



COURT OF APPEAL FOR ONTARIO

CITATION: Henry v. Gore Mutual Insurance Company, 2013 ONCA
    480

DATE: 20130716

DOCKET: C55845

Simmons, Hoy and Strathy JJ.A.

BETWEEN

Tyrone Henry

Applicant (Respondent)

and

Gore Mutual Insurance Company

Respondent (Appellant)

Philippa G. Samworth, for the appellant

Joseph Y. Obagi, for the respondent

Heard: May 16, 2013

On appeal from the judgment of Justice Timothy D. Ray of
    the Superior Court of Justice dated June 27, 2012, with reasons reported at
    2012 ONSC 3687.

Hoy J.A.:

I.

OVERVIEW

[1]

The respondent, Tyrone Henry, was left a paraplegic after a motor
    vehicle accident on September 28, 2010. His mother took an unpaid leave of
    absence from work to provide the full-time care he required.

[2]

In 1990, limits were introduced on tort compensation for victims of
    automobile accidents and insurers were required to provide various benefits
    prescribed by regulation, including paying for the reasonable and necessary
    expenses incurred by or on behalf of an insured for attendant care, subject to
    various limitations, regardless of whether the insured was at fault.

[3]

The issue on this appeal is whether, under the regulation in effect at
    the time of the respondents accident  the
Statutory Accident Benefits
    Schedule  Effective September 1, 2010
, Ont. Reg. 34/10 (SABS-2010) 
    the appellant insurer, Gore Mutual Insurance Company, is required to pay
    attendant care benefits for the entire 24 hours per day that the respondent
    required, and the mother provided, care, or only for the care provided during
    the 40 hours per week of paid employment foregone by the mother. The insurer
    took the position that because the mother worked an eight hour day, the amount payable
    for attendant care benefits would be pro-rated, based on an eight hour day.

[4]

The application judge concluded that the insurers obligation to pay for
    attendant care benefits was not restricted to care provided during the 40 hours
    per week of paid work foregone by the mother.  I agree, and, for the reasons
    that follow, would dismiss this appeal.

II.

SABS 2010 - THE RELEVANT PROVISIONS

[5]

This appeal turns of the interpretation of the term incurred defined
    in s. 3 (7)(e) of SABS-2010:

3(7) For the purposes of this Regulation,



(e)  , an expense in respect of goods and
    services referred to in this Regulation is
not incurred by an insured
    person unless,

(i)      the insured
    person has received the goods or services to which the expense relates,

(ii)      the insured
    person has paid the expense, has promised to pay the expense or is otherwise
    legally obligated to pay the expense, and

(iii)    the person
    who provided the goods or services,

(A)     did
    so in the course of the employment, occupation or profession in which he or she
    would ordinarily have been engaged, but for the accident, or

(B)
        sustained an economic loss as a result of providing the goods or services
    to the insured person;

[Emphasis added.]

The appellant concedes that the requirements of
    3(7)(e)(i) and (ii) are met, and that the mother sustained an economic loss as
    a result of providing attendant care services to the respondent. The issue is
    whether an expense was incurred by the respondent with respect to the attendant
    care services provided by his mother outside of her normal hours of work.

[6]

Economic loss is not defined in SABS-2010.

[7]

The term incurred is used in s. 19 of SABS-2010, which governs payment
    of attendant care benefits:

19(1) Attendant Care benefits shall pay for all
    reasonable and necessary expenses,

(a) that are
incurred
by or on behalf of
    the insured person as a result of the accident for services provided by an aide
    or attendant

19(2) Subject to subsection (3), the amount of a
    monthly attendant care benefit is determined in accordance with the version of
    the document entitled Assessment of Attendant Care Needs that is required to
    be submitted under section 42 and is calculated by,

(a) multiplying the total number of hours per
    month of each type of attendant care listed in the document that the insured
    person required by an hourly rate that does not exceed the maximum hourly rate,
    as established under the Guidelines, that is payable in respect of that type of
    care; and

(b) adding the amounts determined under clause
    (a), if more than one type of attendant care is required.

[Emphasis added.]

[8]

Subsection 3(7)(c) defines an aide or attendant to include a family
    member or friend who acts as the persons aide or attendant, even if the family
    member or friend does not possess any special qualifications.

[9]

Subsection 19(3) sets out maximum amounts payable for attendant care. 
    Unless increased by optional benefits, the amount of the attendant care benefit
    for someone such as the respondent who sustained a catastrophic impairment as a
    result of the accident shall not exceed $6,000 per month and $1,000,000 for any
    one accident.

[10]

The
    document entitled Assessment of Attendant Care Needs that is required to be
    submitted under s. 42 of SABS-2010, and referred to in s. 19(2), is known as
    Form 1.  Section 42 provides that it must be prepared and submitted to the
    insurer by an occupational therapist or a nurse. It sets out the weekly
    attendant care needs of the insured, at various levels of care, and applies a
    statutory rate to each level, to calculate the total monthly care benefit
    payable. Subsection 42(3) provides that the insurer may, by notice to the
    insured, challenge a Form 1 within 10 days after receiving it. The insurer must
    specify the expenses described in the assessment of attendant care needs the
    insurer agrees to pay, the expenses the insurer refuses to pay and the medical
    and any other reasons for the insurers decision.  Under ss. 42(4) and 44(1),
    it may require the insured to undergo an examination by persons chosen by the
    insurer who are regulated health professionals or who have expertise in
    vocational rehabilitation; however, s. 42(6) requires that the insurer begin
    payment of attendant care benefits within 10 business days after receiving the
    assessment of attendant care needs and, pending receipt by the insurer of the
    report of any examination under section 44, shall calculate the amount of the
    benefits based on the assessment of attendant care needs.

[11]

Finally,
    subsection 33(1) requires an insured, within 10 business days after receiving a
    request from the insurer to provide the insurer with certain information,
    including, [a]ny information reasonably required to assist the insurer in
    determining the applicants entitlement to a benefit. And subsection 33(6)
    provides that an insurer is not liable to pay a benefit in respect of any
    period during which the insured fails to comply with subsection 33(1).

III.

THE APPLICATION JUDGES DECISION

[12]

The
    application judge commented that the intent of SABS-2010 was to prevent a
    member of an insureds family who was not ordinarily an income earner or
    working outside the home, from profiting from an attendant care benefit, when
    they would likely be at home anyway  and would have looked after the injured
    person without compensation.

[13]

He
    noted that economic loss was not defined in SABS-2010.  He reasoned:

If the amount as opposed to the fact of economic loss were
    intended to be relevant, then one would expect the regulations to be of
    assistance in calculating the amount, since economic loss has been defined in
    very broad terms in claims for compensation in tort law cases, and has been the
    subject of a great deal of jurisprudence because of the difficulty in
    quantification. This omission implies that no such calculation is relevant
    beyond a finding that the person has 
sustained an economic loss
  or
    not. It is a threshold finding for incurred expense, but is not intended as a
    means of calculating the quantum of the incurred expense. I accept that the
    amended provisions now eliminate claims by non professional service providers
    who have not sustained an economic loss.

[14]

On
    a plain reading of s. 19(1),  if a family member stays home from work and
    loses income in order to provide all reasonable and necessary attendant care to
    the insured, and the insured is obligated to pay, promises to pay or does pay
    the family member, then the definition in s. 19(1) has been met. The insurer
    must pay all reasonable and necessary attendant care expenses to the insured as
    described in the Form 1.

IV.

THE APPELLANTS SUBMISSIONS

[15]

The
    appellant argues that the application judge made two errors in interpreting
    SABS-2010.

[16]

First,
    his interpretation does not give effect to the word the, which precedes
    goods or services in s. 3(7)(e)(iii)(B).  That word co-relates the economic
    loss to the particular services provided to the insured person. In this case,
    the respondents mother only sustained an economic loss as a result of
    providing the attendant care services she provided during the hours that she
    would otherwise be working, and the appellant is therefore only required to pay
    for attendant care in respect of those hours.

[17]

Moreover,
    the legislative history indicates that SABS-2010 was intended to limit
    compensation payable to family members. If the insurer is required to pay the
    insured for all attendant care provided by a family member during the period of
    economic loss, SABS-2010 would not achieve that objective.

[18]

Second,
    the application judge erred in finding that the insurer must pay all of the
    expenses described in the Form 1. Payment in accordance with Form 1 is not
    automatic. The Form 1 identifies attendant care needs, but does not constitute
    evidence that expenses have been incurred. The insurer is entitled to request
    additional information from the insured to satisfy itself that an expense has been
    incurred: see
McKnight v. Guarantee Co. of North America
, FSCO
    A02-000299, 2003 CarswellOnt 5408, at paras. 11-13;
Stargatt v. Zurich
    Insurance Co.
, FSCO P01-00045, 2003 CarswellOnt 6358, at para. 32;
Fernandes
    (Attorney of) v. Certas Direct Insurance Co.
, FSCO P06-00030, 2008
    CarswellOnt 988, at paras. 45 and 47. The application judges interpretation would
    hamper insurers ability to combat fraud.

[19]

I
    address these two issues in turn.

V.

ANALYSIS of issue one

(1)

Guiding approach and conclusion

[20]

In
    my approach to the first issue before me, I am guided by this courts decision
    in
Monks v. ING Insurance Co. of Canada
2008 ONCA 269, 90 O.R. (3d)
    689.

[21]

In
Monks
, this court considered the interpretation of the word incurred
    in the
Statutory Accidents Benefits ScheduleAccidents on or after November
    1, 1996
, O. Reg. 403/96 (SABS-1996). The word incurred was not defined
    in SABS-1996.  At para. 51, the court noted that SABS-1996 was incorporated in
    every standard insurance policy by virtue of s. 268(1) of the
Insurance Act
,
    R.S.O. 1990, c. I.8 (the Act). The court explained that, as such, the
    principles applicable to the construction of insurance coverage provisions were
    applicable to it: insurance coverage provisions are to be interpreted broadly,
    while coverage exclusions or restrictions are to be construed narrowly in
    favour of the insured.  To the extent that the word incurred restricts
    coverage available to the insured, it must be assigned a narrow meaning.

[22]

Applying
Monks
, I agree with the application judge that, under SABS-2010,
    economic loss serves as a threshold for entitlement to (and not as a measure or
    factor in quantifying the amount of) reasonable and necessary attendant care
    benefits to be paid by an insurer. I conclude this based on the language used,
    the scheme and logic of SABS-2010, and the fact that the legislature could
    have, but did not, include a provision in SABS-2010 for calculating the amount
    payable where a family care-giver sustains an economic loss as a result of
    providing required care to an insured.  Moreover, this interpretation is not
    inconsistent with the evolution of the regulations governing payment for
    attendant care provided by family members or the five-year report on automobile
    insurance in Ontario released by the Financial Services Commission of Ontario
    (FSCO) shortly before SABS-2010 came into force.

(2)

The language used

[23]

I
    do not read the word the in s. 3(7)(e)(iii)(B) as necessarily limiting an
    insureds entitlement to attendant care benefits to those provided during the
    hours that the family member would otherwise be at work. In my view, applying
Monks
,
    the goods or services in s. 3(7)(e)(iii)(B) should be broadly construed to
    refer to the goods or services referred to in [SABS-2010] referenced in the
    opening words of s.3(7)(e). SABS-2010 refers to a number of kinds of goods and
    services, including, in s. 19(1)(a), the services provided by an aide or
    attendant. Accordingly, I read s. 3(7)(e)(ii)(B) as referring to an economic
    loss as a result of providing services as an aide or attendant.

(3)

The scheme and logic of SABS-2010

[24]

This
    interpretation is also consistent with the scheme and logic of SABS-2010.
    Subsection 19(2) provides that, subject to the maximums set out in subsection
    19(3), the
amount
of a monthly care benefit is
determined
in accordance with the Form 1 required to be submitted under s. 42, and is
    calculated based on the number of hours of each type of attendant care
that
    the

insured person requires
. As the respondent argues, s. 19(2)
    makes clear the underlying premise that, once entitlement is determined, the amount
    of the benefit is based on the insureds need for care. That amount is, of
    course, subject to the maximums in s. 19(3), and the insurer has the right to
    challenge a Form 1 (pursuant to s. 42) and to request certain information to
    assist it in determining the insureds entitlement (pursuant to s. 33).
[1]

(4)

What SABS-2010 does not say

[25]

As
    the application judge indicates, if the amount of the monthly care benefit were
    to be calculated based upon the number of hours the family care-giver was
    unable to work because she was providing care, or the quantum of the economic
    loss sustained by the care-giver, SABS-2010 could have so indicated. SABS-2010
    is comprehensive legislation. In ss. 4, 7, 8, 9 and 30, it includes detailed
    formulas for the calculation of income replacement benefits, the adjustment of
    those benefits after age 65 and their indexation.

(5)

Legislative history and intent

[26]

I
    agree with the appellant that the evolution of the regulations governing
    payment for attendant care provided by family members and the five-year report
    on automobile insurance in Ontario released by FSCO shortly before SABS-2010
    came into force support his argument that SABS-2010 was intended to provide a
    check on payments to family care-givers.  However they do not, in my view,
    support the appellants interpretation of s. 3(7) (e).

[27]

Under
    the first Statutory Accident Benefits Schedule enacted by the government of
    Ontario  the
Statutory Accident Benefits ScheduleAccidents Before January
    1, 1994
, R.R.O. 1990, Reg. 672, (SABS-1990)  insurers were required to
    pay the amount of the gross income reasonably lost by a person other than the
    insured person as a result of the accident in caring for the insured person, to
    a maximum of $3,000 a month, and $500,000 with respect to each insured person. Insurers
    were not required to pay for attendant care provided by family members who did
    not lose income as a result of providing care:
Monachino v. Liberty
(2000), 47 O.R. (3d) 481.

[28]

Section
    47 of the next Statutory Accident Benefits Schedule enacted by the government 
Statutory Accident Benefits ScheduleAccidents After December 31, 1993 And
    Before November 1, 1996
, O. Reg. 776/93 (SABS-1994)  provided for the
    compensation of family members of the insured person who provided attendant
    care, without proof of loss of income. SABS-1996 continued this treatment of
    care-giving by family members.

[29]

On
    March 31, 2009, FSCO released its first, five-year report on automobile
    insurance in Ontario. The report, which was mandated under s. 289.1 of the
Insurance
    Act
, summarized issues and concerns raised by stakeholders, and included
    recommendations aimed at improving the effectiveness and administration of the
    automobile insurance system.

[30]

The
    appellant points to the concerns raised by the Insurance Bureau of Canada
    (IBC) with respect to attendant care. At pages 44-45, FSCO reported that IBC
    indicated that over-utilization of the attendant care benefit was becoming a
    problem, with a 59.1 per cent increase in attendant care costs between 2004 and
    2007. FSCO also reported anecdotal information from the insurance industry
    suggesting that an increasing number of claimants with minor injuries are now
    claiming and receiving attendant care benefits. At page 45, FSCO expressed
    concern that assessments were being conducted by individuals without explicit
    training in functional assessments to address functional impairment At page
    46, it recommended that only occupational therapists and nurses who have been
    trained on the use of Form 1 should be permitted to assess auto accident
    victims for the attendant care benefit.
[2]
It concluded that, if adopted, this recommendation should provide insurers with
    more confidence of the necessity of the attendant care claimed.

[31]

At
    p. 47, FSCO also addressed the payment of attendant care benefits to family
    members:

Another issue raised in the IBC submissions related to the
    payment of attendant care benefit to a claimants family members and friends.
    Insurers are concerned that the benefit can become a windfall for the claimant
    if no actual services are provided.The IBCs solution is to restrict payment
    to family members only where it can be shown that an economic loss has been
    incurred.

[32]

FSCO
    rejected IBCs solution:

The issue is not so much who is providing the care but whether
    care is actually required. FSCO believes that proper use of the Form 1 to
    screen claims is the most effective approach to ensuring that the benefit is
    paid to those who truly need the care. Introducing additional disability or
    functional eligibility tests or requiring caregivers to demonstrate economic
    loss would add more complexity to the system.

[33]

SABS-2010,
    enacted without official commentary following the release of FSCOs report,
    required the Form 1 to be prepared by an occupational therapist or a registered
    nurse, and included the language at issue, requiring that the family care-giver
    have sustained an economic loss as a result of providing the attendant care
    services to the insured.

[34]

IBCs
    solution, as summarized by FSCO, did not include restricting the amount of
    the payment for attendant care to care provided during the period that the
    family care-giver would otherwise have been at work, as the appellant now
    proposes. Nor, based on FSCOs summary, did it propose reverting to the system
    in SABS-1990, which provided for reimbursement of income reasonably lost by a
    person other than the insured in caring for the insured, subject to maximums.

[35]

In
    my view, the requirement adopted (that the family care-giver have sustained an
    economic loss) provides a rough check on attendant care costs.

[36]

Attendant
    care benefits are only payable in respect of the provision by a family member
    of care detailed in the Form 1 assessment of the insureds attendant care needs
    if the family member sustains an economic loss as a result of providing such
    care to the insured.  If an economic loss is sustained, attendant care benefits
    are payable with respect to all care detailed in the Form 1 provided by the
    family member, subject to the maximums in s. 19(3) and various other 
    safeguards, including ss. 42 and 33 of SABS-2010.  If no such loss is
    sustained, no attendant care benefits are payable in respect of care provided
    by the family member, even if the family member provides care that would
    otherwise be provided by someone in the course of their employment, occupation
    or profession and would necessitate the payment of attendant care benefits by
    the insured.  And to the extent that the economic loss sustained by the family
    member as a result of providing such care to an insured exceeds the maximum
    attendant care benefits stipulated in SABS-2010, the family member is not
    indemnified.

(6)

Definition of economic loss

[37]

The
    appellant argues that because economic loss is not defined in SABS-2010,
    insurers risk facing claims for attendant care benefits founded on wide and
    expansive interpretations of economic loss, or
de minimis
financial
    or monetary loss.
[3]
If this transpires, it argues, the reduction in attendant care costs the
    legislature sought to achieve with SABS-2010 will not be achieved. The
    appellant urges the court to define economic loss for the purpose of
    SABS-2010. I would decline to do so. On the facts of this case, economic loss
    is clear. The respondents mother gave up full-time paid employment to provide
    care for her son on a 24-hour per day basis.

VI.

ANALYSIS OF ISSUE TWO

[38]

As
    indicated above, the appellant argues that the application judge erred in
    stating that the insurer must pay all of the expenses described in the Form 1. It
    must be noted that the appellant conceded that the full-time care described in
    the Form 1 was reasonable and necessary, and that the mother provided it. The
    statement by the application judge must be viewed in that light, and not as
    derogating from an insurers right to challenge the assessment of an insureds
    attendant care needs reflected in the Form 1 pursuant to s. 42, or to request
    additional information from the insured pursuant to s. 33(1) of SABS-2010 to
    satisfy itself that the care was provided and the expense claimed was incurred.

[39]

The
    three FSCO decisions that the appellant relies on 
Stargratt
,
McKnight
and
Fernandes
 involved disputes with respect to attendant care
    benefits governed by SABS-1996. SABS-1996 did not contain a definition of
    incurred.  At issue in each if these cases was whether the Form 1 created an
    automatic entitlement to payment.

[40]

McKnight
held that the insurer may in some cases require additional information pursuant
    to s. 33 of SABS-1996 to satisfy itself that the attendant care services were
    provided. Subsection 33(1) provides that a person applying for a benefit under
    SABS-1996 shall, within 10 days after receiving a request from the insurer,
    provide the insurer with any information reasonably required to assist the
    insurer in determining the persons entitlement to a benefit. Substantially the
    same language is included in s. 33(1) of SABS-2010.

[41]

In
Fernandes
, the insured sought recovery for the attendant care provided
    by family members, in addition to expenses paid to long term care facilities,
    in accordance with the Form 1. The Arbitrator found that only a small portion
    of the attendant care provided by family members was reasonable and necessary
     a pre-condition in SABS-1996 which remains in SABS-2010. FSCO held that a
    Form 1 does not bind an arbitrator, and that the onus was on the insured to
    establish that the attendant care sought was reasonable and necessary. FSCO
    agreed with the arbitrator that the additional care provided by the family was
    neither reasonable nor necessary.
Fernandes
cited
McKnight
:
    SABS 1996 requires a benefit to be paid in accordance with the Form 1 only once
    entitlement to the benefits has been established.

[42]

Stargratt
,
    which preceded
McKnight
, commented in
obiter
, at para. 32,
    that insurers are entitled to require documentation of caregiver and attendant
    care services claimed.

[43]

In
    my view, s. 33(1) of SABS-2010 and the three FSCO cases that the appellant
    relies on make clear that an insurer can request information to verify that a
    family member has sustained an economic loss as a result of providing care to
    the insured, and, viewed in context, the application judge did not indicate to
    the contrary.

VII.

SUMMARY, DISPOSTION AND COSTS

[44]

In
    this case, the appellant does not challenge the Form 1, Assessment of Attendant
    Care Needs prepared in respect of the insured.  That form established the need
    for 24 hour care and the amount payable for that care. As long as the care was
    provided and the family member who provided the care sustained an economic loss
    in so doing, the amount payable is not reduced only because the number of hours
    of paid employment forgone by the family member was fewer than the number of
    hours of care provided pursuant to the Form 1.

[45]

I
    would accordingly dismiss this appeal. I would award costs to the respondent in
    the agreed amount of $17,402.32, inclusive of disbursements and applicable
    taxes.

Released:





[1]
The
    SABS-2010 also provides the insurer with other safeguards. For example,
    pursuant to s. 46.2(1), an insurer may also request a person who submits an
    invoice for payment for attendant care to provide any information required to
    assist the insurer, acting reasonably, to determine its liability for payment.
    And pursuant to s. 53, an insurer may terminate payment of benefits if the
    insured person has wilfully misrepresented material facts with respect to the
    application for the benefit and the insured has been provided with notice
    setting out the reasons for the termination.  It should also be noted that
    pursuant to the Act, the insurer can refer disputes in respect of an insured
    persons entitlement to statutory accident benefits or in respect of the amount
    of statutory accident benefits to which an insured person is entitled to
    mediation. Subsection 279(1) of the Act provides that such disputes shall be
    resolved in accordance with ss. 280 to 283 of the Act and the
Statutory Accident
    Benefits Schedule
. Pursuant to those sections of the Act, either the
    insured or the insurer may refer the issue in dispute to a mediator and, if the
    mediation fails, the parties jointly or the mediator may refer the issue in
    dispute to a person appointed by the Director for an evaluation of the probable
    outcome. If the issue is not thereby resolved, the insured may then bring a
    court proceeding, refer the issue to an arbitrator under s. 282, or the insured
    and the insurer may agree to submit the matter in dispute to any person for
    arbitration in accordance with the
Arbitration Act, 1991
, S.O. 1991, c.
    17.



[2]
Subsection 39(1) of SABS-1996 provided that the Form 1 was to be prepared and
    submitted by a member of a health profession who is authorized by law to treat
    the persons impairment.



[3]
In
Simser v. Aviva Canada Inc.
,
    FSCO A11-004610, 2013 CarswellOnt 422, FSCO recently considered this issue.


