Allstate Insurance Co. of Canada v. Da Rosa et al. [Indexed as: Allstate Insurance Co. of Canada v. Da Rosa]

91 O.R. (3d) 475

Ontario Superior Court of Justice,

Divisional Court,

Jennings, Pitt and Molloy JJ.

June 13, 2008

Insurance -- Automobile insurance -- Statutory accident benefits -- Insured residing in nursing home as result of injuries suffered in motor vehicle accident -- Ministry of Health paying most of insured's costs but nursing home charging monthly co-payments for accommodation and food -- Insured applying under Reg. 832 under Nursing Homes Act for reduction of her co-payments based on financial need -- Director refusing application on grounds that insured's automobile insurer was liable for co-payment -- Director's decision reasonable -- Director not restricted under Reg. 832 to consideration of nursing home resident's taxable income -- Subsidy under Reg. 832 not falling within ambit of s. 75(13) of Statutory Accident Benefits Schedule -- Nursing Homes Act, R.S.O. 1990, c. N.7 -- R.R.O. 1990, Reg. 832 -- Statutory Accident Benefits Schedule -- Accidents after December 31, 1993 and before November 1, 1996, s. 75(13).

D suffered very serious injuries in a motor vehicle accident in 1995 and resided in a nursing home as a result. A significant portion of her nursing home costs were paid by the Ministry of Health, but the nursing home charged monthly "co- payments" for accommodation and meals. Regulation 832 under the Nursing Homes Act permits nursing home residents to apply to the Director under the Act for a reduction of all or part of the co-payments they are liable to pay based on financial need. D made such an application, which was refused on the grounds that D's automobile insurer was liable for the co-payment. The insurer brought an application for judicial review of that decision. It relied on s. 75(13) of the Statutory Accident Benefits Schedule -- Accidents after December 31, 1993 and before November 1, 1996, which exempts an insurer from paying supplementary medical benefits that are "reasonably available in respect of the insured person under any insurance plan or law or under any other plan or law", and argued that because a nursing home resident with D's financial resources could receive a reduction of the co-payments based on financial need, the requirement of s. 75(13) of the Schedule was met.

Held, the application should be dismissed.

The standard of review of the Director's decision was reasonableness. It was not reasonable to interpret Reg. 832 as fettering the Director's discretion to such an extent that only the taxable income of the patient can be taken into account in assessing need. Further, a purposeful interpretation of s. 75(13) of the Schedule did not support the conclusion that benefits or subsidies such as those available under Reg. 832 were intended to fall within its ambit. Section 75(13) speaks of an exemption for the insurer if the expense is reasonably available "under any insurance plan or law or under any other plan or law". It was not reasonable to interpret this as including social benefit type legislation. As the Ministry declined to allow D's application for a reduction of or exemption from her co-payment, there was no benefit "reasonably available" to her. Section 75(13) of the Schedule had no application. The Director's decision was reasonable.

APPLICATION for the judicial review of a decision of the Director under the Nursing Homes Act.

Cases referred to Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42, 212 D.L.R. (4th) 1, 287 N.R. 248, [2002] 5 W.W.R. 1, J.E. 2002-775, 166 B.C.A.C. 1, 100 B.C.L.R. (3d) 1, 18 C.P.R. (4th) 289, 93 C.R.R. (2d) 189, 113 A.C.W.S. (3d) 52, REJB 2002-30904; [page476] Doctor's Hospital v. Ontario (Minister of Health) (1976), 1976 739 (ON SC), 12 O.R. (2d) 164, [1976] O.J. No. 2098, 68 D.L.R. (3d) 220, 1 C.P.C. 232 (Div. Ct.); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006; Roncarelli v. Duplessis, 1959 50 (SCC), [1959] S.C.R. 121, [1959] S.C.J. No. 1, 16 D.L.R. (2d) 689

Statutes referred to Ministry of Health and Long-Term Care Act, R.S.O. 1990, c. M.26 Insurance Act, R.S.O. 1990, c. I.8 Nursing Homes Act, R.R.O. 1990, c. N.7, s. 21(1)

Rules and regulations referred to General Regulations, R.R.O. 1990, Reg. 832, ss. 116.1(1), (3) Statutory Accident Benefits Schedule -- Accidents after December 31, 1993 and before November 1, 1996, O. Reg. 776/ 93, s. 75(13)

Authorities referred to Sullivan, Ruth, Sullivan and Dreidger on the Construction of Statutes, 4th ed. (Markham, Ont.: Butterworths Canada, 2002)

Ian J. Kirby, for applicant. Rebecca Nelson, for respondent Zita Da Rosa. Lise Favreau, for respondent Ministry of Health and Long-Term Care. Larissa Easson, for respondent Financial Services Commission of Ontario.

Endorsement BY THE COURT: -- Introduction

[1] This is an application made by Allstate Insurance Company of Canada ("Allstate") for judicial review of a decision of the Ontario Ministry of Health and Long-Term Care (the "Ministry") dated March 17, 2004 by which the Ministry ordered Allstate to pay Zita Da Rosa's ("Da Rosa") long-term care fees at the O'Neill Centre, and for an order setting aside the decision of Director's Delegate Nancy Makepeace of Financial Services Commission of Ontario who, by declining jurisdiction to compel the Ministry to change its decision, confirmed the Ministry's decision.

[2] We are all of the view that the application should be dismissed for the reasons that follow. [page477] Delay

[3] We are all of the view that since the respondents were themselves not always diligent in advancing their respective positions, and because the history of the proceeding was convoluted, it would be inappropriate to dismiss the application for delay, notwithstanding that Allstate did not commence its application until about two years and three months after the decision and failed to perfect its application for another year.

The Issue

[4] The Director's Delegate is a statutory official whose jurisdiction is limited to adjudicating disputes between insurers and insureds. No authority has been offered to support the proposition that the Director's Delegate has any jurisdiction to oversee the decisions of the Ministry.

[5] Accordingly, the real issue before the court is therefore judicial review of the Ministry's decision. The Ministry accepts that its decision is subject to judicial review as to whether its power was exercised within the ambit of the statutory provisions and for the purposes intended by the governing statute. See Roncarelli v. Duplessis, 1959 50 (SCC), [1959] S.C.R. 121, [1959] S.C.J. No. 1 and Doctors Hospital v. Ontario (Minister of Health) (1976), 1976 739 (ON SC), 12 O.R. (2d) 164, [1976] O.J. No. 2098 (Div. Ct.).

[6] At its core, the issue is whether any inter-relationship between the Nursing Homes Act, R.S.O. 1990, c. N.7; R.R.O. 1990, Reg. 832; and the Insurance Act, R.S.O. 1990, c. I.8 requires the Ministry to pay for a portion of the respondent Da Rosa's long-term care fees, which Allstate would otherwise be contractually obligated to pay.

Standard of Review

[7] The parties agree and this court finds that the standard of review is one of reasonableness.

The Facts

[8] Da Rosa suffered permanent and very serious injuries, including brain injuries, in an automobile accident on January 21, 1995. She has been hospitalized ever since. According to an arbitration decision, she requires assistance in most areas of self-care.

[9] On April 27, 1995, Da Rosa was transferred from an acute care hospital to Riverdale Hospital, a chronic-care facility ("Riverdale"). On February 12, 1997, she was moved to the O'Neill Centre, a long-term care facility ("O'Neill") where she continues to reside. [page478]

[10] Da Rosa submitted an application for benefits to Allstate, pursuant to the Statutory Accident Benefits Schedule -- Accidents after December 31, 1993 and before November 1, 1996, O. Reg. 776/93 (the "Schedule"). The Schedule requires an insurer to pay all reasonable expenses for hospital services and services provided by a long-term care facility.

[11] A significant portion of Da Rosa's nursing home costs are paid by the Ministry as part of the health care benefits to which Ontario residents are entitled. In addition, nursing homes are permitted under the Nursing Homes Act to charge its residents specified monthly "co-payments" for accommodation and meals: Nursing Homes Act, s. 21(1). Da Rosa was charged for chronic-care co-payments by Riverdale and O'Neill.

[12] Regulation 832 under the Nursing Homes Act permits residents of a nursing home to apply to the Director under the Act for a reduction of all or part of the co-payment they are liable to pay based on financial need.

[13] Da Rosa applied to the Director under Reg. 832 for a reduction in the co-payments charged by the nursing home. The Director refused the application on the grounds that Allstate, as Da Rosa's insurer, was liable for the co-payment.

The Position of the Parties

[14] Allstate relies on s. 75(13) of the Schedule, which exempts it from paying supplementary medical benefits that are "reasonably available in respect of the insured person [Da Rosa] under any insurance plan or law or under any other plan or law". Allstate argues that the automobile insurance it provides is excess to any other insurance coverage and that the Director is only entitled to take into account Da Rosa's taxable income in deciding her eligibility for a reduction in co-payments. Allstate submits that because under Reg. 832 of the Nursing Homes Act, a nursing home resident with the respondent Da Rosa's financial resources could receive a reduction of all of the co-payment based on financial need, the requirement of s. 75(13) of the Schedule is met and Allstate is not liable for any portion of the co-payment.

[15] The Ministry takes the position that the reduction in co-payments contemplated by Reg. 832 is in the nature of a social-assistance benefit and is only available to persons who demonstrate financial need. The Ministry submits that the Director is not restricted to considering only taxable income, but rather is entitled to look at all the financial circumstances of the applicant. According to the Ministry, Da Rosa has not demonstrated financial need because she has access to insurance benefits. [page479]

Analysis

[16] It is not disputed that Allstate would be required to pay all of Da Rosa's co-payment charges at the nursing homes unless the Reg. 832 reduction is "reasonably available" to her.

[17] The applicable sections of Reg. 832 do not specify what criteria the Director is required to consider in deciding whether to grant a request for reduced co-payments. Section 116.1(3) of the Regulation states that the application shall be made to the Director by submitting "the exceptional circumstances application" together with the applicant's tax return and any notice of assessment for the immediately preceding year. The exceptional circumstances application requires disclosure of all sources of income, including insurance benefits.

[18] The accepted modern approach to statutory interpretation is that "the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": R. Sullivan, Sullivan and Dreidger on the Construction of Statutes, 4th ed. (Markham, Ont.: Butterworths Canada, 2002), p. 1; Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43.

[19] Read in accordance with this rule of statutory construction, no proper basis can be found in the Statutes or Regulations referenced above that would require the Ministry, in determining whether to provide assistance to a patient, to take into consideration only the taxable income of the patient. Clearly payments made by the Ministry are designed to help patients who need financial assistance. If Da Rosa had a private source of income from which she could cover the co- payments, she would not be eligible for financial assistance under the Regulation. There is no reason to distinguish that situation from one in which Da Rosa's ability to cover the co- payments is because of her private contract of insurance with Allstate. On either scenario, she has not demonstrated financial need.

[20] It is not reasonable to interpret the Regulation as fettering the Director's discretion to such an extent that only taxable income can be taken into account in assessing need. For example, it would be inconsistent with the purpose of the legislation if the Director was required to ignore substantial financial assets and focus solely on the income generated by those assets.

[21] Further, a purposeful interpretation of s. 75(13) of the Schedule does not support the conclusion urged by Allstate that benefits or subsidies such as those available under Reg. 832 were [page480] intended to fall within its ambit. The section speaks of an exemption for the insurer if the expense is reasonably available "under any insurance plan or law or under any other plan or law". It is not reasonable to interpret this as including social benefit type legislation. If the section was meant to include government subsidies of this kind, one would expect clear language to that effect.

[22] If Da Rosa was a person of substantial financial means, it is clear she would not be eligible for a reduction under the Regulation. It is equally clear that in that situation, Allstate, as her insurer, would be liable under its policy to cover the co-payments. If Allstate's position on this appeal is correct, then insurers would be required to pay insurance benefits for wealthy insureds, but not required to pay the same benefits for indigent insureds under policies and legislation that is exactly the same. That is an anomalous result and one that is not consistent with the object and intention of the legislative scheme, considered as a whole.

[23] The Director clearly exercised her power within the ambit of the statutory provisions and for the purposes intended by the Ministry of Health and Long-Term Care Act, R.S.O. 1990, c. M.26, a statute the objectives of which do not conflict with those of the Insurance Act. The decision is a reasonable one and consistent with a reasonable interpretation of all relevant legislative provisions. That decision is entitled to deference and we see no basis for interfering with it.

[24] The Ministry having declined to allow Da Rosa's application for a reduction in or exemption of her co-payment, there was no benefit "reasonably available" to her. Section 75(13) of the Statutory Accident Benefits Schedule has no application to the facts before us. Therefore, this application for judicial review is dismissed.

Costs

[25] In default of any agreement between the parties as to costs, brief written submissions not to exceed three pages in length, may be made within thirty (30) days of the release of this endorsement.

Application dismissed.