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Considering “Big Picture” to Determine Dependency

January 21, 2019

In the recent decision released on December 21, 2018, between Pafco Insurance Company (Applicant) and Wawanesa Mutual Insurance Company and Western Assurance Company (Respondents), Arbitrator Novick concluded that Mr. Austin Henry Jr. was principally dependent for financial support on his father, Mr. Austin Henry Sr., at the time of the accident and was accordingly an insured under the Pafco policy.  As a result, under Section 268(2)1 of the Insurance Act, Pafco is the insurer with the highest priority to pay benefits.


Mr. Henry Jr. (the “Claimant”) was living with his mother and father at the time of the accident in Muncey, Ontario located in a community within the Munsee-Delaware Nation (Reserve).  For six months in the year before the accident, the Claimant lived with his girlfriend in an apartment in London, Ontario.  The Claimant had graduated from high school in London approximately one year before the accident.

The Claimant was receiving $600 per month from Ontario Works at the time of the accident.  In the year before the accident, it was calculated that Mr. Austin Henry Jr. received $2,304 cash for helping his father with his cleaning business and $913 from his summer job performing maintenance at a healing lodge.

A few weeks before the accident, the Claimant enrolled in a program called Fostering Aboriginal Success in Trades and Technology (“FASTT”) where he participated in different trades at different locations each week.  All costs were provided by the program and the Claimant received a $40 per diem stipend to cover the costs of meals.

The Claimant’s father provided the Claimant with $50 per week in spending money and stated he provided additional financial support to the Claimant from time to time.  The Claimant testified that he paid rent of $200 per month to his parents and contributed $100 per month towards groceries.  However, given the limited evidence supporting the Claimant’s contributions to the household prior to the accident, Arbitrator Novick found it unlikely that the Claimant would receive spending money from his father and then pay a similar amount back to his parents in the form of rent.

Determining Dependency

Two accounting expert reports were prepared, one on behalf of Pafco and the other on behalf of Wawanesa.  Each report calculated the Claimant’s financial dependency considering LICO statistics.  The report prepared on behalf of Pafco also calculated the Claimant’s financial dependency considering the financial information provided by the Claimant and his father.

Arbitrator Novick states the basic principles to determine dependency require that the four following factors are considered – amount of dependency, duration of dependency, the financial needs of the individual in question and their ability to be self-supporting.

If an individual provides for more than 50% of his or her expenses or needs, they are not principally dependent on anyone else.  There are two ways to determine whether an individual provides for more than 50% of his or her needs – gather specific financial information to quantify the claimant’s financial needs or living expenses or use statistics to estimate an individual’s personal or household expenses considering the size of community in which they reside.  Arbitrators and judges have determined that the financial information received by parties is likely “highly artificial and necessarily inaccurate”.  This is concluded by Justice Myers in Allstate Insurance Company v. ING Insurance and Aviva Canada Inc. (2015).

Arbitrator Novick states, “I find that using LICO data to estimate the Claimant’s expenses in this case would ignore the reality of his circumstance for much of the period in question” as the Claimant and his parents were “status Indians under the Indian Act”.


Given the unique situations in this case, Arbitrator Novick argued that looking at the “big picture” of the Claimant’s life at the time of the accident is the most reliable approach to determine principal financial dependency rather than relying on figures and assumptions.

Arbitrator Novick concluded that the Claimant had not achieved financial independence or developed a plan to do so, at the time of the accident.  Specifically, the Claimant was living in his parents’ home and did not contribute to any of the household expenses.  The Claimant’s father drove him where he needed to go and gave him $50 in spending money each week.  The Claimant had no real work history and his earnings consisted mainly of cash paid from his father.  As a result, Arbitrator Novick found the Claimant had not achieved any financial independence as he was principally dependent on his father for financial support at the time of the accident.

Read the decision in full detail here:

Pafco Insurance Company v. Wawanesa Mutual Insurance Company & Western Assurance Company

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