G.J. v. Coachman Insurance Company, 2019 CanLII 126208

RECONSIDERATION DECISION

Before: Lori Marzinotto, Vice-Chair

Date: November 15, 2019

File: 16-003306/AABS

Case Name: G.J. v. Coachman Insurance Company

Written Submissions By:

For the Applicant: Michael Bennett, Counsel

For the Respondent: Jason Hickman, Counsel

INTRODUCTION

1Both the applicant and the respondent have filed requests for reconsideration in this matter. The requests arise out of a decision dated May 16, 2018 (the “Decision”) in which the Tribunal found that the applicant was entitled to certain benefits but not others.

2Pursuant to s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, I have been delegated responsibility to decide this matter in accordance with the applicable rules of the Tribunal.

ISSUES AND RESULTS IN THE DECISION RELEVANT TO THE RECONSIDERATION

3The Tribunal found that the applicant was entitled to, among other things, the following:

i. income replacement benefits (“IRBs”) of $400.00 per week from October 25, 2015 to October 18, 2017¹;

ii. attendant care benefits (“ACBs”) of $2,894.99 per month from July 7, 2016 to October 18, 2017²;

iii. an award for the outstanding ACBs that the respondent unreasonably withheld paying. The Tribunal calculated that the outstanding ACBs owed to the applicant in the amount of $38,662.12³ and found that the applicant was entitled to an award under s.10 (“O.Reg. 664”) at 40% and calculated the amount of the award to be $15,464.85, plus interest; and

iv. interest (on all overdue payment of benefits owing) to be determined by the parties in accordance with the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').

Respondent’s Request for Reconsideration

4The respondent is seeking reconsideration of the following:

i) The Tribunal’s decision regarding the applicant’s entitlement to and quantum of ACBs for the period from July 7, 2016 to December 31, 2016 only;

ii) The Tribunal’s finding that the applicant is entitled to interest in accordance with the Schedule on all overdue payments of ACBs only;

iii) The Tribunal’s failure to address when interest begins to accrue on the past ACBs, or in the alternative, if it is to be inferred from the Decision that interest begins to accrue from the date entitlement to ACBs began; and

iv) The Tribunal’s finding that the applicant is entitled to and quantum of an award under s.10 of O.Reg. 664 in the form of a lump sum of $15,464.85 representing 40% of the total amount of ACB owing to the applicant;⁴

Applicant’s Request for Reconsideration

5The applicant is seeking reconsideration of the following:

i) Did the Tribunal err in fixing an end date for the applicant’s entitlement to IRBs and ACBs?; and

ii) Did the Tribunal err in the formula used to calculate the quantum of the award and the interest payable on the award?

RESULT

6Both the respondent’s and applicant’s requests for reconsideration are partially granted.

Respondent’s Reconsideration - Result

7The Tribunal erred in finding that the applicant is entitled to ACBs from July 7, 2016 to December 31, 2016 in the amount of $2,894.99 per month.

8The Tribunal did not err in finding that interest was payable on the overdue payments of ACB or failing to address when the interest began to accrue. It is to be inferred from the Decision that interest begins to accrue from the date entitlement to ACBs began.

9The Tribunal did not err in finding the applicant was entitled to an award under s.10 of O.Reg. 664 but the amount shall be reduced to take into account the reduction of the amount of ACBs I am finding payable in this reconsideration decision.

Applicant’s Reconsideration – Result

10The Tribunal did not err in fixing an end date for applicant’s entitled to IRBs and ACBs.

11The Tribunal did err in the formula used to calculate the quantum of the award and interest payable on the award.

4 i) Analysis

12The Tribunal found that the applicant was entitled to ACBs from July 7, 2016 to October 18, 2017. The respondent seeks reconsideration on the applicant’s entitlement to ACBs from the period of July 7, 2016 to December 31, 2016 only. In the alternative, the respondent seeks a reduction in the amount of the ACBs from July 7, 2016 to December 31, 2016.

13The Tribunal erred in finding that the applicant is entitled to ACBs from July 7, 2016 to December 31, 2016 in the amount of $2,894.99 per month. I find that the applicant is entitled to ACBs in the amount of $935.00 per month for the period of July 7, 2016 to December 31, 2016.

14During the July 7, 2016 to December 31, 2016 period, the applicant’s wife was providing attendant care services to the applicant. The Tribunal found that it did not need to determine the applicant’s wife’s economic loss because it found that the respondent unreasonably withheld payment of the benefit and relied on s. 3(8) of the Schedule. As a result, the Tribunal deemed the applicant’s Form 1⁵ amount of $2,894.99 incurred. I find that the Tribunal erred in this respect.

15As stated in paragraph 59 of the Decision, if the person providing the attendant care is a family member, as opposed to a professional service provider, the benefit payable is limited to the economic loss incurred by the family, regardless of the level of care stated in the Form 1.

16Section 3(8) of the Schedule states that, where an insurer unreasonably withheld or delayed payment of a benefit in respect of the expense, the Court or arbitrator may, for the purpose of determining the person’s entitlement to the benefit, deem the expense to have been incurred.

17While s. 3(8) of the Schedule may be punitive in nature, I have not been provided any case law to suggest that a finding of unreasonableness under this section would entitle an applicant to a benefit he would otherwise not be entitled to under the regulation. The expense that legislatively could have been incurred by the applicant’s wife in this case would have been limited to her economic loss, namely, $935.00 per month which I later elaborate on in this decision.

18Cases referenced in the reconsideration submissions suggest that the Form 1 amounts would be payable and not the economic loss amounts (even if it would result in a “windfall” to the attendant care provider). In Henry v. Gore Mutual Insurance Co.⁶ (“Henry”), sustaining an economic loss was a threshold requirement. The Court indicated that had the legislature intended to limit the amount of the benefit to the amount of the economic loss, it would have done so. However, Henry was decided before the Schedule was amended on February 1, 2014.⁷

19Limiting the amount of the benefit to the amount of the economic loss for attendant care providers who were not professionals was exactly what the legislature did in the February 1, 2014 amendments. The amendments limit the entitlement to ACBs for services provided by non-professionals to the amount of the economic loss sustained by the applicant’s wife as a result of providing the services.

20The respondent argues that the applicant’s wife could not have suffered an economic loss for the period of July 7, 2016 to December 2016 because she was not working during that time.

21The Tribunal heard evidence that the applicant’s wife would have started working at [a factory] “T.P.” at the beginning of December 2015 but did not because she was responsible for taking care of the applicant. The Tribunal stated that the applicant’s wife eventually started working at T.P. from December 26, 2016 to April 30, 2017.

22The Tribunal accepted these facts. I was not provided with evidence to suggest that the applicant’s wife would not have been working at T.P. had she not been responsible for the applicant’s care and, therefore, I find no error of fact on this point. Given that the applicant’s wife did in fact start working at T.P. in December 2016, it is reasonable to find that she could have started working there earlier.

23In paragraph 72 of the Decision, the Tribunal refers to the applicant’s submission that the applicant’s wife’s pay stubs and income tax documentation “from that time” – which I take to mean December 26, 2016 to April 30, 2017 (given that she began working at T.P. in December 2016) – establishes that she suffered an economic loss in excess of $2,894.99 for every month that she stayed home to care for him. Other than the applicant’s submission, I can find no evidence in the record of an economic loss in excess of $2,894.99.

24Unlike the finding of fact that the applicant’s wife could have started working at T.P. in December 2015 but for caring for the applicant, which was not disputed in the reconsideration submissions, the fact that the applicant’s wife suffered an economic loss in excess of $2,894.99 was disputed in the reconsideration.

25There is no reference to any evidence of income from December 2016 to April 2017. The evidence of income that is referred to in the Decision is noted in paragraph 73, where the respondent indicates that the applicant’s wife’s Notice of Reassessment for 2015 establishes that her economic loss could be no more than $935.00 per month. This amount was calculated by dividing the declared income of $6,550 over a seven-month period.

26In the respondent’s reconsideration submissions, the respondent indicates that the 2015 income information was not provided until May and July 2017 (which was just prior to the August 2017 Tribunal hearing). More importantly, the respondent also states that no income information has been provided by the applicant’s wife for any part of 2016. Nowhere in the applicant’s responding submissions for the reconsideration did the applicant refute this fact. There is no explanation as to why the 2016 income information of the applicant’s wife was not provided to the respondent.

27The only evidence of income is the 2015 income. Given that the hearing did not take place until August 2017, there was ample time to provide evidence of income from T.P. from December 2016 onward.

28The applicant’s wife provided evidence that she had previously been working from May 2015 to November 2015 as a cashier and stopped to provide attendant care to the applicant. Also provided was evidence of the applicant’s wife’s 2015 income. The Tribunal found as a fact that the respondent unreasonably withheld the payment of the benefit and, although the applicant’s wife was not working from July 2016 to December 2016, deemed the expense for attendant care incurred.

29I do not agree that an expense of $2,894.99 could be deemed incurred given there was no evidence to support that figure other than the applicant indicating that his wife’s economic loss was in excess of that amount.

30The evidence supports that the applicant’s wife’s economic loss would have been $935.00 per month as this was the amount she was earning immediately prior to providing attendant care to the applicant.

31I therefore find that the Tribunal erred in finding the applicant was entitled to attendant care services at the Form 1 amount of $2,894.99 per month and find that the applicant is entitled to $935.00 per month for the period of July 7, 2016 to December 31, 2016.

4 ii) & iii) Interest Accrual on ACBs, Accrual Date and Reduced Interest as a Result of Reduced Quantum

Accrual

32The respondent seeks reconsideration of the interest portion on the outstanding payment of ACBs. The decision is silent on when interest begins to run and simply states that the applicant is entitled to interest in accordance with the Schedule on all overdue payment of benefits.

33The Tribunal did not err in finding that the applicant is entitled to interest in accordance with the Schedule on all overdue payment of benefits or in not stipulating when interest begins to accrue. It is to be inferred from the Decision that interest begins to accrue from the date entitlement to ACBs began.

34Section 51(3) of the Schedule indicates that interest is payable from the date on which the amount becomes overdue.

35The respondent submits that the applicant’s delayed compliance with s. 33 of the Schedule should impact the start date of when interest should begin to accrue.

36The respondent submits that no interest should accrue on any outstanding ACBs until May 26, 2017, the date the “Working Certificate”⁸ was provided to the Tribunal. The respondent further submits that the applicant is not entitled to any interest for ACBSs for the period of January 1, 2017 to October 18, 2017. Alternatively, no interest should accrue until after August 3, 2017 when an OCF-6 was provided midway through the hearing for the personal support worker arranged through Integrated Rehab dated December 16, 2016.

37Although the applicant did not provide documents requested by the respondent in a timely manner, which in many cases would impact when interest begins to accrue, the earlier disclosure of the OCF-6, the economic loss information and the “Working Certificate” does not change the fact that the applicant, according to the respondent, was not entitled to ACBs because his injuries were considered to be within the Minor Injury Guideline (“MIG”).

38Even if the applicant had provided timely disclosure of income information, this would not have changed the fact that the respondent was not prepared to pay ACBs because it considered the applicant’s injuries to be within the MIG. While the respondent submits there were many reasons to deny ACBs, as stated in paragraph 86 of the Decision, the Tribunal found that the respondent’s denial of ACBs was directly linked to the finding that the applicant fell within the MIG.

39Quantum of Interest on ACBs: Given that I have found that the Tribunal erred in the Decision regarding the amount of the applicant’s entitlement to ACBs from July 6, 2016 to December 31, 2016, the interest should be calculated according to the new amounts.

4 iv) Award

40The respondent seeks a reconsideration of the Tribunal’s finding that the applicant is entitled to an award under s. 10 of O. Reg. 664 and the quantum of the award. In the alternative, if an award is still found payable, the respondent seeks a reduction in the amount of the award based on the proper quantum of ACBs and interest payable.

41I do not find that the Tribunal erred in fact or law. The Tribunal found that the respondent “intentionally misrepresented” the findings of its own s. 44 assessors. This finding is well-reasoned in the Decision.

42The respondent submits that the applicant bears the onus of establishing that the respondent acted unreasonably in withholding or delaying the payment of the ACBs. The respondent submits that the Tribunal erred in finding that the respondent acted unreasonably to the extent that would attract an award and that it had several reasons for denying ACBs to the applicant. I note that none of the respondent’s “several reasons” for denying ACB to the applicant were indicated in any of the respondent’s reconsideration submissions.

43As previously stated, the Tribunal found that the respondent’s denial of ACBs was directly linked to the finding that the applicant’s injuries were in the MIG. The Tribunal further found that this was clearly not the opinion of the respondent’s own assessors. The Tribunal referred to evidence that the opinions of the respondent’s assessors, Dr. Martin, Dr. Wolf and Dr. Kim, were that the applicant’s injuries were not within the MIG. Despite these opinions, the respondent wrote the applicant two letters, both of which indicated that the applicant’s injuries were within the MIG. The Tribunal rejected the argument that the respondent’s denial of ACBs was as a result of these doctors concluding that the applicant did not satisfy the criteria for attendant care.

44This was a finding of fact made by the Tribunal and I have not been provided with sufficient support to make a finding that the Tribunal erred factually. The injuries found by the assessors were not within the MIG. There was no explanation provided in the reconsideration submissions as to why the respondent would indicate in its letters to the applicant dated March 24, 2016 and July 8, 2016 that its assessors found the applicant’s injuries to be within the MIG when they had not made such a finding.

45I find that the Tribunal did not err and has provided ample reasons for granting the award of 40 per cent plus interest.

5 i) Fixed End Date for Applicant’s Entitlement to IRBs and ACBs.

46The applicant submits that the Tribunal erred in fixing an end date for the applicant’s entitlement to IRBs and ACBs.

47In this case, the Tribunal found the applicant was entitled to IRBs from October 25, 2015 to October 18, 2017 (i.e., the two-year mark) and found that the applicant was entitled to ACBs from July 7, 2016 also to October 18, 2017 (i.e., the two-year mark).

48For both the IRBs and ACB, entitlement changes at the two-year mark.

Fixed End Date for IRBs

49The applicant relies on Tribunal decisions indicating that adjudicators should not “fix an end-date” for IRBs as doing so restrains the insurer’s ability to adjust the applicant’s file.

50The applicant relies on the reconsideration decisions 16-0000179 v. Old Republic Insurance Company⁹ and 16-001144 v. Aviva Insurance Company¹⁰.

51I find that the cases relied upon by the applicant are distinguishable. In both 16-0000179 and 16-001144, and not unlike this case, the adjudicator fixed end-dates for the benefit (IRBs) at the 104-week mark. Reconsiderations were granted in both cases to ensure that the benefits were payable “to date and ongoing.” However, where these two cases differ significantly from the applicant’s case here is that the end-dates initially imposed by the Tribunal were dates into the future. For example, in 16-001144 v. Aviva, the date of loss was June 4, 2015. In its decision released on February 2, 2017, the Tribunal awarded IRBs from February 11, 2016 to June 5, 2017. This prevented the insurer from adjusting the file and would allow the applicant to continue to receive IRBs to a date into the future regardless of continued entitlement to the benefit. Put another way, despite the fact that the decision was released in February 2017, the respondent was ordered to pay benefits without being able to question the applicant’s continued entitlement to June 2017.

52Similarly, in 16-0000179 the decision released October 17, 2016 awarded IRBs to the future date of May 21, 2017. If the applicant began working before May 21, 2017, the respondent would still be required to pay IRBs until that date. The Tribunal’s order prevented the respondent from adjusting the file until after May 21, 2017.

53In the applicant’s case here, the applicant was seeking IRBs and ACBs to “present and on-going”. The hearing took place in August 2017. For both IRBs and ACBs, the Tribunal ordered the benefits to be paid until October 18, 2017, the two-year mark (104 weeks), at which point the test for entitlement to IRB changes and, unless found to be catastrophically impaired, the applicant would no longer be eligible for ACBs.

54Unlike the decisions in 16-0000179 and 16-001144, cases which were decided prior to the two-year mark, the hearing in the applicant’s case took place in August 2017, only two months before the two-year mark. The decision was released well after the two-year mark. The fixed end date for IRBs and ACBs at that point was essentially moot.

55More importantly, the Tribunal confirmed that, with respect to IRBs, “the parties’ evidence and submissions were limited to the first 104 week period”.¹¹ Two years had not yet been reached at the time of the hearing. No evidence of post-104 week entitlement could have been provided at the hearing which would have allowed the Tribunal to determine post-104 entitlement. Therefore, it was accurate for the Tribunal to state that the evidence and submissions were limited to the first 104 week period.

56Likewise, the Tribunal made it clear that the applicant was seeking ACBs until the end of the 104-week mark.¹² Therefore, the Tribunal had no need to determine entitlement to either benefit beyond the 104-week mark. Indeed, while the Tribunal’s decision was issued after the 104-week mark, no claim for either benefit beyond the 104-week mark had, at least on the Tribunal’s record, been made yet.

Fixed End Date for ACBs

57The Tribunal did not err in fixing an end date for ACBs. The cases cited by the applicant are specific to IRBs. The Schedule treats ACBs very differently. Section 20 of the applicable version of the Schedule at the date of loss stipulated that no attendant care benefit is payable for expenses incurred more than 104 weeks after the accident unless the insured sustains a catastrophic impairment as a result of the accident or purchases optional benefits.

58As the applicant acknowledges¹³, he has not yet been determined to have suffered a catastrophic impairment, which is a condition precedent to receiving ACBs beyond the 104-week mark. Thus, determining entitlement beyond the 104-week mark, particularly in the absence of any such claim, in the face of the more stringent tests for entitlement, and by effectively removing the respondent’s ability to examine the applicant to determine whether he satisfies the more stringent tests for entitlement, would have been inappropriate.

5 ii) Applicant’s Reconsideration on the Quantum of the Award

59The applicant seeks a reconsideration of the formula used to calculate the quantum of the award and the interest payable on the award and states the Tribunal erred in this regard.

Interest

60The applicant appears to make two arguments with respect to interest:

i) Interest on the award; and

ii) Formula to calculate quantum of award and interest thereon

i) Interest on award

61In the applicant’s request for reconsideration at paragraph 26, the applicant submits that the Tribunal erred in ordering interest on the award to be determined by the Schedule as stated in paragraph 89 of the Decision. I find that the applicant misinterprets the Tribunal’s decision on the interest in paragraph 89.

62I find that paragraph 89 of the Decision is with respect to interest on the remaining overdue payment of benefits and not with respect to the interest on the award portion. Interest on the overdue payment of benefits shall be payable in accordance with the Schedule.

63It is clear that the award (s.10 O. Reg. 664) section of the Decision, specifically paragraph 88, indicates the award is plus interest. Although it does not specify the amount, interest on an award is calculated in accordance with s.10 of O. Reg. 664 which stipulates that interest is at the rate of 2% per month compounded monthly, from the time the benefits first became payable under the Schedule.

64As such, interest on the award, shall be calculated in accordance with s.10 of O.Reg. 664 and not the Schedule.

ii) Formula to Calculate Quantum of Award

65The Decision calculates the award by calculating the outstanding ACBs owing as $38,662.12. This calculation was based on $2,894.99 per month found outstanding for 13 months and 11 days. The Tribunal then awarded the lump sum of $15,464.85 (representing a lump sum of 40% of the ACBs owed), plus interest.

66With respect to the proper formula used to calculate the amount of the award, I grant the applicant’s request for reconsideration and find that the Tribunal erred.

67The case of Personal Insurance Company v. Hoang¹⁴ (“Personal”) outlines the proper formula in calculating an award. Personal follows the often-cited Liberty Mutual Insurance Company v. Persofsky¹⁵ case in calculating awards. The quantum of what was then called a special award in Personal, was based on s. 282(10) of the Insurance Act,¹⁶ which has since been replaced with s.10 of O. Reg. 664, however the two provisions are virtually identical and both describe a “special award” as 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.”

68The Tribunal erred in taking the amount of ACBs it found outstanding – $38,662.12 without interest – and calculating 40% of that amount for a total of $15,464.85 and then stating plus interest rather than stipulating the formula in Persofsky.

69Although Financial Services Commission of Ontario (“FSCO”) cases are not binding on this Tribunal, Divisional Court cases are. The percentage calculation without first adding a component of interest is not in accordance with Personal¹⁷ where the Court states that the proper approach to fixing the amount of awards is as stated in Persofsky.

70The proper way to calculate the award in order to capture all interest owed can be summarized as follows in this case¹⁸:

i) Determine the benefits owing to the insured person, including interest calculated under the Schedule;

ii) Determine the maximum award that can be awarded under s.10 of Ontario Regulation 664 which is done by taking the amount in i) and adding the additional interest component in s.10 O. Reg. 664 which is 2 per cent per month, compounded monthly. This calculation includes interest on the unpaid Schedule interest. The maximum award is 50 per cent of this total. Expressed as a formula, the calculation is as follows:

Maximum award = 50% x (benefits that were unreasonably withheld or delayed + interest on these benefits calculated under the Schedule + compound interest calculated according to s.10 O. Reg.664

iii) In this case, given the Tribunal found that the applicant was entitled to an award of 40%, calculate a lump sum equal to 40% of the maximum award¹⁹.

71Given the complexity in calculating the amount of the award, and that I have found the applicant is entitled to ACBs in the amount of $935.00 rather than $2,894.99 per month for the period of July 7, 2016 to December 31, 2016, and keeping in mind that the applicant had previously retained the services of RSM Canada Consulting LP to calculate outstanding benefits, I leave it to the parties to calculate the amount of the award on the outstanding ACBs using the above formula.

CONCLUSION

72For the reasons noted above, both the respondent’s and the applicant’s reconsideration requests are partially granted.

Lori Marzinotto

Vice-Chair

Tribunals Ontario - Safety, Licensing Appeals and Standards

Footnotes

1. 1Applicant sought IRBs of $400 per week from October 25, 2015 to present and ongoing
2. 2Applicant sought ACBs of $2,894.99 from October 18, 2015 to present and ongoing
3. 3Paragraph 88 of the Decision indicates that the outstanding ACB is $38,662.12 representing 13 months and 11 days in which the Tribunal found the ACB payable.
4. 4I have re-ordered the issues in the Reconsideration request in order to make the decision more concise
5. 5Form 1 dated March 10, 2016
6. 6Henry v. Gore Mutual Insurance Co. (2013) ONCA 480 (cited in Motor Vehicle Accident Claims Fund v. Barnes, 2017 CarwsellOnt 5680 (“MVAC”).
7. 7Motor Vehicle Accident Claims Fund v. Barnes, 2017 CarwsellOnt 5680 (“MVAC”) at para.10
8. 8The “Working Certificate” – Tab 12 of the Supplementary Submissions of the Respondent to the Reconsideration Application of the Respondent indicated the May 2015-November 2015 time period the applicant’s wife worked as a cashier, the number of hours per week and that she had to take care of her husband as a result of the car accident.
9. 916-000179 v. Old Republic Insurance Company, 2016 CanLII 93137 (ON LAT)
10. 1016-001144 v. Aviva Insurance Company, 2017 CanLII 69236 (ON LAT)
11. 11See paragraph 36 of the Decision
12. 12See paragraph 60 of the Decision
13. 13Applicant’s Written Submissions – Re: Request for Reconsideration dated July 13, 2018 at para.15
14. 14Personal Insurance Company v. Hoang (2014) ONSC 81
15. 15Liberty Mutual Insurance Company v. Persofsky, FSCO P00-00041, January 31, 2003, Appeal
16. 16Insurance Act, R.S.O. 1990, c.I-8
17. 17Personal Insurance Company v. Hoang (2014) ONSC 81 at para. 64
18. 18At paragraph 26 of the applicant’s reconsideration submissions, he incorrectly identified the formula as 50% x (Benefits Unreasonably withheld & compound interest calculated pursuant to Ont. Reg. 43/16)
19. 19Personal at paragraph 64 citing Persofky at paragraph 53.