Hindley v Dominion of Canada General Insurance Company, 2012 ABQB 728

Court of Queen ’ s Bench of Alberta Citation: Hindley v Dominion of Canada General Insurance Company, 2012 ABQB 728 Date: 20121207 Docket: 0801 12751 Registry: Calgary Between: Erin Lee Hindley Plaintiff - and - Dominion of Canada General Insurance Company Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R. J. Hall _______________________________________________________ [ 1 ] The Defendant Dominion of Canada General Insurance Company (“Dominion”) applies for

summary dismissal of the claim of the Plaintiff Erin Lee Hindley, against Dominion, which claim seeks insurance coverage under her mother’s Family Protection Endorsement, SEF 44, which is an endorsement to her Standard Automobile Policy. The Standard Automobile Policy and the SEF 44 were issued to the Plaintiff’s mother, Leeann Gail Rankel. Dominion seeks a declaration that the Plaintiff is not a “dependent relative” as that term is defined in the SEF 44 endorsement included in the policy issued to Ms. Rankel, and as a result the Plaintiff is not entitled to indemnity under Ms. Rankel’s policy. The application proceeded as a

Summary Trial of an issue, by agreement of the parties. [ 2 ] The SEF 44 endorsement insuring agreement provides:

In consideration of the premium charged and subject to the provisions hereof, it is understood and agreed that the Insurer shall indemnify each eligible claimant for the amount that such eligible claimant is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury or death sustained by an insured person by accident arising out of the use or operation of an automobile. [ 3 ] Certain of the terms used in the insuring agreement above are terms that are defined within the SEF 44 endorsement.

Section 1(c)(

i) of the SEF 44 states: c. The term “eligible claimant” means: i. The insured person sustaining bodily injury; [ 4 ]

Section 1(f)(i)(2) of the SEF 44 states: f. The words “insured person” mean: i. The named insured and his or her spouse if residing in the same dwelling premises and any dependent relative of either, while 2. An occupant of any other automobile but excluding the person who leases such other automobile for a period in excess of 30 days or owns such other automobile unless under insured motorist insurance is in force in respect of such other automobile. [ 5 ] It is conceded by Dominion that the Plaintiff was an occupant of any other automobile as described in the definition of “insured person”.

It is conceded that the Plaintiff suffered damages in a motor vehicle accident which occurred during the currency of the policy. It is conceded that the person from whom the Plaintiff is legally entitled is, or may be, an inadequately insured motorist as defined in the policy. [ 6 ] The policy provides, in

Section 1(b)(i)(3): b. The term “dependent relative” means: i. A person 3. Eighteen years of age or over who, because of full time attendance at a school, college or university, is principally dependent upon the named insured or the spouse of the named insured for financial support. [ 7 ] It is the

interpretation of this definition that is in issue in this application for

summary dismissal of the claim against Dominion. It is acknowledged that the Plaintiff was 18 years of age or over at the time of the accident. It is acknowledged that the Plaintiff was in full time attendance at college. The issue is whether the Plaintiff was a person who, because of full time attendance at college, was principally dependent upon the named insured (her mother) for financial support. Facts

[ 8 ] In the spring of 2005 the Plaintiff moved into a 2 bedroom apartment with her mother in Creston. She continued to reside with her mother until the fall of 2005, at which time her mother relocated to Calgary with her husband. The Plaintiff then returned to live with her father in Creston, British Columbia until March of 2006.

She worked at a saw mill in British Columbia and her father paid for all of her expenses while she was living with him, so that she could save money for school. [ 9 ] From March 2006 until August 2006 the Plaintiff resided with her mother and her mother’s husband in a one-bedroom condominium in Calgary. In September of 2006 the Plaintiff moved to Lethbridge to commence a 2 year Exercise Science program at Lethbridge Community College. She rented accommodation in Lethbridge.

While living in Lethbridge and attending Lethbridge Community College she paid for her own tuition, paid for her own living accommodation, paid for her food, relying upon government student loans and income from summer employment to pay her cost of living. The student loans were repayable personally by the Plaintiff.

This was the situation she was in on October 22, 2006, the date of the accident in which she was injured. [ 10 ] Dominion’s Questioning of the Plaintiff, and cross examination on the affidavit of the Plaintiff discloses that the Plaintiff had saved up money while living with her father and working in British Columbia, and further saved money while living with her mother in Calgary for the purpose of going to college in Lethbridge. As to the following summer, the Plaintiff indicated that she had not really formed her plans.

She was thinking of seeing how long her student loan would last her and then finding a job after that because she would need more money to live on once back in college.

As to whether she intended to return to live with her mother after the school year was over, the Plaintiff indicated that she hadn’t made that plan yet. [ 11 ] The Plaintiff’s affidavit evidence shows that, while the Plaintiff was living in a basement suite in Lethbridge and going to college, her mother gave her pocket money approximately once a month, bought her some clothing, incurred long distance telephone charges so that the Plaintiff would not have to, helped the Plaintiff pay her phone bills, sent her some money for groceries and bought various necessities for personal grooming.

While the Plaintiff had not specifically made plans as to her residence and employment for the next summer recess, she anticipated either returning to live with her father and working in British Columbia to raise the money for school, or alternatively living with her mother in Calgary and working there, again to raise money for the second year of schooling. Issue [ 12 ] As stated above, this Court must determine whether the Plaintiff was a “dependent relative”, as that term is defined in the SEF 44 Family Protection Endorsement.

That determination depends upon whether the Plaintiff falls into the definition of being a person, 18 years of age or over who, because of full time attendance at . . . college. . ., is principally dependent upon the named insured . . . for financial support. [ 13 ] Cases were cited to me by both counsel where the term “dependent relative” has been defined by the Court when it was not otherwise defined in the insurance policy wording. Reliance is placed by the Plaintiff on Miller v.

Safeco Insurance Company of America (1984), 48 O.R. (2) 451 at page 454-5, a case which has been often cited in other cases determining the meaning of “dependent relative”. In that case, Justice O’Brien of the Ontario High Court of Justice stated: 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 ] It is to be noted, however, that in the Miller case, the term “dependent relative” as used in the accident benefits

section of the policy in issue was not a defined term. Therefore, the court had to provide a definition to it, in order to determine if the plaintiff qualified as a dependent relative. [ 15 ] Here, however, the term “dependent relative” is a defined term. Therefore, a court’s definition of “dependent relative” is not called for, since the contract itself provides the definition. Rather, the court is called upon to interpret the written definition. [ 16 ] The Plaintiff cites two decisions in our Court as being guiding.

In Jager v Liberty Mutual Fire Insurance Company , [1996] AJ No. 1076 , ACQB, Justice Smith considered the same definition of “dependent relative” in the SEF 44 endorsement as is under consideration in this case. Justice Smith quoted from the Miller and Safeco decision, supra and stated at para. 35:

Taking guidance from this quote it is appropriate to not be confined to a financial calculation. [ 17 ] Justice Smith stated in that case that this was the first time in the plaintiff’s life that she was able to provide for herself to the degree of $7,000 gross income, with contribution of $3,000 - $4,000 from her parents in the relevant period. She says that the plaintiff was relying on her parents for security in making it month-to-month and that the plaintiff and her parents expected that when she returned to school in the fall of 1991, the plaintiff would once again be fully supported by her parents.

Under those circumstances she was satisfied that the parents provided financial support which carried the character of “principal”. [ 18 ] In E.R.J. v Aviva Insurance Company of Canada , 2011 CarwellAlta 2445, this Court again considered the issue as to whether the plaintiff there was a dependent relative as defined in the SEF 44 endorsement. The Court again applied the reasoning from Miller and Safeco Insurance Company of America , cited above and noted that Miller was endorsed by this Court in Jager , supra.

The Court noted that the plaintiff in that case relied on support services for guidance, counselling, life planning and goals, budgeting and financial planning, and employment services. Those findings, however were not the basis of McCarthy J.’s decision, who found there was no principal dependence in that case. [ 19 ] With the greatest respect to my colleagues in deciding both Jager and E.R.J. , I do not consider that it is open to the Court to view as relevant, support received by the plaintiff from the named insured other than financial support.

The definition in issue requires the Court to determine whether the plaintiff was, because of full time attendance at college, principally dependent upon the named insured for financial support . The definition does not allow consideration of dependencies other than financial support. [ 20 ] This Court considered a similar definition in Baholsky Estate v. Western Union Insurance Company (1974), AJ No 298 , Alberta Supreme Court (Trial Division).

There, the definition concerned read: No amount shall be payable hereunder with respect to the death of an unmarried person over 18 years of age without a dependent child except to the parents of such person and then only if such parents were, at the date of the accident, residing in the same dwelling premises as the deceased person and were principally dependent upon him for financial support . (emphasis added) [ 21 ] The Court considered the definition of “principally” as being “for the most part”.

It noted that Valgardson v Continental Insurance Company Limited , 16 W.W.R. 177 at p. 183 stated that: “Principally” is stated to be a synonym of the word “chiefly”. [ 22 ] In Ontario matters of

interpretation of a similar clause in Ontario’s automobile insurance legislation are dealt with, at least initially, by the Ontario Insurance Commission. While the Insurance Commission is considering legislated terms rather than contractual terms, legislation is considered remedial and broadly interpreted, much as insurance contracts are broadly interpreted to favour coverage. I find the Insurance Commission’s decisions to be illuminativee and persuasive.

In that Commission’s decision in Towsley v Royal Insurance Company (1996), OICD 25, the arbitrator notes that a number of arbitration decisions have held as follows: The term “principally dependent for financial support” requires more than some financial dependence. It requires principal dependence. In order for an applicant to be found 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 person as opposed to other sources; The dependence must be financial.

Section 3(2) does not refer to other forms of dependence such as social dependence except to the extent that social factors pertain to financial dependence; The term “financial support” in Section 3(2) is broad enough to extend beyond money to include the concept of “monies worth” or the reasonable value of goods and services provided to the applicant;

Section 3(2) requires an assessment of all of an applicant’s circumstances to determine whether the applicant was in fact deriving his orher support from the other person. The actual circumstances must be looked at and not an imputed earning capacity;

Section 11 requires an assessment of the applicant’s services in their entirety at the time of the accident.

However the applicant’sposition cannot be determined solely by a single snapshot of his or her circumstances at that date; Each case must be approached on its own facts but matters such as the amount and duration of the financial dependency, the financial orother means of the applicant, the ability of the applicant to be self-supporting are appropriate considerations for determining the questionof financial dependency in the context of Section 3(2); and An applicant can be “principally dependent for financial support” on public funds such as social assistance. [23] The Ontario Court of Appeal in Oxford Mutual Insurance Company v Cooperators General Insurance Company, (ON CA), [2006] OJ No 4518, at para. 12, seems to have adopted what is stated in the Towsley decision, supra.

The Court statesthere: In arriving at his decision on both issues, the arbitrator considered various uncontested legal principles, including that “principally”dependent means “chiefly”, “mainly” or “for the most part”. [24] I am of the same view. There is no ambiguity in the word “principally”. It means “mainly” or “chiefly” or “for the most part”.The word cannot be ignored, and must be considered by the court when applying the definition of “dependent relative” as is requiredhere.

I accept the principles set out above from the Towsley decision, as being applicable considerations in determining whether thePlaintiff qualifies as a “dependent relative” as defined by the SEF 44 endorsement. [25] Because of the wording of the definition of dependent relative in the SEF 44 endorsement, I would add to those factors thatthis Court must consider whether the Plaintiff is principally dependent upon the insured person for financial support because of full timeattendance at school, college or university. [26] The Court must be satisfied that the Plaintiff, because of full time attendance at college, is, chiefly or for the most part,dependent upon the named insured for financial support.

Principally, or chiefly, or for the most part must mean greater than 50 percent.The dependence must be financial, but financial is broad enough to extend beyond money to include the concept of the reasonable valueof goods and services provided. The Plaintiff’s position cannot be determined solely by a single snapshot of her circumstances at the dateof the accident. [27] The relevant facts here are that the Plaintiff had been residing with her mother and her mother had been providing room andboard and other financial benefits to her daughter so that her daughter could save her money to attend college.

That situation changed atthe beginning of September when the Plaintiff moved from Calgary to Lethbridge, rented accommodation, paid her tuition and paid themajority of her living expenses, albeit with some continuing financial assistance from her mother. The Plaintiff intended that, at the endof the school year, she would again return to employment and would most likely reside either with her father in BC or her mother inCalgary, with free room and board, so she could again save money for the next school term.

She was doing all of this “because of fulltime attendance at college”. [28] Without the financial assistance of her mother, the Plaintiff would not have been able to earn funds sufficient to allow her toattend college. [29] It has been argued on behalf of the Plaintiff that, in making its determination the Court should take into consideration not onlythe financial contributions of the Plaintiff’s mother, but also those of the Plaintiff’s father, from whom her mother is divorced. I do notagree.

Dominion agreed to provide coverage for a dependent relative of the Insured; not a dependent relative of the Insured and her exhusband. Dominion provided no insurance coverage to the insured’s ex husband who no longer resided with the Insured.

[ 30 ] It is argued on behalf of the Plaintiff (through the intervenor) that to ignore the contribution of the Insured’s ex husband to the Plaintiff’s financial well being is discriminatory to the child of divorced parents. But the mother and Dominion entered into a contract. Dominion cannot be held to provide insurance coverage outside the corners of the insuring agreement. See the decision of the Ontario Financial Services Commissioner in Sigfried Hau v.

State Farm Insurance Company , [1998] OFS (aa) No. 32, at para. 32, which I endorse. [ 31 ] The period for consideration in this case runs from March 2006 when the Plaintiff moved in with the Insured, until the date of the accident. That is so even though the Plaintiff did not commence full time education until September of 2006.

It was from the time the Plaintiff moved in with her mother that the plan was being carried out allowing the Plaintiff to room and board with her mother, in order to amass sufficient financial capability to attend college on a full time basis. [ 32 ] Neither the Defendant nor the Plaintiff anticipated that my decision would depart from this Court’s decisions in Jager v Liberty Mutual and E.R.J. v Aviva Insurance Company , supra.

Therefore, neither appeared before me with arithmetical calculations of the financial contributions of the Insured and of the Plaintiff, to assist in determining whether the Plaintiff was principally (ie mainly, or for the most part) dependent on the Insured for financial support. [ 33 ] Without such arithmetic information I am unable to make the determination required in this application.

Accordingly, counsel are invited to file such evidence as they deem prudent on that score and re-attend before me to argue whether the test is met. [ 34 ] Counsel are requested to agree upon dates for the filing of additional evidence and cross examination on any new affidavits, and then reappear before me. If dates cannot be agreed upon, counsel may make representations before me. Heard on the 10th day of October, 2012. Dated at the City of Calgary, Alberta this 7th day of December, 2012. R. J. Hall J.C.Q.B.A.

Appearances: Richard Edwards of Pipella Law for the Plaintiff Don Dear, Q.C. of McLennan Ross LLP for the Defendant

Scott Cozens of Cozens Wiens LLP for the Intervener ICBC