Introduction

[1] This case concerns the question of when interest begins to run on attendant care benefits that are found to be owing under the Statutory Accident Benefits Schedule, O. Reg. 403/96 (the “SABS”). The determination of this issue turns on when, under the SABS, the payment of a benefit is “overdue”.

[2] Following the Plaintiff’s motor vehicle accident on December 7, 2001, the Plaintiff retained occupational therapists and case managers who prepared assessments of the Plaintiff’s attendant care needs on the form required by the SABS (Form 1). Invoices were prepared pursuant to these assessments, all of which the Defendant paid in full.

[3] In early 2009, the Plaintiff asked an occupational therapist to perform a “retro-active attendant care assessment” in order, among other things, to re-examine the attendant care assessments that had previously been performed and submitted by the Plaintiff for the period from the date of the accident to July 27, 2003. As a consequence, on February 16, 2009, a retro-active attendant care assessment prepared on Form 1 was submitted to the Defendant.

[4] The Defendant did not pay the retro-active assessment. At trial, the jury awarded the Plaintiff an amount in excess of the amount that the Defendant had paid to the Plaintiff for the period from the date of the accident to July 27, 2003.

[5] The Defendant paid the amount owing, together with interest, from February 16, 2009, the date that the Plaintiff first submitted a Form 1 claim for these amounts. The Plaintiff disputed the Defendant’s starting point for the calculation of interest and claimed interest from February of 2002 (as the jury award of monthly attendant care for the period from December 7, 2001 to January 19, 2002 was zero). The difference in the respective calculations amounted to $46,801.

[6] On September 24, 2012, the trial judge, D.A. Wilson J., accepted the Plaintiff’s position as to the calculation of interest. This is an appeal from her decision.

[7] For the reasons that follow, we would allow the appeal. We find that under the SABS, a payment is not overdue until 10 business days have elapsed after a Form 1 assessment of attendant care needs is received by the insurer. In this case, an assessment in relation to the disputed benefits was not received by the insurer until February of 2009 and, therefore, the payments were not overdue until that time.

The Trial Judge’s Decision

[8] Applying the decision of the Court of Appeal in Attavar v. Allstate Insurance Company of Canada (2003), 2003 7430 (ON CA), 63 O.R. (3d) 199, the trial judge held that simply because the insurer did not know what amounts were due for attendant care benefits did not mean that interest did not begin to run from 10 business days after the payments were subsequently found to be owing.

[9] In Attavar, the Court of Appeal dealt with the issue of when interest began to run on a loss of earning capacity benefit (“LECB”) under the SABS that was in force at that time (O. Reg. 776/93). The insurer argued that interest was only payable from the time that the trial judge ordered the payment. The trial judge ordered that interest was payable from 14 days after the insurer had first received the insured’s application for a LECB. The Court of Appeal upheld the trial judge’s decision.

[10] The trial judge in the case at bar found that the situation before her was no different than the situation in Attavar and that the same underlying policy considerations applied. If the legislators had wished to specify that amounts were not overdue if an insurer in good faith paid a different amount, they could have done so and they did not. As well, “the interest component in the Regulations was not intended to be punitive but rather to ensure that insureds are paid benefits promptly.” (Trial Judge’s Reasons, at para. 19).

[11] The trial judge also found that the situation with respect to interest on the amounts that a court finds to be due for accident care benefits is no different than the situation with respect to the interest payable on general damages. Under the Courts of Justice Act, R.S.O. 1990, c. C.43, an insurer is required to pay interest on general damages from the date of the accident, even though the amount of the general damages may not be known at that time.

The Legislative Framework

[12] Section 46 of the SABS deals with the payment of interest. It provides as follows:

(1) An amount payable in respect of a benefit is overdue if the insurer fails to pay the benefit within the time required under this Part.

(2) If the payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue at the rate of 2 per cent per month compounded annually.

[13] Thus, under s. 46, interest is payable on overdue amounts and an amount is overdue if the insurer fails to pay within the required time under Part X of the SABS (the part dealing with procedures for claiming benefits).

[14] Section 39 in Part X of the SABS sets out how a claim is made for attendant care benefits and when such benefits must be paid.

[15] With respect to what is required to make a claim for attendant care benefits, s. 39(1) provides as follows:

An application for attendant care benefits for an insured person must be in the form of an assessment of attendant care needs for the insured person that is prepared and submitted to the insurer by a member of a health profession who is authorized by law to treat the person’s impairment.

[16] Therefore, pursuant to s. 39(1), a claim for attendant care benefits must be in the prescribed form of an assessment of attendant care needs. Under the SABS, Form 1 is the prescribed form for assessment of attendant care needs. Under that form, a health care practitioner details the amount of time per week that an insured needs attendant care assistance with respect to various aspects of his or her life, such as assistance with feeding, changing location, dressing, grooming and laundry. At the end of the form, the amount of time required in each category is multiplied by an hourly rate to arrive at a monthly care benefit for that service. The monthly care benefits for each service are then totalled to arrive at a “Total Assessed Monthly Attendant Care Benefit.” The assessor then signs the form.

[17] Section 39(4) specifies the time within which an insurer is required to commence the payment of attendant care benefits. It states:

The insurer shall 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 42 required by the insurer [the insurer did not require such an examination in this case], shall calculate the amount of the benefits based on the assessment of the attendant care needs. [Emphasis added.]

[18] Thus, under s. 39(4), an insurer is required to pay attendant care benefits within 10 business days after receiving an assessment of attendant care needs. The amount that the insurer is required to pay is the amount that is set out in that assessment of attendant care needs.

[19] Section 39(3) provides that the insurer “may, but is not required to pay an expense incurred before an assessment of attendant needs that complies with subsection (1) is submitted to the insurer”.

Standard of Review

[20] The central issue before this court is the proper interpretation of s. 46 of the SABS with respect to the payment of interest on attendant care benefits. This is a question of law which, pursuant to Housen v. Nikolaisen, 2002 SCC 33, is reviewed on a standard of correctness.

Analysis

[21] In Attavar, the insured submitted an application to the insurer for loss of earning capacity benefits. The insurer maintained that the insured was not entitled to any such benefits, and, therefore, made her an “offer” under the SABS that was in force at that time to pay her a zero LECB. The insured rejected the insurer’s offer and, under the relevant SABS, was then required to undergo an assessment at a Designated Assessment Centre (“DAC”). The insurer paid the insured LECBs in accordance with the DAC assessor’s recommendations. The insured rejected the DAC assessment and litigated to vindicate her claim. The litigation was successful, and the trial judge accepted the insured’s position as to her LECB entitlement.

[22] With respect to the payment of interest, the insurer took the position that it should only pay interest on the LECB ordered from the date of the trial judge’s decision and not from the date of the insured’s application for those benefits. It did so on the basis that it had paid the insured the benefit recommended by DAC, which it likened to an interim order. It argued that the purpose of the overdue interest section was to encourage insurers to comply with DAC recommendations.

[23] The Court of Appeal rejected the insurer’s position and upheld the trial judge’s decision that interest was payable 14 days after the insurer had received the insured’s application for LECBs. In doing so, the Court of Appeal found:

(a) That the wording of the legislation in question required the insurer to pay LECBs within 14 days after receiving an application from an insured for those benefits.

(b) That the section providing for interest on overdue payments did not make an exception for insurers who paid the amounts recommended by a DAC assessment. If the legislature had wished to make such an exception, it could have done so.

(c) That the amount of interest payable on overdue amounts under the SABS, while above the bank rate, is not intended to be punitive. Rather, the purpose of the provision is “to compensate insureds for the time value of money and to encourage insurers to pay accident benefits promptly.” (Attavar at para. 49)

[24] In Attavar, s. 62(1) of the relevant SABS required an insurer to “mail or deliver” the applicable benefit “to the insured person within 14 days after the insurer receives an application for the benefit”. Section 62(4) provided that an amount was overdue if the insurer failed to pay in accordance with s. 62(1).

[25] In the case at bar, an insurer is not required to pay a claim for attendant care needs until 10 business days after it receives an assessment of attendant care needs. In the case of the disputed benefits, that did not happen until February of 2009, when a revised assessment of attendant care needs was filed for the period from January 20, 2002 to August 1, 2003. Under s. 46(1) of the SABS, a payment is not overdue unless “the insurer fails to pay the benefit within the time required” under s. 39, which is 10 business days after the receipt of an assessment of attendant care needs. Further, s. 39(3) specifically provides that an insurer is not required to pay attendant care benefits before “an assessment of attendant care needs that complies with subsection (1) is submitted to the insurer”.

[26] Thus, the wording of the legislation at issue in this case as to when a payment for attendant care benefits is overdue is very different than the wording of the legislation at issue in Attavar. This means that the answer to the question of when interest is payable is also different. As the Court of Appeal made clear in Attavar, the starting point for its decision was the wording of the statute it was dealing with.

Conclusion

[27] For these reasons, we would allow the appeal and amend the judgment of the trial judge to provide that interest on the attendant care benefits found to be owing to the Plaintiff for the period December 7, 2001 to July 27, 2003 be calculated from February 2009. The Defendant insurer is entitled to its partial indemnity costs of this appeal, which we fix in the amount of $5000.00 for fees and $4988.40 for disbursements, for a total of $9988.40, all inclusive.

H. SACHS J.

R. J. SMITH J.

HARVISON YOUNG J.

Released: 201507

CITATION: Grigoroff v. Wawanesa Mutual Insurance Company, 2015 ONSC 3585

COURT FILE NO.: 04-CV-280208CM

DIVISIONAL COURT FILE NO.: DC-12-00000-508-0000

DATE: 20150715

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

H. Sachs, R.J. Smith and Harvison Young JJ.

BETWEEN:

Angela Grigoroff

Plaintiff/ Respondent

– and –

Wawanesa Mutual Insurance Company

Defendant/ Appellant

REASONS FOR JUDGMENT

H. SACHS J.

Released: 20150715

Angela Grigoroff v. Wawanesa Mutual Insurance Company, 2015 ONSC 3585

Case Summary

Introduction

The Trial Judge’s Decision

The Legislative Framework

Standard of Review

Analysis

Conclusion

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Legal Tests 1

Legislation 3