C.J.Q.B. 2004 SKQB 156 Q.B. A.D. 2001 No. 671 J.C. P.A. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF PRINCE ALBERT BETWEEN: ERNEST MONTGRAND and SASKATCHEWAN GOVERNMENT INSURANCE RESPONDENT P. V. Abrametz for the appellant J. A. Bailey for the respondent JUDGMENT ROTHERY J. April 19, 2004 [1] The appellant, Ernest Montgrand, appeals the calculation of his income replacement benefit made by the respondent, SGI, as provided by Part VIII of The Automobile Accident Insurance Act, R.S.S. 1978, c. A-35 (the “Act”). Under s. 198 of the Act, hearing was held to determine certain facts. The parties agree that Montgrand is non-earner as defined by the Act, who was involved in motor vehicle accident on July 25, 1998, and suffered injuries to an extent that he is not able to carry on gainful employment as skidder operator. Montgrand is entitled to an income replacement benefit. [2] Counsel for Montgrand estimates that he ought to receive an income replacement benefit (“IRB”) based on yearly wages in excess of $50,000. This position is based on employment promised to Montgrand which would have commenced during the first 180 days following the accident. Counsel for SGI submits that the weighted average approach in calculating Montgrand’s gross yearly employment income (“GYEI”) sets the IRB much lower. Over the previous three years, Montgrand earned no more than $12,000 per year. [3] The Act provides for calculation of IRB for the first 180 days after the accident, and for the 181st and subsequent days. The provisions of the Act for determining the IRB for the first 180 days that are pertinent in this situation are as follows: 116(1) For the first 180 days after an accident, non-earner is entitled to an income replacement benefit if, as result of the accident, the non-earner: (a) is unable to hold an employment that he or she would have held during the 180-day period if the accident had not occurred; (3) Subject to the regulations, the insurer shall calculate the income replacement benefit pursuant to clause (1)(a) on the basis of the gross yearly employment income the non-earner would have earned from his or her employment. [4] The relevant sections from The Personal Injury Benefits Regulations, c. A-35, Reg are as follows: s. 19(1) An income replacement benefit for non-earner to be calculated pursuant to section 116 of the Act, is to be calculated based solely on the time that the victim would have actually been employed during the first 180 days after the accident. s. 20 Subject to these regulations, victim’s gross yearly employment income not derived from self-employment at the time of the accident is the sum of the following amounts: (c) in the case of non-earner, the salary or wages, excluding benefits or commissions in clauses (d) or (e), from an employment that the non-earner would have held, if the accident had not occurred, during the first 180 days after the date of the accident divided by the number of days the employment would have been held and then multiplied by 365; [5] Counsel for the appellant called Wayne Cowan, president of CLC Logging Ltd., to testify on Montgrand’s behalf and to give evidence of employment that he would have provided for Montgrand but for the intervening accident. CLC Logging Ltd. is logging and milling business in the Meadow Lake area of Saskatchewan. Cowan testified that the business operates all year round. When staff are not in the woods working as skidder operators and operating logging machinery, they are utilized in the mill. Skidder operators are paid $17 per hour and work sixty hours per week, consisting of five twelve-hour days. Logging continues during inclement weather. When the operation moves from one site to another, the employees assist in setting up camp. [6] Cowan stated that Montgrand had worked for him before as skidder operator, and found Montgrand to be capable employee. Cowan recalls personally contacting Montgrand during the summer of 1998 to commence work for him on August 17, 1998. No documents were produced by Cowan pertaining to Montgrand’s employment. But, T-4 statement of remuneration paid prepared for Canada Customs and Revenue Agency for another employee indicated that employee received $50,516 for employment income from Cowan’s company in 1999. [7] Montgrand’s counsel submits that this promise of employment is sufficient to qualify Montgrand to receive an income replacement benefit from August 17, 1998 to January 21, 1999 inclusive based on wages calculated at $17 per hour for 60-hour work week. Counsel concedes that Montgrand was receiving employment insurance benefits at the date of the accident, and did so until October 24, 1998 inclusive. The income replacement benefit at this rate ought to commence immediately thereafter until January 21, 1999 inclusive. [8] Section 116(1)(a) and Regulation 19(1) require that the income replacement benefit be calculated “based solely on the time that victim would have actually been employed during the first 180 days after the accident”. Thus, an assertion by prospective employer that employment was promised may not be sufficient to prove, on balance of probabilities, that the victim would actually have been employed during the first 180 days. It is certainly not sufficient in Montgrand’s case. Other evidence leads to conclusion that Montgrand would not have actually been employed at $17 per hour for 60 hours per week for the entire 180 day period. [9] As stated in Dietner v. Saskatchewan Government Insurance, [2001] S.J. No. 67 (Q.B.), at para. 26, when referring to an IRB for part-time and temporary earners, “these sections [s. 114 and s.115] indicate legislative intent to have the IRB reflect claimant’s earning reality by providing for reduction of the IRB calculation in certain circumstances such as those in which the claimant is capable of part-time work.” [10] While this appeal deals with s. 116 and s. 117 for non-earners, agree that the legislative intent remains the same. The income replacement benefit must reflect a claimant’s earning reality. In Montgrand’s case, his earning reality is far from Cowan’s promised employment. Cowan had previously employed Montgrand from January, 1998 to March, 1998 as skidder operator until Montgrand was laid off. Pay stubs for the time period of January 24, 1998 to March 6, 1998 reflect an hourly wage of $16 paid to Montgrand. Over that six-week period, Montgrand never worked close to 60-hour work week. The average work week was 34.25 hours. [11] In the previous three years, CCRA tax printouts show that Montgrand only worked part of the year. Of Montgrand’s total income of $18,358 for 1995, $11,864 was from employment income and $6494 was employment insurance benefits. Of Montgrand’s total income of $22,450 for 1996, $9388 was from employment income and $11,042 was employment insurance benefits, and $2020 for other benefits. Of Montgrand’s total income of $16,673 for 1997, $5278 was from employment income and$10,870 was workers’ compensation benefits. [12] I find that Montgrand’s earning reality was working for employment income no more than half the time. Working for CLC Logging Ltd. amounted to wage rate of $16 per hour for work week averaging 34.25 hours. Montgrand would have worked, on average, 90 of the 180 days. The IRB ought to be calculated accordingly. [13] SGI submits that reduction in the period of employment be reduced to factor in inclement weather. No reduction for inclement weather is required. accept Cowan’s evidence that his operation continues in inclement weather. The issue is determining the time that Montgrand would have actually been employed and that finding has been made. [14] The relevant provisions of the Act for determining the IRB on the 181st day and subsequent days for non-earner are as follows: 117(1) Subject to subsection (5), if on the 181st and subsequent days following an accident non-earner is unable to hold the employment he or she could have held at the time of the accident, the non-earner is entitled to an income replacement benefit calculated pursuant to this section. (2) For the purposes of calculating an income replacement benefit pursuant to this section, the insurer shall determine an employment for the non-earner pursuant to section 131. (3) Subject to subsection (4), the insurer shall calculate the income replacement benefit on the basis of the gross yearly employment income that the insurer determines the non-earner could have earned from the employment mentioned in subsection (2), considering the following factors: (a) whether the non-earner would have held the employment on full-time or part-time basis; (b) the work experience and earnings of the non-earner in the five years before the accident; and (c) any prescribed factors. (4) An income replacement benefit pursuant to this section is not to be less that the income replacement benefit the non-earner received pursuant to section 116... [15] The corresponding provisions of the Regulations are found in sections 24 -28. These regulations prescribe the calculations for establishing the gross yearly employment income required for s. 117(3) of the Act. Counsel for the appellant submits that the employment insurance benefits that Montgrand received during the first 180 days, up to October 25, 1998, ought to be included in the calculation of benefits mentioned in section 20(c) of the Regulations that affect the calculation referred to in section 24(1) of the Regulations. [16] Section 24(1) of the Regulations states: 24(1) The gross yearly employment income of victim who, at the time of the accident, does not hold the employment determined for him or her by the insurer but who, in the five calendar years preceding the date of the accident, held that employment is the greatest gross yearly employment income earned by the victim from the employment in any of those calendar years, including any benefits mentioned in sections 20 and 21, where the income is annualized, indexed pursuant to section 28 and then adjusted pursuant to section 27. (Emphasis added) [17] The benefits referred to in section 20 of the Regulations are set out in s. 20(d), and include employment bonuses, tips, overtime, and personal use of motor vehicle. There is no requirement to include employment insurance benefits in the calculation required for s. 24(1) of the Regulations. [18] Counsel for the appellant argues that Dietner stands for just this proposition. But, in that case, the court was required to make determination whether the claimant was deprived of an employment insurance benefit in the first 180 days. In Montgrand’s situation, no determination was required to be made under s. 116(1)(b) of the Act as to whether Montgrand was deprived of an employment insurance benefit because he was receiving employment insurance at the time of his accident, and received his full entitlement to employment insurance until it expired on October 24, 1998. The ratio in Dietner is not relevant to this case. Section 117 and the corresponding regulations provide the mathematical formula to determine Montgrand’s IRB and the GYEI from which the IRB is derived. [19] Counsel for the appellant further submits that s. 117(4) of the Act ensures that Montgrand’s IRB as calculated by what SGI refers to as “weighted average approach” for the time period after the first 180 days is not less than the IRB calculated under s. 116 of the Act and received by Montgrand in the first 180 days after the accident. agree with counsel’s position. The wording of s. 117(4) is clear. [20] Ensuring that the IRB is not less than the amount received for the first 180 days is in keeping with the purpose of the legislation. It strives for one’s earning reality. non-earner in the past may well become someone whose employment income, but for the accident, would be more than the “weighted average approach”. If claimant has proved on balance of probabilities that the promised employment reflects his or her earning reality, poor past record ought not to preclude the claimant from an IRB that reflects his earning reality. [21] Whether Montgrand’s IRB in the first 180 days, based on the court’s finding of facts, is greater or less than the IRB as prescribed by s.117 of the Act for the subsequent days, is matter of mathematical calculation. If it is greater, Montgrand has the benefit provided by s. 117(4) of the Act. As agreed by counsel, if they are unable to agree on the calculation of the IRB, the matter may be remitted back to me. [22] Counsel for the appellant is entitled to solicitor-client costs as provided by s. 198(5) of the Act and Regulation 101. If Montgrand is entitled to benefits other than what SGI has paid him, he is awarded interest on the value of those benefits not paid, from June 1, 2001 to date. SGI did not receive information from the appellant regarding promised employment until that date, and could not act on the appellant’s information before that date.
The appellant appeals the calculation of his income replacement benefit made by the respondent, SGI, as provided by Part VIII of The Automobile Accident Insurance Act. Under s. 198 of the Act, a hearing was held to determine certain facts. The parties agree the appellant was a non-earner as defined by the Act, who was involved in a motor vehicle accident and suffered injuries to an extent that he is not able to carry on gainful employment as a skidder operator. The appellant estimated that he should receive an income replacement benefit (IRB) based on yearly wages in excess of $50,000. This position was based on employment promised to the appellant that would have started during the first 180 days following the accident. The respondent submits that the weighted average approach sets the IRB much lower, as in the previous 3 years the appellant earned no more than $12,000 per year. HELD: 1) The IRB must reflect a claimant's earning reality. The appellant's earning reality was far from the promised employment. The Court found that the appellant's earning reality was working for employment income no more than half the time and the IRB ought to be calculated accordingly.  2) The benefits referred to in s. 20 of the Regulations include employment bonuses, tips, overtime, and personal use of a motor vehicle. There is no requirement to include employment insurance benefits in the calculation required for s. 24(1) of the Regulations. 3) Counsel for the appellant was entitled to solicitor-client costs as provided by s. 198(5) of the Act and Regulation 101.