Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200
CITATION: Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200
DIVISIONAL COURT FILE NO.: 603/20
DATE: 2021-09-20
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DALEY, PENNY AND CULLIN JJ.
BETWEEN:
Aviva Insurance Company of Canada
Appellant
– and –
Danay Suarez
Respondent
Kevin Griffiths and Kristopher B. Angle, for the Appellant
Anu Bakshi and Moira Gracey, for the Respondent
Trevor Guy, for the Intervenor, Licence Appeal Tribunal
Alexander M. Voudouris, Stanley Pasternak, M. Steven Rastin and Jessica M. Golosky, for the Intervenor, Ontario Trial Lawyers’ Association
Karen R. Spector and Dianne Wintermute, for the Intervenor, Coalition of Citizens with Disabilities – Ontario and Health Justice Program
HEARD at Thunder Bay: June 23, 2021
DECISION ON APPEAL
Cullin, J.
Overview
[1] Danay Suarez was involved in a motor vehicle accident on May 8, 2013.
[2] Following the accident, Ms. Suarez submitted an Application for Accident Benefits to her motor vehicle insurer, Aviva, pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”). Among other things, she sought funding from Aviva for medical and rehabilitation benefits.
[3] Aviva appeals the decision, dated March 5, 2020 (DS v. Aviva Insurance Canada), and the reconsideration decision, dated June 26, 2020 (D.S. v Aviva Insurance Company of Canada), of Adjudicator Derek Grant of the Licence Appeal Tribunal (“LAT”).
[4] The decision involves four chiropractic Treatment Plans submitted by Ms. Suarez to Aviva between October 25, 2016 and August 30, 2017. The Treatment Plans were denied by Aviva on the basis that they were not reasonable and necessary to treat Ms. Suarez’s accident-related injuries. Following Aviva’s denials, Ms. Suarez applied to the LAT to resolve their dispute. The LAT agreed that the Treatment Plans ought to have been approved and ordered that they were payable, with interest, in accordance with the Schedule.
[5] A further Treatment Plan for massage therapy was submitted to Aviva and denied; the denial was upheld by Adjudicator Grant. It is not at issue in this appeal.
[6] Aviva does not dispute the finding that the Treatment Plans ought to have been approved. It submits, however, that Adjudicator Grant erred in law when he ordered Aviva to pay the treatment expenses claimed in the Treatment Plans because: (1) there was no evidence before the LAT of expenses incurred by Ms. Suarez in advance of the hearing; and, (2) the LAT lacked the jurisdiction to order Aviva to pay expenses incurred by Ms. Suarez following the completion of the hearing.
[7] For the reasons that follow, I would deny Aviva’s appeal.
Decision of the Licence Appeal Tribunal
[8] The application to the LAT proceeded as a written hearing on May 21, 2019. In his decision, dated March 5, 2020, Adjudicator Grant ruled that three of the disputed Treatment Plans (identified as Glavan TP1, Viglasky TP1, and Viglasky TP2) were payable, with interest. He made the following specific findings:
a. That, with respect to Glavan TP1 and Viglasky TP1, Aviva’s reasons for denial were deficient and did not comply with the notice requirements provided in s. 38(8) of the Schedule. This finding triggered the mandatory consequences under s. 38(11).
b. That Glavan TP1 and Viglasky TP1 were payable, commencing on the 11th business day after each plan was submitted, with interest, in accordance with s. 51 of the Schedule.
c. That Glavan TP2 was reasonable and necessary, and that Ms. Suarez was entitled to payment for the Treatment Plan.
d. That Viglasky TP2 was reasonable and necessary and was payable with respect to any treatment incurred after August 30, 2017, with interest, in accordance with s. 51 of the Schedule.
e. That Ms. Suarez’s claim for massage therapy expenses, submitted on an OCF-6 Expense Claim Form, was not payable because it was not first submitted as a Treatment Plan.
[9] Aviva sought reconsideration of Adjudicator Grant’s March 5, 2020 decision. Aviva submitted that Adjudicator Grant erred in determining that Ms. Suarez was entitled to medical and rehabilitation benefits without addressing whether those benefits were incurred within the meaning of s. 3(7) of the Schedule.
[10] Ms. Suarez did not seek reconsideration of Adjudicator Grant’s decision but sought an amendment of his Order as it did not address the payment of Glavan TP2 notwithstanding his finding that this Treatment Plan was reasonable and necessary.
[11] In his decision, dated June 26, 2020, Adjudicator Grant agreed that his failure to order the payment of Glavan TP2 was an oversight. He amended his Order accordingly.
[12] With respect to the definition and application of the term “incurred”, Adjudicator Grant rejected an argument by Ms. Suarez that her treatment expenses should be deemed incurred pursuant to s. 3(8) of the Schedule. He found that Aviva’s denial was based on the information that was available to it, and that it had not unreasonably withheld or delayed payment of the benefit.
[13] In considering ss. 3(7) and 15 of the Schedule, Adjudicator Grant agreed with the reasoning of Adjudicator Gosio in 17-006470 v Aviva Insurance Company of Canada. He found that the issue of whether a benefit was “incurred” was not a threshold issue within the meaning of s. 55 of the Schedule, and that an adjudicator could make a finding that treatment was reasonable and necessary and order that a benefit be payable, provided that the order complied with the Schedule (that is, that treatment and interest be payable once incurred and overdue). He denied Aviva’s request to vary his decision.
Standard of Review
[14] The LAT’s enabling statute, the License Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, provides at s. 11(6) that an appeal to the Divisional Court relating to the Insurance Act may proceed on a question of law only
[15] Counsel concur that the standard of review in this statutory appeal respecting a question of law is correctness.
Positions of the Parties
[16] For the purpose of the appeal, Aviva did not dispute Adjudicator Grant’s findings that it improperly denied Glavan TP1 and Viglasky TP1 pursuant to s. 38(8) of the Schedule. It also did not dispute his finding that the treatment described in Glavan TP2 and Viglasky TP2 was reasonable and necessary. Aviva’s submissions focussed on the absence of evidence at the LAT hearing regarding “incurred” treatment.
[17] In support of its position on the appeal, Aviva argued that:
a. In the absence of a finding that an expense ought to be “deemed incurred” pursuant to s. 3(8) of the Schedule, the LAT only had the authority to order the payment of expenses that had been “incurred” by Ms. Suarez, as defined in s. 3(7)(e) of the Schedule, in advance of the LAT hearing. Specifically:
i. With respect to Glavan TP1 and Viglasky TP1, Adjudicator Grant was, in addition to considering whether they were improperly denied pursuant to s. 38(8) of the Schedule, obligated to consider whether expenses were incurred for the treatment that was described in these plans. In the absence of such evidence, he ought to have dismissed these claims;
ii. With respect to Glavan TP2 and Viglasky TP2, satisfying the “incurred” definition was an essential element of a claim for medical rehabilitation benefits under the Schedule and therefore, it was required to be established before reasonable and necessary medical rehabilitation benefits could be found payable;
b. With respect to the payment of expenses incurred after the date of hearing, Adjudicator Grant was functus officio. He had no jurisdiction to order Aviva to make payment upon the happening of a future event.
c. Alternatively, with respect to future expenses, if Ms. Suarez were permitted to complete her claim post-hearing by incurring treatment expenses for payment by Aviva, then Aviva should also be permitted to take post-hearing action to issue Treatment Plan denials which complied with s. 38(8) of the Schedule in order to avoid the mandatory consequences of s. 38(11).
[18] In support of her position on the appeal, Ms. Suarez argued that:
a. The LAT has broad statutory authority and flexible remedial powers under that statutory authority to resolve disputes between insurers and claimants.
b. Disputes about entitlement to coverage for submitted Treatment Plans and disputes about compliance with statutory notice provisions in response to submitted Treatment Plans are entitlement disputes. A decision by the LAT that an insured is entitled to coverage for treatment replaces an insurer’s approval of the Treatment Plan in dispute. An order that an insurer pay for the proposed treatment once it has been incurred in accordance with the Schedule is the only effective remedy available after such a decision and fits within the legislative purpose of the Schedule.
c. Adjudicator Grant’s Order did not offend the doctrine of functus officio. Entitlement and quantum are distinct issues, each of which may be subject to independent adjudication.
d. An order for entitlement to benefits is final and binding. Aviva’s alternative submission that it should be permitted to “cure” its deficient notice after a hearing would effectively thwart the LAT’s dispute resolution process.
[19] In addition to the parties, there were three intervenors who made submissions. Their positions can be summarized as follows:
a. The Licence Appeal Tribunal provided a summary of the relevant statutory provisions and LAT jurisprudence regarding the issues being appealed. It otherwise took no position on the appeal.
b. The Ontario Trial Lawyers’ Association submitted that the initial Order and Reconsideration Decision of Adjudicator Grant were correct, made in the normal course and were not prospective. It submitted that Aviva was seeking to overturn decades of existing practice and jurisprudence, that its proposed interpretation of the Schedule offended its statutory purpose as consumer protection legislation, and that the relief sought by Aviva would render the dispute resolution function of the LAT inaccessible to most claimants.
c. The Coalition of Citizens with Disabilities – Ontario and Health Justice Program submitted that the Schedule does not expressly stipulate when treatment expenses must be incurred, and that the statutory provisions at issue ought to be interpreted and applied in a manner that promotes access to justice. They submitted that there was an inherent power imbalance between accident claimants and their insurers, and that a requirement that healthcare treatment expenses be incurred before accessing the LAT would adversely impact low-income persons with disabilities.
Analysis
Statutory Authority of the LAT to Resolve Accident Benefits Disputes
[20] The statutory jurisdiction of the LAT to resolve disputes involving statutory accident benefits arises pursuant to s. 280 of the Insurance Act, R.S.O. 1990, c.I.8. Specifically:
280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).
[21] Section 280(4) of the Act stipulates that disputes must be resolved in accordance with the Schedule. The Schedule identifies the following restrictions on LAT proceedings at s. 55(1), which are also known as “threshold issues”:
(1) Subject to subsection (2), an insured person shall not apply to the Licence Appeal Tribunal under subsection 280 (2) of the Act if any of the following circumstances exist:
The insured person has not notified the insurer of the circumstances giving rise to a claim for a benefit or has not submitted an application for the benefit within the times prescribed by this Regulation.
The insurer has provided the insured person with notice in accordance with this Regulation that it requires an examination under section 44, but the insured person has not complied with that section.
The issue in dispute relates to the insurer’s denial of liability to pay an amount under an invoice on the grounds that,
i. the insurer requested information from a provider under subsection 46.2 (1), and
ii. the insurer is unable, acting reasonably, to determine its liability for the amount payable under the invoice because the provider has not complied with the request in whole or in part. O. Reg. 44/16, s. 6.
Statutory Obligation of Insurer to Pay Medical Benefits
[22] In support of its position, Aviva relies on ss. 3(7)(e) and 15(1) of the Schedule. They provide:
3.(7) For the purposes of this Regulation,
(e) subject to subsection (8), an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,
(i) the insured person has received the goods or services to which the expense relates,
(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and
(iii) the person who provided the goods or services,
(A) did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or
(B) sustained an economic loss as a result of providing the goods or services to the insured person;
- (1) Subject to section 18, medical benefits shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for,
(a) medical, surgical, dental, optometric, hospital, nursing, ambulance, audiometric and speech-language pathology services;
(b) chiropractic, psychological, occupational therapy and physiotherapy services;
(c) medication;
(d) prescription eyewear;
(e) dentures and other dental devices;
(f) hearing aids, wheelchairs or other mobility devices, prostheses, orthotics and other assistive devices;
(g) transportation for the insured person to and from treatment sessions, including transportation for an aide or attendant; and
(h) other goods and services of a medical nature that the insurer agrees are essential for the treatment of the insured person, and for which a benefit is not otherwise provided in this Regulation.
Deemed Incurred Expenses
[23] In her submissions on the reconsideration hearing, Ms. Suarez argued that Adjudicator Grant should exercise his discretion pursuant to s. 3(8) of the Schedule to deem her expenses to be incurred. She did not advance that argument on this appeal.
[24] In my view, it would have been available to Ms. Suarez to advance such an argument with respect to Glavan TP1 and Viglasky TP1 given Adjudicator Grant’s findings of non-compliance with s. 38(8) of the Schedule and the absence of any steps by Aviva to rectify that non-compliance in advance of the initial hearing before the LAT. As this issue was not pursued before this court, it will not be addressed further in this decision.
Purpose, Intent, and Function of Accident Benefits Legislation
[25] As noted by MacKinnon, J. in Arts v. State Farm Insurance Company:
The SABS is remedial and constitutes consumer protection legislation. 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. The goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and, as such, assumes an importance which is both pressing and substantial. (para. 16)
[26] In 2016, the LAT was delegated the exclusive jurisdiction to resolve Accident Benefits disputes between insurers and claimants. The Court of Appeal in Stegenga v. Economical Mutual Insurance Company 2019 ONCA 615 noted that the purpose of assigning Accident Benefits disputes to the LAT was to, “[speed] up dispute resolution, in large part by providing an efficient, fair and accessible mechanism for resolving disputes” (para. 38).
[27] The LAT has broad remedial powers to address Accident Benefit disputes. As the court in Stegenga noted:
Taken together, the words of s. 280(1) cover a wide array of disagreements connected in some way to the SABs to which an insured person was or is entitled. Viewed in the context of the purpose and history of the dispute resolution provisions, those words include disagreements about when the insurer’s obligation to provide SABs should be or should have been performed, and how the obligation to provide them should be or should have been performed. (para. 45)
[28] In executing its dispute resolution functions, the LAT, “has all the powers that are necessary or expedient for carrying out its duties” (Licence Appeal Tribunal Act, 1999, s. 3(2)).
[29] In interpreting and applying legislation, the court must also be mindful of the remedial purpose of legislation. Pursuant to s. 10 of the Interpretation Act, R.S.O. 1990, c.I.11:
Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of any thing that the Legislature deems to be for the public good or to prevent or punish the doing of any thing that it deems to be contrary to the public good, and shall accordingly receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.
Must a Benefit be “Incurred” Before a Claimant Can Access the LAT?
[30] Ms. Suarez does not dispute that the medical benefits approved by Adjudicator Grant’s Orders will only become payable when they are “incurred” as defined in s. 3(7)(e) of the Schedule. It is her position, and the position of the Intervenors to this appeal, that incurring treatment expenses should not be a precondition to accessing the dispute resolution processes of the LAT.
[31] I concur with the Respondent’s argument that LAT Orders approving treatment and permitting claimants to incur and submit treatment expenses are the only effective remedy to a denied Treatment Plan.
[32] If Aviva’s position is accepted, claimants will be required to fund disputed Treatment Plans in advance of an application to the LAT and will be limited to pursuing payment of only that treatment which they can afford to self-fund. Claimants with limited or no access to funds will be at the mercy of their insurers’ goodwill; this is the very power imbalance that the legislation is intended to circumvent.
[33] In Rizzo & Rizzo Shoes Ltd. (Re), Iacobucci, J. noted:
It is a well established principle of statutory interpretation that the legislature does not intend to produce absurd consequences. According to Côté, supra, an interpretation can be considered absurd if it leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislative enactment (at pp. 378-80). Sullivan echoes these comments noting that a label of absurdity can be attached to interpretations which defeat the purpose of a statute or render some aspect of it pointless or futile (Sullivan, Construction of Statutes, supra, at p. 88). (para. 27)
[34] Aviva’s position is untenable on any interpretative approach to the legislation. Not only does its proposed interpretation offend the remedial, consumer-oriented purpose of the legislation and regulations, it also ignores the clear wording of s. 280(1) of the Insurance Act which identifies entitlement and quantum as mutually exclusive issues, and s. 55(1) of the Schedule which is silent on a claimant’s failure to “incur” expenses as a restriction to initiating proceedings.
[35] Aviva has suggested in argument that it is inconsistent to permit claimants to “complete” their claim after the fact by incurring expenses while denying insurers the ability to issue compliant denials after the fact. I reject this argument.
[36] Permitting an insurer to issue a compliant denial following a LAT hearing would effectively render s. 38(11) of the Schedule meaningless and the result of the hearing moot. It defies logic that the legislature would impose strict consequences intended to minimize delay in accessing benefits only to permit insurers to avoid those consequences by taking remedial action following an adverse determination at the LAT. Insurers have the ability to take remedial action in advance of the LAT hearing; if they choose not to, then they do so at their own peril.
[37] Aviva has also suggested in argument that granting the LAT the authority to approve Treatment Plans which have not yet been incurred will deprive it of its remedies to dispute invoices or could result in payments in excess of insurance limits. I also reject both of these arguments.
[38] First, I would note that the doctrine of functus officio is not applicable in the manner submitted by Aviva. Adjudicator Grant made a determination regarding the issue of entitlement to the benefits set out in the disputed Treatment Plans. Those benefits must still be incurred by Ms. Suarez before they will become payable. There is nothing in Adjudicator Grant’s decision that precludes Aviva from raising the same objections to submitted invoices and incurred expenses that would be available to it had it approved the Treatment Plans in the first instance.
[39] Section 55(1)(3) of the Schedule clearly contemplates disputes solely regarding the issue of liability to pay invoices. In S.M.Z. v Aviva Insurance Company-003310/AABS, Aviva approved the claimant’s Treatment Plans for psychological treatment, but then refused to pay the invoices submitted by the treatment-provider, arguing that the services provided were different than what was proposed in the Treatment Plans. The claimant applied to the LAT to request an order requiring Aviva to remit payment. The LAT determined the dispute; its jurisdiction to do so was not challenged by Aviva.
With respect to potential claims beyond insurance policy limits, it is not challenging in our age of technology to track the benefits claimed in submitted Treatment Plans and to deny treatment in excess of policy limits when there are outstanding Treatment Plans which are or may be the subject of appeal. The failure or unwillingness of insurers to track liability for expenses should not be the responsibility of consumers.
Conclusion
[40] Aviva’s appeal is denied.
[41] Glavan TP1 and Viglasky TP1 are payable, pursuant to s. 38(11)(2) of the Schedule, starting on the 11th business day after they were submitted, with interest in accordance with s. 51 of the Schedule.
[42] Glavan TP2 is reasonable and necessary and is payable, with interest in accordance with s. 51 of the Schedule.
[43] Viglasky TP2 is reasonable and necessary and any treatment incurred after August 30, 2017 is payable, with interest in accordance with s. 51 of the Schedule.
[44] Payment of the Treatment Plans is due when incurred as defined in the Schedule and interest is payable once the Treatment Plans have been incurred and payment is overdue in accordance with s. 51 of the Schedule.
Costs
[45] The parties agreed in advance of the hearing that costs would be fixed in the amount of $5,000 (inclusive of HST), payable to the successful party. No costs were being sought by or would be payable against the Intervenors.
[46] I therefore order that costs in the amount of $5,000 be payable by the Appellant, Aviva, to the Respondent, Danay Suarez.
Cullin J.
I agree _______________________________
Daley J.
I agree _______________________________
Penny J.
Released: September 20, 2021
CITATION: Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200
DIVISIONAL COURT FILE NO.: 603/20
DATE: 2021-09-20
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Daley, Penny and Cullin JJ.
BETWEEN:
Aviva Insurance Company of Canada
Appellant
– and –
Danay Suarez
Respondent
decision on appeal
Released: September 20, 2021