Co-operators General Insurance Company v. John Pierre Moons, 2001 ONFSCDRS 76

Financial Services Commission / Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 76 Appeal: P00-00033 Office of the Director of Arbitrations

Co-operators General Insurance Company Appellant

and

John Pierre Moons Respondent

Before: David R. Draper, Director of Arbitrations (A)

Counsel: Philippa G. Samworth (for Co-operators) Maia L. Bent (for John Pierre Moons)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is allowed. The arbitration order dated May 3, 2000 is rescinded and replaced with the following:

Co-operators General Insurance Company is not required to pay John Pierre Moons' claim for wages lost by his mother as visitor's expenses under s.21 of Ontario Regulation 403/96, the Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996.

2. If demanded, John Pierre Moons must repay the amount he received for visitor's expenses pursuant to the arbitration order dated May 3, 2000.

3. On consent, Co-operators General Insurance Company will pay John Pierre Moons' reasonable appeal expenses.

May 28, 2001

David R. Draper Director of Arbitrations (A)

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Co-operators General Insurance Company ("Co-operators") appeals from an arbitration order dated May 3, 2000. It claims the arbitrator erred in concluding that lost wages are recoverable as visitor's expenses under s.21 of the SABS-1996.¹

II. BACKGROUND

The facts are straightforward. John Pierre Moons was injured in an automobile accident on March 6, 1999. He received treatment at a series of hospitals until May 6, 1999, when he was discharged to his parents' home. While in hospital, his mother took a leave of absence from her job as a part-time health care aide in a nursing home to visit him on a daily basis. Since she was not entitled to sick leave, Ms. Moons did not receive any income during this period. The question is whether her lost wages, totalling $3,966.43 (gross), are compensable under the SABS-1996.

As noted by the arbitrator, Mr. Moons presented the claim as visitor's expenses under s.21 of the SABS-1996, not attendant care expenses under s.16. The full text of s.21 is set out below:

21. (1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for reasonable and necessary expenses incurred by the following persons as a result of the accident in visiting the insured person during his or her treatment or recovery:

22. The spouse, children, grandchildren, parents, grandparents, brothers and sisters of the insured person.

23. An individual who was living with the insured person at the time of the accident.

24. An individual who has demonstrated a settled intention to treat the insured person as a child of the individual's family.

25. An individual whom the insured person has demonstrated a settled intention to treat as a child of the insured person's family.

(2) No payment is required under this section for expenses incurred more than 104 weeks after the accident.

(3) Subsection (2) does not apply if the insured person sustained a catastrophic impairment as a result of the accident.

[emphasis added]

Co-operators denied the claim on the basis that lost income is not an "expense incurred" and, therefore, not recoverable under this section. The arbitrator rejected this interpretation. He concluded that Ms. Moons' wage loss "was the financial cost of her daily attendances," and that interpreting s.21 to cover this loss was more consistent with the legislative purpose of providing the reasonable and necessary costs of visits through the first party insurer.

Co-operators appealed, asking that the arbitrator's order be stayed pending the outcome of the appeal. I declined to order a stay. While I was satisfied the appeal had merit, I concluded that an unspecified concern about the recovery of a fairly small amount was not sufficient to overcome the general rule in the Insurance Act and the Dispute Resolution Practice Code that arbitration orders are not stayed by an appeal.

III. ANALYSIS

The claim in this case is quite sympathetic. Ms. Moons took a relatively short time off work to visit her seriously injured son while he was hospitalized. There is no suggestion that her actions were unreasonable or unnecessary. The only question is whether the arbitrator erred in concluding that her lost income fits within the phrase, "expenses incurred," and, therefore, is covered under s.21 of the SABS-1996.

As the arbitrator states, the Ontario Court of Appeal has held that automobile insurance legislation should be interpreted in a manner that complies with the legislative text, promotes the legislative purpose and produces a reasonable and just meaning,² with ambiguities being resolved in favour of the insured person.³ Even taking this broad approach, however, I am not persuaded that the arbitrator's interpretation is warranted.

Significantly, Mr. Moons was unable to provide any decisions in which lost income has been treated as an expense. In my view, this is because lost income in not viewed as an expense in either ordinary usage or legislation. Someone talking about the expenses involved in visiting an injured relative is likely to include transportation, accommodation, food and even babysitting — expenditures necessary to make the trip. While he or she might also mention other consequences of the trip, including lost income, these would likely be described as losses, not expenses.

Nor am I convinced that the following definition of "expense" from Black's Law Dictionary (6th Edition), provided by Mr. Moons, suggests a different approach:

That which is expended, laid out or consumed. An outlay: charge: cost: price. The expenditure of money, time, labor, resources, and thought. That which is expended in order to secure benefit or bring about a result.

Ms. Moons did not expend, lay out or consume the amount in dispute. She lost the opportunity to earn her regular income. Again, this is a loss, not an expense.

The difference can be illustrated by changing the facts. Suppose Ms. Moons had significant daily work-related expenses for commuting, parking and meals that she did not incur when she visited her son in the hospital. If the approach were to determine the "financial cost of her daily attendances," the insurer would be allowed to reduce her visiting expenses by the expenses not incurred. In my view, this kind of damages analysis is inappropriate under s.21. The insurer's obligation is to pay the reasonable and necessary expenses incurred by the insured person's relative in making the visit — not more and not less.⁴

Even if the word "expenses" is arguably broad enough to include lost income, s.21 must be read in context. The most striking observation is that where the SABS-1996 (and it predecessors) provides benefits based on lost or past income, as opposed to expenses or the cost of services, it clearly says so and sets out rules for calculating the amount, including limits. For example, someone injured in an accident covered by the SABS-1996 is entitled to income replacement benefits ("IRBs") based on 80 per cent of his or her weekly pre-accident income, to a maximum of $400 per week.⁵ In addition, IRBs are subject to deductions for collateral benefits. In contrast, s.21 says nothing about lost income and does not provide any rules for calculating the amount. In my view, this strongly suggests that lost income is not included in visitor's expenses, not that it is recoverable at 100 per cent of gross as the arbitrator held.

This is not the only contextual clue. The SABS-1996 also extends benefits beyond the person directly involved in the accident. The definition of "insured person" in s.2 includes someone who suffers psychological or mental injury as a result of an accident that results in physical injury to his or her spouse, same-sex partner, child, grandchild, parent, grandparent, brother, sister, dependant, spouse's dependant or same-sex partner's dependant. In other words, if Ms. Moons had suffered psychological injuries, she could have claimed benefits as an insured person. As with any insured person, her IRBs would have been limited to 80 per cent of her net weekly pre-accident income, to a maximum of $400. This is significant, as it makes little sense that more benefits would be payable for Mrs. Moons as a visitor than if she had suffered injuries that prevented her from working.

Just as importantly, the SABS-1996 includes another option. If someone goes beyond visiting and takes on a more substantial role in the insured person's care, attendant care benefits can be claimed under s.16. Although this section does not cover lost income, it provides up to $3,000 per month. Any doubts about whether family members can provide attendant care are answered by s.2(7) which provides as follows:

2. (7) For the purpose of this Regulation, an aide or attendant for a person includes a family member or friend who acts as the person's aide or attendant, even if the family member or friend does not possess any special qualifications.

This means that if Mrs. Moons cared for her son while he was hospitalized, including helping him with his routine personal care,⁶ attendant care benefits would be available under s.16. However, for reasons that are not obvious, this claim was only pursued as a claim for visitor's expenses. As a result, the agreed statement of facts does not provide sufficient information to determine whether attendant care benefits are payable.

The distinction between visitor's expenses and care benefits is not unique to the SABS-1996. Previous versions of the legislation have also limited compensation for visitors to "expenses," while using broader language for benefits relating to care or other services provided to the insured person. This legislative history, in my view, provides further reason to doubt the arbitrator's interpretation.

In the SABS-1990,⁷ which applies to accidents from June 22, 1990 to December 31, 1994, visitor's expenses are payable under s.6(2) for "expenses actually incurred . . . in visiting the insured person during his or her treatment or recovery." However, if the insured person needs care, the insurer is required to pay up to $3,000 per month for:

7.(1) (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.

[emphasis added]

I am not aware of any decisions in which income lost by a visitor was found to be compensable under s.6(2), although the issue was raised in Gazzola and Canadian Surety Company, (OIC A-000324, July 27, 1992). In that case, the insured person's son missed approximately eight weeks work to care for her while she was in hospital — facts very similar to this case. Mrs. Gazzola claimed her son's lost income as care benefits under s.7(1) and, alternatively, as a visitor's expense under s.6(2). The arbitrator held that because the claim was for lost income, the starting point was s.7(1)(a), not s.6(2). While not conclusive, this decision supports the view that lost income and expenses are distinct categories.

The more contentious issue under the SABS-1990 has been whether compensation is available for the services performed by a non-professional, such as a family member, who does not lose any income as a result of caring for the insured person. In a number of decisions, arbitrators ordered compensation, usually at minimum wage.⁸ Recently, the Court of Appeal came to a different conclusion. In Monachino v. Liberty Mutual Fire Insurance Company (2000), 2000 CanLII 5686 (ON CA), 47 O.R. (3d) 481, the Court held (2-1) that s.7 of the SABS-1990 only covers the cost of a professional caregiver or the gross income reasonably lost by someone caring for the insured person, not the value of services provided by a non-professional.

Like here, the facts in Monachino were sympathetic. Sylvio Monachino, a university student, was seriously injured in an automobile accident. He was in a coma for four days and remained in the hospital for approximately six weeks, when he was discharged to his parents' home. The undisputed medical evidence was that he suffered significant brain damage that would prevent him from ever leading an independent life. Sylvio's mother, who was not employed at the time of the accident, cared for him while he was in hospital and following his release.

The tort action against the other driver was settled on an undisclosed basis prior to trial, but accident benefits were not. One unresolved question was whether Sylvio was entitled to caregiver benefits under s.7 at the maximum rate of $3,000 per month for the time his mother spent caring for him and providing household services such as cooking, cleaning, laundry, and shopping. The trial judge held that in contrast to s.61 of the Family Law Act,⁹ the SABS-1990 did not provide compensation for the value of services provided by family members — it only covers the cost of a professional caregiver, income lost by a non-professional caregiver and out-of-pocket expenses.

On appeal, Sylvio Monachino argued that 7(1)(a) was broad enough to cover the cost of non-professional caregivers. Otherwise, he argued, it would penalize those who do not have the financial means to risk incurring professional care costs in the hope that they will be reimbursed. Also, it would unfairly discriminate between income-earning family members who provide care, and those who do not lose any income as a result of providing care. The majority rejected this argument. It held that entitlement to caregiver costs (as opposed to lost income) under s.7(1)(a) involves three preconditions: a cost must be incurred, it must be reasonable and it must be for a professional caregiver. To conclude otherwise, in the majority's view, would be to rewrite the legislation.

Sylvio also argued that the costs of a non-professional caregiver could be recovered under s.7(1)(b) and s.6(1)(f) as "expenses." The majority also rejected this argument, concluding that while the value of services performed by a family member might be recoverable under the Family Law Act, it is not an "expense" within the meaning of the SABS-1990.

This analysis clearly does not help Mr. Moons. Even the dissent does not provide much assistance. In dealing with the meaning of "expenses," Weiler J.A. states as follows:

Both before and after the relevant time period, the word "expense" in the legislation was interpreted inclusively as allowing a permanently disabled person to claim for the expenditure of time and effort by members of his family. There is no suggestion that the legislature intended a different result in the period in question here. The usage of the same word, "expense," the recommendations contained in the Osborne Report, and the broader phraseology with respect to care all suggest the opposite conclusion. Courts in the United States have also interpreted similarly-worded and structured no-fault provisions respecting expenses for the care of the insured to include payment to the appellant for the care being provided by his mother does not offend the legislative text and is in harmony with all of the purposes of the legislation.

The same cannot be said for visitor's expenses. The legislation has never specifically covered lost income as a visitor's expense, nor have arbitrators or judges found it to be included. While the policy intent of the legislation clearly is to facilitate visits by family members, the scope is limited. For example, the travel expenses incurred by an aunt or uncle are not covered under the SABS-1996, or its predecessors, no matter how important the visits are to the insured person.

I would not suggest that the decision in Monachino is determinative. It involved a claim for the value of services performed, not lost income, and was decided under different legislation. However, the Court's analysis is instructive and, in my view, strongly suggests that the term "expenses" is not as elastic as Mr. Moons contends. The simple truth is the accident benefits do not cover all losses. Tort remains part of the equation under the current legislation. As suggested in Monachino, Mrs. Moons may need to look to s.61 of the Family Law Act for relief. Alternatively, as discussed above, her son might be able to claim attendant care benefits for the services she performed.

The SABS-1990 was followed by the SABS-1994.¹⁰ It applies to accidents from January 1, 1994 to October 31, 1996, and provides visitor's expenses using the same language as the SABS-1990: "expenses actually incurred in visiting the insured person during his or her treatment or recovery." Attendant care benefits under the SABS-1994 are set out in Part X, with the following section being central:

47.-(1) If an person sustains an impairment as a result of an accident, the insurer shall pay for all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for,

(a) services provided by an aide or attendant; or

(b) services provided by a long-term care facility, including a nursing home, home for the aged or chronic care hospital.

(2) For the purposes of clause (1)(a), an aide or attendant may be any person who is capable of providing the services, including a family member of the insured person, even if the aide or attendant does not possess any special qualifications.

Unlike s.7 of the SABS-1990, this section does not include any reference to lost income. However, it provides up to $3,000 per month for attendant care, including attendant care provided by a family member with no special qualifications.¹¹ In this respect, the SABS-1994 are like s.16 of the SABS-1996. Interestingly, I am not aware of any cases in which lost income has been claimed as an expense under either s.47 of the SABS-1994 or s.16 of the SABS-1996.

The most relevant decision under the SABS-1994 is Stewart and Co-operators General Insurance Company, (OIC A-950561, May 27, 1996). In that case, the insured person's stepfather took a number of days off work to visit him in hospital and at home while he recovered from his injuries. He was fully compensated by his employer for his time off, but had to use some of his accumulated sick days. The insured person claimed visitor's expenses under s.53(1) of the SABS-1994 for the value of his stepfather's lost sick days, as well as attendant care benefits under s.47(1) for the care provided by his stepfather and mother.

Under s.53(1) of the SABS-1994, the question was whether the value of the lost sick days was an expense "actually incurred" in visiting the insured person. The arbitrator held that it was not. While he accepted that the stepfather's use of his sick days could leave him short if he faced future illness or injury, or could result in a smaller payout on retirement, he found this speculative:

To this point, in my view, Mr. Buckle [the stepfather] has simply incurred the possibility of a future loss. Section 53 of the Schedule is very clear and specific. It requires not only that there be an expense, but that it be "actually" incurred.

"Expense" is defined in Black's law dictionary (Revised, Fourth Edition), 1957, as "an actual outlay," "an actual and honest disbursement," "an actual outlay of money," "expenditures, outlays, or disbursements of money."

While I am prepared to accept that, in some circumstances, "an expense" need not necessarily involve money, I am of the view that in this particular instance, if there was an expense, it was not "actually incurred." In my view, Mr. Buckle's expenditure of his sick time involves, at the very best, a future loss.

This excerpt makes it clear that the outcome in Stewart did not turn on whether the lost sick days were an "expense." The arbitrator held that even if they were, they were not "actually incurred," as required by s.53. As a result, it is not clear that this decision has anything to say about whether lost income is an expense.

In summary, I conclude that the plain meaning of "expenses incurred," the context of s.21 of the SABS-1996 and the legislative history all lead to the conclusion that Mr. Moons cannot recover his mother's lost income as a visitor's expense. Further, I am not convinced that this interpretation undermines the "exchange of rights" reflected in the statutory accident benefits legislation.¹² The focus of the accident benefits is on the insured person. While each version of the SABS has provided for visitor's expenses, they have never covered all of the consequential losses that visitors might suffer.

The situation is different if the person does more than visit. The three versions of the SABS have all included care or attendant care benefits that provide compensation for the services of a non-professional based on lost income (SABS-1990), or the value of the services performed (SABS-1994 and SABS-1996). If Mrs. Moons did more than just visit, compensation may be available under s.16 of the SABS-1996 as attendant care. Alternatively, her recourse is under s.61 of the Family Law Act.

For these reasons, the appeal is allowed.

IV. APPEAL EXPENSES

Co-operators agreed that it would pay Mr. Moons' reasonable appeal expenses regardless of the outcome. This agreement will be reflected in the order.

May 28, 2001

David R. Draper Director of Arbitrations (A)

Date

Footnotes

1. 1Ontario Regulation 403/96, as amended, the Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996.
2. 2Bapoo v. Co-operators General Insurance Company (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616.
3. 3July v. Neal (1986), 1986 CanLII 149 (ON CA), 57 O.R. (2d) 129.
4. 4A similar analysis is found in Bajic and Zurich Insurance Company and Pafco Insurance Company Limited, (FSCO A97-000572, July 5, 2000), p.43, under appeal on different issues.
5. 5See SABS-1996, s.6, s.7 and ss.61-63. Also, the maximum may be increased to $600, $800 or $1,000 if optional coverage was purchased (s.27).
6. 6See Assessment of Attendant Care Needs (Form 1), which is Schedule C to the Attendant Care Designated Assessment Centre Assessment Guide (December 2000).
7. 7R.R.O. 1990, Reg. 672, as amended, the Statutory Accident Benefits Schedule — Accidents Before January 1, 1994.
8. 8For example, see MacAulay and General Accident Assurance Company, (FSCO A96-001971, February 9, 1998), upheld on appeal on other issues; Bush and Pilot Insurance Company, (OIC A-004687, April 25, 1997); McNutt and Metropolitan Life Insurance Company, (OIC A-006964, September 20, 1994); and Ferreyra and Ferreyra and Royal Insurance Company of Canada, (OIC A-000301, A-000325 and A-000384, July 9, 1992).
9. 9The damages recoverable under s.61 of the Family Law Act include "a reasonable allowance for loss of income or the value of the services" where, as a result of the injury, the family member "provides nursing, housekeeping or other services."
10. 10Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996.
11. 11With higher maximum amounts if the insured person suffers certain serious injuries.
12. 12Meyer v. Bright (1993), 1993 CanLII 3389 (ON CA), 15 O.R. (3d) 129 (C.A.).