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It's About Permanence (or not)

 Jul 11, 2018 11:00 PM
by Neil Reeves

A recent Superior Court decision allowed an appeal from an arbitrator’s award in a priority dispute dealing with financial dependency, on the basis that the decision was not reasonable. In State Farm v. R, the arbitrator determined that two claimants were not financially dependent on State Farm’s insured, leaving the Motor Vehicle Accident Claims Fund as the payor of both claims.

The underlying factual matrix was complex, involving two claimants and a multi-generational extended family. There were a number of family members who had recently moved to Canada and were residing in different family residences. Essentially, the claimants had lived with one family member for a period of 3 months before moving into the residence of another family member for the 3 months prior to the accident. One claimant was in receipt of ODSP and on this basis, no dependency was found regardless of the time frame used. That decision was upheld on appeal as being reasonable.

For the other claimant, who had no means of support other than from the person with whom she was residing, the arbitrator used a 6 month time frame to analyze financial dependency.  The critical aspect of the case which informed the Court’s ruling was the arbitrator’s determination that the 3 month period prior to the accident was not the appropriate time frame because it lacked an element of permanency. In the case of Intact v. Allstate, the Court of Appeal ruled that importing a permanency test into the process of determining the appropriate time frame to analyze dependency was inconsistent with applicable legal principles. This was the nub of the determination in Intact v. Allstate.

Therefore, the decision as it pertained to that particular claimant was overturned. In spite of only residing with the State Farm insured for a 3 month time period, with no indication that this was circumstance was permanent, the claimant was found to be a dependent of the State Farm insured.

Establishing the appropriate time frame to analyze dependency is a fundamental and critical part of any dependency analysis. This is an issue that is determined case by case and ultimately depends on finding the time frame that reflects the circumstances of the parties at the time of the accident. The decision in State Farm v R.  can be found here.




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