Citation: Seinen v. CAA Insurance Company, 2026 ONLAT 24-013760/AABS

Licence Appeal Tribunal File Number: 24-013760/AABS

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

Between:

Fenny Seinen

Applicant

and

CAA Insurance Company

Respondent

DECISION

ADJUDICATOR:

Melanie Malach

APPEARANCES:

For the Applicant:

Brian Cameron, Counsel

Bennet Dawson, Counsel

For the Respondent:

Kathleen O’Hara, Counsel

Ethan Edwards, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Fenny Seinen, the applicant, was involved in an automobile accident on May 14, 2022, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the "Schedule"). The applicant was denied benefits by the respondent, CAA Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the "Tribunal") for resolution of the dispute.

ISSUES

2The issues in dispute are:

i. Is the applicant entitled to a rehabilitation benefit (cost of rent for an accessible unit), proposed by FunctionAbility as follows:

a. $43,398.64 in the treatment plan dated August 8, 2023; and

b. $44,590.57 in the treatment plan dated August 27, 2024?

ii. Is the applicant entitled to painting expenses in the amount of $3,763.70?

iii. Is the respondent liable to pay an award under s. 10 of Reg. 664 because it unreasonably withheld or delayed payments to the applicant?

iv. Is the applicant entitled to interest on any overdue payment of benefits?

3The applicant has raised the issue of her entitlement to painting expenses in her submissions. While this issue was not listed on the Case Conference Report and Order ("CCRO"), I have added it as an issue in dispute which will be addressed in my reasons below.

RESULT

4I find that the applicant is entitled to the treatment plans in dispute dated August 8, 2023 and August 27, 2024, less the rental differential calculated using the main residence income only, plus applicable interest.

5I find that the applicant is not entitled to painting expenses.

6I find that the respondent is not liable to pay an award.

ANALYSIS

The Law

7Pursuant to s. 16(1) of the Schedule, rehabilitation benefits shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person in undertaking activities and measures described in subsection (3) that are reasonable and necessary for the purpose of reducing or eliminating the effects of any disability resulting from the impairment or to facilitate the person's reintegration into his or her family, the rest of society and the labour market.

8Section 16(3)(i) of the Schedule sets out that the activities and measures referred to in subsection (1) include home modifications and home devices. Both parties agree that s. 16(3)(i) applies to accommodating a higher rental expense for living accommodations.

Background

9At the time of the accident, the applicant owned two condominium units. A main residence, a two-bedroom condominium, in Thunder Bay (the "main residence") and a one-bedroom condominium in Toronto which she used for vacation (the "vacation property"). She claims that she spent most of her time in Thunder Bay.

10At the time of the accident, the applicant was staying at her vacation property, intending to stay for a month-long vacation.

11Following the subject accident as a result of the injuries she sustained, the applicant's surgeon advised her to remain in Toronto to continue her outpatient treatment. The applicant did not return to live in Thunder Bay and continued to stay at her vacation property in Toronto with some minor modifications to the unit to improve her independence and accessibility.

12In the Spring of 2023, the applicant determined that she would need to remain in Toronto for the foreseeable future and would not be able to return to her main residence in Thunder Bay until her impairments significantly improved. She began to rent out her main residence in Thunder Bay in April of 2023.

13Despite the modifications made to the vacation property, the applicant struggled with the limited space in the one-bedroom unit. As a result of these challenges, and under the recommendation of her treatment team, the applicant signed a rental lease and moved into a larger, two-bedroom accessible unit in Toronto in August 2023. Following this move, the applicant began renting out her vacation property.

14Corry Kreindler, occupational therapist, at FunctionAbility, submitted a treatment plan on August 8, 2023, in the amount of $43,498.64, which recommended the following:

Completion of Claim Form: $ 200.00
Prescription, support activity: $ 87.29
Rental Unit - $3,600.00 x 12 months: $43,200.00

15On August 27, 2024, a second treatment plan was submitted by Ms. Kreindler, in the amount of $44,590.57, which recommended the following:

Completion of Claim Form: $ 200.00
Other supplies: $ 50.00
Prescription, support activity: $ 127.50
Rental Unit – October 2024: $ 3,600.00
Rental Unit – November 2024 to September 2025 - $3,690.00 x 11 months: $40,590.00

Parties' Positions

16The applicant argues that the respondent is only entitled to deduct the rental income she earns from the main residence. She argues that the respondent is not entitled to deduct the rental income she earns from the vacation property. The applicant submits that she is not required to use income unrelated to her pre-accident primary housing to fund her post-accident primary housing. The applicant relies upon the Housing Costs Calculation Report, prepared by ADS Forensic Accounting, dated March 12, 2024. The applicant submits that this report considered the yearly rent received from her main residence, the rent paid for her accessible unit, as well as her one-time moving costs. The applicant submits that she is entitled to a housing benefit of $1,972.05 per month, starting from October 2023 and ongoing.

17The applicant further argues that the respondent should not benefit from a "windfall" by forcing her to finance a housing benefit that is clearly payable under the Schedule. The applicant submits that sections 16(1) and 16(3)(i) of the Schedule provide rehabilitation benefits that are intended to pay for all reasonable and necessary expenses incurred for rehabilitation activities and measures, and that these measures may include home modifications or the purchase of a new home. The applicant submits that these sections do not specifically state that prior living expenses be deducted when calculating a housing benefit. The applicant states that while the section on housing is silent on whether one should deduct prior housing expenses from the housing benefit, other sections of the Schedule specifically note when prior expenses and assets are to be considered when determining the amount of the benefit. She argues that had the Legislature intended that a housing benefit be calculated by deducting prior living expenses, such specific intention would be stipulated under s. 16(4), as is the case with regards to vehicle replacement benefits.

18The applicant submits that deducting the rental income of her pre-accident main residence from her accessible unit's rental costs is a comparable calculation as it compares her primary living arrangements pre-accident to her primary living arrangements post-accident. She argues that the purpose of the housing benefit is to provide support for an insured when their normal living situation has been disrupted, thus mitigating the financial burden of finding appropriate accommodation. Therefore, the rental income received from the main residence is correlated with the same expense as that being addressed by the housing benefit.

19The applicant submits that the vacation property is a secondary residence that she used for short visits. Due to her injuries and treatment requirements, she is restricted from using the vacation property and therefore has chosen to rent the unit out. She argues that the income from her vacation property mitigates the loss of her opportunity to use the vacation property, an asset that is not related to her post-accident primary housing.

20The applicant relies upon the Tribunal decision in 17-002592 v. Cumis General Insurance, 2018 CanLII 95555 (ON LAT), which addressed an applicant who moved to a rental accommodation. The Tribunal relied upon the decision in MacMaster v. Dominion of Canada General Insurance Company, [1994] FSCO A-006025, 1994 CarswellOnt 4976, which specified the principles to be applied when determining the benefit to be paid to insureds for post-collision rental accommodations. The decision stated, "The applicant's ordinary (i.e. pre-accident) accommodation expenses should be recognized in calculating the benefit to be paid for providing post-accident accommodations".

21The respondent argues that the applicant is not entitled to a housing benefit after deducting her rental income received from the main residence and the vacation property. The applicant rented out her pre-accident properties which resulted in a net positive income, a positive rental differential. If the applicant is paid a housing benefit, this would result in a windfall to her. It relies upon the Housing Costs Calculation Report, prepared by MDD Forensic Accountants, dated October 15, 2024. This report includes the rent received from the main residence and the vacation property as deductions for her rent differential and concluded that she is not entitled to a housing benefit. Overall, the respondent argues that the rental arrangements of the applicant's three properties resulted in a positive cash flow and benefit to the applicant.

22The respondent submits that the applicant has failed to meet her burden to establish entitlement to the two treatment plans in dispute. It argues that the applicant's submissions are silent as to the legal test for reasonableness and necessity. She has not pointed to any evidence as to the goals of these rehabilitation benefits, nor has she provided any arguments as to how the overall cost of these benefits is reasonable given the calculated positive rental differential.

23The respondent states that it does not dispute the fact the applicant's injuries and impairments necessitated a larger accessible residence. However, it argues that the applicant is required to mitigate her damages which she did by offsetting the rent of her large accessible unit by renting out her other properties. These three rental arrangements have resulted in net positive rental income flowing to the applicant. Therefore, as she is receiving positive income, the treatment plans proposing the respondent cover the entire cost of the larger 12-month rental without the appropriate offsets, are not reasonable and necessary. To require the respondent to fund the full cost of the accessible rental unit would not restore the applicant to her pre-accident position but would instead provide her with a clear windfall, contrary to the purpose of the Schedule and the Tribunal's consistent jurisprudence.

Entitlement to a Housing Benefit

24I find that there is no dispute that the applicant is entitled to a housing benefit for the rental costs of her accessible unit. The respondent states in its submissions that it does not dispute the fact that the applicant's injuries and impairments necessitated a larger accessible residence. I find that both parties agree that the accessible unit was reasonable and necessary given her limitations and treatment needs. Therefore, I do not accept the respondent's submissions that the applicant has not proved that the treatment plans in dispute are reasonable and necessary because she did not address the goals of the treatment plans. I find that the only issue in dispute is the calculation of the rent differential and whether the rental income from the vacation property should be used when calculating the rent differential in her housing benefit.

25I find based on the evidence and submissions of the applicant that at the time of the accident, the applicant's main residence was her condo in Thunder Bay where she spent most of her time. I further accept the applicant's submission that she considered the Toronto condo her vacation property. I find that this is supported by the applicant's submissions that during the Covid pandemic, when she was restricted from travelling to Toronto, she rented her vacation property for the year.

26The Ontario Court of Appeal in Tomec v. Economical Mutual Insurance Co., 2019 ONCA 882, 148 O.R. (3) 438 ("Tomec"), discusses the consumer protection mandate of the Schedule. At paragraph 42 of the decision, it states that the Schedule is remedial and, "as such, it is to be read in its entire context and in their ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature."

27I find that there is limited guidance in s. 16 of the Schedule to address the subject issue. I agree with the applicant that this section does not specifically state that prior housing expenses should be deducted when calculating a housing benefit. To go even further, I find that this section does not discuss multiple residences or how to deal with a situation where the applicant owned more than one property at the time of the subject accident. However, I find that s. 16(3)(i) discusses home modifications and home devices, or the purchase of a new home singularly. There is no consideration of multiple homes in this section.

28I further agree with the applicant's argument that other sections of the Schedule specifically note when prior expenses and assets are to be considered when determining the amount of the benefit. Section 16(4)(f) of the Schedule sets out the explicit limitations on the calculation of vehicle replacement benefits and provides specific instructions for deducting a pre-existing asset in the calculation of the benefit. This is not the case for dealing with housing expenses as the Legislature has not provided any inclusion of specific deductions.

29I therefore find that based on Tomec, when reading s. 16 in its entire context, that the focus of the housing benefit is on the applicant's main residence at the time of the accident. I do not find that the Legislature intended for this section to deal with multiple residences owned by an insured or that properties such as a vacation property are to be considered in the analysis or quantification of the housing benefit. I agree with the applicant's argument that this would imply that where an insured owns several vacation properties and choses to rent them out, that the insurer could use these sources of rental income to reduce or eliminate an applicant's entitlement to a housing benefit.

30I further find that the report of ADS provided a direct comparison and calculation of the applicant's pre- and post-accident main residence. I therefore accept their calculation that the rental income earned from the applicant's pre-accident main residence must be deducted from the cost of the applicant's post-accident main residence. I find that these are the proper deductions that should be made in order to calculate the applicant's housing benefit. I therefore accept the calculations made by ADS that the applicant is entitled to a housing benefit in the amount of $1,972.05 per month, with total arrears of $41,413.05 since October 2023.

31I further find that while the parties have directed me to various Tribunal decisions, these decisions do not deal with the particular issue before me as to whether the vacation property rental income ought to be deducted from the housing benefit. The focus of these decisions is on the interpretation of the housing benefit and whether the benefit will award a "windfall".

32Both parties have argued that a windfall will result. I agree with the applicant's submission that she is not receiving a windfall by omitting the income from her vacation property in the housing benefit calculation. I find that the purpose of the housing benefit is to restore her pre-accident position, namely living in her main residence. She is able to achieve this goal by living in the accessible unit. I find that due to the injuries and impairments sustained in the subject accident, the applicant has lost the use of her vacation property. She is therefore entitled to be compensated for the loss of use of the vacation property by earning rental income from the vacation property.

33I agree that if the vacation property rental income is deducted by the respondent, it would be receiving a windfall as no housing benefit would be payable. The respondent would be essentially receiving the benefit of the rental income from the vacation property received by the applicant in order to reduce the housing benefit payable. I find that the applicant would not be restored to her pre-accident position of owning two properties, one of which is a vacation property. Such an interpretation is contrary to the decision in Tomec that requires reduction of economical dislocation and hardship.

34For the reasons outlined above, I find that the applicant has proven on a balance of probabilities that she is entitled to the treatment plans in dispute less the rental differential calculated using the main residence income only. I will leave it to the parties to provide the correct calculations of her entitlement on this basis.

Entitlement to Painting Expenses

35The applicant in her submissions claims entitlement to expenses for painting her main residence in Thunder Bay in the amount of $3,763.70. She claims that prior to renting out the main residence she incurred the expenses for painting. She submits that she is not claiming this amount as a medical or rehabilitative expense, but rather, as a legitimate deduction on the amount of the credit the respondent would receive from the housing benefit to which she is entitled.

36The applicant argues that the respondent wishes to take full credit for the rent associated with the prior main residence, while not compensating the applicant for the out-of-pocket expense she had to incur because she was forced to rent the unit. She states that the unit would not have been painted if she had remained living in the main residence. She contrasts this to the expense of replacing the windows in the house which she is not claiming for because she would have replaced the windows if she had remained living in the main residence. She further states that the respondent should not receive a full credit for the rent on the main residence while she is left paying the painting expense necessary to generate the credit which is therefore a "windfall" for the respondent.

37The respondent submits that the CCRO indicates that there are two treatment plans in dispute dated August 8, 2023 and August 27, 2024. It argues that the inclusion of the claim for "painting expenses" is improper and is not properly in dispute because it is not listed in the CCRO. It therefore submits that this issue should be disregarded.

38In the alternative, the respondent submits that "painting expenses" are not a prescribed benefit nor a payable benefit under the Schedule. It argues that cosmetic or preparatory work done to facilitate renting out a pre-existing residence is outside the scope of the accident benefits prescribed under the Schedule.

39While I agree with the respondent that the issue of "painting expenses" is not listed as an issue in dispute in the CCRO, I will address this issue because the applicant submits that this issue is related to the calculation of her housing benefit which is an issue before the Tribunal.

40I agree that "painting expenses" are not a prescribed benefit nor a payable benefit under the Schedule. I find that the applicant has not directed the Tribunal to any section in the Schedule or case law that supports her entitlement to painting expenses. While I accept that she claims that the painting was required in order for her to rent out the main residence, I find that she has not established that such expenses are payable or that I have the jurisdiction to order payment of same.

41For the reasons outline above, I find that the applicant has not proved on a balance of probabilities that she is entitled to the painting expenses.

Interest

42Interest applies on the payment of any overdue benefits pursuant to s. 51 of the Schedule. As I have found that the housing benefits are overdue, interest is payable pursuant to s. 51 of the Schedule.

Award

43The applicant sought an award under s. 10 of Reg. 664. Under s. 10, the Tribunal may grant an award of up to 50 percent of the total benefits payable if it finds that an insurer unreasonably withheld or delayed the payment of benefits.

44I find that the applicant has not made any submissions as to her entitlement to an award. I therefore find that she has not proved on a balance of probabilities that the respondent is liable to pay an award.

ORDER

45For the reasons outlined above, I find:

i. The applicant is entitled to the treatment plans in dispute dated August 8, 2023 and August 27, 2024, less the rental differential calculated using the main residence income only, plus applicable interest;

ii. The applicant is not entitled to the painting expenses; and

iii. The respondent is not liable to pay an award.