Aurèle M. Ducharme v. Gerling Global General Insurance Company, 1995 ONICDRG 100

ONTARIO INSURANCE COMMISSION

Neutral Citation: 1995 ONICDRG 100 File No.: A-013316

Between:

Aurèle M. Ducharme Applicant

and

Gerling Global General Insurance Company Insurer

DECISION

Issues:

The Applicant, Aurèle M. Ducharme, was injured in a motor vehicle accident on January 15, 1992 involving an Ottawa-Carleton Regional Transit Commission vehicle. Mr. Ducharme applied for and received statutory accident benefits from the Insurer, Gerling Global General Insurance Company ("Global"), payable under Ontario Regulation 672.¹ Mr. Ducharme is in a long-term care facility, the Centre hospitalier Sainte-Jeanne-d'Arc. Global is paying only part of the facility's cost. Mr. Ducharme claims Global should be paying the entire cost. The parties were unable to resolve their disputes through mediation, and Mr. Ducharme applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Global required to pay the entire cost of Mr. Ducharme's residence at the Centre hospitalier Sainte-Jeamie-d'Arc, pursuant to either section 6 or section 7 of the Schedule?

2. Is Mr. Ducharme entitled to a special award against Global pursuant to section 282(10) of the Insurance Act?

Mr. Ducharme also claims interest on any amounts owing, and his expenses incurred in the hearing.

Result:

1. Global is required to pay the entire cost of Mr. Ducharme's residency at the Centre hospitalier Sainte-Jeanne-d'Arc, or at any such similar facility, pursuant to section 7 of the Schedule.

2. Mr. Ducharme is not entitled to a special award against Global.

Hearing:

The hearing was held in Ottawa, Ontario, on Thursday, June 1, 1995, before me, David Evans, arbitrator.

Present at the Hearing:

Applicant's Representative: Bernard Manton, Barrister and Solicitor Insurer's Representative: Peter Beaman, Barrister and Solicitor OCRT Officer: Kim Hunton Translator: George Desjardins

As Mr. Ducharme was too injured to travel, his friend Mrs. G. Lebeau attended in his stead.

Evidence and Findings:

Facts:

The hearing was limited to the submissions of the parties. The evidence was presented in the form of an Agreed Statement of Facts. The following is a summary of the evidence.

Prior to the accident on January 15, 1992, Mr. Ducharme, a retiree, lived alone in an apartment in Ottawa. He paid $474.50 per month in rent.

As a result of the accident, Mr. Ducharme was hospitalized until November 1992, when he became a resident of a long-term disability facility, the Centre hospitalier Sainte-Jeanne-d'Arc in Montréal. Mr. Ducharme's counsel advised that the Centre presently charges $1,138 a month for the occupancy.

Since Mr. Ducharme became a resident, the Insurer has been paying the difference between what the Centre charges and what Mr. Ducharme was paying in rent before the accident. As of November 1994, Global had paid $15,161.00 in respect of his long-term institutional accommodation, representing $26,549.00 less $474.50 for each month the expenses were incurred.

As part of his concluding submissions, counsel for Global noted that the deduction of $474.50 was a compromise, as Mr. Ducharme's present accommodation also includes utilities and food, which he would have had to pay for regardless of the accident. Global is not seeking to deduct these expenses from the cost of long-term care.

Mr. Ducharme seeks recovery of the full amount paid for the long-term accommodation under subsection 6(1)(f) or alternatively under subsection 7(1) of the Schedule.

The first question appears to be: which section applies to the benefit?

Which Section?

The benefit is payable under Part II of the Schedule, titled Supplementary Medical and Rehabilitation Benefits and Care Benefits. Counsel for the Applicant suggested that the benefit is payable under section 7; counsel for the Insurer proposed instead that the benefit is payable under section 6. Section 6 is time-limited (10 years, pursuant to subsection 6(3)), whereas section 7 has no time limit, but rather a monthly monetary limit ($3,000). Both benefits have a lifetime limit of $500,000.

If the benefit is payable under section 6, the only appropriate paragraph appears to be 6(1)(f). I reproduce the relevant portions of the two sections:

Supplementary Medical and Rehabilitation Benefits

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,

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

Care Benefits

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 caregiver 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.

[Emphasis added.]

In attempting to place the benefit within paragraph 6(1)(f), counsel for the Insurer relied in particular upon Malfitano.² In this decision, Arbitrator Draper drew a distinction between "nursing services," which he concluded would fall under paragraph 6(1)(a), and the "care" provided under section 7, in particular the care provided by a professional care-giver under paragraph 7(1)(a):

Neither "nursing services" nor "care" is defined in the legislation. In my view, the dividing line between them is not obvious. It seems to me, however, that a number of factors help distinguish "nursing services" from "care," although none of them are determinative. These factors are:

• Where are the services provided?

• Do the services involve active treatment or rehabilitation?

• Who provides the services?

I summarize Arbitrator Draper's proposals as follows:

	Section 6 — Nursing	Section 7 — Professional Care
Where?	Institution	Home
Active treatment and rehabilitation		— help with daily activities — meets chronic needs
Who?	Qualified nurse	Someone other than qualified nurse

Counsel for Global submitted that there is no "care" element in Mr. Ducharme's residency, and that as a pure accommodation expense the benefit should be placed under paragraph 6(1)(f).

I was not provided with very many facts about Mr. Ducharme's residency. Counsel advised me that the Centre's invoice does not separate accommodation from the other services provided, with the exception of special services such as regular treating baths, for which Global pays separately. The Centre must presumably feed Mr. Ducharme, either by bringing food to his bed or taking him to the canteen. The facility must change his bedding, and must provide other services that Mr. Ducharme could not do on his own. I find that there must be a "care" element, otherwise Mr. Ducharme would have no need of the facility. This is exactly the kind of care to help him with his daily activities and chronic needs that someone other than a qualified nurse would provide. As for care in the "home" — Mr. Ducharme has no "home" now, other than the Centre.

Arbitrator Makepeace also considered the distinction between sections 6 and 7 in MacMaster,³where she stated: "Considering the language of both sections in context, I think the legislators intended section 6 to deal, broadly, with the insured person's expenses during the initial period of acute treatment and recovery, and section 7 to deal with long-term attendant care." Mr. Ducharme obviously requires long-term attendant care in his present residence.

I find on balance that the accommodation in the Centre hospitalier Sainte-Jeanne-d'Arc fits within section 7.

Criteria

The tests for recoverability in sections 6 and 7 are similar.⁴ Paragraph 7(1)(b) uses the phrase "all reasonable expenses resulting from the accident," and subsection 7(1) provides that these reasonable expenses must be "for the care, if any, required by the insured person" as a result of the accident. Therefore, the criteria are the following:

(1) it must be a reasonable expense resulting from the accident

(2) it must be required because of the accident

Both parties appear to be agreed that Mr. Ducharme requires the care because of the accident. I find that Mr. Ducharme requires this care.

"All reasonable expenses resulting from the accident"

The parties disagreed on the meaning of "all reasonable expenses resulting from the accident." Mr. Ducharme's counsel submitted that one only has to look at the expense itself and, if it is reasonable, the insurer pays. Counsel for Global submitted that the phrase only applies to expenses that are in addition to whatever expenses Mr. Ducharme had before the accident.

Counsel for Global submitted that the onus is on an applicant to show that the two criteria under paragraph 7(1)(b) have been met in order to receive a benefit. If, as counsel also submitted, Global is only responsible for additional expenses, then the burden is much greater on an applicant. In this particular case, counsel have agreed on a pre-accident housing cost. However, absent such an agreement, an applicant would presumably have to prepare a pre-accident financial statement. For instance, an applicant in Mr. Ducharme's situation, in addition to saving rent, would save the cost of laundry, or food, or sheets, or even clothes. (As noted above, Global considered the $474.50 a compromise, not seeking to deduct these other expenses). The insurer would only be liable for the difference between those costs and whatever the post-accident costs were.

This is precisely what the insurer tried to prove in Macpherson.⁵ In that case, Arbitrator Makepeace ordered the insurer, Pilot, to reimburse the applicant's residence fees while attending university. Pilot sought to reduce the amount payable by amounts representing commuting, meals, and other expenses the applicant would have incurred as a non-resident student. Arbitrator Makepeace found the claimed deductions too speculative, and was not persuaded in any event that the applicant or her family saved money by her living in residence.

Counsel for Global submitted that, unlike in Macpherson, the deduction is a precise amount and not speculative. I am not convinced that this is an entire answer to Mr. Ducharme's position.

The insurer's submission in Macpherson, repeated in the submissions before me, was that payment without deduction results in a "windfall" for an applicant. I am troubled by this assumption. In any common-sense view, Mr. Ducharme's health and resulting accommodation are worse than they were before the accident. He was living on his own, self-sufficient, with complete privacy, self-determination, and the pride of having a home of his own. Now, whether he has a private room or not (I do not know), his accommodation is essentially a bed, with limited privacy and little independence. I would think the value of the accommodation per se is considerably less. Surely the largest portion of the cost of Mr. Ducharme's accommodation is the care portion. I do not see why Global should be able to deduct the value of his earlier accommodation from the cost of his present accommodation.

The insurer in Plows made a similar argument regarding a perceived over-compensation:

The Insurer has argued that if it is obliged to pay for a vehicle, the Applicant will somehow be over-compensated for his injuries: he will in fact gain, to the extent that he did not previously own a vehicle. The Insurer therefore requested that if I ordered it to purchase a vehicle for the Applicant, it should be allowed to retain ownership of the vehicle "in trust."

I have determined that a vehicle is a reasonable expense resulting from the accident, pursuant to subsection 6(1)(f) of the No-Fault Benefits Schedule. Section 6(8) obliges the Insurer to pay all such expenses under Section 6, to a maximum amount of $500,000.00 with respect to each insured person. I see no reason to treat a motor vehicle differently from any other item — such as a wheel chair or prosthetic device — which the Applicant reasonably requires as a result of the accident.

I am inclined to consider the expense of residence at the Centre — which is really the expense of care — similarly. Mr. Ducharme was in an accident. As a result of the accident, he had to go into a long-term care facility. There was no argument that the cost of care in that facility is exorbitant, and I find it reasonable. This reasonable expense resulted from the accident.

Counsel for Global also sought to rely on Arbitrator Makepeace's interim decision in MacMaster. In that case, the insurer was paying a rent supplement so the applicant could afford a three-bedroom apartment, but the applicant claimed that the apartment could not be modified to meet his needs, and that a house should be bought and modified. Although Arbitrator Makepeace made no order as to the amount of benefits or type of accommodation to which the applicant was entitled, she found that the applicant's accommodation at the time of the hearing was unacceptable. She listed almost 20 items the applicant needed for appropriate accommodation, and then discussed approaches the applicant and the insurer could take in trying to settle the matter.

Counsel for the insurer highlighted the following statements Arbitrator Makepeace wrote as part of her guidelines towards settling the matter: "...the Applicant's ordinary accommodation expenses should be recognized in the agreement reached by the parties"; and "Mr. MacMaster is not entitled to receive a 'windfall' as a result of his accident."

Counsel used these sentences to support his thesis that Mr. Ducharme's pre-accident rent should be deducted from the cost of his present residence, and that Mr. Ducharme would receive a "windfall" if that deduction was not effected.

I do not believe that Arbitrator Makepeace's decision in any way leads to such a conclusion. First of all, it is important to read the sentences cited by counsel in context. I reproduce larger portions of Arbitrator Makepeace's text:

It was clear in the hearing that the social significance of where people live, and particularly of home ownership, played a part in the positions taken by both parties. The underlying purpose of section 6 is to return the applicant to his or her pre-accident level of function, to the extent that is reasonably possible. Mr. MacMaster is not entitled to receive a "windfall" as a result of his accident. He is not entitled to hold out for a house, and accept nothing less. He must be reasonable in working with the Insurer to reach a solution which, while it may not be ideal, is workable and reasonable. Nor is he required to accept a standard of living he would not have accepted before the accident. If, as a result of the accident, he requires a different and more expensive type of housing than he had before the accident, the necessary expenses fall squarely within paragraph 6(1)(f), to the limits set out in the section.

[Emphasis added to the last two sentences.]

It is clear that the sentences so relied upon by counsel for Global only express some ideas on how the parties could approach a settlement. Arbitrator Makepeace held that, if necessary, the insurer would have to pay for a house or whatever accommodation was appropriate. Applying the reasoning in MacMaster to the present case, I find that Mr. Ducharme's life has completely changed. He is not able to return to his former life at all. Therefore, his reasonable expense is the cost of staying in a long-term care residence.

Counsel for Global also relied on Arbitrator Mackintosh's decision in Edwards,⁶ where, among other things, the applicant sought reimbursement under paragraph 6(1)(f) for some miscellaneous babysitting expenses not connected to medical appointments. Arbitrator Mackintosh stated the following:

In the present case the Applicant was engaged in full-time employment at the time of the accident in October 1990. Her husband was off work due to a strike at that time. I heard no evidence concerning the arrangements made for the care of her two young children when both she and her husband were working during December 1990 and January 1991. Up to April 4, 1991, the Applicant received Weekly Income Benefits calculated on the basis of her employment income, in accordance with the provisions of section 12 of the Schedule. During this time, the Applicant was able to pay her portion of the children's ongoing babysitting expenses from this income. I heard no evidence to establish that the Applicant incurred babysitting expenses as a result of the injuries suffered by her, beyond what she would have incurred for work-related day care arrangements. Without such evidence, I am not prepared to award the miscellaneous babysitting expense claimed for the period prior to April 4, 1991.

Counsel for Global submitted that this paragraph stands for the proposition that the insurer does not have to pay for any expenses post-accident beyond what an applicant would have had to pay in expenses had the accident not occurred.

I find it difficult to discover this principle in the legislation. In any event, I do not read Edwards as suggesting this principle.

It should be noted that, for the period after April 4, 1991 and before August 1992, Arbitrator Mackintosh in Edwards did award babysitting expenses. The applicant had been advised to restrict her activities during this period — including looking after her children — until she assumed some responsibility for them in August 1992. My understanding of the rationale in Edwards is that for the earlier period prior to April 4, 1991, it appears that the evidence adduced by the applicant did not establish the necessary connection between the babysitting expenses claimed and her rehabilitation. Once the connection was drawn — that is, once the applicant's evidence established that she incurred babysitting expenses as a result of her injuries — the insurer had to pay, despite the fact that the applicant might have had to incur babysitting expenses in any event, had she worked.

The necessary connection between Mr. Ducharme's injury and his long-term need for care has been drawn.

As has often been repeated, the Schedule is remedial legislation, and must be broadly and liberally interpreted, in accordance with the usual principles of statutory construction, in order to best achieve the object and intent of the legislation — the provision of fair, adequate and speedy compensation. Requiring an applicant to prove every expense in excess of pre-accident expenses would hardly provide speedy or fair compensation, and the resulting benefit would likely be inadequate. I quote from Arbitrator Palmer's Gaba⁷ decision:

The question of who has the onus of proof of reasonableness was not directly addressed by either counsel. It would appear to be implicit that this task is required to be performed by the Applicant. It is my view that once a prima facie case has been made for the reasonableness of the account, the secondary onus shifts to the Insurer to disprove the reasonableness. It is not my sense of the Schedule that the legislature sought to impose a heavy accounting onus on injured persons.

Applying these principles, I find that Mr. Ducharme only has to satisfy me that the expense that results from the accident is reasonable, and I have already found that the cost is reasonable. There is no doubt that the expense resulted from the accident. I find that, once Mr. Ducharme has proved these elements, he has sufficiently answered the burden without having to go through the exercise of distinguishing post-accident from pre-accident costs.

It has also been said that the present no-fault benefits scheme does not guarantee full and perfect compensation to persons injured in motor vehicle accidents. The system has a certain element of "rough justice." Injured applicants may lose the right to claim benefits in excess of the $600 maximum, or to sue for their injuries, but in exchange they should not have to account for every penny.

In the result, I am not convinced that Global is entitled to deduct Mr. Ducharme's pre-accident housing cost from the cost of his long-term care at the Centre hospitalier.

Special Award

Mr. Ducharme seeks a special award from Global, pursuant to section 282(10) of the Insurance Act. In light of the Insurer's legitimate concerns about "windfall," the fact that Global has otherwise been regular about its payments, and the fact that this appears to be a novel point, I decline to order a special award in this case.

Expenses:

I exercise my discretion to award Mr. Ducharme his expenses of this arbitration.

Interest:

Under section 24 of the Schedule, interest is payable on care benefits owing. I understand the parties should be able to agree upon the amount owing. I remain seized of this issue. If the parties are unable to agree on the amount owing, either party may bring the matter before me for determination.

Order:

1. Global is required to pay the entire cost of Mr. Ducharme's residency at the Centre hospitalier Sainte-Jeanne-d'Arc, or at any such similar facility, pursuant to section 7 of the Schedule.

2. Mr. Ducharme is entitled to his expenses incurred in respect to the arbitration and interest on the amounts owing since Global started making deductions.

July 25, 1995

David Evans Arbitrator

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Santina Malfitano and CAA Insurance Company (Ontario), August 4, 1994, OIC File No. A-007490
3. 3Hugh John Macmaster and Dominion of Canada General Insurance Company, October 26, 1994, OIC File No. A-006025
4. 4See the decision of Senior Arbitrator Rotter in Richard Mark Plows and Jevco Insurance Company, January 16, 1992, OIC File Nos. A-000175 and A-000588
5. 5Debra H. Macpherson and Pilot Insurance Company, January 31, 1994, OIC File No. A-003688
6. 6Barbara Edwards and State Farm Mutual Automobile Insurance Company, July 12, 1993, Commission File No. A-001707
7. 7Surbir Singh Gaba and Allstate Insurance Company of Canada, August 21, 1992, OIC File No. A-000624