DATE: 20020430 DOCKET: C35021

COURT OF APPEAL FOR ONTARIO

CATZMAN, DOHERTY, ABELLA, LASKIN and SHARPE JJ.A.

B E T W E E N :

1. )

Robert Gabor and

JANICE HOPE

Michael Ellis

for the appellant

Appellant

• and -

Brian Atherton

for the respondent

CANADIAN GENERAL INSURANCE

and CHRISTY YOUNG

Respondent

Heard: November 8, 2001

On appeal from the order of Justice Janet M. Wilson dated August 3, 2000.

DOHERTY J.A.:

2. I

3. [1] This appeal turns on the interpretation of the Statutory Accident Benefits Schedule – Accidents Before January 1, 1994, R.R.O. 1990, Reg. 672, as amended (the “SABS”), which governs entitlement to no-fault first-party medical and rehabilitation expenses arising out of accidents that occurred before January 1, 1994. In particular, the court must decide whether an insured under the Insurance Act, R.S.O. 1990, c. I.8, as amended, can recover no-fault benefits for treatments and services provided beyond the “benefit period” as defined in the SABS, if the need for those treatments or services is established within the “benefit period”.

4. II

5. [2] The appellant was injured in a car accident in July 1992. As a passenger in a motor vehicle covered under an insurance policy issued by the respondent, Canadian General Insurance,[^1] the appellant falls within the definition of an insured person in Part VI of the Insurance Act and is entitled to receive no-fault first-party benefits from the respondent.

6. [3] The appellant sued the respondent claiming, among other things, $3.1 million for medical and rehabilitation expenses. That amount was based on a report prepared for the appellant which fixed her present and future medical and rehabilitative needs at approximately $3.1 million. That report assumed that the appellant had a life expectancy of fifty-one years. It set out various medical and rehabilitative treatments as well as other services and products that the appellant would need throughout the rest of her life as a result of the serious back injury she suffered in the car accident. Many of the treatments, services, and products, described in the report will not be required by the appellant until more than ten years after the accident.

7. [4] The appellant brought a motion under Rule 21 of the Rules of Civil Procedure seeking a determination of the following question of law:

May the Plaintiff recover reasonable supplementary medical and rehabilitation benefits pursuant to s. 6(1) of the Statutory Accident Benefits Schedule [– Accidents Before] January 1, 1994, beyond the 10 year anniversary of the accident if the said expenses [are related] to the accident … and determined with certainty before the end of the 10 year benefit period?[^2]

5. [5] The motion was argued on the assumptions that the expenses outlined in the report were reasonable and that they were certain to be incurred by the appellant. The only question to be resolved on the motion was whether the expenses were payable even if the services, treatments, or goods, giving rise to those expenses were not supplied within the “benefit period” as defined in the SABS. That benefit period was ten years from the date of the accident.

6. [6] The motions judge, relying on Bannon v. McNeely (1998), 1998 4486 (ON CA), 38 O.R. (3d) 659 (C.A.), held, somewhat reluctantly, that the appellant was not entitled to recover any expenses beyond the ten year anniversary of the accident. In so holding, the motions judge observed that the interpretation in Bannon v. McNeely, supra, seemed inconsistent with the more flexible interpretation given the predecessor regulation governing the availability of no-fault first-party medical and rehabilitation benefits.

7. [7] I agree with the conclusion of the motion judge and would dismiss the appeal.

8. III

9. [8] As the appellant’s accident occurred in 1992, her entitlement to no-fault benefits fell to be determined under the regime in place between June 1990 and January 1, 1994.[^3] That regime, through amendments to the Insurance Act, restricted an insured’s right to sue third-parties in tort, while at the same time (through new regulations), increasing an insured’s entitlement to no-fault first-party benefits: see Meyer v. Bright (1993), 1993 3389 (ON CA), 15 O.R. (3d) 129 (C.A.). Section 6 of the SABS addresses supplementary, medical and rehabilitation benefits. The relevant parts of s. 6 are set out below:

6. (1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;

(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;

(c) rehabilitation, life-skills training and occupational counselling and training;

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

(e) home renovations to accommodate the needs of the insured person;

(f) other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident.

(3) For the purposes of this section, the benefit period is the longer of the two following periods calculated from the day of the accident and ending on the anniversary of the accident:

1. Ten years.

2. Twenty years less the age of the insured person on the day of the accident.

(4) Subject to subsections (5) and (6), the insurer, before making a payment for an expense under subsection (1), may require the insured person to submit a statement signed by the insured person’s qualified medical practitioner or psychological advisor stating that the expense is necessary for the insured person’s treatment or rehabilitation.

(7) In case of a dispute concerning an expense described in clause (l)(a), (b) or (d), the insurer will pay the expense pending resolution of the dispute.

(8) The maximum amount payable under this section is $500,000 with respect to each insured person.

9. [9] Section 6(1) uses a broad concept of injury (physical, psychological or mental) and provides for the payment of expenses for a wide variety of treatments and services where those treatments and services are referable to injuries resulting from an accident. Entitlement to the expenses is limited in three ways: the expense must be reasonable; it must result from the accident; and it must result within the “benefit period”.

10. [10] Section 6(3) defines “benefit period”. That period runs for a minimum of ten and a maximum of twenty years from the date of the accident depending on the age of the insured at the time of the accident. If an insured is at least ten years old at the time of the accident, the benefit period will be ten years. As the appellant was an adult at the time of the accident her benefit period is ten years.

11. [11] Counsel for the appellant submits that the words “all reasonable expenses resulting from the accident within the benefit period” in s. 6(1) are ambiguous. He acknowledges that they could refer only to services, treatments or other matters covered by s. 6(1) that are provided within the ten years following the date of the accident. He submits, however, that the words could also be read as referring to any of the described expenses that could be established with certainty within the ten years following the accident even if those expenses were to be incurred for services or treatment provided beyond the tenth anniversary of the accident. For example, the report prepared for the appellant indicates that as a result of the injury suffered in the car accident, she will most certainly need back surgery some time after the tenth anniversary of the accident. Counsel submits that s. 6(1) can reasonably be read so as to bring the cost of that surgery within the expenses recoverable under s. 6(1) even though the surgery itself will not be performed until after the tenth anniversary of the accident.

12. [12] Counsel further contends that if the ambiguity he describes exists, the appellant, as the insured, is entitled to the benefit of the more favourable interpretation. Counsel relies on the contra proferentem rule; the principle that coverage provisions in insurance policies should be construed broadly; and the principle that ambiguous provisions in a policy should be read so as to give effect to the reasonable expectations of the parties.

13. [13] These principles of interpretation are well known. Some or all have been applied in the many cases where the language used in insurance policies, or insurance related statutory or regulatory provisions, obscures as much, or more, than it reveals about the intended meaning. They operate, however, only where there is a genuine ambiguity as to the meaning of the impugned language: see, Chilton v. Co-Operators General Insurance Co. (1997), 1997 765 (ON CA), 32 O.R. (3d) 161 at 167 (C.A.).

14. [14] Ambiguity cannot be determined by examining words in isolation from the text in which they appear. Nor is ambiguity established by demonstrating that if the legislature had intended a particular meaning, it could have used different language that would have expressed that meaning more clearly. Not all language that falls short of crystal clarity is properly labelled ambiguous.

15. [15] A finding that a provision is ambiguous can be made only after a proper inquiry as to the meaning of the provision. The approach to be taken when construing legislative language is described by Professor Driedger in his text, Construction of Statutes, 2nd ed. (1983), at p. 87:

Today there is only one principle or approach, namely the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

16. [16] The words of Professor Driedger have been repeatedly adopted in the recent jurisprudence from the Supreme Court of Canada: e.g., see, R. v. Z. (D.A.), 1992 28 (SCC), [1992] 2 S.C.R. 1025 at 1042-3; Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27 at 41; R. v. Gladue, 1999 679 (SCC), [1999] 1 S.C.R. 688 at 704; Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250 at 267; R. v. Ulybel Enterprises Ltd. (2001), 2001 SCC 56, 157 C.C.C. (3d) 353 at 367 (S.C.C.). The same approach has been used by this court when interpreting provisions of the Insurance Act: Meyer v. Bright, supra, at 134.

The Grammatical and Ordinary Meaning

17. [17] To determine the grammatical and ordinary meaning of s. 6(1), it is helpful to remove the language that is irrelevant for present purposes and insert the operative definition of “benefit period”. The section would then read as follows:

The insurer will pay all reasonable expenses resulting from the accident within ten years calculated from the day of the accident and ending on the tenth anniversary of the accident.

18. [18] When the section is read as set out above, its grammatical and ordinary meaning is clear. The insurer’s obligation to pay reasonable expenses is triggered when those expenses result from an accident and that result occurs within ten years of the date of the accident. If an expense arises out of one of the services or treatments described in ss. 6(1)(a) to 6(1)(f), but that service or treatment is supplied beyond the tenth anniversary of the accident, then on a plain reading of the operative words it cannot be said that the expenses resulted within the benefit period. In my view, the language of s. 6(1), and particularly the phrase “benefit period”, connotes payment of expenses for a fixed period of time, and not potentially for the rest of an insured’s life where those expenses can be established with certainty within a fixed period of time.

19. [19] In concluding that the plain meaning of the words in s. 6(1) excludes expenses resulting from treatments or services provided after the benefit period, I do not pretend that there will never be a factual dispute as to whether an expense or treatment resulted within the benefit period. For example, there may be situations in which a service or treatment is provided during the benefit period and continued beyond the benefit period. In those cases, depending on the nature of the treatment or service, there may be an argument that the entire expense resulted when the treatment or service began. For example, if the treatment or service is properly characterized as a single treatment or service which by its nature had to be delivered in stages over a period of time (e.g. the fitting of an artificial limb), and not as a series of treatments, it would seem arguable that the entire expense for that process resulted when the treatment or service began. This inevitability of factual disputes does not suggest ambiguity in the language of s. 6(1), but merely reflects the reality that no language can provide a clear answer to every fact situation that may arise.

The Object of the Legislation

20. [20] Prior to 1990, automobile accident compensation was provided mainly through third-party liability based on traditional tort concepts with some modest first-party no-fault benefits. In 1990, the Legislature introduced an automobile compensation scheme that significantly limited access to tort recovery but at the same time significantly increased entitlement to first-party no-fault benefits. The object of that legislation was described in Meyer v. Bright, supra, at p. 134:

The scheme of compensation provides for an exchange of rights wherein the accident victim loses the right to sue unless coming within the statutory exemptions, but receives more generous first-party benefits, regardless of fault, from his or her own insurer. The legislation appears designed to control the cost of automobile insurance premiums to the consumer by eliminating some tort claims. At the same time, the legislation provides for enhanced benefits for income loss and medical and rehabilitation expenses to be paid to the accident victim regardless of fault.

21. [21] Section 6(1) addresses the enhanced first-party benefits side of the equation described in Meyer v. Bright, supra. On any interpretation of s. 6(1), the insured is entitled to much more generous no-fault benefits than he or she was entitled to prior to its enactment. Under s. 6(1), the insured is entitled to expenses up to $500,000. The previous limit was $25,000. Under s. 6(1), the insured is entitled to expenses that result within ten years following the accident. Previously, that entitlement extended only to expenses incurred within four years of the accident. Finally, s. 6 aims at facilitating quick recourse to rehabilitative and medical needs by eliminating the requirement that the insured actually incur the expenses before they become payable by the insurer. In keeping with that theme, s. 6(7) requires the insurer to pay certain of the expenses pending the resolution of any dispute as to the insured’s entitlement to those expenses.

22. [22] Both the interpretation advanced by the appellant and the interpretation I take from the plain reading of s. 6(1) yield significantly better first-party no-fault benefit benefits than existed under the previous legislation. Both interpretations are, therefore, true to the object of the legislation as described in Meyer v. Bright, supra. Consequently, reference to the object of the legislative scheme provides no basis for preferring the appellant’s interpretation over the plain meaning of the words.

23. [23] I must also reject the appellant’s contention that an interpretation of s. 6(1) that could result in under compensation to a particular insured must be regarded as being inconsistent with the object of the scheme introduced in 1990. That scheme imposed limits on the recovery of expenses on a first-party no-fault basis. The risk of under compensation is inherent in any system that imposes any limitation on the recovery of first-party no-fault benefits. This argument would have merit only if the object of the 1990 scheme was to introduce full compensation for all reasonable medical and rehabilitation expenses on a first-party no-fault basis. No one suggests that that was the object of the 1990 legislation.

The Predecessor Regulation

24. [24] The appellant attempts to inject ambiguity into s. 6(1) by reference to the judicial interpretation of Schedule C of the Insurance Act, R.S.O. 1980, c. 218, as amended, which governed first-party no-fault benefits prior to June 1990, and by reference to the introduction of the more comprehensive no-fault benefits found in s. 6(1). That regulation provided in part that an insured was entitled to “all reasonable expenses incurred within four years from the date of the accident”. Some courts had held that the word “incurred” was ambiguous and favoured an interpretation that allowed an insured to recover expenses that could be determined with certainty within four years from the date of the accident even if those expenses related to services or treatments provided beyond the four year period: e.g., see, Smith (Committee of) v. Wawanesa Mutual Insurance Co. (1998), 1998 18861 (ON SC), 42 O.R. (3d) 441 at 448-49 (Div. Ct.).

25. [25] Without commenting on the merits of the analysis found in those cases, I find myself in agreement with the observations of Finlayson J.A. in Bannon v. McNeely, supra, at p. 686. As he noted, the language of s. 6(1) is entirely different from that of the prior regulation. The prior regulation spoke of “incurred” expenses. Section 6(1) refers to expenses “resulting” during a benefit period. Like Finlayson J.A., I do not think that cases that have found ambiguity in the entirely different language of a predecessor regulation assist in the interpretation of s. 6(1). Whatever ambiguity may have existed in the language of the previous regulation, that language was not carried forward to s. 6(1).

Previous Authority of this Court

26. [26] The meaning I ascribe to s. 6(1) is consistent with the meaning given to that provision in Bannon v. McNeely, supra. In that case, the insurer argued that the insured was entitled to benefits under s. 6(1) beyond the tenth anniversary of the accident and that those benefits should have been deducted from the tort award made against the insurer. Finlayson J.A. rejected this argument saying at p. 686:

The appellants submit that a no-fault insurer is liable for expenses such as supplementary medical and rehabilitation benefits available under s. 6 of the SABS beyond the limited period they are stated to be available under s. 6(3). I reject the argument that this period is extended if the insurer was aware of and knew during the initial period that there was a risk that the expenses would be ongoing and would continue beyond the limited period provided for in s. 6(3). … The language of s. 6(3) of the SABS clearly describes a “benefit period” which in this case is ten years ending on the anniversary of the accident. … [emphasis added]

27. [27] The appellant seeks to distinguish Bannon v. McNeely, supra, on the basis that she seeks only expenses which are certain to arise beyond the ten year benefit period and not expenses which could arise beyond that time frame. I do not think this distinction makes any difference to the interpretation of s. 6(1). In Bannon v. McNeely, supra, this court read s. 6(1) as defining a finite benefit period which began on a specific day and ended on a specific day. The fact that expenses beyond that date might be certain rather than only possible does not, in my view, justify departing from the interpretation of s. 6(1) set down in Bannon v. McNeely, supra.

28. IV

29. [28] For the reasons set out above, I would interpret s. 6(1) as requiring an insurer to pay expenses otherwise recoverable under that section if those expenses result within the benefit period. Expenses referable to the treatments and services described in the appellant’s assessment, which are to be provided beyond the benefit period, will not result within the benefit period and are not recoverable under s. 6(1).

30. [29] I would dismiss the appeal with costs.

RELEASED: “MAC”

“APR 30 2002”

“Doherty J.A.”

“I agree: M.A. Catzman J.A.”

“I agree: R.S. Abella J.A.”

“I agree: J.I. Laskin J.A.”

“I agree: Robert J. Sharpe J.A.”

[^1]: The other respondent, Christy Young is an adjuster employed by Canadian General Insurance.

[^2]: I have quoted the question as set out in the reasons of the motions judge. It differs from the question as framed in the motion but is clearly the question the appellant wants answered.

[^3]: See Insurance Statute Law Amendment Act, 1990, S.O. 1990, c. 2; No-Fault Benefits Schedule, R.R.O. 1990, Reg. 672, as amended by O. Reg. 660/93, subsequently became the SABS pursuant to amendments by O. Reg. 779/93.