in money or money’s worth. I consider relative financial contribution to be an important factor, but not the only consideration. And this is not a moralistic analysis based on whether a young person “should” or “should not” have achieved independence. Here the question is not whether the young person “should” be independent, but whether, in fact, he is so.

[6] Section 3(7)(b) of the Schedule says that a “dependant” is a person who is “principally dependant for financial support or care” on the named insured or their spouse.

[7] The case law interpreting this phrase has developed some guidelines for making this determination if someone is “principally dependant for financial support or care”, among them the following:

a. In deciding if a person is principally dependant on another, one must consider the amount and duration of the financial or other dependency, the financial or other needs of the claimant, and the ability of the claimant to be self supporting (Miller v Safeco Insurance Company of America (1985), 1985 CanLII 2022 (ON CA), 50 O.R. (2d) 797 (CA), affirming (1984), 1984 CanLII 2019 (ON SC), 48 O.R. (2d) 451 (HCJ)).

b. The determination requires a “realistic assessment of the parties’ actual financial circumstances at the time of the accident” (Co-Operators General Insurance Co. v Halifax Insurance Company, [2002] OJ No 2459 (SCJ)).

c. In determining whether a son or daughter is independent of their parent, it is important to bear in mind that the change from dependant to independent is “more of a transition than an event”. Recognizing this, the decision maker must choose a time frame that “fairly reflects the status of the parties at the time of the accident” (State Farm Insurance Companies v Bunyan, 2013 ONSC 6670; Liberty Mutual Insurance Company v Federation Insurance Company of Canada, [2000] OJ No 1234 (CA), quoted in Oxford Mutual Insurance Company v Co-operators General Insurance Company, 2006 CanLII 37956 (ON CA))

d. One must consider not only the earnings of the claimant, but their capacity to earn. This is a factual issue. A person’s earning capacity is a product of education, talents, physical and mental abilities or disabilities, employment history and external factors such as the job market. (Gore Mutual Insurance Company v Co-Operators General Insurance Company, 2008 CanLII 46914 (ON SC), [2008] OJ No 3603 (SCJ))

e. “Principally” means more than 50%. If the claimant earns, or has the capacity to earn, enough to provide for more than 50% of their basis needs, they are not “principally dependant” on someone else for financial support. (Allstate Insurance Company v ING Insurance Company of Canada & Aviva Canada Inc., 2015 ONSC 4020).

f. Two approaches to determining whether a person can financially provide for their basic needs are used in the case law: the mathematical approach, which looks at the evidence available of what is actually spent to cover the claimant’s needs, and the statistical approach, which looks at what someone in the claimant’s circumstances needs to cover living expenses. The mathematical approach is generally considered unreliable because the documentary evidence of these expenditures is often scarce, and the claimant’s recollections are difficult to validate. The statistical approach, using the Market Basket Measure (MBM) is more satisfactory as it is a calculation of the basic needs of a family unit. (Allstate Insurance v ING Insurance Company of Canada & Aviva Canada Inc., supra).

g. However, one’s needs also include a care component. One must consider if the claimant has a need for care to ensure they are able to maintain a reasonable level of functioning in their daily life. Key factors to consider include social and emotional support, companionship, protection and services such as feeding, clothing, cleaning and transportation. (Oxford Mutual Insurance Company v Co-operators General Insurance Company, 2006 CanLII 37956 (ON CA).

h. The applicant has the burden of proving on the balance of probabilities that he was principally dependant on his mother at the time of the accident.

Result

Although the authorities to which counsel referred did to some extent have conflicting results, I believe that the following conclusions can be drawn from them notwithstanding the result:

(1) In order to be principally dependent for financial support on another person, the applicant must chiefly or, for the most part, derive his or her financial support from that other person.

(2) The wording of s. 3(2) of the Regulation is clear: the dependence must be financial.

(3) The applicant's circumstances must be considered as they existed at the time of the accident.

[25] The section of the Statutory Accident Benefits Schedule under consideration in this case is s. 2(6). For the purposes of s. 2(6), the relationship to be examined is not a "snapshot" at the time of the accident as it is in other sections of the regulation.

[26] In contrast, under s. 2(6), the true characterization of a dependent relationship at the time of the accident will usually require consideration of that relationship over a period of time, particularly in the case of young adults whose lives are in transition. The parameters of that period will depend on the facts of the case. The time frame chosen will also be influenced by the nature of the relationship between the person providing the care and the person receiving the care. The analysis may also consider the degree of care provided to the individual at certain times as well as the individual's need for care.

[27] In Liberty Mutual Insurance Co. v. Federation Insurance Co. of Canada, Award of Arbitrator Samis, 7 May 1999, affd [2000] O.J. No. 1234 (C.A.), the arbitrator noted that:

[r]elationships change from time to time, perhaps suddenly. Transient changes may alter matters for a short period, but not change the general nature of the relationship. A momentary snapshot would not yield any useful information about these time-dependant relationships. . . . The evaluation should be made by examining a period of time which fairly reflects the status of the parties at the time of the accident.

I agree.

[13] Dependency generally falls into two categories: for care and for financial support. Only one kind of dependency needs to be established for the death benefit to be payable.

[...]

[19] The Schedule is silent on what factors to consider when analyzing dependency for care and the parties relied on previously decided decisions for guidance. Miller v. Safeco is the pivotal case on dependency and outlines that I must look beyond the dependent’s financial independence and also consider the ability to provide for one’s own basic needs[2]. This is expanded on in the private arbitration decision of Intact and MVACF where the Arbitrator wrote that key factors to consider include social and emotional support, companionship, protection, and services such as feeding, clothing, cleaning, and transportation[3]. Harris & Liberty Mutual also addresses dependency in the realm of care and considers two main factors: the nature of emotional and physical care provided and whether in fact the dependent was principally dependent on the applicant 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.[4]

The Court of Appeal determined that Mr. Williams was not principally dependant for care on his mother as a result of this legal arrangement. The court found that in determining issues of dependency/care the following rules should be followed:

In determining dependency the relationship to be examined should not simply be a “snap shot” at the time of the accident. The true characterization of a dependant relationship at the time of the accident will require consideration of that relationship over a period of time, particularly in the case of young adults whose lives are in transition. The analysis should also consider the degree of care provided to the individual at certain times as well as the individual’s need for care.

While the legal relationship between the two individuals is relevant and important it is not determinative. It is only one factor to be considered in determining whether an individual is dependant for care. Other factors include the claimant’s physical, social and emotional needs.

The definition of a person in need of care under the Statutory Accident Benefits Schedule (a person who is less than 16 years of age or who requires care because of physical or mental incapacity) deals exclusively with eligibility for caregiver benefits. This section only appears in part 4 of the Regulation. As the legislature chose not to incorporate a similar defined term into that part of the Regulation dealing with entitlement to Statutory Accident Benefits the court concluded that that provision does not necessarily have any relevance to a determination as to whether someone is principally dependant for care on another individual.