ARTHUR EMIL CUSTER, PLAINTIFF - v. –, 2023 SKKB 13

KING’S BENCH FOR SASKATCHEWAN 2023 SKKB 13 Date: 2023 01 17 Docket: QBG-PA-00094-2021 Judicial Centre: Prince Albert BETWEEN: ARTHUR EMIL CUSTER, PLAINTIFF - and – SASKATCHEWAN GOVERNMENT INSURANCE, DEFENDANT Counsel: Peter V. Abrametz for the Plaintiff Heather J. Laing, K.C. for the Defendant ___________________________________________________________________________ JUDGMENT MESCHISHNICK J. January 17, 2023 ___________________________________________________________________________ [ 1 ] While employed by Bloomfield’s Ballanytne Bay Resort in 1999 the Plaintiff was injured in a motor vehicle accident.

At the time of the accident, he was paid $7 per hour plus $5 per hour for room and board. He claimed an Income Replacement Benefit based on a wage of $12 per hour. The Defendant allowed the claim based on a wage of $7 per hour. The Plaintiff appeals that determination to this court under s. 191 and 192 or alternatively s. 197 of The Automobile Accident Insurance Act , RSS 1978, c A-35 , as amended [ Act ]. [ 2 ] The Plaintiff applies for

summary judgment. The parties filed an agreed statement of facts. The Terms of the Employment Contract [ 3 ] According to the Agreed Statement of Facts the Plaintiff: a. Was hired to do carpentry, mechanical, plumbing and electrical work as well as repairs, brush clearing, log cutting and other yard work; b. His duties also included servicing and preparing boats and canoes for use; c. Was “on call” after his eight-hour shift to assist customers when they came off the lake and with cleaning and preparing the boats

and canoes for use the next day; d. Was required to be at the resort 24 hours per day from Monday to Friday. He had weekends off and would return to his home at Deschambault Lake on weekends. [ 4 ] The Agreed Statement of Facts also says that the Plaintiff “was paid $7 per hour, plus room and board valued at $5 per hour, or $40 per day/$200 per week, which included three meals per day, lodging and housekeeping, and that the value of the room and board so calculated is reasonable”.

Relevant Legislation and Regulations [ 5 ] At the time of the Plaintiff’s accident the relevant provisions of the Act and The Personal Injury Benefits Regulations , RRS c A-35 Reg 3 [ Regulations ] that determined the Plaintiff’s entitlement to an Income Replacement Benefit read: The Act 112 …

(2) The Insurer shall calculate the income replacement benefit pursuant to clauses 1(

a) and (

b) on the basis of: (

a) the gross yearly employment income the full time earner earned from his or her employment, if the full time earner holds employment in the employ of another at the time of the accident; The Regulations 20 Subject to these regulations, a victim’s gross yearly employment income not derived from self-employment at the time of the accident is the sum of the following amounts: (

a) in the case of a full-time earner, the salary or wages, excluding benefits or commissions in clauses (

d) and (e), received or receivable with respect to employment that the full-time worker held or would have held if the accident had not occurred and that are the greater of: (

i) the salary or wages received or receivable for the pay period in which the accident occurred, multiplied by the number of pay periods in the year; and … (

d) any of the following benefits, to the extent that the benefit is not received as a result of the accident and to the extent that the benefit is regularly payable to the claimant: … (vii) the cash value of any other benefit received or that the victim was entitled to receive in the 52 weeks before the date of the accident, excluding employer funded benefit plans; Principles Applicable to the

Interpretation of this Provisions [ 6 ] In Holtby-York v Saskatchewan Government Insurance , 2016 SKCA 95 , [2016] 11 WWR 65 [ Holtby-York ] the court, in determining that Canada Pension Plan disability payments would not be included in yearly employment income for the purposes of calculating a survivor’s benefit under the Act , applied certain principles of statutory

interpretation to the Act . Among them were: a. As the Act confers a benefit on an insured it must be interpreted in a broad and generous manner; b. Any doubt arising from difficulties in language should be resolved in favour of the claimant. [ 7 ] It also applied the associated words rule in interpreting the words “other benefits” as found in 17(1)(b)(vii) of the Regulations . This provision succeeds s. 20 of the Regulations in force at the time of the accident. While the wording in s. 20 has been modified in the current Regulations it does not appear that the changes have any bearing on this appeal. More importantly, the

interpretation of s. 17 by Holtby-York is applicable to the former s. 20 . [ 8 ] Noting that the listed benefits to be included in calculating income found in s. 17(1)(b)(

i) to (vi) included bonuses, tips, overtime, the value of profit-sharing plans, the value of personal use of a vehicle and the value of employer funded benefit plans Holtby-York concluded: [16] ….The common denominator linking the benefits listed in Section 17(2)(

b) is that they are all directly related to compensation or benefits received from employment. CPP disability payments do not fit that mold. As pointed out earlier in these reasons, they are not related to remuneration or benefits pertaining to an insured’s employment but, rather, are an insurance payable as a result of a loss of earning capacity. [ 9 ] In Holtby-York the court also applied the principle that the

interpretation of a provision within a statute, or in that case within a regulation, must fit within the scheme and purpose of the statute:

[17] Moreover, limiting the scope of s. 17(2)(b)(vii) to benefits related to an insured’s employment is consistent with the overall scheme and purpose of the no-fault benefit provisions of the Act , which are intended to indemnify an insured, amongst other things, for income loss attributable to the accident. While Mr. York’s death resulted in the termination of his CPP disability benefits, it also triggered the appellant’s entitlement to survivors benefits pursuant to that plan. In other words, Mr.

York’s CPP benefits were not terminated by the accident but, rather, changed from disability benefits to survivor benefits. [ 10 ] Another similarity between this case and the ruling in Holtby-York is that in both s. 112(2) (

a) of the Act , applicable in this case, and s. 144 which was applied in Holtby-York , the determination of yearly employment income depends on amounts “earned” from employment. [ 11 ] In Holtby-York the court also commented on the meaning of “earned” saying: 11 Third, s. 144(1)(

a) speaks of yearly employment income "earned" by an insured. Black's Law Dictionary , 10th ed, defines "earned" as acquiring by way of "labor, service, or performance." Given its plain meaning, the use of the word "earned" in s. 144(1)(

a) suggests the income referred to therein must be compensation for work performed or services rendered. CPP disability benefits are not "earned" in the sense of being payment for work or services. In fact, they have no direct relationship to a recipient's employment income. They are based on a flat rate, plus 75% of the amount of a contributor's retirement pension (see s. 56 of the Canada Pension Plan , RSC 1985, c C- 8 ). Analysis [ 12 ] The Plaintiff advances an argument based on the caselaw and the

interpretation of the Act and the Regulations that the whole of the room and board allowance is a benefit which should be added into the calculation of the income that will determine his income replacement benefit. It is not the Plaintiff’s position that a portion of the room and board allowance is a benefit. [ 13 ] The Plaintiff argues that the room and board allowance is both “earned” and “directly related to compensation or benefits earned from employment”.

He argues it is earned because it is acquired by way of performance and fits the mold of a benefit received from employment. [ 14 ] Notionally, the room and board benefit is earned and acquired as it accrues when the Plaintiff is at work and thus fits within the parameters of a “benefit” as laid out in Holtby-York . [ 15 ] The Defendant argues that the room and board allowance is not a benefit at all but is simply a reimbursement of expenses.

The Defendant points to cases decided by the Automobile Injury Insurance Commission which have ruled that sustenance payments are not a “benefit” to be included in the determination of a claimant’s employment income when determining an income replacement benefit, V.L. v Saskatchewan Government Insurance , 2010 SKAIA 43 [ V.L. ] , S.V. v Saskatchewan Government Insurance , 2010 SKAIA 26 . [ 16 ] In the V.L . case the Commission reasoned at para. 48: … The basis of such payments is to be revenue neutral, to reimburse the employee for the expenses incurred while working for the employer.

We recognize that individual employees because of their personal circumstances or decisions could reduce their sustenance costs and reap a windfall, but that is not the way the program is designed. [ 17 ] There would appear to be a couple of novel aspects of the employment arrangement in this case. [ 18 ] I doubt many sustenance payments are earned by the hour. [ 19 ] The sustenance was provided to the Plaintiff by the employer.

I doubt there are many sustenance arrangements where the employer pays a sustenance amount, then provides the sustenance and, in effect, charges the employee for the room and board an amount equal to the allowance making the arrangement, in effect, revenue neutral to the employer. [ 20 ] But I cannot see how those novelties change the overall purpose of the arrangement. It is designed for reimbursement of the Plaintiff for his expenses associated with having to stay at his employer’s premises.

It is expressly agreed in the Agreed Statement of Facts that the value of $5 per hour attributed to the three meals per day, housekeeping, and board was reasonable. It is not disputed that the Plaintiff utilized the housekeeping and room and consumed the three meals provided to the Plaintiff.

If so, the payment cannot be characterized as anything but a reimbursement of those expenses. [ 21 ] Fundamentally, a benefit must either provide a fund that the recipient has the discretion to spend as the recipient sees fit or pay expenses that allow the recipient to use other income for discretionary spending. [ 22 ] In addition, that a benefit must provide an advantage to a recipient is another common denominator found in the benefits listed in s. 20 (

d) of the Regulations . Overtime, tips, bonuses, profit sharing plans provide funds for discretionary spending.

Personal use of a vehicle provided by an employer or the payment of premiums by the employer for benefit plans means that the employee does not have to spend a portion of the salary on those items and thereby has additional funds for other discretionary spending. [ 23 ] A sustenance payment which provides no net benefit to the recipient does not, as is the case with Canada Pension Plan disability benefits, fit into that mold, Holtby-York at para 16 . [ 24 ] Nor, when the purpose and intent of the Act is considered does an allowance that is revenue neutral result in an income loss to the recipient.

There is no loss to be indemnified, Holtby-York at para 17 .

Conclusion [ 25 ] The room and board allowance paid to the Plaintiff was not a benefit under s. 20 (d)(vii) of the Regulations . [ 26 ] This appeal is dismissed with costs to the Defendant. J. G.A. MESCHISHNICK