minicounsel

Neutral Citation: 1992 ONICDRG 28

File No. A-000324

BETWEEN:

IMELDA GAZZOLA

Applicant

and

CANADIAN SURETY COMPANY

Insurer

DECISION

The Applicant, Imelda Gazzola, was involved in a tragic motor vehicle accident on July 5, 1990. Her husband was killed in the accident. The Applicant was seriously injured. She was hospitalized for four months, first at Sunnybrook Medical Centre, and then at St. John's Rehabilitation Hospital.

The Applicant was insured under an automobile insurance policy issued by the Insurer. She claimed and received benefits under the policy. Every motor vehicle policy contains the no-fault benefits set out in Ontario Regulation 273/90, ("the No-Fault Benefits Schedule" enacted under the Insurance Act, R.S.O. 1990, c. I.8.

The Insurer disputed certain benefits claimed by the Applicant on the basis that they were not covered under the policy, and that expenses claimed had not been verified.

Mediation was unsuccessful and the Applicant applied for arbitration under the Insurance Act.

The issues in this hearing are:

Care Benefits:

Is the Applicant entitled to care benefits under s. 7 of the No-Fault Benefits Schedule, in a total amount of $13,963.54? The Applicant claims this amount as the amount of gross income reasonably lost by her son in caring for her following the accident for the period between July 5, 1990 and August 30, 1990. The Applicant was in hospital during this period.

At the hearing, counsel conceded that the maximum amount that can be paid every month under Section 7(2) is $3,000.00.

At the hearing, in the alternative, counsel for the Applicant submitted that the amount claimed was recoverable under subsection 6(2) of the No-Fault Benefits Schedule. He submitted that it was an expense actually incurred by the Applicant's son in visiting her during her treatment or recovery.

Special Award:

Is the Applicant entitled to a special award under section 282(10) of the Insurance Act, on the basis that the Insurer has unreasonably withheld or delayed payments?

Counsel for the Applicant took the position that the Insurer's refusal to pay the care benefits claimed was unreasonable.

Counsel for the Applicant also submitted that the Applicant was entitled to a special award on the basis that the Insurer had unreasonably delayed payment of charges for the rental cost of a telephone, and for telephone calls made by the Applicant while she was in hospital. The amount in issue was $148.01. There was also a dispute regarding the rental cost of a television during the same period. The amount in issue was $422.32. These claims were settled prior to the hearing.

The Applicant also claims interest on any amount found to be owing, and her expenses in participating in the arbitration.

The decision is:

The Applicant is entitled to the amount of $2,030.34, being the amount of gross income reasonably lost by Mr. Sergio Gazzola, the Applicant's son, as a result of the accident, in caring for the Applicant, under s. 7(1)(a) of the No-Fault Benefits Schedule.
The Applicant is entitled to interest on this amount.
The Applicant is not entitled to a special award under s. 282(10) of the Insurance Act.
The Applicant is entitled to her expenses incurred in respect of the arbitration under s. 282(11) of the Insurance Act.

The hearing was held at North York, Ontario, on December 11, 1991, before me, Susan Naylor, arbitrator.

Present at the hearing were:

Applicant:

Imelda Gazzola

Insurer's Representative:

Altor Shields Barrister & Solicitor

Insurer:

represented by:

Mary Wright

Claims Specialist

Insurer's Representative:

Lee Samis Barrister & Solicitor

The following witnesses testified at the hearing, on oath:

Imelda Gazzola, Applicant

Sergio Gazzola, Applicant's Son

Mary Wright, Claims Specialist

An interpreter in Italian, Joseph Dionigi, from Global Translations Services, interpreted the proceedings for the Applicant. A court reporter was present to record the evidence.

Documents Filed:

Exhibits to the Hearing, consisting of photocopies are as follows:

Exhibit 1:

Hospital Records from Milton District Hospital, in regards to the accident on July 5, 1990 (7 pages)

Exhibit 2:

Hospital Records from Sunnybrook Medical Centre, including Emergency Report, the Trauma Assessment Record, Progress Notes, Operation Records, and Physiotherapy Reports (the nurses' notes were not included).

Exhibit 3:

Hospital Records from St. John's Rehabilitation Hospital, in respect to the accident.

Exhibit 4:

An additional copy of the Progress Report at St. John's Rehabilitation Hospital (8 pages)

Exhibit 5:

Letter dated September 24, 1990, from Gordon E. Duggan, Catalytic Maintenance, Inc., to Mr. R. Lofranco.

Exhibit 6:

Letter dated January 10, 1991, from Mary Wright, Canadian Surety, to L. Brent Vickar of Lofranco, Longley Vickar

Exhibit 7:

Original photograph of the Applicant at Sunnybrook Medical Centre

Exhibit 8:

Brief of claims submitted by the Applicant (introduced by the Insurer)

The following documents were filed with the arbitrator, but not marked as exhibits:

Application for Appointment of an Arbitrator, filed on September 6, 1991,
Response of an Insurer, filed on September 27, 1991
Report of Mediator, dated August 23, 1991

Evidence:

The Applicant's Testimony:

Mrs. Gazzola gave evidence at the hearing.

At the time of the accident, she was 59 and married to her husband, Daniel Gazzola. Mr. and Mrs. Gazzola lived in Milton. They had two children, Sergio and Luciano. The younger son, Luciano, aged 27, lived with his parents. Sergio, the older son, was married with three children, and lived in his own home in Milton.

The Applicant testified that before the accident, she was a home-maker. She had not worked for wages outside the home, except for occasionally cleaning other families' houses in the past.

The motor vehicle accident happened on July 5, 1990 on the 401 highway. Her husband was driving. The Applicant was a passenger in the front seat. (She does not have a driving license). The car they were in was hit head-on by a truck at high speed. Her husband was killed in the crash. The Applicant suffered very serious injuries, including lacerations and fractures to her right arm and shoulder area, left arm, left leg, ribs and forehead. She was cut out of the car and taken first to Milton District Hospital, then transferred by air ambulance to the Trauma Unit at Sunnybrook Medical Centre. She was admitted to the intensive trauma unit, and subsequently transferred to the general floor.

The Applicant testified that she did not find out immediately that her husband had died in the accident. When she found out, she was very emotional. She would scream. She was in a great deal of pain - "all tied up in so much pain". She needed to see her family, Sergio and his wife, Monica, and no one else.

At Sunnybrook, she had surgery and skin grafts on her right arm. Some days after her admission to Sunnybrook, a fractured left wrist was identified and operated upon, and an external steel plate was fixed. Her left foot was placed in a cast. Her right arm was open at the forearm and shoulder.

A photograph of the Applicant at Sunnybrook Medical Centre was introduced as Exhibit 7. It shows the Applicant in bed, with a steel rod attached to her left wrist. Her right arm is bandaged at the forearm and shoulder. She testified that the photograph was taken approximately one and a half months after she had arrived at Sunnybrook.

The Applicant was immobilized at Sunnybrook. She could not get on or off the bed, and had to be raised by a machine. She was unable to feed herself, and testified that her son or daughter-in-law would feed her at noon. Otherwise, she was fed by the nurses.

There were no staff at Sunnybrook who could speak to her in Italian, except a lady who swept and did cleaning. She could not speak with doctors or nurses in English and, therefore, relied on her children to speak to the doctors and nurses, and explain what they said.

The Applicant testified that she cried all the time until she saw her family. They visited her every day. She stated that their visits made her happy. She cried when they left.

The Applicant stated that, while she was at Sunnybrook, her son visited her every day at noon. She was moved from Sunnybrook to John's Rehabilitation Hospital on August 21, 1990. There, her son continued to visit her as much as he had done at Sunnybrook. The time of the visit depended upon her daughter-in-law, on how busy she was it was either at noon or in the evening. The visit would last for approximately an hour. Her son would then return home.

The Applicant testified that her son would sit and talk to her. He would bring his children, and the Applicant would visit with them. He would bring her news of the family, and bring her anything she wanted at home. He would reassure her and comfort her -- tell her to stay calm and to accept that her husband would not be coming back. He reassured her that he continued to pay the bills at home. He would say "have courage" and that he would help her.

She stated that her son helped her to sit up and eat her meals. If he was not there, the nurses gave her her meals. She could not say the exact number of times that he helped her with her meals, but he was there often.

She testified that her son did not wheel her around in the hospital because she was not mobile. It was only two weeks before she moved to St. John's that they took away the steel cast, so she could move about in a wheelchair.

The Applicant confirmed that her son was not working during this time. She said he was not at work because he was looking after her affairs.

When she was finally discharged from St. John's at the end of October, her son and daughter-in-law moved in with her. They are still living with her. When she went home, she cried all the time.

Testimony of Mr. Sergio Gazzola, the Applicant's Son:

The Applicant's son, Sergio Gazzola, also gave evidence. At the time of the accident, he was 33 years old and married with three children. Like his parents, he lived in Milton, approximately three miles from his parents' home. His younger brother, Luciano, lived at home with his parents.

Mr. Gazzola has been employed for the last 13 years by Catalytic Maintenance Inc., a plant maintenance company. At the time of the accident, he was employed as field support "runner". He supplied rental materials to contracting principals. He was responsible for arranging the return of rental material when the project ended. He was also the shop steward and safety representative at the plant.

He explained that part of the work of the company is doing maintenance for Petro-Canada. Every three years, the Number 1 Petro-Canada plant in Oakville is shut down and totally rebuilt. The plant shutdown occurred at the beginning of June 1990. The maintenance work was scheduled for three weeks, and should have been completed by July 5th. However, problems occurred with the work and it continued for a further three weeks before the plant was in operation again.

Mr. Gazzola testified that the workers looked forward to the shutdown, because it is the only time they can make overtime. His basic regular hours are 40 or 32 hours. The shutdown requires 14-hour shifts and so is a "moneymaker" for the employees. Overtime is paid at double-time. If workers are called in to work on the project on a Friday -- a day off for the contractors -- they are also paid double-time.

Before the accident, Mr. Gazzola had made no specific vacation plans, but he testified that he would probably have taken a one-week vacation towards the end of the summer -- the first or second week of August. He would have had to provide about a week's notice for this.

On the day of the accident, he was at work. At around noon on July 5th, he received a call to go to the hospital. He left work immediately, and did not go back to work until the beginning of September, after the Labour Day holiday. He was off work for approximately eight weeks.

Exhibit 5 is a letter from Mr. Gordon E. Duggan, Project Superintendent at Catalytic Maintenance Inc. It provides a record of Mr. Gazzola's loss of time from work due to the automobile accident. This was work that otherwise would have been available for him to do. Mr. Gazzola stated that the figures provided represented the actual earnings of the person who replaced him during his absence.

The letter indicates that there were eight payweeks during Mr. Gazzola's absence. During the period, a total of 280 hours paid at straight time were worked, together with 122.25 overtime hours and 122.25 premium hours, for a total of 524.5 hours. The letter indicates that the hourly union wage rate (comprising a base hourly rate of $22.65 and certain benefits vacation, statutory holiday, welfare, pension) is $27.14. It shows the straight hours, overtime hours and premium hours worked by Mr. Gazzola's replacement for the eight pay-weeks lost. It states:

The Financial loss to Mr. Sergio Gazzola is:

Straight + Overtime hours (times)

Rate

(280 + 122.25 (times) $27.14

= $10,917.07

Premium Time

(122.25) (times) $24.92

= $ 3,046.47

Benefits are not paid on premium portion of wages

Total

$13,963.54

On cross-examination, Mr. Gazzola testified that he normally worked an eight-hour day, with an 8:00 a.m. start. The Oakville plant is some 20 to 25 minutes from his home. The overtime he worked was not optional, but was compulsory. He was not reimbursed for his loss of income.

Mr. Gazzola testified that his mother was unaware that his father had been killed in the crash, until the day after the accident. When he arrived at the hospital, his father was already dead.

He stayed off work because he wanted to be there for his mother. She had been very dependent on his father and she was the only family he had.

Either he or his wife would go to the hospital daily. Every day he was occupied. If he could not make it, his wife went.

He testified that the trip to the hospital took about one hour travelling time, and was about 52 or 53 kilometres one way. He would be at Sunnybrook for approximately one to one and a half hours.

When he visited his mother, her spirits appeared to lift. She felt more secure and was more excited. She was depressed beforehand, and depression always set in when they were leaving. He felt that his visits helped.

Mr. Gazzola stated that it was not possible to go into work because the day was essentially "shot" by the time he had finished at the hospital. There were also other things to do in Toronto. He felt that it would not be right to go into work in the circumstances. During the time, there was a lot of running around that had to be done. There were funeral arrangements to be made; he had to see lawyers, contact doctors, get forms signed. Finding doctors to sign forms was a big problem. The banking arrangements also caused problems. He was unable to withdraw money except for funeral expenses. He had to get a mark from his mother, and have it witnessed, before he could withdraw money. In addition, he stated that his children came down with chickenpox during this time.

His mother did not have the use of either of her arms at Sunnybrook. When she had to make a mark on a document to enable him to withdraw money, the best that she was able to do was just dot the paper.

He had discussions with the doctors about what they were going to do. He signed the consents for the operations. He pretty much handled the whole thing.

He testified that his younger brother took care of paying his mother's household expenses. However, he did not really participate in the other things, because he could not face the death of his father.

His mother was moved to St. John's on August 21, 1990. Mr. Gazzola stated that he continued to visit her at St. John's as often as at Sunnybrook - every day. He felt his presence improved her progress. He continued to give her assistance in eating. When he was not there, the staff would do it. He did not provide any specific assistance at St. John's, except helping to feed her. He or his wife were there at mealtimes so that they could either eat with her or feed her. He was able to stay longer at St. John's, for approximately one and a half to two hours. The travelling time involved was the same.

He felt that he could not go into work at this time. He would have had to be at work for the whole day, not just part of the day.

The Hospital Records:

The hospital records of Milton District Hospital, Sunnybrook Medical Centre and St. John's Rehabilitation Hospital in Toronto were introduced in evidence.

(a) Milton District Hospital:

Exhibit 1 is the records from Milton District Hospital relating to the Applicant's accident. These show that the Applicant was taken to the emergency department at the hospital by ambulance and transferred to Sunnybrook by air ambulance several hours later. She had multiple injuries including lacerations to her right forehead and right knee, and multiple left-sided broken ribs. Her right shoulder was seriously injured with a fractured right scapular and complete dislocation of the acromioclavicular joint, serious axillary and brachial artery injury, and right brachial plexus injury.

(b) Sunnybrook Medical Centre:

Exhibit 2 is the hospital records from Sunnybrook Medical Centre. They comprise the emergency report, the trauma assessment record, progress notes, clinical operative records, radiological reports, physiotherapy and occupational therapy reports from the Department of Rehabilitation Medicine, and social work reports. They do not include the nurses notes.

Exhibit 2 shows that the Applicant underwent multiple surgeries for her injuries. On arrival, she had bypass surgery for a blockage to the right brachial artery. The doctors attempted to repair the shoulder dislocation but this was unsuccessful. Subsequently, on July 18, plastic surgery was carried out on the forearm, with skin grafts taken from the Applicant's right thigh. The right axillary shoulder wound became infected, and further surgery and skin grafts took place on August 3 and August 10. Further fractures of the left foot and wrist were identified about ten days after her admission. On July 18, the Applicant's left wrist was operated on and an external fixator attached. Her foot was placed in a cast.

The physiotherapy reports from the Department of Rehabilitation Medicine at Sunnybrook indicate that the Applicant had severe functional limitations as a result of her injuries.

The Applicant was referred to a social worker, Ms. Joy Friedman-Bali, at the Department of Social Work on July 18th. The summary notes record the Applicant's social history. It indicates that

She enjoys television, and movies, as well as spending a lot of time with family. She noted that she had a very close family.

While in hospital, Mrs. Gazzola has expressed a great deal of sadness, due to the loss of her husband.

The social work progress notes dated July 18, 1990 state:

She has been quite tearful, while in the hospital, and seems to be feeling the loss quite strongly. Mrs Gazzola's family impress as close, caring, and very supportive towards her.

The notes state that the social work plan will focus on grief counselling, adjustment counselling, crisis counselling for family members, and continued care planning.

(c) St. John's Rehabilitation Hospital:

The Applicant was transferred to St John's Rehabilitation Hospital on August 21, 1990. The records of St. John's are Exhibits 3 and 4. These indicate that, as of the date the Applicant was transferred, she was able to touch weight bear on her fractured left leg, and to walk very limited distances with a high-wheeled walker. She still had the external fixator on her left forearm, healing skin grafts on her right shoulder, arm and thigh, a splint on the right hand and wrist, and her left leg was in a below-knee cast.

The application for transfer was completed by Ms. Friedman-Bali, the social worker. After reiterating her comments quoted earlier, she states, under the heading, "Problems that might require assistance",

No problems anticipated. Mrs. Gazzola benefits from any additional emotional support.

Also attached is a functional assessment and care requirements form, dated July 24, 1990, completed by C. Ford, a registered nurse. It indicates that the Applicant was immobile in ambulation, required more than two people or aids for transfer, was dependent in regards to bathing, washing or dressing, required supervision/assistance eating, was depressed and had a language barrier.

The integrated progress notes contain the notes of the treating professionals, including physicians, social worker, nurses, etc. These make it clear that the severe functional limitations referred to above continued well beyond the period of the claim. The patient care flowsheet indicates the patient functionability in regards to mobility, diet, personal care, elimination and requirements of skin maintenance. It graduates assistance as independent, activity with supervision, nurse standby, with nurse assistance, constant or complete care. For the period claimed, the Applicant required nurse assistance in all areas.

The notes contain a social work assessment, commencing on August 27, 1990. It states that the Applicant is a very demonstrative, affective and open individual, who is very family orientated and places much emphasis on family dynamics and roles. The objective impressions are that Mrs. Gazzola was grieving the death of her spouse and also had concerns about her future functionality and ability to be independent. The social worker concludes that the grief response and illness response were within normal ranges, and do not seem to be interfering with the Applicant's ability to participate in rehabilitation.

The Testimony of Mary Wright, Claims Specialist:

Mary Wright, Claims Specialist with the Insurer, also testified. She confirmed that the Insurer had paid a number of claims, including death benefits, an ambulance account, parking expenses, travel and medical aid. She confirmed that a number of claims had been denied. Details are contained in Exhibit 8, a brief of claims. It contains a letter dated December 19, 1990 from Lofranco, Longley & Vickar, the Applicant's lawyers. This letter was apparently sent in response to a request for clarification of the relationship of certain items claimed to the accident. The letter states that the expenses with respect to Sterivision and telephone calls are claimable under s. 6(1)(f) as goods and services, non-medical in nature, that Mrs. Gazzola required because of the accident. It states that the claim for time lost by Mr. Gazzola is also a matter that falls under the heading of expenses incurred as a result of the accident.

Ms. Wright responds by letter dated January 10, 1991, also filed separately at Exhibit 6. It states that a number of the claims submitted are expenses of family members, not the insured person, and are therefore not recoverable. These include the wage loss claim. In regards to the TV rental and telephone service, the letter states that "the Insurer fails to see how these were required". The letter goes on to state that if the Applicant disagrees with the Insurer's position, counsel should notify the Insurer, who would proceed to mediation.

Ms. Wright was cross-examined with respect to the claims. She stated that she denied these claims after discussing them with the adjuster and the head office. She did not recall that she got medical information before she refused the account for a television rental. She was familiar with the provisions of Section 6(2) of the No-Fault Benefits Schedule, regarding visiting expenses. She made the decision to reject the claims based on the information she had. She stated that she had requested further information and, prior to the letter, had contacted the Applicant's law firm to get some further explanation. She was told to pay what the Insurer felt was covered.

Submissions:

Counsel for the Applicant submitted that the medical records and the evidence showed the care and attention received by the Applicant from her son. He referred to numerous parts of the medical records that indicated the extent of the Applicant's injuries and the important role of the family. He submitted that the amount claimed was payable under either Section 7(1) or section 6(2) of the No-Fault Benefits Schedule.

He conceded that the maximum payable under s. 7(2) was $3,000 per month.

He acknowledged that Mr. Gazzola would likely have taken one week's vacation - either the 32 hour week of August 2 or the 40 hour week of July 26.

He submitted that the Applicant was entitled to a special award under Section 282(10), because Ms. Wright testified that she did not get any further medical information in respect of the claims. He submitted that the Insurer's obligation goes beyond merely saying "no" and that the letter of December 19 (Tab 2 of Exhibit 8) was couched in terms very close to the words of Section 6(2). He submitted that this placed a responsibility on the Insurer to make further inquiries.

Counsel for the Insurer:

Counsel for the Insurer expressed concern about the procedure in the arbitration. He stated that the claim for loss of earnings had been made under Section 7. It was only at the hearing that reference was made to Section 6(2). He also drew attention to the fact that, at the pre-hearing, Mr. Shields had expressly stated that he would be relying only on the denial of benefits as the grounds for a special award.

He submitted that the Applicant's son was absent from work for a number of reasons, of which taking time because of his mother's injuries was only one. The other reasons, such as banking, household matters or his children's illness were immaterial to the application.

He submitted that the claim could not constitute visiting expenses under s. 6(2) because the wages lost did not represent expenses actually incurred. Visiting consumed only a small part of the day: since the Applicant's son was working a 40-hour week, visiting could have been done outside of work.

He acknowledged that a claim for lost wages was expressly addressed under s. 7(1)(a) of the Regulations. However, he submitted that the Applicant's son, in visiting the Applicant, was not providing care within the meaning of the regulation. Furthermore, not all the income loss resulted from visiting. In his submission, payment was more properly the responsibility of a third party insurer under the tort scheme. He further submitted that, in any event, the services performed were available under a health insurance plan, and therefore deductible, under s. 9(1). He further submitted that the amount payable was limited to $3,000 each month.

In respect to the special award, he submitted that the Insurer had acted properly, and had followed up with the Applicant's counsel to request further information. In his view, the high standard enunciated by the Supreme Court of Canada in Vorvis v. Insurance Corp. of British Columbia, 1989 CanLII 93 (SCC), 1 S.C.R. 1085, for an award of exemplary or punitive damages was appropriate in the case of a special award under s. 282(10). This meant that the conduct of the insurer must call out for punishment. In this case, the Insurer had acted in the best interests of the insured, and had fulfilled all necessary obligations.

In reply, Mr. Shields contested that Section 6(2) covered both actual expenses, and the loss of the right to earn income. He also noted that under Section 7 there was no requirement of a medical certificate respecting care. In his view, Section 7 does not merely deal with medical care but extends to all that is required to attend to the needs of the Applicant.

The Legislation:

The relevant sections of the No-Fault Benefits Schedule are: Section 6

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;

(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

(e) home renovations to accommodate the needs of the insured person;

(f) other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident;

(2) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident an allowance that is reasonable having regard to all of the circumstances for expenses actually incurred by a spouse, child, grandchild, parent, grandparent, brother or sister of the insured person in visiting the insured person during his or her treatment or recovery.

(3) For the purposes of this section, the benefit period is the longer of the two following periods calculated from the day of the accident and ending on the anniversary of the accident:

Ten years.
Twenty years less the age of the insured person on the day of the accident.

(4) Subject to subsections (5) and (6), the insurer, before making a payment for an expense under subsection (1), may require the insured person to submit a statement signed by the insured person's qualified medical practitioner or psychological advisor stating that the expense is necessary for the insured person's treatment or rehabilitation.

(5) A person qualified to practise as a chiropractor may sign a statement required under subsection (4) in respect of chiropractic services under clause(1)(a).

(6) A person qualified to practise dentistry may sign a statement required under subsection (4) in respect of dental services and dentures under clauses(1)(a) and (b).

(7) In case of a dispute concerning an expense described in clause(1)(a),(b) or (d), the insurer will pay the expense pending resolution of the dispute.

(8) The maximum amount payable under this section is $500,000 with respect to each insured person.

Section 7

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident, for the care, if any, required by the insured person,

(a) the reasonable cost of a professional care-giver or the amount of gross income reasonably lost by a person other than the insured person as a result of the accident in caring for the insured person; and

(b) all reasonable expenses resulting from the accident in caring for the insured person after the accident.

(2) The maximum amount payable per month under this section is $3,000 a month with respect to each insured person.

(3) The maximum amount payable under this section is $500,000 with respect to each insured person.

Section 9

(1) The insurer will not pay any portion of an expense referred to in subsection 6(1) or (2) or subsection 7(1) for a service that is reasonably available to the insured person under any insurance plan or law or under any other plan or law that will pay the expense.

(2) The insurer will pay benefits under this Part even though the insured person is entitled to or has received benefits under an Act administered by the Ministry of Community and Social Services for Ontario or under similar legislation in another jurisdiction.

Reasons:

The Claim for Recovery of Lost Wages:

I am called upon to determine whether the amount of wages lost by Mr. Sergio Gazzola, during his absence from work following the automobile accident, is recoverable under s. 7 or s. 6(2) of the No-Fault Benefits Schedule.

The first question is whether the income lost by Mr. Gazzola represents an amount reasonably lost by him as a result of the accident in caring for the Applicant, under s. 7(1)(a) of the No-Fault Benefits Schedule.

s. 7(1)(a) provides that the insurer shall pay for the care required by the insured person:

"the reasonable cost of a professional care-giver or the amount of gross income reasonably lost by a person other than the insured person as a result of the accident in caring for the insured person. (emphasis added)

In his submissions, counsel for the Applicant addressed himself to the terms of s. 7(1)(b), rather than subsection 7(1)(a), and then to those of subsection 6(2). Both these subsections, which are cited in full on page 21, provide for the recovery of certain expenses resulting from the accident. Since, however, the claim is for that of lost income, the starting point in the analysis is clearly s. 7(1)(a), which specifically provides for reimbursement of wages reasonably lost by a third party in caring for the insured. The application of this subsection was addressed directly by counsel for the Insurer.

This case concerns the reimbursement of income lost by the Applicant's son. The claim covers the period of time that the Applicant was hospitalized at Sunnybrook Medical Centre, and a further ten-day period after she was transferred to St. John's Rehabilitation Hospital. She was not, in fact, discharged from St. John's until October 31, 1990.

In order to succeed in her claim for this amount, the Applicant must establish that:

The Applicant required and received care as a result of the accident,
A person lost income as a result of caring for the Applicant,
The amount claimed represents the gross income reasonably lost by the person in caring for the Applicant.

In accordance with the usual principles of statutory construction, the words used in section 7 must be construed in their ordinary and grammatical sense, in context, and in light of the purpose and scheme of the legislation.

The principal issue before me is whether the activities that Mr. Gazzola engaged in attending upon his mother while she was in hospital constitute care within the meaning of s. 7.

Section 7(1)(a) extends beyond reimbursement for professional care services. The section provides for reimbursement of the cost of a "professional care-giver" or the reimbursement of income lost by "a person other than the insured person...in caring for the insured person". It therefore extends to care given by a person, whose usual occupation is not professional care-giving, and whose earnings from employment or self-employment are interrupted or reduced by their care-giving services.

It was suggested that "care" and "caring for the insured person" is equivalent to attendant care - the provision of services by an attendant of a constant or regular nature relating to nursing and personal care, such as assistance with eating, dressing and personal hygiene, in, for example, the insured person's home or a residential home. It may be that these are the usual circumstances under which a claim for care benefits under s. 7 will arise. However, each case must be determined in light of its own particular circumstances - in the circumstances, was a service rendered to an applicant, and a benefit derived therefrom, that can be characterised as "caring for the insured person"?

It should be noted that section 7 does not use the term "attendant care". The Concise Oxford Dictionary includes numerous definitions of the word "care", none of which provides much help. It defines "caring", an adjective, as, compassionate, esp. with reference to the professional care of the sick or elderly

It is noteworthy, however, that, in the context of the No-Fault Benefits Schedule, "care" is not equivalent to nursing services. Nursing services are separately covered by s. 6(1)(a) of the Regulations. There is no requirement under s. 7 that a medical or other professional certify that the care services are required for the rehabilitation or treatment of the Applicant, as there is under s. 6(4). Nor is there any provision specifically excluding persons in hospital from receipt of care benefits.

However, I question whether the meaning of "care" and "caring for the insured person" can be extended as broadly as counsel for the Applicant suggests, to "attending to the needs of the insured". This would be incompatible with the scheme of the regulations, in rendering s. 6 largely redundant.

Counsel for the Insurer submits that "care" involves more than the fact of visiting an applicant in hospital. I accept this submission. Expenses incurred in visiting an injured person in hospital are clearly provided for under a separate head under s. 6(2) of the Regulations. While visits from relatives to an applicant in hospital generally may be presumed to be of therapeutic and rehabilitative value, they do not of themselves constitute "care" within the meaning of s. 7.

However, each case must be evaluated in light of its particular circumstances, having reference to the particular services required and rendered.

Mrs. Gazzola was 59 years old when the tragedy happened. Her son testified that before the accident she was very dependent upon her husband. They had both come to Canada together over 30 years ago. She was a home-maker. She spoke little English. She did not drive.

On July 5, 1990, Mrs. Gazzola's world collapsed. She and her husband were involved in a terrible and tragic accident. Her husband -- her support -- was killed. She sustained very serious injuries. She had numerous operations. She was hospitalized for almost four months, at Sunnybrook Medical Centre, until August 20, and then St. John's Rehabilitation Hospital, until her discharge in October.

The hospital records indicate that, for most of the period in question, Mrs. Gazzola's injuries left her immobile and unable to use her arms. It was not until the middle of August that the Applicant was able to move in a wheelchair. She required assistance to transfer to a sitting position, and to stand. She was dependent upon assistance in most aspects of personal hygiene, such as bathing, washing and dressing. She required help during meals.

In addition to her physical problems and suffering, the Applicant had to bear the terrible loss of her husband. She was grief-stricken. Her pain and grief were evident in the course of her testimony at this hearing, which was itself clearly a very painful experience for her.

The notes of the social workers at both Sunnybrook and St. John's direct themselves to this, and both note the importance attached by the Applicant to her family. Mrs. Friedman-Bali states that "the family impress as close, caring and very supportive towards her."

The Applicant's son testified that he took time off work "to be there for his mother", to reassure her and comfort her. His testimony is that he usually visited her daily. If he did not do so, his wife visited her. Allowing for travelling time, his attendance at Sunnybrook took between three and three and a half hours, and at St. John's, three and a half to four hours a day.

While at the hospital, Mr. Gazzola provided his mother with comfort and reassurance. The evidence -- the oral testimony of the Applicant and her son, and the hospital records -- indicate that Mrs. Gazzola had a significant language barrier in dealing with the doctors and nurses. The evidence is that her son dealt with the doctors and nurses and translated his discussions with them to his mother. Her language difficulties meant that she was psychologically isolated at Sunnybrook, her family forming her link to the world.

Her son also testified that he helped his mother with her meals. The evidence is clear that during the period in question Mrs. Gazzola was not able to eat unassisted. He testified that when he was not there, the nurses helped her.

Some of these functions performed by Mr. Gazzola - such as assisting the Applicant with her meals - were performed by the nurses in his absence. They represent services otherwise available to the Applicant and therefore would not be recoverable, under s. 9. However, I am satisfied that Mr. Gazzola's attendance primarily was to provide reassurance and support to his mother in tragic circumstances, to attend to her acute emotional and psychological needs, and to communicate with the doctors and nurses on her behalf. I am satisfied that such services, in the circumstances of this case, constitute caring for the Applicant within the meaning of s. 7. These services were not otherwise available to the Applicant under any plan or law under s. 9.

This is not to say that the No-Fault Benefits Schedule provides compensation to an applicant for grief or solace. It does not. However, in this case, there is clear and specific evidence in the hospital records, in particular the social work reports, that Mr. Gazzola's regular visits were required to meet his mother's acute needs resulting from the accident, and that they assisted and benefited her directly. I find therefore that Mr. Gazzola was engaged in caring for the Applicant within the meaning of s. 7 while attending upon her at the hospital. I also find that the time reasonably taken to travel to and from the hospital is necessarily ancillary to his attendance and is also recoverable under s. 7(1)(a).

Having determined that Mr. Gazzola engaged in caring for the Applicant in attending at hospital, I must determine whether all, or a proportion, of the wages lost by Mr. Gazzola was income reasonably lost in caring for her.

Mr. Gazzola took a leave of absence from work for eight weeks following the accident. Exhibit 5 is a letter from his employer. It represents the earnings of the person who replaced Mr. Gazzola during his absence. It provides a record of the time Mr. Gazzola lost from work from the date of the accident on July 5, 1990 to August 30, 1990, a period of two months. The amount lost was stated to be $13,963.54. This evidence was uncontradicted, and I accept that it accurately reflects what Mr. Gazzola would have earned, had he been at work.

When Mr. Gazzola was not in attendance at the hospital, he testified that he was busy with other matters - funeral arrangements, meeting with lawyers, insurance, banking. In addition, he stated that his children came down with chickenpox.

The submissions of counsel for the Applicant were primarily addressed to Mr. Gazzola's attendance at the hospital, arguing that the time spent visiting rendered it impossible for Mr. Gazzola also to go into work. There was no evidence before me as to the specifics of the additional tasks rendered, how long they took, and the period over which they were performed. I do not know what proportion of time was spent by Mr. Gazzola in performing services for his mother as a result of the accident, although I am satisfied that many of his activities were done for her benefit and on her behalf. Even were I to find that some of the activities represented "caring for the insured person" within the meaning of s. 7, I heard no specific argument in regards to this. I have no way of assessing these services. I have therefore excluded the performance of activities outside of time spent attending to the Applicant in hospital in the calculation of the Applicant's benefits.

The Insurer submitted that Mr. Gazzola could have visited his mother out of working hours, or could have returned to work for the remainder of the day. The Insurer further submitted that he took time off work for a number of reasons, some of which were unrelated to attendance upon his mother.

Mr. Gazzola stated that he was not able to go into work after visiting his mother because the day was essentially "shot", and it would not be right to do so, and because he had these other things to do.

The evidence in regard to Mr. Gazzola's ability to go into work in addition to visiting the hospital was incomplete. There was no evidence from company sources that he could not have done so, and he did not testify that he was prevented from working less than a full day. I accept that Mr. Gazzola felt, in the circumstances, that it would not be right to go into work. I accept also that he had many time-consuming responsibilities to perform because of the automobile accident, and the death of his father.

However, the question before me is whether the time he lost from work is income reasonably lost in caring for the Applicant. I cannot conclude, based on the evidence before me, that it was not possible for Mr. Gazzola to go to work in addition to attending at hospital.

In my view, it is necessary to pro-rate the total earnings he lost to reflect the earnings reasonably lost as a result of the specific hours spent caring for the Applicant. However, in the absence of further evidence, in particular specific evidence as to how often Mr. Gazzola visited the hospital, and for how long, and in the absence of additional evidence in relation to his working arrangements, this assessment will necessarily be somewhat arbitrary.

I accept that, for the month following the accident, Mr. Gazzola could not have attended hospital outside of working hours. Mr. Gazzola normally worked a 32 or 40 hour regular work week. However, the evidence is that June and July were the busiest months at his workplace, because of the Petro-Canada plant maintenance project. Fourteen hour shifts were worked during the project, and overtime, paid at double-time, was compulsory. Fridays, if worked, were also paid at double-time.

Exhibit 5 shows the work that would have been available to Mr. Gazzola for the months of July and August. For July, it shows:

Payweeks Endings

Straight Time

Overtime

Premium Time

July 12, 1990

23.00

July 19, 1990

34.50

July 26, 1990

21.75

August 2, 1990

3.00

The evidence is that Mr. Gazzola visited the hospital for one to one and a half hours. He was not always able to attend, and when he could not, his wife would go. I am prepared to assume that, for the month of July, until the end of the project, Mr. Gazzola visited his mother on four working days each week. His evidence is that Fridays were paid days off, unless worked, when they were paid at double-time. He therefore could have visited his mother, without loss of wages, on this day. Since there is no evidence that Fridays were, in fact, worked during the project, I have excluded this fifth day a week from the calculation. This also takes account of the fact that Mr. Gazzola was not always able to go to the hospital in person every day. I am prepared to assume that 50 per cent of the time - two days a week - Mr. Gazzola visited for one hour, for a total visiting and travelling time of three hours, and the other 50 per cent - the last two days - he visited for one and a half hours, for a total of 3.5 hours.

Whereas Mr. Gazzola may have been able to go in to work for a number of hours a day, in addition to attending at the hospital, it is reasonable to infer from the evidence that he nonetheless would have lost a significant amount of additional overtime. This is likely to be the case, even if the hours he visited his mother (at noon-time according to the evidence) were during regular working hours, because of his having to make up the lost time. This should be taken into account in calculating the income he reasonably lost in attending at the hospital. Given the extensive overtime his substitute worked during the period, it is reasonable to find that all the hours lost should be paid at overtime rates. Exhibit 5 shows that the rate is the regular hourly rate of $27.14, plus double time at $24.92.

I have assumed that Mr. Gazzola would probably have taken a vacation in the week ending August 2, 1990, when the Petro-Canada project ended. Therefore, I have excluded this week from the calculation altogether. I therefore find the amount for the period from July 5, 1990 to August 2, 1990 to be as follows:

Wages Lost from July 5 to July 26

3 overtime hours times 2 days

= 312.36

3.5 overtime hours times 2 days

= 364.42

Total

= 676.78

Total for three pay-weeks

= 2,030.34

Excluding the week of August 2, 1990, I find that the total income reasonably lost by Mr. Gazzola for the first month after the accident is $2,030.34.

For August, the figures shown are:

August 9, 1990

8.00

August 16, 1990

8.00

August 23, 1990

8.00

August 30, 1990

16.00

For the second month following the accident, the project being over, the work schedule returned to normal. Given that Mr. Gazzola worked a regular 40 hour week, with limited overtime, I am not satisfied that he could not have visited his mother in hospital outside of working hours. In fact, his evidence was that once his mother was transferred to St. John's on August 21, he visited her either at noon or in the evening. I cannot therefore find that the income he lost during this period due to his absence from work was income reasonably lost in caring for the Applicant.

I find therefore that the total gross income reasonably lost by Mr. Gazzola in caring for the Applicant is $2,030.34.

In view of my finding that this claim properly falls within the scope of subsection 7(1)(a), it is unnecessary for me to go on to deal with the alternative submission that the lost wages represent expenses actually incurred in visiting the Applicant under s. 6(2).

The Applicant is entitled to interest on the amount found to be owing, and to her expenses incurred in respect to the arbitration. I remain seized of this matter in the event there is a dispute regarding the amount of these expenses.

Special Award:

The Applicant also seeks a special award under s. 282(10) of the Act. This section states:

(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the No-Fault Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

It is the position of the Applicant that the Insurer unreasonably withheld payments in that it did not pay the Applicant's claim for care benefits when it was submitted. The Applicant submits that the Insurer further unreasonably delayed reimbursement of the television and telephone expenses. The disputed rental cost of a telephone and for telephone calls made by the Applicant while she was in hospital amounted to $148.01. The rental cost of a television set while the Applicant was in hospital was $422.32. At the hearing, I was advised that these claims had been settled.

The Insurer submits that the standard for awarding exemplary or punitive damages should be adopted as the standard of conduct required for a statutory special award. He cited the decision of the Supreme Court of Canada in Vorvis v. Insurance Corp. of British Columbia, 1989 CanLII 93 (SCC), 1 S.C.R. 1085.

In my view, however, to accept the submission of the Insurer would be to substitute the test stipulated in the legislation for another, more stringent test established for a different purpose at common law. Section 282(10) requires a special award to be made when an insurer has unreasonably withheld or delayed payment. The concept of "unreasonableness" is well known at law.

In the arbitration decision of Larry Erickson and Guarantee Company of North America, Commission File No. A-000560, dated July 16, 1992, F. Rotter, Arbitrator, stated:

I find that the criteria for punitive damages, that is wilful and deliberate misconduct or bad faith, goes considerably beyond the Insurance Act standard of simple unreasonableness. It is clear that conduct may be unreasonable, but still not deliberately or wilfully injurious, or motivated by bad faith. I find that wilful or deliberate misconduct or bad faith are additional factors in the conduct of the Insurer, beyond unreasonableness, which should be taken into consideration when assessing the quantum of a special award.

The position of the Applicant is that the Insurer was under a duty to inquire further before denying benefits. He submitted that the letter, dated December 19, 1990 (Exhibit 8), from counsel for the Applicant was crafted in terms very close to the words of the Regulation, and should have elicited further inquiries on the part of the Insurer, before benefits were denied.

In the facts of this case, I am not satisfied, however, that the Insurer acted unreasonably. In regards to the claim for lost wages, I accept that this is a novel point under a new scheme of no-fault benefits. The Insurer's denial was based upon a reasonable and legitimate dispute over the scope of s. 7 of the No-Fault Benefits Schedule.

In regards to the delayed payments for the telephone and television accounts, again I find that the Insurer did not unreasonably withhold or delay benefits in initially denying these claims. The Insurer is under an obligation to deal with its insured in utmost good faith, and to pay claims promptly. In this case, I find that the Insurer, on receiving claims for these and other expenses, sought clarification as to how certain items related to the accident. In its letter of December 19, 1990, counsel for the Applicant responded to these inquiries in essence by reciting the provisions of s. 6(1)(f) of the No-Fault Benefits Schedule. No supporting explanation or documentation was provided. The Insurer denied the claims. Counsel for the Applicant submitted that the Insurer should have made further inquiries. In my view, however, the obligations of the parties are mutual. As stated by F. Rotter, Arbitrator, in the arbitration decision of Richard Mark Plows and Jevco Insurance Company, Commission File No. A-000175 and A-000588, dated January 16, 1992:

..both sides have a duty to communicate with each other openly and in good faith.

The Applicant was represented by capable counsel in her dealings with the Insurer. In the absence of further explanation on behalf of the Applicant, I cannot conclude that the actions of the Insurer in denying benefits at that point in the proceedings were unreasonable.

I find therefore that the Applicant is not entitled to a special award under s. 282(10) of the No-Fault Benefits Schedule.

Order:

It is ordered that:

The Applicant is entitled to the amount of $2,030.34, being the amount of gross income reasonably lost by Mr. Sergio Gazzola, the Applicant's son, as a result of the accident, in caring for the Applicant, under s. 7(1)(a) of the No-Fault Benefits Schedule.
The Applicant is entitled to interest on this amount.
The Applicant is not entitled to a special award under s. 282(10) of the Insurance Act.
The Applicant is entitled to her expenses incurred in respect of the arbitration under s. 282(11) of the Insurance Act.

July 27, 1992

Susan Naylor Arbitrator

Date

Imelda Gazzola v. Canadian Surety Company, 1992 ONICDRG 28

Case Summary

Present at the hearing were:

Documents Filed:

Evidence:

The Applicant's Testimony:

Testimony of Mr. Sergio Gazzola, the Applicant's Son:

The Hospital Records:

(a) Milton District Hospital:

(b) Sunnybrook Medical Centre:

(c) St. John's Rehabilitation Hospital:

The Testimony of Mary Wright, Claims Specialist:

Submissions:

Counsel for the Insurer:

The Legislation:

Reasons:

The Claim for Recovery of Lost Wages:

Special Award:

Order:

Imelda Gazzola v. Canadian Surety Company, 1992 ONICDRG 28

Case Summary

Present at the hearing were:

Documents Filed:

Evidence:

The Applicant's Testimony:

Testimony of Mr. Sergio Gazzola, the Applicant's Son:

The Hospital Records:

(a) Milton District Hospital:

(b) Sunnybrook Medical Centre:

(c) St. John's Rehabilitation Hospital:

The Testimony of Mary Wright, Claims Specialist:

Submissions:

Counsel for the Insurer:

The Legislation:

Reasons:

The Claim for Recovery of Lost Wages:

Special Award:

Order: