[1995] 2 F.C. 413
A-94-94
Ylona A. Gall (Applicant)
v.
The Attorney General of Canada (Respondent)
Indexed as: Gall v. Canada (C.A.)
Court of Appeal, Isaac C.J., Desjardins and McDonald JJ.A.—Toronto, December 6, 1994; Ottawa, January 26, 1995.
Unemployment insurance — Judicial review of Umpire’s decision payments under Ontario No-Fault Benefits Schedule, s. 13(1) earnings under Unemployment Insurance Regulations, s. 57(2)(d), properly deducted from U.I. benefits — Applicant unemployed when injured in motor vehicle accident entitling her to benefits under s. 13 — S. 13 benefits not for income loss — Umpires to determine whether no-fault payments compensation for loss of employment income, actual or presumed — Must examine provincial legislation in each case to determine whether payments for income or non-income losses.
Construction of statutes — Unemployment Insurance Act — Whether motor vehicle no-fault insurance payments to be deducted from U.I. benefits — Unlike marginal notes, section headings may be used as aids in statutory construction — Umpire erred in not following correct construction set out in law text O’Donnell’s Automobile Insurance in Ontario.
This was an application for judicial review of an Umpire’s decision dismissing the applicant’s appeal from the Board of Referees’ decision. The Board had dismissed the applicant’s appeal from a decision of the Canada Employment and Immigration Commission that weekly payments received pursuant to the Ontario No-Fault Benefits Schedule, section 13 were earnings under Unemployment Insurance Regulations, paragraph 57(2)(d) and properly deducted from unemployment insurance benefits pursuant to Unemployment Insurance Act, subsection 17(4). Regulations, paragraph 57(2)(d) provides that the earnings to be taken into account to determine the amount to be deducted from benefits payable are the payments a claimant has received, or is entitled to receive, from motor vehicle accident insurance provided under provincial law in respect of the actual or presumed loss of income from employment due to injury. Schedule, subsection 12(1) provides for payment of a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of her occupation or employment. Subsection 13(1) provides for payment of a weekly benefit during the period in which the insured person suffers substantial inability to perform the essential tasks in which she would normally engage.
On July 26, 1991, while unemployed and in receipt of unemployment insurance benefits, the applicant was injured in a motor vehicle accident. She was entitled to benefits under the No-Fault Benefits Schedule, section 13 effective August 2, 1991. The amounts payable thereunder were deducted from the applicant’s unemployment insurance benefits pursuant to Regulations, paragraph 57(2)(d).
The issue was whether the no-fault payments were received “in respect of the actual or presumed loss of income from employment.”
Held, the application should be allowed.
The Umpire erred in his construction of paragraph 57(2)(d) of the Regulations and subsection 13(1) of the No-Fault Benefits Schedule. The applicant was unemployed when she was injured in the motor vehicle accident. She lost no income as a result of the accident and could lose none. The no-fault benefit payments which she received were not payments for loss of income.
The language of subsection 12(1), when contrasted with that of subsection 13(1) makes it clear that subsection 13(1) payments were not income related. The heading preceding section 12 is “Income Benefit” while that preceding section 13 is “Benefit If No Income.” It is well settled that headings, unlike marginal notes, may be used as aids to the construction of an enactment. The plain language of the provisions also indicates that while payments received pursuant to subsection 12(1) would clearly be “in respect of the actual or presumed loss of income from employment due to injury” within paragraph 57(2)(d), payments received pursuant to subsection 13(1) would not be since they are not income related. On this construction the question that arises for determination by Umpires in the context of a paragraph 57(2)(d) inquiry is not whether subsection 13(1) no-fault payments represent compensation for pain and suffering, but whether they represent compensation for loss of income from employment, actual or presumed. An affirmative response will attract the application of paragraph 57(2)(d). A negative response will not.
It is wrong to assume that all payments made under provincial no-fault insurance plans are compensation for actual or presumed loss of employment income due to injury from a motor vehicle accident. Some payments are made as compensation for non-income losses. It is therefore necessary to examine applicable provincial legislation in each case to determine the precise purpose for which the no-fault payments were in fact made.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Family Benefits Act, R.S.O. 1980, c. 151.
Federal Court Act, R.S.C., 1985, c. F-7, s. 28 (as am. by S.C. 1990, c. 8, s. 8).
No-Fault Benefits Schedule, O. Reg. 273/90, now R.R.O. 1990, Reg. 672, ss. 12(1),(2),(3), 13(1),(2),(3),(7).
R.R.O. 1980, Reg. 318, s. 13(2) (as am. by O. Reg. 396/86, s. 4).
Unemployment Insurance Act, R.S.C., 1985, c. U-1, ss. 17(4), 80.
Unemployment Insurance Regulations, C.R.C., c. 1576, ss. 57(2) (as am. by SOR/90-756, s. 17), (d) (as enacted by SOR/78-233, s. 1), (2.1) (as enacted by SOR/78-233, s. 1; 90-761, s. 16), (3), 58 (as am. by SOR/90-756, s. 18).
CASES JUDICIALLY CONSIDERED
APPLIED:
Marshall v. Heliotis (1993), 16 O.R. (3d) 637 (Gen. Div.).
CONSIDERED:
MacInnis (1993), CUB 23255; Rousseau (1990), CUB 18443; Mills (1992), CUB 21067; Villanueva (1994), CUB 25448; Gates v. Ontario (Ministry of Community & Social Services) (1994), 19 O.R. (3d) 158 (Div. Ct.); Attorney General of Canada v. Walford, [1979] 1 F.C. 768 (1978), 93 D.L.R. (3d) 748; 24 N.R. 594 (C.A.).
REFERRED TO:
Mountney (1993), CUB 22427.
AUTHORS CITED
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
O’Donnell, Allan. Automobile Insurance in Ontario. Toronto: Butterworths, 1991.
APPLICATION for judicial review of Umpire’s decision that weekly payments received pursuant to the Ontario No-Fault Benefits Schedule, section 13 were earnings under Unemployment Insurance Regulations, paragraph 57(2)(d) and properly deducted from unemployment insurance benefits pursuant to Unemployment Insurance Act, subsection 17(4) (Gall (1994), CUB 23985). Application allowed.
COUNSEL:
Sarah E. Colquhoun for applicant.
Dominic Clarke for respondent.
SOLICITORS:
Kinna-Aweya Legal Clinic, Thunder Bay, Ontario, for applicant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
Isaac C.J.:
1. Introduction
In this section 28 [Federal Court Act, R.S.C., 1985, c. F-7 (as am. by S.C. 1990, c. 8, s. 8)] application we are asked to review and set aside the decision of an umpire dated February 3, 1994 [(1994), CUB 23985] which dismissed the applicant’s appeal from the decision of a board of referees (the Board) dated October 22, 1991.
In a unanimous decision, the Board had dismissed the applicant’s appeal from a decision of the Canada Employment and Immigration Commission (the Commission) that certain weekly payments, each in the amount of $185, which the applicant had received pursuant to section 13 of the Ontario No-Fault Benefits Schedule (No-Fault Benefits Schedule) R.R.O. 1990, Reg. 672, were earnings within the meaning of paragraph 57(2)(d) of the Unemployment Insurance Regulations (the Regulations), C.R.C., c. 1576 [as enacted by SOR/78-233, s. 1; 90-756, s. 17] and properly deducted from her unemployment insurance benefits pursuant to subsection 17(4) of the Unemployment Insurance Act, R.S.C., 1985, c. U-1. Relying upon a dictum of the Umpire in [MacInnis] (1993), CUB 23255 respecting the nature of payments received from government no-fault automobile insurance plans, the learned Umpire upheld the decision of the Board and dismissed the applicant’s appeal, saying that he did so “[w]ith considerable regret for the plight of the claimant” (at page 4).
2. The Facts
The facts are not disputed and may be briefly stated. The applicant was employed by Lowerys Ltd., in Thunder Bay, Ontario, as an electronics technician from January 28, 1985 to October 12, 1990 when she was laid-off for redundancy. On December 12, 1990, she applied for unemployment insurance benefits. A benefit period was established effective December 9, 1990. On July 26, 1991, while unemployed and in receipt of unemployment insurance benefits, the applicant was injured in a motor vehicle accident. As a result, she became entitled to benefits pursuant to section 13 of the No-Fault Benefits Schedule effective August 2, 1991. The initial letter from the claims adjuster to the applicant, dated August 21, 1991, reads in part:
Please find enclosed our total disability draft in the amount of $370.00 for the time period August 2nd, 1991 until August 15, 1991.
Please be advised that we did talk to the Unemployment and advised them these payments were not wage compensation but rather a disability payment based on someone that is unemployed.
On September 11, 1991, the Commission notified the applicant by letter that she had been overpaid unemployment insurance benefits in the amount of $407 being the amount of the no-fault payments she had received from July 28 to August 22, 1991 (this amount was allocated as follows: week commencing July 18, 1991—$37; week commencing August 4, 1991—$185; and week commencing August 11, 1991—$185). Needless to say, the Commission deducted the amounts of the overpayment from unemployment insurance benefits which the applicant received subsequent to the date of notification. The Commission justified its decision on the basis that the no-fault payments were received “from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employment due to injury,” as provided in paragraph 57(2)(d) of the Regulations. The applicant appealed this decision to the Board with the result already described.
Before the Board, the applicant contended that the no-fault payments ought not to have been deducted, because they were unrelated to her employment. The Board rejected this contention, stating in its reasons that those payments had been properly allocated in accordance with paragraph 57(2)(d) of the Regulations. Nonetheless, the Board made the following observation:
The Board recognized that the Claimant’s objection for the deduction of this benefit from the U.I.C. is very valid. The Board, at the same time, anticipates that the proper authorities will take this opportunity to review the act (sic) in conjunction with the provincial “No Fault” provisions.
3. Relevant Statutory Provisions
(a) No-Fault Benefits Schedule—O. Reg. 273/90 [now R.R.O. 1990, Reg. 672]
PART IV
Weekly Benefits
Income Benefit
12. (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3). [Emphasis added.]
(2) The following qualifications apply to an insured person who claims a weekly benefit under subsection (1):
1. He or she must have been at the time of the accident,
i. employed or self-employed,
ii. on a temporary lay-off, or
iii. entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
2. He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks of his or her occupation or employment.
(3) A person who was unemployed and who was not self-employed at the time of the accident is qualified to receive a weekly benefit under subsection (1) if he or she was employed or self-employed for any 180 days in the twelve-month period before the accident, and if he or she as a result of and within two years of the accident has suffered a substantial inability to perform the essential tasks of the occupation or employment in which he or she spent the most time during the twelve-month period before the accident.
…
Benefit If No Income
13. (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident, a weekly benefit during the period in which the insured person suffers substantial inability to perform the essential tasks in which he or she would normally engage if he or she meets the qualifications set out in subsection (2). [Emphasis added.]
(2) The following qualifications apply to an insured person who claims weekly benefits under subsection (1):
1. He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks in which he or she would normally engage.
2. He or she must not be entitled to receive a benefit under section 12 at the time of the payment of a benefit under this section or, if entitled to a benefit under that section, he or she must be a primary caregiver as described in subsection (4) and have only income from self-employment from work in his or her home.
3. He or she must attain the age of sixteen years before being eligible to receive the weekly benefit.
(3) The weekly benefit under subsection (1) will be $185 less any payments for loss of income, except Unemployment Insurance benefits,
(a) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan; or
(b) received under any sick leave plan.
…
(7) A person cannot receive benefits under this section and section 12 at the same time.
(b) The Act
17. …
(4) If earnings are received by a claimant for any period in a week of unemployment during which he is incapable of work by reason of illness, injury or quarantine, subsection 15(2) does not apply and all those earnings shall be deducted from the benefits payable in respect of that week.
(c) The Regulations [ss. 57(2.1) (as enacted by SOR/78-233, s. 1; 90-761, s. 16), (3), 58 (as am. by SOR/90-756, s. 18)]
57. …
(2) Subject to this section, the earnings to be taken into account for the purpose of determining whether an interruption of earnings has occurred and the amount to be deducted from benefits payable under subsection 15(1) or (2), 17(4), 18(5), or 20(3) of the Act and for the purposes of sections 37 and 38 of the Act are
…
(d) notwithstanding paragraph (3)(b) but subject to subsection (2.1), the amount of payments a claimant has received or, upon application, is entitled to receive from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employment due to injury, if the benefits paid or payable under the Act are not taken into account in determining the amount that the claimant receives or is entitled to receive from such insurance; [Emphasis added.]
(2.1) When, subsequent to the week in which an injury referred to in paragraph (2)(d) occurs, a claimant has accumulated the number of weeks of insurable employment required by section 6 of the Act, the payments referred to in paragraph (2)(d) shall not be taken into account as earnings.
(3) That portion of the income of a claimant that is derived from any of the following sources is not earnings for the purposes mentioned in subsection (2):
…
(b) payments under a sickness or disability wage-loss indemnity plan that is not a group plan;
…
58. …
(11) The following payments shall be allocated to the weeks in respect of which the payments are paid or payable, namely,
(a) payments in respect of sick, maternity or adoption leave and leave for the care of a child or children referred to in subsection 20(1) of the Act;
(b) sickness or disability payments under a group wage-loss indemnity plan;
(c) payments referred to in paragraphs 57(2)(d) and (f); and
(d) workers’ compensation payments, other than permanent settlement workers’ compensation payments.
4. The Issue
The sole issue for determination is whether the learned Umpire erred in concluding that the no-fault payments which the applicant received pursuant to section 13 of the No-Fault Benefits Schedule came within the definition of earnings in paragraph 57(2)(d) of the Regulations and were therefore properly deducted from her unemployment insurance benefits.
5. The Decision of the Umpire
In his reasons (at pages 2-3), the learned Umpire noted that section 12 of the No-Fault Benefits Schedule deals with income benefits while section 13 deals with benefits where there is no income. He reasoned, nonetheless, that [at page 3] “the scheme propounded in Section 12 would be identical with respect to Section 13, namely, the pay or compensation is to compensate, not for pain and suffering, but rather for other headings.” After quoting from the decision of the Umpire in CUB 23255, he concluded [at page 4] that the no-fault benefits which the applicant had received pursuant to section 13 were “income within the meaning of the Regulation” (paragraph 57(2)(d)).
6. The Contention of the Parties
Before us, counsel for the applicant contended that sections 12 and 13 provide for each insured person, like the applicant, two distinct classes of compensation. She noted first that section 12 is preceded by the heading “Income Benefit;” and, secondly, that by its terms subsection 12(1) provides that the benefit to which an insured person is entitled thereunder is “a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment” [emphasis added]. It is clear, she contended, that the benefit payable pursuant to this section is designed to compensate the injured insured for loss of income from employment or occupation. She contrasted section 12 with section 13 which, she noted, is preceded by the heading “Benefit If No Income.” She then drew attention to the text of subsection 13(1) which, by its terms, provides “a weekly benefit during the period in which the insured person suffers substantial inability to perform the essential tasks in which he or she would normally engage” [emphasis added]. Based on these differences, counsel argued that the two subsections provide compensation for different classes of losses—section 12 for income loss and section 13 for non-income loss. Hence, in her view, the learned Umpire was in error in characterizing payments made pursuant to section 13 as compensation for loss of income actual or presumed, and thus deductible from unemployment insurance benefits by virtue of paragraph 57(2)(d) of the Regulations. She contended further that the learned Umpire misdirected himself by asking the wrong question. He asked whether the payments received under section 13 of the No-Fault Benefits Schedule were compensation for pain and suffering when he should have asked whether they had been received pursuant to a provincial law in respect of an actual or presumed loss of income from employment. In addressing a question not before him, the learned Umpire fell into legal error.
Counsel for the respondent supported the Umpire’s conclusion. He contended first that the no-fault payments were earnings within the meaning of paragraph 57(2)(d) of the Regulations and were properly deducted from the applicant’s unemployment insurance benefits pursuant to subsection 17(4) of the Act. This conclusion, he said, is supported not only by the text of paragraph 57(2)(d) of the Regulations and sections 12 and 13 of the No-Fault Benefits Schedule, but also by certain jurisprudence of the umpires. In oral argument, counsel placed great reliance on Gates v. Ontario (Ministry of Community & Social Services) (1994), 19 O.R. (3d) 158 (Div. Ct.) to support his contention that payments received under subsection 13(1) of the No-Fault Benefits Schedule were earnings.
He contended, secondly, based on the decision of this Court in Attorney General of Canada v. Walford, [1979] 1 F.C. 768(C.A.), that the Umpire and the Board were right in upholding the Commission’s decision to deduct from the unemployment insurance benefits paid to the applicant the amount of the no-fault benefit payments she had received since at the relevant times she had suffered no compensable loss. Finally, he contended that the Umpire acted within jurisdiction and properly since he could only interfere with the Board’s decision if section 80 grounds existed and, in this case, none were or could have been found to exist.
7. Analysis
For convenience, I repeat the text of paragraph 57(2)(d) of the Regulations and subsections 12(1) and 13(1) of the No-Fault Benefits Schedule:
57. …
(2) Subject to this section, the earnings to be taken into account for the purpose of determining whether an interruption of earnings has occurred and the amount to be deducted from benefits payable under subsection 15(1) or (2), 17(4), 18(5), or 20(3) of the Act and for the purposes of sections 37 and 38 of the Act are
…
(d) notwithstanding paragraph (3)(b) but subject to subsection (2.1), the amount of payments a claimant has received or, upon application, is entitled to receive from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employment due to injury, if the benefits paid or payable under the Act are not taken into account in determining the amount that the claimant receives or is entitled to receive from such insurance; [Emphasis added.]
[No-Fault Benefits Schedule]
12. (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3). [Emphasis added.]
…
13. (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident, a weekly benefit during the period in which the insured person suffers substantial inability to perform the essential tasks in which he or she would normally engage if he or she meets the qualifications set out in subsection (2). [Emphasis added.]
It is common ground that the no-fault benefit payments which the applicant received were all paid to her pursuant to section 13 of the No-Fault Benefits Schedule, a provincial law. The issue for determination on this application then is whether, by virtue of paragraph 57(2)(d) of the Regulations, those payments were properly deducted from the unemployment insurance benefits paid or payable to the applicant.
It is plain from the language of paragraph 57(2)(d) of the Regulations that, in a case such as this, the only amounts that the Commission is authorized to deduct from benefits payable under subsection 17(4) of the Act are “payments a claimant has received or … is entitled to receive from motor vehicle accident insurance provided under or pursuant to a provincial law in respect of the actual or presumed loss of income from employment due to injury, if the benefits paid or payable under the Act [Unemployment Insurance] are not taken into account in determining the amount that the claimant receives or is entitled to receive from such insurance” [emphasis added].
There is no issue here that the no-fault payments were received from motor vehicle accident insurance provided under or pursuant to a provincial law or that they were payments due to injury. There is equally no issue that unemployment insurance benefits were not taken into account in determining the quantum of the no-fault benefit payments. As I have already said, the only issue is whether they were payments received “in respect of the actual or presumed loss of income from employment.”
On the uncontroverted facts, the applicant had no employment since October 12, 1990 when she was laid off or on July 26, 1991, when she was injured in the motor vehicle accident as a result of which the no-fault benefit payments were made. On these facts she lost no income as a result of the accident and could lose none. There was also uncontroverted evidence in the record (Exhibit 3, “It [the $185 per week no fault payment] is not a reimbursement for salary since she is not working” and Exhibit 5, “these payments were not wage compensation but rather a disability payment based on someone that is unemployed”), that the no-fault benefit payments which the applicant received were not payments for loss of income.
Moreover, the language of subsection 12(1) of the No-Fault Benefits Schedule, when contrasted with that of subsection 13(1), makes it clear that subsection 13(1) payments were not income related. First, the heading preceding subsection 12(1) is “Income Benefit” while the heading preceding subsection 13(1) is “Benefit If No Income.” It is now well settled that, unlike marginal notes, headings may be used as aids to the construction of the language of an enactment. See Driedger, Construction of Statutes (2nd ed.) (Toronto: Butterworths, 1983) at pages 138-141. Secondly, by its terms, subsection 12(1) imposes upon an insurer an obligation to pay each insured who sustains injury “as a result of an accident a weekly income benefit during the period in which that insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment” [emphasis added], while subsection 13(1) imposes upon the insurer an obligation to pay each insured person who sustains injury as a result of an accident “a weekly benefit during the period in which the insured person suffers substantial inability to perform the essential tasks in which he or she would normally engage” [emphasis added]. As a matter of construction of the plain language of these legislative provisions I would, without more, conclude that while payments received pursuant to subsection 12(1) of the No-Fault Benefits Schedule would clearly be “in respect of the actual or presumed loss of income from employment due to injury” within the meaning of paragraph 57(2)(d) of the Regulations, payments received pursuant to subsection 13(1) would equally clearly not be, since they are not income related. However, I find that such a construction was placed on these two subsections by the learned author of O’Donnell’s Automobile Insurance in Ontario (Toronto: Butterworths, 1991) in the following terms, at page 100:
Generally, weekly benefits are available when the claimant is disabled as a result of an automobile accident. There are two kinds of benefits but they are mutually exclusive. Only one of two benefits is payable—never both.
The Income Benefit represents an indemnity for loss of income from employment or occupation whereas the Benefit if No Income represents an indemnity for being unable to engage in the essential tasks of living. The theory is that the latter benefit will reimburse the disabled claimant for expenses that will be incurred in paying others to perform functions such as snow shovelling, grass cutting and house cleaning but no receipts are required nor must the money be spent. The latter benefit of $185 per week is equivalent to the lowest indemnity payable under the Income Benefit assuming that the Income Benefit is payable at all. [Emphasis added.]
On this construction, the question that arises for determination by umpires in the context of a paragraph 57(2)(d) inquiry is not whether subsection 13(1) no-fault payments represent compensation for pain and suffering, the question which the Umpire addressed in this case, but whether or not they represent compensation for loss of income from employment, actual or presumed. An affirmative response will attract the application of paragraph 57(2)(d). A negative response will not.
But this is not how the Umpire approached the question in this case. I agree with counsel for the applicant that the Umpire erred by failing to do so. Accordingly, it is my view that the Umpire erred in his construction of paragraph 57(2)(d) of the Regulations and subsection 13(1) of the No-Fault Benefits Schedule.
As I have said, both the Umpire and counsel for the respondent have relied upon jurisprudence of the umpires (in oral argument, counsel added jurisprudence of the Ontario Divisional Court) as support for a construction which I consider erroneous. This jurisprudence I will now examine. I will deal first with the jurisprudence of the umpires. However, I must observe that I find it unsupporting of the respondent’s position.
The first in time is [Rousseau] CUB 18443, decided on August 24, 1990. There, the issue was whether compensation paid by the Régie de l’assurance-automobile du Québec constituted earnings within the meaning of paragraph 57(2)(d) of the Regulations. In quashing the decision of the Board of Referees, the Umpire reasoned thus, at page 3:
Moreover, since it was not disputed that the weekly payments received from the R.A.A.Q. were calculated without taking into account the unemployment insurance benefits payable during the benefit period of the claimant that took effect on February 28, 1988, this compensation was earnings under paragraph 57(2)(d) of the Regulations and must be allocated to the weeks in respect of which it was payable in accordance with subsection 58(11) of the Regulations.
The report of this decision does not disclose whether the learned Umpire examined the provincial legislation to determine the purpose for which the payments were made by the RAAQ.
CUB 21067 [Mills], decided on April 24, 1992, is next in time. In this case, the Board of Referees had dismissed the Commission’s appeal because it found that the Commission had misinformed the claimant that no-fault benefits received under the Ontario No-Fault Insurance Plan were earnings that he had to declare on an application for unemployment insurance benefits. The Umpire upheld the conclusion of the Board of Referees and expressed no opinion on the merits of the appeal.
CUB 23255 [MacInnis], on which the Umpire relied in this case, was also decided on September 10, 1993. There, like here, the claimant had been laid off for redundancy. She applied for unemployment insurance benefits. A benefit period was established and she commenced receiving benefits. She was subsequently injured in a motor vehicle accident and was paid compensation under the Ontario No-Fault Insurance Plan in the amount of $285 per week. The Commission determined that these payments were earnings within the meaning of paragraph 57(2)(d) of the Regulations and sought to deduct an overpayment of $1,311. In allowing the claimant’s appeal, the Board of Referees found [at page 3] that the insurance monies which the claimant received “does not appear to be tied to a loss of wages but to her total disability arising from the automobile accident.” Without examining the provincial legislation to determine the purpose for which payments were made under the provincial plan, the Umpire stated, at page 4:
The legislation is unequivocal that payments from government no fault automobile insurance plans, designed to compensate for actual or presumed loss of wages due to an accident, are earnings for benefit purposes, provided the plan does not take unemployment insurance benefits into account.
He characterized as erroneous the finding of the Board of Referees that the payments under the Ontario No-Fault Insurance Plan were made in respect of total disability and therefore not tied to loss of wages. In his view, a payment made to the claimant “by reason of her substantial inability, as a result of the accident, to perform the essential tasks in which she would normally have been engaged” were payments directly related to the claimant’s presumed loss of income due to the injuries she sustained. With respect, I am unable to understand how this conclusion follows logically from the premise without a more detailed examination of the provincial legislation. CUB 22427 [Mountney] was decided on March 18, 1993 by the same Umpire on the same basis.
In CUB 25448 [Villanueva], decided on August 29, 1994, the claimant left her employment in April 1991, because she had been injured in a motor vehicle accident. She filed a claim for unemployment insurance benefits in 1993 and a benefit period was established, ante-dated to April 14, 1991. However during this time the claimant had been in receipt of no-fault benefits under the Ontario No-Fault Insurance Plan in the amount of $815 every two weeks as a result of her injuries. Upon discovering this latter fact, the Commission notified the claimant that such payments were earnings under paragraph 57(2)(d) of the Regulations and allocated them as such pursuant to section 58. The decision of the Commission was upheld by the Board of Referees. A further appeal to the Umpire was dismissed on the basis that:
Paragraph (d) of Regulation 57 is clear and unequivocal that insurance benefits paid or payable under a provincial plan, that do not take into account U.I. benefits are earnings for the purposes of … the Unemployment Insurance Act … and the Regulations thereunder.
In all of these cases the assumption was made, wrongly, in my respectful view, that all payments made under provincial no-fault insurance plans are compensation for actual or presumed loss of income from employment due to injury from a motor vehicle accident. As I have demonstrated, an examination of provincial legislation discloses that this assumption is false and that some payments are made as compensation for non-income losses. It is therefore necessary, in my view, to examine applicable provincial legislation in each case in order to determine the precise purpose for which the no-fault payments were in fact made.
It follows that where payments under provincial no-fault benefit plans are in issue, a conclusion that payments made in a particular case are payments for loss of income from employment as a result of an accident within the meaning of paragraph 57(2)(d) of the Regulations can only be reached after determining by reference to provincial legislation the purpose for which such payments were made.
I come now to Gates v. Ontario (Ministry of Community & Social Services), supra, which counsel for the respondent told us was determinative of the issue before us. Before embarking upon an examination of this case, I should state that counsel for the applicant reported to us in argument that an appeal from this decision is pending in the Court of Appeal for Ontario. An inquiry at the Ontario Court of Appeal disclosed that this is indeed the case, but that the appeal has not yet been perfected.
The sole issue before the Divisional Court in Gates was whether payments made pursuant to subsection 13(1) of the No-Fault Benefits Schedule were compensation for pain and suffering, such that they were exempted from income by [R.R.O. 1980] Regulation 318 under the Family Benefits Act, R.S.O. 1980, c. 151 for the purpose of determining the quantum of social assistance to be paid to the appellants in that case. Paragraph 41 of subsection 13(2) [as am. by O. Reg. 396/86, s. 4] of Regulation 318 provided that income for the purpose of the Family Benefits Act shall not include
13. …
41. an amount received as damages or compensation for
(i) pain and suffering …
The Divisional Court held, for the six reasons enumerated on page 160 (19 O.R. (3d)), that the payments were not compensation for pain and suffering. It did not decide that they were compensation for loss of income from employment, actual or presumed. Counsel for the respondent sought succor in the third reason, namely that:
(3) The payments under s. 13(1) are at a flat rate and paid weekly. These features are associated with income replacement schemes and not with payments for pain and suffering which are usually paid in a lump sum.
This, he said, supports the Umpire’s conclusion and his own contention that payments made pursuant to subsection 13(1) represent compensation for loss of income. I am unable to accept this contention. Firstly, the language used by the Court does not reasonably bear the construction which counsel seeks to place on it. And if it did, it would have invited the question why the legislature of Ontario would deal with income loss in two subsections when it could have done so in one. It is idle to suggest, in my respectful view, that the legislature of Ontario would have dealt with the identical subject-matter in two different sections of the Regulations when one would have sufficed. Finally, the contention overlooks the observation made by Ferguson J. in Marshall v. Heliotis (1993), 16 O.R. (3d) 637 (Gen. Div.) that the no-fault scheme in Ontario is a statutory scheme which essentially replaces common law rules in actions arising out of motor vehicle accidents. It follows that the provisions of the scheme must be examined in each case in order to determine the character of and the purpose for which payments are made thereunder. In this case I am unable to conclude, for the reasons already given, that the payments which the applicant received pursuant to subsection 13(1) of the No-Fault Benefits Schedule were earnings within paragraph 57(2)(d) of the Regulations and thus deductible under subsection 17(4) of the Act.
I would, accordingly, allow the section 28 application, set aside the decision of the Umpire and remit the applicant’s appeal to an umpire for re-determination on the basis that the Board erred when it concluded that the payments which the applicant had received pursuant to subsection 13(1) of the No-Fault Benefits Schedule were earnings within the meaning of paragraph 57(2)(d) of the Regulations and were therefore properly allocated in accordance with that paragraph.
Desjardins J.A.: I concur.
McDonald J.A.: I agree.