Johnson v Saskatchewan Government Insurance, 2019 SKCA 110

Court of Appeal for Saskatchewan Docket: CACV3316 Citation: Johnson v Saskatchewan Government Insurance , 2019 SKCA 110 Date: 2019-10-30 Between: Christine Johnson, Sherry Ross and Brennan Roberts Appellants (Plaintiffs) And Saskatchewan Government Insurance Respondent (Defendant) Before: Richards C.J.S., Whitmore and Leurer JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Chief Justice Richards In concurrence: The Honourable Mr. Justice Whitmore The Honourable Mr.

Justice Leurer On Appeal From: 2018 SKQB 265 , Saskatoon Appeal Heard: September 5, 2019 Counsel: Jonathan Abrametz for the Appellants Dale Brown for the Respondent Richards C.J.S. I. Introduction [ 1 ] This appeal concerns the statutory death benefits payable pursuant to The Automobile Accident Insurance Act , RSS 1978, c A- 35 [ AAIA ]. [ 2 ] Garry Johnson died in a motor vehicle accident. He had three dependant children, the appellants in this case. Mr.

Johnson had no surviving spouse within the meaning of the AAIA . [ 3 ] Pursuant to s. 145 of the AAIA , the appellants each claimed to be entitled to the death benefit that would otherwise have been available to a surviving spouse.

The respondent, Saskatchewan Government Insurance [SGI], determined that the appellants were collectively entitled to a single surviving spouse benefit and that it should be divided amongst them as provided in The Personal Injury Benefits Regulations , RRS c A-35 Reg 3 [ Regulations ]. [ 4 ] The appellants each issued a statement of claim and thereby took their concerns to the Court of Queen’s Bench. A judge of that Court upheld SGI’s disposition of the matter. The appellants now seek to overturn the Queen’s Bench decision.

They submit that, properly interpreted, the AAIA and the Regulations entitle each of them to a full spousal death benefit. [ 5 ] As explained below, the appellants’ arguments cannot succeed. As a consequence, their appeal must be dismissed. II. relevant statutory provisions [ 6 ] This appeal turns on the

interpretation of ss. 144 and 145 of the AAIA as those sections read at the time of Mr. Johnson’s death.

Section 144 sets out the death benefit payable to a surviving spouse.

Section 145 provides that, if there is no surviving spouse, the dependant of the deceased is entitled to the spousal death benefit. The pertinent features of ss. 144 and 145 are set below: 144(1) Subject to subsections (2) to (6) and to the regulations, a surviving spouse is entitled to a weekly death benefit in an amount DB calculated in accordance with the following formula: DB = (50% x IRB) where IRB is the weekly income replacement benefit that an insured, other than a seasonal worker, would have been entitled to calculated on the basis of the greater of: (

a) the yearly employment income the insured earned or would have earned from all employments held at the date of the accident; and (

b) the yearly employment income the insured earned in the year before the accident excluding any benefits paid to the insured pursuant to the Employment Insurance Act (Canada) if the insurer is satisfied that the insured would have held a more remunerative employment at the date of the accident but for special circumstances.

(2) If the insured was a seasonal worker at the date of the accident, the surviving spouse of the insured is entitled to a weekly death benefit in an amount DB calculated in accordance with the following formula: DB = (50% x IRB) …

(3) Notwithstanding subsection (2), if an insured held or would have held a seasonal employment at the date of the accident but the insured did not hold the employment held at the date of the accident in the two years before the accident, the yearly employment income to be used in clause (

a) of the definition of IRB in subsection (2) is the yearly employment income as determined in accordance with the regulations for an employment of the same class as the seasonal employment that the insured held or would have held but for the accident.

(4) The minimum death benefit a surviving spouse is entitled to receive pursuant to this

section is $51,582. … 145(1) If both of a dependant’s parents die in the same accident, the dependant is entitled to the death benefit mentioned in

section 144 for each parent as if the dependant were the surviving spouse of each parent.

(2) If the insured is the sole parent of a dependant and dies as a result of an accident, the dependant is entitled to the death benefit mentioned in

section 144 as if the dependant were the surviving spouse of the insured.

(3) If, at the date of the accident, the surviving parent of the insured’s dependant is not entitled to the weekly death benefit set out in subsection 144(1), the dependant is entitled to the death benefit mentioned in

section 144 as if the dependant were the surviving spouse of the insured.

(4) A death benefit mentioned in this

section is payable until whichever of the following occurs first: (

a) the dependant reaches 21 years of age; and (

b) the dependant dies. …

(6) If there is more than one dependant, the death benefits mentioned in this

section are to be paid in the prescribed manner. I note that s. 144(4) provides that the minimum death benefit is $51,582. That amount is automatically increased to account for inflation. The parties agree that, for the purposes of this appeal, the amount in issue is $66,696. [ 7 ] As will be explained later, s. 26(4) of the Regulations is also relevant to the arguments advanced by the appellants. At the applicable times, it said this:

(4) If there is more than one dependant entitled to death benefits pursuant to

section 145 of the Act, the insurer shall calculate and pay the death benefits in accordance with the following rules: (

a) the death benefits mentioned in subsection 144(1), (2) or (3) of the Act must be calculated on the basis of the youngest dependant being considered the surviving spouse; (

b) the death benefits payable in clause (

a) are payable until the youngest dependant reaches 21 years of age and each dependant is entitled to an equal share of the death benefits as long as that dependant remains under 21 years of age; (

c) the death benefits mentioned in subsection 144(6) of the Act must be calculated on the number of dependants, not including the youngest, and must be paid until the second youngest reaches 21 years of age; (

d) a dependant is entitled to an equal share of the death benefits mentioned in clause (

c) as long as that dependant remains under 21 years of age. III. facts and procedural history [ 8 ] Mr. Johnson died in a motor vehicle accident on August 9, 2014. He was unemployed and, at the time of his death, had no “spouse” or “surviving spouse”, as those terms are defined in ss. 2(1) (rr) and (ss) of the AAIA . [ 9 ] The minimum spousal death benefit payable at the time of Mr. Johnson’s death was $66,696.

The appellants, Christine Johnson, Brennan Roberts and Sherry Ross, were all under 21 years of age at the time of their father’s death and thus “dependants” within the meaning of the AAIA . [ 10 ] The appellants applied to SGI for death benefits. SGI determined that each of them was entitled to receive benefits pursuant to s. 145(3) of the AAIA as if he or she was the surviving spouse of Mr. Johnson. As there was more than one dependant, SGI relied on s. 26 of the Regulations to conclude that the benefit payable under s. 145(3) should be divided amongst the appellants.

That division was accomplished by taking into account the age of each appellant at the time of Mr. Johnson’s death and the amount of time that would pass until he or she reached the age of 21. Ms. Johnson, Mr. Roberts and Ms. Ross were determined to be entitled to $7,778.44, $24,659.32 and $34,258.24 respectively. [ 11 ] The appellants disagreed with SGI’s approach. In their view, a proper reading of the AAIA and the Regulations meant they were each entitled to $66,696, not to a prorated share of that amount. They each issued a statement of claim and proceeded to the Court of Queen’s Bench.

IV. the queen’s bench decision

[12] The Queen’s Bench judge undertook his analysis on the basis that the appellants’ claim was rooted in s. 145(2) of the AAIA.The appellants and SGI agree that this was an error because the appellants’ claim is actually grounded in s. 145(3). This is because theappellants’ mother survived Mr.

Johnson but was not a “surviving spouse” within the meaning of the AAIA at the time of his death.Nonetheless, it is also agreed that the Queen’s Bench judge’s error on this point does not affect the integrity of his analysis because hisline of reasoning would be equally applicable to s. 145(3). [13] The Queen’s Bench judge appears to have proceeded on the premise that s. 144 of the AAIA involves four different spousaldeath benefits: (

a) a benefit payable where the insured was employed on the date of the accident and had a surviving spouse (s. 144(1));(

b) a benefit payable where the insured was an employed seasonal worker on the date of the accident and had a surviving spouse (s.144(2)); (

c) a benefit payable where the insured had a surviving spouse and would have held seasonal employment on the date of death buthad not held such employment for two years (s. 144(3)); and (

d) a minimum benefit (s. 144(4)). Against this background, the Queen’sBench judge turned to s. 145(6) of the AAIA which provides that, if there is more than one dependant, the death benefits contemplated bys. 145 are to be paid “in the prescribed manner”. [14] This led the Queen’s Bench judge to s. 26(4) of the Regulations. It refers to the equal sharing, among multiple dependants, ofthe death benefits “mentioned in subsection 144(1), (2) or (3)” but makes no reference to s. 144(4).

As a result, the Queen’s Bench judgeappeared to accept that, read literally, s. 145 of the AAIA and s. 26 of the Regulations would operate so as to entitle each of the appellantsto the minimum payment of $66,696 referred to in s. 144(4). [15] Nonetheless, the Queen’s Bench judge rejected this view of the AAIA because it would result in what he referred to as absurdconsequences. He explained this as follows: [35] An example demonstrates the absurd result that would flow from accepting the plaintiffs’

interpretation. Two insureds are killed inautomobile accidents. Insured A has a spouse and five children ages 15 to 20. Insured B also has five children ages 15 to 20 but no spouse.Each of A and B were unemployed and, under the Act, an IRB status such that the minimum spousal death benefit was $66,696. In bothsituations, weekly death benefits for the dependants are paid until they reach age 21. The dependant weekly death benefit payments are,until the ages of 18, paid to the surviving spouse of A and to the Official Guardian in the case of B.

After age 18, the dependant weeklydeath benefits are paid directly to the children. A’s surviving spouse received the capitalized minimum spousal death benefit and was ableto maintain that sum intact and as a segregated fund until her youngest child reached age 21, then shortly thereafter died and under her willdirected that this fund was to be shared equally. In this situation, the children of A ultimately receive a collective benefit of $66,696 or$13,339 each. By contrast, under the plaintiffs’

interpretation, the children of B ultimately receive a collective benefit of $330,480 of$66,696 each. [16] The Queen’s Bench judge then went on to reference s. 26(3) of The

Interpretation Act, 1995, SS 1995, c I-11.2 (now repealed),which says that “[w]ords in an enactment in the singular include the plural and words in the plural include the singular”. He concludedthat, as a result, the reference in s. 145(2) of the AAIA to “the dependant” being entitled to the death benefit mentioned in s. 144 must beread as meaning that “the dependants” collectively were entitled to a single benefit. [17] In the end, therefore, the Queen’s Bench judge found he could not accept the appellants’ arguments and concluded that SGIhad properly determined the extent of their benefits. See: 2018 SKQB 265. V. analysis [18] The appellants contend the Queen’s Bench judge erred in his

interpretation of the AAIA and the Regulations. They emphasizethat s. 145(3) refers to “the dependant” being entitled to receive the death benefit mentioned in s. 144 as if “the dependant were thesurviving spouse of the insured”. The appellants submit this means that they are each entitled to the minimum benefit of $66,696 payableunder s. 144(4). The appellants also stress that s. 26(4) of the Regulations, which provides for the division of spousal death benefitsamong dependants, does not mention the minimum benefit payable under s. 144(4), i.e., the provision they say is applicable here.

Inaddition, the appellants argue, by way of something of an alternative submission, that if s. 26(4) of the Regulations can be read aseffecting the division of benefits payable under s. 144(4) of the AAIA, it should be found to be invalid because the AAIA itself does notcontemplate the division of spousal death benefits in this way. [19] As is apparent, the appellants’ arguments reduce to questions about the proper

interpretation of the AAIA and the Regulations.As explained in Montgrand v Saskatchewan Government Insurance, 2017 SKCA 2, 406 DLR (4th) 546, this kind of issue involves reviewon a standard of correctness. [20] The basic approach to problems of statutory

interpretation is well known. It was described as follows by the Supreme Court inRizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 SCR 27: 21 … Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. Herecognizes that statutory

interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states: Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in their grammaticaland ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. … [21] In my view, the ordinary and grammatical sense or meaning of the words used in the AAIA and the Regulations does notsupport the position of the appellants. To begin, I find it difficult to place much significance on the fact that s. 145(3) of the AAIA isdrafted using the word “the”, i.e., that it says “the dependant is entitled to the death benefit mentioned in

section 144 as if the dependantwere the surviving spouse of the insured”. This language, in and of itself, at most creates some ambiguity. By this I mean that the wordingof s. 145(3) makes the intentions of the Legislature less clear than if it involved a reference to “each” dependant being entitled to the deathbenefit or, contrastingly, a reference to “all of the dependants collectively” being entitled to the benefit. However, any ambiguity caused

by the use of the word “the” in s. 145(3) is resolved by s. 145(6) . [ 22 ] Section 145(6) provides that death benefits are to be paid “in the prescribed manner” when there is more than one dependant. As a result, s. 145(6) necessarily signals that, when there is more than one dependant, each of them is entitled to something other than the full amount of the death benefit. That is so because, if each dependant was entitled to the full amount of the benefit, there would be no reason to include s. 145(6) in the AAIA .

Each dependant would claim and be paid a death benefit in the same manner as if there was only one dependant. Thus, notwithstanding how s. 145(3) is worded, s. 145 as a whole can only reasonably be taken to mean that, when there are multiple dependants, they will share a single spousal death benefit. [ 23 ] As for the line of the appellants’ submission concerning the Regulations , it is useful to begin by taking a more considered look at ss. 144 and 145.

In this regard, and unlike the Queen’s Bench judge, I read s. 144 as setting out the benefits payable in three situations: (a) s. 144(1) – where the insured was employed and had a surviving spouse; (b) s. 144(2) – where the insured was an employed seasonal worker and had a surviving spouse; and (c) s. 144(3) – where the insured was an unemployed seasonal worker and had a surviving spouse. Section 144(4) does no more than provide that, on each of these three tracks, the minimum benefit is $66,696.

It does not provide a distinct type of spousal benefit or a spousal benefit payable in any particular kind of situation. Indeed, s. 144(4) could be readily rewritten or rephrased to say “the minimum death benefit a surviving spouse is entitled to receive pursuant to either of subsection (1), (2) or (3) is $66,696”. [ 24 ] All of this is significant because, in effect, it explains the wording of s. 26 of the Regulations . In other words, it explains why s. 26 refers only to the division of benefits payable under ss. 144(1), (2) or (3) and makes no reference to a benefit payable under s. 144(4).

Those subsections, i.e., ss. 144(1), (2) and (3), are the subsections pursuant to which benefits are payable. Subsection 144(4), as noted, does no more than establish the minimum amount of those benefits. As a result, it is entirely understandable why it is not referenced in s. 26 . [ 25 ] Accordingly, although I take a somewhat different view of the AAIA than did the Queen’s Bench judge, I see no sustainable merit in the appellants’ argument about the Regulations .

Section 26 cannot be read as somehow acknowledging, by not mentioning s. 144(4), that the appellants are each entitled to a full spousal death benefit payment. [ 26 ] I turn, therefore, to the appellants’ alternative argument concerning the question of whether s. 26 of the Regulations is lawfully authorized by the terms of the AAIA . In my view, it is. Section 145(6) anticipates a regulation like s. 26 by indicating that death benefits are to be paid “in the prescribed manner” if there is more than one dependant.

Section 216(1)(aa) then speaks directly to the issue by providing that the Lieutenant Governor in Council may make regulations “respecting the calculation of a death benefit pursuant to

section 144 or 145”. In other words, the AAIA both contemplates that multiple dependants will share a death benefit in a manner to be prescribed in regulations and authorizes the making of such regulations. This is not a situation where a regulation is somehow in conflict with the substance of its parent statute or where there is no authority to make the regulation. [ 27 ] In the end, I conclude that the appellants’ arguments concerning the

interpretation of the AAIA and the Regulations cannot succeed. VI. costs [ 28 ] The appellants suggest that it would be appropriate to make an enhanced order for costs in their favour regardless of how this appeal is resolved. They point out that the no-fault regime put in place by the AAIA removes their right to sue for damages and provides them, instead, with defined benefits. In this sort of circumstance, say the appellants, they should not be forced to absorb the cost of the legal services needed to obtain the benefits due to them.

They contend that, after legal fees are weighed into the balance, they should not receive less than what the AAIA contemplates. [ 29 ] This general issue was discussed in Saskatchewan Government Insurance v Gardipy , 2019 SKCA 32 , 92 CCLI (5th) 1 [ Gardipy ]. There, Ottenbreit J.A. pointed out that, when the no-fault system launched in 1995, there was only a right of appeal to the Court of Queen’s Bench from an SGI denial of a claim. At the time, s. 198(5) of the AAIA provided that the claimant on a successful appeal to the Court of Queen’s Bench would receive costs on a solicitor and client basis:

(5) Subject to the regulations, the insurer shall reimburse a claimant who is successful on an appeal pursuant to this

section or

section 199 for the claimant’s costs on a solicitor and client basis. [ 30 ] This changed in 2002 with the introduction of amendments to the AAIA that gave claimants the choice of appealing either to the Commission or to the Court of Queen’s Bench. Appeals to the Court of Queen’s Bench were governed by s. 192 of the AAIA : 192(1) An appeal to the Court of Queen’s Bench is to be conducted in accordance with The Queen’s Bench Rules respecting actions commenced by statement of claim.

(2) If the insurer is obligated to pay a claimant’s bill of fees and disbursements in an appeal pursuant to this section, the insurer is deemed to be a person charged with the bill and may apply for taxation of the claimant’s bill of fees to a taxing officer in the same manner as costs pursuant to The Queen’s Bench Rules or The Legal Profession Act, 1990 .

As explained in Bear v Saskatchewan Government Insurance , 2004 SKQB 398 , 255 Sask R 203, and Gardipy , this meant that solicitor and client costs were no longer mandatory. [ 31 ] In light of this history, it would be wrong for this Court to adopt a rigid approach to costs that runs counter to the clear intentions of the Legislature. In other words, solicitor and client costs should not be awarded reflexively to claimants regardless of whether they win, lose or draw. That said, the appellants’ overall position might warrant further consideration in an appropriate case.

It would seem that, in a situation where a claimant succeeds as an appellant in overturning a refusal of benefits or, as a respondent, in resisting an attempt to deny benefits, this Court should at least be open to entertaining and examining an argument that costs should be awarded

against SGI on an enhanced basis. Awarding costs to a claimant who loses on appeal involves climbing a higher hill than does awarding costs to a claimant who is successful. However, even in cases where the claimant is unsuccessful, there might be a potential argument that he or she should be entitled to costs if his or her position was reasonable and involved an arguable position of genuine merit. [ 32 ] I need not attempt to resolve these issues here because, on any view of the situation, this is not a case where it would be appropriate to award costs, enhanced or otherwise, to the appellants.

They were not successful in their claim for benefits. Further, in my respectful view, this is not a situation where the merits of the case were sufficiently strong or where the case was sufficiently “close to the line” as to make a costs award appropriate even though the appeal was not successful. [ 33 ] There is one further costs issue that needs to be addressed. SGI advanced a somewhat qualified request for costs as a reaction to the appellants’ decision to present arguments in this Court that had not been presented in the Court of Queen’s Bench.

Although I understand SGI’s overall concern about proceedings that change legal shape as they move up the appellate ladder, I do not see this as a basis for awarding costs in the case at hand. VII. conclusion [ 34 ] I conclude this appeal must be dismissed. There will be no order with respect to costs. “Richards C.J.S.” Richards C.J.S. I concur. “Richards C.J.S.” for Whitmore J.A. as per authorization I concur. “Leurer J.A.” Leurer J.A.