S.K. v. Aviva Insurance Canada, 2020 CanLII 43700

Citation: S.K. vs. Aviva Insurance Canada, 2020 ONLAT 17-006866/AABS and R.K. vs. RBC General Insurance Company, 2020 ONLAT 17-006651/AABS

In the matter of Applications pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

S.K.

Applicant

-and-

Aviva Insurance Canada

Respondent

AND

Between:

R.K.

Applicant

-and-

RBC General Insurance Company

Respondent

AMENDED DECISION AND ORDER

VICE CHAIR: Susan Mather

APPEARANCES: Julia Abd Elseed Lisa Bishop, Counsel for the Applicants

Michael Baura, Counsel for the Respondent

HEARD BY WAY OF WRITTEN SUBMISSIONS

OVERVIEW

1S.K. and R.K. (the “applicants”) were involved in a motor vehicle collision on October 29, 2015 and filed an application for attendant care benefits (“ACBs”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”) from Aviva Insurance Canada (“Aviva”).¹

2On June 18, 2018, the Tribunal released my written decisions on both applications which granted the applicants’ requests for ACBs together with interest on overdue benefits.

3On August 30, 2019, Vice-Chair Jeffrey Shapiro granted, in part, Aviva’s requests for reconsideration of both decisions. Vice-Chair Shapiro found that I made an error of law in calculating the quantum of ACBs owing to the applicants. He directed that, if the parties could not agree on the proper quantum of ACBs, the applications should be sent back to me for a written hearing to determine the quantum issue.²

4Following a case conference on November 22, 2019, a written hearing was scheduled to address the issues of the quantum of the ACBs and interest on any overdue payment of benefits for both applications.³

5Following a subsequent motion, the applicants were also permitted to add to this hearing the issue of whether Aviva unreasonably withheld or delayed payment of their ACBs.⁴

ISSUES

6The issues before me are:

1. What is the quantum of the ACBs owing to each applicant?

2. Are the applicants entitled to interest on any overdue payment of benefits?

3. Are the applicants entitled to an award because Aviva unreasonably withheld or delayed payment of their ACBs pursuant to s. 10 of the R.R.O. 1990, Reg. 664?

RESULT

7For the reasons provided below I find that:

1. S.K. is entitled to ACBs in the amount of $5,073.50

2. R.K. is entitled to ACBs in the amount of $5,606.98

3. The applicants are entitled to interest on the overdue payment of benefits as provided for in s. 51(4) of the Schedule.

4. The applicants are entitled to awards under s. 10 of the R.R.O. 1990, Reg. 664.

QUANTUM OF ATTENDANT CARE BENEFITS

8Section 42 of the Schedule requires an application for ACBs to be made on a document entitled “Assessment of Attendant Care Needs,” commonly known as a “Form I”. The Form I must be prepared in accordance with any guideline that is issued for the purpose of s. 42.⁵ The Financial Insurance Commission of Ontario (“FSCO) has issued a guideline entitled the Attendant Care Hourly Rate Guideline (the “Guideline”) establishing the maximum hourly rates used to calculate the maximum monthly attendant care benefit in accordance with s. 19(2) of the Schedule.

9The maximum hourly rates that may be claimed for the three levels of services in the Guideline applicable to an accident that occurred on October 29, 2015 are set out below:⁶

Attendant Care Costs

Maximum Hourly Rate

Part 1: Hourly Rate A

Level 1 Attendant Care is for routine personal care.

$13.19

Part 2: Hourly Rate B

Level 2 Attendant Care is for basic supervisory functions.

$11.25

Part 3: Hourly Rate C

Level 3 Attendant Care is for complex health/care and hygiene functions.

$19.35

10According to the Guideline, Aviva is not liable to pay for expenses related to attendant care costs rendered to the applicant that exceed the maximum hourly rate set out in the Guideline for the level of service. These applications have been sent back to me to determine the quantum of ACBs because, in my original decisions, I erroneously allowed expenses for services rendered that exceeded the maximum hourly rate set out in the Guideline.

11The challenge in determining the amount of expenses for which Aviva is liable to pay is that the invoices the applicants rely on to establish that they incurred expenses for ACBs do not provide a breakdown of the care between levels. As Vice-Chair Shapiro stated in his reconsideration decisions, the applicants are entitled to some reimbursement for their attendant care expenses, but the question is what amount.

12Vice-Chair Shapiro mentions three possible methods to calculate quantum. He sent the issue back to a hearing to allow the parties the opportunity to make submissions on the three methods he identified. He also allowed the parties to propose other methods to calculate the benefit.

13The parties only made submissions on the three methods proposed by Vice- Chair Shapiro which are as follows:

1. The Tribunal could attempt an actual allocation of the hours between the levels.

2. The Tribunal might consider applying a ratio of the Form 1’s allocated hours and rates to the hours performed.

3. The Tribunal could conclude that, although the applicants have established the hours incurred, they failed in their burden to establish the allocation, and thus the hours should be allocated to the lowest Form 1 rates first. This method produces the least possible amount to which the applicants would be entitled.

14I have no suggestions to make with respect to other methods that could be used to determine the amounts of ACBs to which the applicants are entitled.

15The applicants submit that the second method proposed by Vice-Chair Shapiro, the “ratio method,” is the most reasonable means to calculate the amounts payable to the applicants as it takes into consideration their needs in each level of care as set out in their respective Form 1s. The applicants submit that to take away the consideration of each level to determine amounts payable would negate the meaning, use, and need for the Form 1 categories for care altogether.

16Aviva submits that the third method Vice-Chair Shapiro proposed, the “minimum award approach,” should be applied in both cases. Aviva asks me to allocate the hours to the lowest Form 1 rates first because the applicant failed in their burden to establish the hours actually spent on each level of care. Aviva submits that applying a ratio of the Form 1’s allocated hours and rates to the hours performed is not permitted by the case law because there is no evidence of the actual allocation of hours to attendant care tasks. Aviva submits that the Schedule does not provide a trier of fact with the authority to use discretion and simply apply a ratio, and that the word “rendered” used in the Guideline prevents a ratio approach.

17For the reasons provided below, I agree with Aviva that the minimum award approach is the most appropriate approach to use.

18While I am satisfied that the applicants have shown on the balance of probabilities that they incurred ACBs, I am not satisfied that they have shown on a balance of probabilities that the care they received was delivered in the ratios indicated by their respective Form 1s.

19The applicants make no attempt to allocate the actual hours of care between the levels of care, presumably because there is not enough information in the invoices to allow them to do so. I have made no attempt to allocate the actual hours of care for the same reason.

20In my view, applying the ratio method poses the same difficulty. There is no evidence to support that attendant care services were actually rendered at all levels in the same ratio indicated by the Form 1s. The invoices indicate that “care giving,” “housekeeping” and “attendant care” services were rendered with no indication of how much time was spent on each.

21Without the evidence of the actual allocation of the hours between levels of service, I am of the view that the applicants are unable to show on the balance of probabilities how the attendant care benefits should be allocated between the levels of care. For that reason, the hours of attendant care claimed by the applicants must be allocated first to the lowest Form 1 rate. To do otherwise may result in Aviva being liable to pay an hourly rate for attendant care services that exceeds the maximum hourly rate set out in the Guideline for the level of service provided.

22The Court of Appeal for Ontario in Daly v. ING Halifax Insurance Co⁷ held that, while insureds are entitled to dispute the number of hours of attendant care provided, they are not entitled to dispute the hourly rates on a Form I. The hourly rates are fixed rates and, thus, there is no discretion to increase or reduce those rates. I agree with Aviva that I am unable to make an order which might result in an hourly rate being paid for a level of service that exceeds the maximum hourly rate set out in the Schedule. Again, it is the applicants’ obligation to prove the rate at which they should be compensated.

23The applicants submit that the ratio method is the most reasonable means to calculate the amounts payable given their needs in each level of case as set out in their Form1s. However, they fail to recognize their own failure to provide the allocation of attendant care services between the levels of care.

24Indeed, the applicants’ submissions do not totally reject the “minimum award approach”. Rather, they point out that the amount payable in Level B is less than minimum wage in Ontario as of 2016.

Calculation of the Benefits

S.K.

25For the reasons provided below, I find that the amount payable to S.K. using the minimum award approach is $5,073.50. Both parties accept Vice-Chair Shapiro’s method of calculating the benefits owing under the minimum award approach.

26In his reconsideration decision in S.K. v. Aviva, Vice-Chair Shapiro provided a sample calculation of the minimal award approach arriving at a benefit of $5,033.93. Aviva points out that Vice-Chair Shapiro used 29 hours in his calculation of the minimal award approach benefit for the month of April 2016 when, in fact, the invoice for April 2016 shows the actual hours to be 32. Aviva re-calculated the benefit to allow for the extra three hours of care, arriving at $5,073.50.

27While S.K. asks me to find that the benefit should be calculated applying a ratio of the Form I hours, she does not dispute Vice-Chair Shapiro’s method for calculating the benefits owing under the minimum award approach or Aviva’s re-calculation of the benefits owning under this approach.

R.K.

28For the reasons provided below I find that the amount payable to R.K. using the minimum award approved is $5,606.98.

29Vice-Chair Shapiro did not calculate the benefit owing to R.K. using his minimum award approach. R.K. submits that the minimal award approach results in a benefit payable of $5,501.64. R.K. does not provide any details of his calculation of this amount.

30Aviva submits that the minimal award approach for R.K. results in a benefit of $5,606.98 and has provided its calculation of the benefit using on Vice-Chair Shapiro’s method. ⁸ R.K. does not refute Aviva’s calculation and, for that reason, I find the benefit payable to R.K. is $5,606.98.

INTEREST

31In my original decisions on these applications, I found that the applicants were entitled to interest in accordance with the Schedule on the benefits I found owing. The Schedule⁹ sets out how interest is to be calculated when there is a dispute as to entitlement to a benefit or the amount of benefit.

32Vice-Chair Shapiro’s reconsiderations decisions do not raise the issue of interest. The only issue sent back for a rehearing was the quantum of the attendant care benefit due to each applicant based upon the hours that I had found to be incurred.

33Following a case conference on November 22, 2019, the adjudicator issued an order setting out the issues for this hearing to be both the quantum of the attendant care benefit and whether the applicants are entitled to interest on any overdue payments.

34The applicants submit that Aviva’s requests for reconsideration did not take issue with whether interest is payable on any benefits found owing. The applicants submit that the only issue that remans to be determined is which of the three methods proposed by Vice-Chair Shapiro should be used to calculate the attendant care benefits payable to each applicant.

35There is no explanation provided in the case conference order as to why the interest issue was included when it had not been dealt with in the reconsideration decisions.

36Aviva submits that no interest should be payable because the applicant’s failure to provide the insurer with a proper breakdown of attendant care tasks lead to the hearings.

37I find that the applicant is entitled to interest on the benefits owing as provided for in s. 51(4) of the Schedule. I agree with the applicants that Vice-Chair Shapiro did not send the interest issue back for a rehearing and, for that reason, in my view my original decision on the question of interest remains in effect.

38In any event, the Schedule clearly provides for interest to be payable in the case of a dispute in respect of an insured’s entitlement to statutory automobile benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. Aviva has not provided me with any authorities to support its request that I find no interest is payable.

Award under Regulation 664¹⁰

39The applicant asks me to make an award under O. Reg. 664.

40This regulation allows me to award an additional amount of money to the applicant if I find that the respondent unreasonably withheld or delayed payments of benefits. Section 10 allows me to award an extra lump sum payment of up to 50% of the amount to which the applicant is entitled together with interest on all amounts owing to the insured (including unpaid interest) at the rate of 2 per cent per month compounded monthly, from the time the benefit first became payable.

41The applicants ask for this award on the basis that Aviva has failed to pay them even the minimum benefits outlined in the reconsideration decisions dated August 30, 2019. The applicants submit that Aviva’s behaviour in failing to pay any benefits following the release of the reconsideration decisions must attract a significant award.

42Aviva submits that there are no grounds for me to order awards in these two applications. Aviva submits that the issue of the award was added to this hearing only one day after the applicant served their Notices of Motion, and the Order adding the issues was made without providing Aviva an opportunity to respond to the motion.

43Aviva further submits that Vice-Chair Shapiro’s reconsideration decisions did not order Aviva to make any payments to the applicants pending the final outcome of the hearing to determine the quantum of benefits. Aviva submits that it breached no Orders, and there are no grounds for an award. Aviva submits that there is no precedent in case law or otherwise to support a finding that it was obligated to make a payment to the applicants before the Tribunal made an order requiring a payment.

44For the reasons provided below, I find that the applicants are both entitled to lump sum awards under s. 10 of O. Reg. 664 each in the amount of $1500.

45In ordering these lump sum awards, I have considered the following facts;

1. It was over two years ago that Aviva was first ordered to pay ACBs to the applicants;

2. It was over nine months ago that Vice-Chair Shapiro confirmed that Aviva owed the applicants ACBs. Aviva did not seek a review of that decision;

3. Aviva has not submitted any other method to calculate the benefits that would result in lower payments than would the minimum award approach it advocates for at this hearing; and

4. The difference in the ACBs payable under the ratio approach as compared to the minimum award approach is minimal. For S.K., for example, it amounts to less than $600.00 in total and for R.K. less than $200.00 in total.¹¹

46In my view, once Aviva accepted Vice-Chair Shapiro’s decision that benefits were owing, it was unreasonable for Aviva not to pay to the applicants the minimum amount of benefits it had determined were owing.

47While Aviva argues that there is no precedent for an insurer to be obligated to pay a benefit before the Tribunal has determine the quantum, in my view once an insurer accepts that a benefit is payable it has an obligation to pay at least the minimum amount owing for benefits that have been incurred.

48I see no prejudice to Aviva in me considering this request for an award despite the fact that it was not provided with the opportunity to make submissions on the motion brought to add the issue to this hearing. Aviva admits that the threshold for adding the issue was low. I would also add that this is an issue that the Tribunal routinely adds to hearings in any form.

49Moreover, s. 10 of O. Reg. 664 gives a Tribunal adjudicator the discretion to consider an award regardless of whether an applicant requests that it be added as an issue. That said, the rules of natural justice and procedural fairness require that Aviva be given the opportunity to provide evidence and make full argument on the issue. That happened. Although Aviva takes issue with the manner in which the issue was added, the issue remained to be determined. Before this hearing, Aviva knew the case it had to meet, and had the opportunity to respond with its own evidence and submissions. For that reason, I am satisfied that Aviva has had the opportunity to provide evidence and make full argument on the issue and that, as a result, there has been no denial of natural justice or procedural fairness.

Quantum of the Awards

50Section 10 of O. Reg. 664 provides that an award is to be made as a lump sum and provides guidance with respect to how to calculate the maximum award that may be found to be payable. The applicants make no submission on the calculation of the awards other that to ask for the maximum award available under s. 10. Fifty-percent of the benefits that the applicant`s are entitled to is approximately $2500.00 each.

51The applicants argue that Aviva’s behaviour must attract a significant award, as was ordered payable in Whiten v. Pilot Insurance Company¹² (“Whiten”). The Whiten case is distinguishable from the case before me. The Whiten case concerns a $1,000,000 punitive damage award where the insurance company unreasonably withheld insurance benefits after a house fire destroyed the insured’s home. The unreasonable behaviour of the insurance company in Whiten is far beyond the unreasonable behaviour of Aviva following the release of Vice-Chair Shapiro’s reconsideration decisions.

52The purpose and calculation of awards was discussed in detail in the Financial Services Commission of Ontario (“FSCO”) case of Liberty Mutual Insurance Company and Persofsky (“Liberty Mutual”) decided by David Draper, then Director of Arbitrations.¹³ While I am not bound by the decision of a FSCO Director, I find that this case provides a helpful discussion of the purpose and calculation of awards.¹⁴

53In Liberty Mutual, Director Draper found that the purpose of an award was to punish insurers that unreasonably fail to pay accident benefits promptly, as required by the Schedule, and to deter the insurance company and others from acting similarly in the future. He also found that a special award is not contingent on bad faith or the commission of an actionable wrong by the insurer – all that is required is an unreasonable withholding of payments due to the insured.

54Director Draper suggested that the principles of rationality and proportionality be applied in considering the size of the special award. Rationality refers to consideration of what amount is large enough to further the goals of punishment and deterrence but no larger than is needed to serve that purpose. Proportionality refers to the need to ensure that the consequences imposed on the insurer are rationally related to the misconduct at issue.

55Director Draper listed a number of factors to be considered in determining the size of an award, including the amount of the benefits that were unreasonably withheld and the amount of time the payment of the benefits was delayed. He also recognized that there may be mitigating factors that may reduce the size of an award. He specifically pointed to actions by the insured that make a claim more difficult to determine, as was the case here.

56For the following reasons, I do not agree with the applicants that the maximum lump sums awards should be made:

1. I do not find the amount of ACBs that were delayed to be significant.

2. I am satisfied that Aviva did not act unreasonably in failing to pay the ACBs until after Vice-Chair Shapiro’s reconsideration decisions were released. There were genuine issues to be heard both at the first hearing and on the requests for reconsideration.

3. The fact that the applicants’ invoices for attendant care services did not provide any breakdown of the allocation of the attendant care services between the levels of service is a mitigating factor which should reduce the size of the awards.

57Having considered the factors above, I have concluded that Aviva`s conduct warrants an award of $1500.00 for each applicant plus interest on the awards as provided for in s. 10 of O. Reg. 664. These amounts satisfy the principles of both rationality and proportionality.

58If the applicants had promptly received the amounts owing under the minimum award approach, there may have been no need for this hearing given the small differences in the amounts owing between the two approaches. The awards are large enough to impose consequences on Aviva for its actions in not paying the amounts owing under the minimum award approach once it decided not to seek a review of Vice-Chair Shapiro’s reconsideration decision.

59While the awards punish Aviva for not paying the minimum amount of benefits owing promptly after the release of Vice -Chair Shapiro’s decision they also account for the mitigating circumstances set out above.

60For the reasons provide above I find that each applicant is entitled to an award of $1500.00 plus interest according to s. 10 of O. Reg. 664.

ORDER

61For the reasons provided above I ORDER:

1. S.K. is entitled to ACBs in the amount of $,5073.50.

2. R.K. is entitled to ACBs in the amount of $5,606.98.

3. Aviva shall pay interest on the ACBs in accordance with s. 51(4) of the Schedule.

4. S.K. is entitled to an award under s. 10 of O. Reg. 664 in the amount of $1500.00 plus interest according to s. 10 of O.Reg.664.

5. R.K is entitled to an award under s. 10 of O. Reg. 664 in the amount of $1500.00 plus interest according to s. 10 of O. Reg. 664.

Footnotes

1. 1O. Reg. 34/10.
2. 2I note that there is a typo in the file number shown on the front page of the Reconsideration Decision for 17-006651. It is incorrectly shown as 17-006851.
3. 3Order of Adjudicator Therese Reilly dated November 22, 2019. Ms. Reilly ordered that the two applications/files be heard together.
4. 4Order of Vice-Chair Terry Hunter issued January 27, 2020.
5. 5The Guideline applicable to this accident is Superintendent’s Guideline 02/15, Tab 13 Aviva’s submissions.
6. 6The applicant submits that higher hourly rates should be applied for invoices dated after October 1, 2016 because the Guideline rates were increased. Aviva points out that the Guideline rates which became effective October 1, 2016 apply only to accidents that occurred after October 1, 2016. See Guideline 03/16, Tab 14, Aviva’s submissions.
7. 72006 CanLII 42548 (ON CA), 85 O.R. (3d) 70.
8. 8Tab 18, Aviva’s submissions.
9. 9S. 51(4) O. Reg. 34/10.
10. 10S. 10, O. Reg. 644 made under S. 280 of the Insurance Act, R.S.O. 1990, c. I.8.
11. 11According to the calculations of the applicant the difference in ACBs for the applicants between the ratio method and minimum award approach is methods is $569.78 for S.K ($5603.71-5,033.93) and $161.14 for R.K.($5,764.93-5,603.79). (I note that the applicants have misstated the ratio method amount for R.K. on page three of the applicant’s submissions as $5,679.67.)
12. 12[2002] 1 S.C.R. 18.
13. 13FSCO P00-00041.
14. 14The award in the Liberty case was the “special award’ previously provided for in s. 282(10) of the Insurance Act, R.S.O 1990, C.I.8. which was replaced in 2016 by s. 10 of O. Reg. 664