Neutral Citation: 2000 ONFSCDRS 180

FSCO A99-001086

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JUNE M. JOHNSTON

Applicant

and

PAFCO INSURANCE COMPANY LIMITED

Insurer

REASONS FOR DECISION

Before:

David J. Evans

Heard:

August 8, 9 and 10, 2000, in Hamilton, Ontario.

Appearances:

Donald Johnston for Mrs. Johnston

Stuart Aird for Pafco Insurance Company Limited

Issues:

The Applicant, June M. Johnston, was injured in a motor vehicle accident on January 10, 1997. She applied for and continues to receive statutory accident benefits in the form of other disability benefits from Pafco Insurance Company Limited ("Pafco"), payable under the Schedule.¹ However, she disputes Pafco’s interpretation of the Schedule’s provisions regarding the reductions in the amount of her benefit mandated because of her age. She also claims other benefits such as attendant care and rehabilitation. The parties were unable to resolve their disputes through mediation, and Mrs. Johnston applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mrs. Johnston entitled to 52 weeks of non-earner benefits at the non-adjusted rate, pursuant to sections 10 and 12 of the Schedule?
Is Mrs. Johnston entitled to further attendant care benefits pursuant to section 16 of the Schedule?
Is Mr. Donald Johnston, Mrs. Johnston's son, entitled to visitor's expenses pursuant to section 21 of the Schedule?
Is Mrs. Johnston entitled to housekeeping expenses incurred while she was visiting her daughter in Montreal at the end of December 1997 pursuant to section 22 of the Schedule?
Is Mrs. Johnston entitled to be reimbursed for her travel expenses to visit her daughter in Montreal?
Is Mrs. Johnston entitled to receive a rehabilitation benefit claimed pursuant to section 15 of the Schedule?
Is Mrs. Johnston entitled to a special award pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c.I.8 as amended?
Is Pafco liable to pay Mrs. Johnston's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?
Is Mrs. Johnston liable to pay Pafco's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

Mrs. Johnston also claims interest on any amounts owing.

Result:

Mrs. Johnston is entitled to 52 weeks of non-earner benefits at the non-adjusted rate, pursuant to sections 10 and 12 of the Schedule. The outstanding non-earner benefit is $3,367, exclusive of interest.
Mrs. Johnston is not entitled to further attendant care benefits pursuant to section 16 of the Schedule.
Mr. Donald Johnston, Mrs. Johnston's son, is entitled to visitor's expenses pursuant to section 21 of the Schedule in the amount of $480.
Mrs. Johnston is entitled to housekeeping expenses incurred while she was visiting her daughter in Montreal at the end of December 1997 pursuant to section 22 of the Schedule in the amount of $60.
Mrs. Johnston is not entitled to be reimbursed for her travel expenses to visit her daughter in Montreal.
Mrs. Johnston's claim for a rehabilitation benefit claimed pursuant to section 15 of the Schedule is premature.
Mrs. Johnston is not entitled to a special award pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c.I.8 as amended?
The issue of expenses is deferred.
Pafco shall pay Mrs. Johnston interest on overdue payments in accordance with section 24 of the Schedule.

EVIDENCE AND ANALYSIS:

Background:

On January 10, 1997, Mrs. June Johnston suffered fractures to her left leg when a car hit her in a parking lot. There is no dispute that as a result of these injuries she continues to be entitled to a non-earner benefit under section12 of the Schedule.

Mrs. Johnston’s claim divides into two parts. The first part relates to the reduction in the amount of her non-earner benefit and the total period of benefits. This is essentially a question of statutory interpretation. The second part relates to Mrs. Johnston’s assorted claims for unpaid attendant care, rehabilitation benefits, visitor's expenses, and the cost of a trip to Montreal to stay with her daughter.

Reduction of the Non-earner Benefit and Total Period of Benefit:

The injuries Mrs. Johnson sustained in the accident left her unable to carry out substantially all of her normal pre-accident activities, meaning that she suffered a complete inability to carry on a normal life² immediately after the accident. Accordingly, she has continued to receive a non-earner benefit under section 12 of the Schedule from 26 weeks after the accident. However, as she was over age 65 at the time of the accident, she is only entitled to the benefit up to 208 weeks from the time she "became entitled to receive the benefit." Mrs. Johnston disputes Pafco's interpretation of section 12(7)(a), which provides that Pafco is not required to pay a non-earner benefit for the first 26 weeks after the onset of the complete inability to carry on a normal life. In the context of Mrs. Johnston's claim, Pafco treats the 26-week period as a kind of deductible from the 208 weeks; Mrs. Johnston claims that the 26 weeks is a simple waiting period and that after it expired, she is entitled to the full 208 weeks of benefits.

The following are the relevant statutory provisions relating to Mrs. Johnston's non-earner benefit:

12.(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications:

(1) The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit.

(2) . . . [T]he amount of the non-earner benefit shall be $185 for each week that the insured person is eligible to receive the benefit.

(6) Subject to subsection (7), the non-earner benefit is payable during the period that the insured person suffers a complete inability to carry on a normal life.

(7) The insurer,

(a) is not required to pay a non-earner benefit for the first 26 weeks after the onset of the complete inability to carry on a normal life;

(8) Sections 9 and 10 apply, with necessary modifications, to a non-earner benefit and, for that purpose, the reference in subsection 10(1) to "the amount determined under section 7" shall be deemed to be a reference to the amount referred to in subsection (2) of this section.

Mrs. Johnston was born on August 24, 1918 (according to her Applications for Benefits), so her entitlement to the non-earner benefit arose after she had attained age 65. Section 10 (entitled "Entitlement Arising after Age 65") therefore applies. With the necessary modifications, the relevant portions read as follows:

10.(1) Despite sections 6 and 7, if a person becomes entitled to receive a non-earner benefit after attaining 65 years of age, the weekly amount of the benefit shall be the amount determined under sub-section 12(2) multiplied by the factor set out in Column 2 of the Table to this subsection opposite the number of weeks that have elapsed since the person became entitled to receive the benefit.

TABLE

Column 1	Column 2
Number of Weeks since Entitlement Arose	Factor
Less than 52 weeks	1.0
52 weeks or more but less than 104 weeks	0.8
104 weeks or more but less than 156 weeks	0.6
156 weeks or more but less than 208 weeks	0.3
208 weeks or more	0.0

(2) A non-earner benefit is no longer payable to a person to whom subsection (1) applies if more than 208 weeks have elapsed since the person became entitled to the benefit.

Pafco started reducing Mrs. Johnston's weekly benefit 52 weeks after the accident using the factors in the Table on the basis that her "entitlement" to the benefit arose immediately after the accident. Accordingly, the mandated reduction would start at the 52-week point after the accident. It also takes the position that a person such as Mrs. Johnston will never receive 208 weeks of benefits, as section 12(7) effectively reduces the payment period by 26 weeks to a total of 182 weeks.

Mr. Johnston argues that this makes no sense. If the drafters knew that an applicant could never receive the full amount of the benefits for 52 weeks, nor any benefits for the full 208 weeks, then why does the Table refer to 52 weeks and not 26, or to 208 weeks and not 182?

I find Mr. Johnston's common sense compelling. His position is also consistent with the provisions of the Schedule. Thus, pursuant to section 12(7), Pafco was not required to pay a non-earner benefit for the first 26 weeks after the accident. If Pafco was not required to pay the benefit, then surely Mrs. Johnston was not entitled to receive the benefit. Subsection 10(1) applies based on "the number of weeks that have elapsed since the person became entitled to receive the benefit." Similarly, section 10(2) relieves the Insurer from further payment "if more than 208 weeks have elapsed since the person became entitled to the benefit."³ I find that Mrs. Johnston's "entitlement" turns on the point when she started to receive benefits 26 weeks after the accident and not when she met the disability test immediately after the accident. I find that Pafco incorrectly interpreted the provisions of sections 10 and 12.

I find that Mrs. Johnston was entitled to benefits in the full amount of $185 for 52 weeks starting 26 weeks after the accident. The first reduction by the 0.8 factor should have occurred 78 weeks and not 52 weeks after the accident. The other reductions should have followed a similar pattern. Assuming no change in Pafco’s position regarding Mrs. Johnston’s disability, her entitlement will expire 234 weeks after the accident on July 6, 2001.

Although Mrs. Johnston claimed 26 weeks of benefits or $4,810.00, she has not yet been deprived of that amount. Thus, for the period from 52 to 78 weeks after the accident, Mrs. Johnston received 80 percent instead of 100 percent of the benefit, or $148 instead of $185. This represented a shortfall of $962. The same shortfall occurred the following year. The shortfall was $1,443 for the first half of 2000. The benefit currently being paid is correct. The total current shortfall is $3,367, exclusive of interest, as set out below:

weeks since MVA	start of period	Benefit: Pafco	Benefit: Johnston	Shortfall at end of period	Cumulative shortfall
0-26	10-Jan-97	0	0	0	0
26-52	11-Jul-97	185	185	0	0
52-78	09-Jan-98	148	185	962	962
78-104	10-Jul-98	148	148	0	962
104-130	08-Jan-99	111	148	962	1924
130-156	09-Jul-99	111	111	0	1924
156-182	07-Jan-00	55.5	111	1443	3367
182-208	07-Jul-00	55.5	55.5	0	3367
208-234	05-Jan-01	0	55.5	1443	4810
234	06-Jul-01	0	0	0	4810

Other Expenses:

Although Mrs. Johnston testified briefly at the hearing, she is elderly and suffers from some dementia and memory problems. Most of the Applicant's evidence came from her son and representative at the hearing, Mr. Donald Johnston.

Mr. Johnston testified that prior to the accident, his mother had been independent, living in her own apartment. On the night of the accident, his mother was taken to the hospital but was released to his care with a splint on her leg. However, she needed extensive assistance, so he made arrangements for her to stay at the Central Park Lodge for two weeks and then at the Wellington Retirement Home until approximately March 1997. Mrs. Johnston was then released to her apartment.

During the following 18 months, Mrs. Johnston had the aid of Ms. Jacqueline F. Ruch, who provided housekeeping and attendant care services weekdays. Mr. Johnston assisted his mother on weekends and continued to make housekeeping and attendant care claims on her behalf. An Attendant Care DAC on December 9, 1997 found that she was in need of attendant care,⁴ which was subsequently assessed at $667.55 per month.⁵

Mr. Johnston testified that he observed his mother's condition improve for the first half of that period, before it plateaued and then worsened. Ms. Ruch also had concerns towards the end of the 18 months⁶ and eventually decided that Mrs. Johnston could no longer fend for herself. She ceased her services at the beginning of October 1998 in the hope that Mrs. Johnston would consider entering a more secure facility.

At the same time, Mr. Johnston, following the advice of his mother's physician, had her admitted to St. Joseph's Hospital on October 2, 1998, at which point Pafco stopped the attendant care benefits. The hospital records show that on admission, Mrs. Johnston had a number of complaints and was found to be suffering from a number of conditions such as iron deficiency anemia, an ulcer, inflammation of the esophagus, and chronic lung disease. She may also have had a small stroke.

Mr. Johnston testified that after discussions with the doctors it was determined that she could no longer live alone. He found the Atrium Villa for her, which she entered on November 1, 1998. Mrs. Johnston enjoys staying at the Atrium Villa. She testified that she is "quite popular" with the people in the building. They exercise every day, sing music from a book, and a couple of times a month, listen to the piano players who come in to entertain them. She plays bingo once a week, and she has been quite lucky with the "races with the little horses." She is also able to get around a bit to do some shopping, which she does by putting her goods in the little bucket on her walker. She does not have to worry about cooking for herself or making sure she takes the right amount of medication.

Mr. Johnston presented a claim for the costs associated with the Atrium Villa's attendant care on December 24, 1998, which was denied in an Explanation of Benefits dated January 18, 1999 as not accident-related. At the hearing, Pafco also relied on the fact that no attendant care benefit is payable for attendant care expenses incurred more than 104 weeks after the accident,⁷ namely from January 8, 1999 in this case. Mr. Johnston also claimed for unpaid attendant care after Mrs. Johnston's release to the Atrium up to the 104-week mark on the basis of the DAC assessment. This claim settled at the hearing, but not the claim for rehabilitation benefits associated with the Atrium.

Attendant Care Expenses:

Mr. Johnston claimed for additional attendant care expenses for activities he performed such as shopping for his mother and doing her banking. Counsel for Pafco prepared and filed summaries showing the total amounts claimed and paid for Ms. Ruch's and Mr. Johnson's services.⁸

The summaries show that the total amounts paid for attendant care ($17,359.95) slightly exceed the total amounts claimed ($17,271.50) by $88.45, in my calculation.⁹ Included in these claims were claims for the banking and shopping Mr. Johnston performed for his mother, some of which were denied. However, paragraph 16(2)(a) provides that the attendant care benefit shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for services provided by an aide or attendant. The claim is Mrs. Johnston's, and although some of Mr. Johnston's individual banking and shopping claims were not paid, the total of the expenses incurred by or on behalf of Mrs. Johnston were in fact paid. Therefore, no amounts remain outstanding, and I deny the claim.

As an aside, I note that in final submissions, Mr. Johnston objected to Pafco’s practice in the seven months prior to his mother's October 1998 stay in the hospital of only paying exactly what was claimed. He suggested that the DAC assessment was a mandatory amount that Pafco had to pay. The issue was raised too late for me to deal with, but in any event, as I read the records, the total amounts claimed and paid over the seven months from mid-February to the end of September ($4,606.70) very nearly match what seven payments of $667.55 would have equalled ($4,672.85), for a net difference of only $66.15.

Travel Expenses:

Subsection 21(1) provides that if an insured person sustains an impairment as a result of an accident, the insurer shall pay for reasonable and necessary expenses incurred as a result of the accident by persons such as the insured person’s children in visiting the insured person during his or her treatment or recovery. Mr. Johnston is essentially claiming for times when he was also carrying out attendant care for his mother. He claims the equivalent of the bus fare ($3.00), which I find reasonable, in light of the fact that according to Mr. Johnston, Pafco had paid this amount when he visited his mother at Central Park and Wellington. Visitor expenses are not excluded under attendant care expenses, unlike other expenses listed in section16(3).¹⁰ As I understand it, Mrs. Johnston was also still receiving treatment and recovering from the accident while in her apartment.

Mr. Johnston testified that he visited his mother on the weekend and occasionally dropped off groceries or supplies during the week. However, he testified that he visited his mother regularly approximately every 10 to 14 days before the accident. Since section 21(1) provides that the expenses of visitors are only payable for those expenses incurred "as a result of the accident in visiting the insured person," I find that the claim should be reduced to account for the pre-accident visit history. I find that he would likely have continued to visit his mother anyway, so some post-accident visits were not as a result of the accident. I allow a claim for two visits per week at $3.00 per visit over 80 weeks, for a total of $480.00 (2x3x80).

Trip to Montreal:

Mr. Johnston testified that on Christmas 1997 neither he nor Ms. Ruch could attend to his mother. He arranged to send his mother to his sister, Patricia Anka, in Montreal. He now claims for the cost of the flight ($436.40) and for housekeeping expenses while she was there.

Regarding the cost of the trip, Mr. Johnston conceded that this was a "grey area." As well, Mrs. Johnston had made similar holiday trips in the past. There is no medical or other documentation to support the trip. Although I sympathize with Mr. Johnston's situation at the time, I find it impossible to fit the cost of this trip somewhere into the Schedule as a reasonable and necessary expense.

Regarding the housekeeping expense in Montreal, Mr. Johnston testified that most weeks the expense was $80. The week of the trip Ms. Ruch only worked two hours for a total of $20. The $60 claimed is to make up the $80. He told Ms. Anka that he would make a claim for the extra time she spent cleaning up after their mother. Ms. Anka told him that she spent about an extra hour a day cleaning up after Mrs. Johnston and doing her laundry.

Mrs. Johnston clearly needed housekeeping services. I find that Ms. Anka had to perform these extra housekeeping services when her mother was there in Montreal. I accept that Mr. Johnston’s promise to claim for the extra services means that Mrs. Johnston incurred the extra expense. Therefore, I find that Mrs. Johnston is entitled to the housekeeping expense claim of $60.

Rehabilitation Benefit:

On the understanding that a claim had been presented to Pafco, I allowed Mr. Johnston to present his mother's claim for a rehabilitation benefit for the purposes of vacations and recreational activities outside of the Atrium over the objections of counsel for Pafco.

However, Mr. Johnston testified, that, in fact, there has never been a claim made to Pafco for rehabilitation, as he has no treatment plan,¹¹ and consequently there has been no denial. The claim made on December 24, 1998 was for attendant care at the Atrium and not rehabilitation. It was only at the start of the hearing that Mr. Johnston attempted to quantify the amount of the claim. Mr. Johnston is essentially asking me to decide whether Mrs. Johnston can make a rehabilitation claim for the attendant care she requires.

I find that I have no jurisdiction to determine the benefit. The claim is clearly premature, as there is not even a dispute.

Mr. Johnston testified that he feels Pafco should have arranged a further attendant care DAC when the claim for the attendant care at the Atrium was presented. That DAC would then have provided him information on which to base the rehabilitation benefit claim. However, as I read the Schedule, Pafco was not required to arrange a DAC before the entitlement to the attendant care ended. According to section 39(1), Pafco was supposed to respond within 14 days of the application as to whether it would accept the claim or require a health professional's certificate. Only after requiring a certificate would Pafco have to arrange a DAC if it still disagreed with the certificate. As the application was received December 24, 1998, Pafco was supposed to respond by January 7, 1999. It missed that deadline, but the entitlement to any attendant care for Mrs. Johnston expired a day later, namely January 8, 1999 (104 weeks after the accident).¹²

Furthermore, an attendant care DAC is not at all the same thing as a rehabilitation DAC, as the assessments are dealing with different benefits. I quote from the current DAC guidelines:

Medical and rehabilitation assessments deal only with issues relating to medical and rehabilitation benefits. Attendant care assessments deal only with issues relating to attendant care benefits. . . Attendant care assessments do not deal with evaluating a claimant's continuing treatment or rehabilitation needs.¹³

Accordingly, even if I could order an attendant care DAC despite its being of no value at this time, it would be of no assistance to Mrs. Johnston's rehabilitation claim.

Special Award:

Mrs. Johnston claimed a special award. Mr. Johnston submitted that this case should be considered for a special award because he was not able to resolve the issues with Pafco and was required to proceed with the hearing. However, that is not the test for a special award. Subsection 282(10) of the Insurance Act reads as follows:

(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 Statutory Accident 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.

The issue pertaining to the reduction in the amount of the non-earner benefit was novel and required my decision. Therefore, I find that the reduction in the benefit will not attract a special award. As for the other matters, I find that the related benefits were not unreasonably withheld or delayed, as Pafco raised valid concerns that required a decision on the facts. Accordingly, I find that no special award is warranted.

EXPENSES:

The issue of expenses is deferred. If the parties cannot agree on the entitlement to expenses, an expenses assessment may be arranged in the usual manner. However, I encourage them to communicate with each other as quickly as possible.

September 28, 2000

David J. Evans Arbitrator

Date