CITATION: Aviva General Insurance Company v. Catic, 2022 ONSC 6000
DIVISIONAL COURT FILE NO.: 753/21
DATE: 20221026
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
McWatt A.C.J.S.C., Swinton, and McCarthy JJ.
BETWEEN:
AVIVA GENERAL INSURANCE COMPANY
Appellant
– and –
VESNA CATIC
Respondent
M. White, for the Appellant
A. Mancuso, for the Respondent
HEARD at Toronto (by videoconference): October 13, 2022
REASONS FOR DECISION
MCCARTHY J.
The Appeal
[1] Aviva General Insurance Company (“Aviva”) appeals from a reconsideration decision of Adjudicator Derek Grant (“the reconsideration decision”) of the License Appeal Tribunal (“LAT”) dated August 12, 2021.
[2] The reconsideration decision set aside the LAT’s prior decision (“the decision of first instance”) dated December 11, 2020, which had concluded that a treatment and assessment Plan (“the treatment plan”) submitted by the insured respondent Vesna Catic (“the insured”) to Aviva was not reasonable and necessary. The reconsideration decision found that the insured was entitled to the disputed treatment plan.
Background
[3] The insured had been involved in a motor vehicle accident on July 15, 2016. She applied to Aviva for benefits under the Statutory Accident Benefit Schedule — Effective September 1, 2010, O. Reg. 34/10 (“SABS”). On November 15, 2016, she submitted the treatment plan to Aviva seeking coverage for the cost of a psychological assessment. In response, Aviva delivered an explanation of benefits on June 5, 2017, stating that the treatment plan was not reasonable and necessary. There is no dispute that the explanation of benefits was not delivered within the 10-day period called for under s. 38(8) of the SABS. There is no dispute that the insured did not incur any expenses under the treatment plan between November 15, 2016 and June 5, 2017.
The Reconsideration Decision
[4] The Adjudicator determined that, pursuant to ss. 38(11)2 of the SABS, the treatment plan was automatically payable by the insurer without proof of the services being incurred because of the insured’s failure to satisfy the notice requirements in s. 38(8) of the SABS.
The Issue on Appeal
[5] This appeal raises the narrow but important issue of the interpretation which should be given to ss. 38(11)2 of the SABS, which sets out the consequences which flow from an insurer’s failure to give the timely notice called for in s. 38(8) of the SABS.
Section 38 of the SABS
[6] Section 38 of the SABS deals with the procedure to be followed when an insured submits a treatment plan for medical and rehabilitation benefits. The key provisions for the purpose of this appeal are as follows:
38(8) Within 10 business days after it receives the treatment and assessment plan, the insurer shall give the insured person a notice that identifies the goods, services, assessments and examinations described in the treatment and assessment plan that the insurer agrees to pay for, any the insurer does not agree to pay for and the medical reasons and all of the other reasons why the insurer considers any goods, services, assessments and examinations, or the proposed costs of them, not to be reasonable and necessary.
38(11) If the insurer fails to give a notice in accordance with subsection (8) in connection with a treatment and assessment plan, the following rules apply:
The insurer is prohibited from taking the position that the insured person has an impairment to which the Minor Injury Guideline applies.
The insurer shall pay for all goods, services, assessments and examinations described in the treatment and assessment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives a notice described in subsection (8).
38(15) The insurer shall pay for goods and services the insurer agreed to pay for in the notice under subsection (8) or (14) or is required to pay for under this section within 30 days after receiving an invoice for them.
Jurisdiction and Standard of Review
[7] The License Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, provides at s. 11(6) that an appeal from a decision of the LAT relating to a matter under the Insurance Act, R.S.O. 1990, c. I.8, lies to the Divisional Court on a question of law only.
[8] The parties agree that the issue in dispute is a pure question of law. The standard of review is therefore one of correctness: see Canada (Minister of Employment and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 37.
Aviva’s Position
[9] Aviva submits that the Adjudicator erred in finding that the treatment plan was payable by the insurer. The thrust of the insurer’s position is that s. 38(11)2 only requires an insurer to pay for the goods and services actually incurred by the insured between the 11th business day following the insurer’s receipt of the treatment plan and the date the insurer gives notice (approval or denial) under s. 38. It is only during this “shall-pay” period that incurred expenses need be paid. The subsections in question need to be read harmoniously with the entirety of the section and in particular with s. 38(15) which requires an insurer to pay only upon receipt of an invoice for goods or services.
The Insured’s Position
[10] The insured argues that the entire purpose of s. 38(8) and s. 38(11)2 would be defeated if Aviva’s interpretation were to be accepted. Since the SABS form part of consumer protection legislation, the section in question must be interpreted to compel an insurer to pay for proposed goods and services if they do not respond to a treatment plan containing those goods and services within the prescribed time. The wording in s. 38(11)2 must be afforded its literal meaning to accomplish the purpose for which it was intended: the insurer shall pay for all goods, services etc. described in the treatment plan if the insurer fails to give timely notice. Section 38(11)2 does not require the insured to adduce evidence that services in the disputed treatment plan were incurred. It would be an unfair and unintended result if only those insureds with the financial ability to fund the expenses up front would be able to compel the insurer to pay for goods and services during the shall-pay period.
Analysis
[11] There are competing decisions at the LAT on this issue. The Adjudicator, in reversing his decision of first instance, relied on the Tribunal’s decision in P.M. v. Aviva General Insurance, 2020 80284 (ON LAT) where at para. 40 the adjudicator held that:
On a plain reading of s. 38(11)2, there is no requirement for any services to be “incurred” as the section only states “that relate to”. […] it would be contrary to its consumer protection purpose to require an injured person to incur an expense prior to a finding by the Tribunal on issues raised over compliance with s. 38(8) and s. 38(9) of the Schedule because there would be little, if any incentive, for an insurer to comply with its obligations under s. 38 otherwise.
[12] This decision contrasts with the LAT decision in N.P. v. Wawanesa Mutual Insurance Company, 2020 19563 (ONLAT) where it was held that s. 38(11)2 requires the goods and services to be incurred. In 17-006851 v. RBC Insurance Company, 2018 83514 (ONLAT), the tribunal concluded that the insurer’s failure to comply with s. 38(8) of the SABS prevented it from taking the position that the Minor Injury Guidelines (MIG) applied and obliged it to pay for any incurred treatment expenses during the shall-pay period. It was only because the treatment was incurred by the insured during this prescribed period that the benefit was payable. In Sivalingam v. Unifund Assurance Company, 2021 111087 (ONLAT), Vice-Chair McGee found that, due to non-compliance with s. 38(8) of the SABS, the insurer became liable for treatment plan services incurred between the 11th business day after submission of the application and the date on which the insurer issued a proper notice. For expenses incurred outside that “shall pay” period, a reasonable and necessary analysis was still called for: see paras. 25 and 31.
[13] In its interpretation and application of legislation, the Court must be mindful of the remedial purpose of legislation. Section 64 of the Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, reads:
Rule of Liberal Interpretation
64(1) An Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects.
64(2) Subsection (1) also applies to a regulation, in the context of the Act under which it is made and to the extent that the regulation is consistent with that Act.
[14] In Kyrylenko v. Aviva Insurance Canada, 2021 ONSC 4929, the Divisional Court considered the nature and purpose of s. 38(11) of the SABS. At para. 13 of that decision McKelvey J. stated as follows:
[…] the wording of s. 38(11) is mandatory and requires an insurer to pay, for “all goods, services, assessments and examinations described in the treatment and assessment plan”. In our view, s. 38(11) is akin to consumer protection legislation and is designed to protect victims of motor vehicle accidents where an insurer fails to respond within the prescribed time frame. It requires a broad and remedial interpretation. Therefore, the adjudicator ought to have directed the parties to identify those physiotherapy expenses that related to the timeframe under s. 38(11) and to have ordered payment accordingly.
[15] The insured suggests that the Divisional Court’s decision in Kyrylenko stands for the proposition that the wording of s. 38(11) is mandatory and requires an insurer pay for all goods, services, assessments and examinations described in an OCF-18 (a treatment plan).
[16] I disagree.
[17] The Court in Kyrylenko did not address the question of whether an incurred expense was necessary in order to compel the payment requirement in the shall-pay period. The Court clearly specified “physiotherapy expenses” which I take to mean monies outlaid or costs incurred for physiotherapy services. I am unable to conclude that this case stands for the proposition that goods and services are to be paid even in the absence of an accompanying expense or invoice.
[18] On the contrary, I find that s. 38(11)2 operates so as to compel an insurer who fails to provide the statutory notice called for in s. 38(8) to pay for all of the items listed in the subject treatment plan, but only if they are incurred and only for the period during which any denial notice remains outstanding. I have arrived at this conclusion for the following reasons:
(i) Subsections 38(8) and (11)2 must be read in conjunction with s. 38(15) which requires the insurer to pay for goods and services it is “[…] required to pay for under this section within 30 days after receiving an invoice for them.” This mechanism for payment clearly encompasses the items listed in a treatment plan for which a denial notice remains outstanding. It also requires payment by the insurer in response to an invoice being rendered for goods or services, provided they are incurred during the shall-pay period.
(ii) While s. 38(11)2 does not specify that an expense need be incurred for the payment obligation to be invoked, the opposite is also true – the section does not require payment to be made in respect of non-incurred goods and services.
(iii) I can fairly take judicial notice that treatment providers are normally, if not automatically, tied into the communications between the insurers and the insured. Indeed, the OCF-18 is designed to be prepared by a proposed treatment provider; and the treatment provider is routinely advised directly or indirectly by the insurer if the listed services are approved or not. Those treatment providers will likely have sufficient knowledge of the SABS scheme to recognize that a treatment plan that is not denied within the mandated time frame must be paid if the subject goods and services are provided (and the accompanying expense incurred) prior to the insurer issuing a denial notice. In these circumstances, it is likely that the invoice will simply be sent by the treatment provider directly to the insurer, engaging the automatic payment obligation. I would think it would be a rare case where an insured would be expected to shoulder the costs of an unapproved treatment plan during the shall-pay period.
(iv) Consumer protection should not result in consumer windfall. A requirement that the insurer must pay for non-incurred goods and services may result in an insured receiving payment for items that it elects not to receive or pursue. This would defeat the entire purpose of the SABS, which is intended to provide injured persons timely access to reasonable and necessary goods and services for the treatment and management of their injuries.
(v) I cannot agree that the insurer suffers no consequences if it fails to provide timely notice under s. 38(8). During the shall-pay period, the insurer loses the ability to deny the goods and services in the treatment plan on the basis that they are not reasonable and necessary. As well, pursuant to s. 38(11)1, a failure by the insurer to comply with the statutory notice requirement results in it being prohibited from claiming that the insured’s impairments fall within the Minor Injury Guidelines (“the MIG”). The MIG limits an insured from making claims for medical and rehabilitation benefits beyond a modest total of $3,500.
(vi) Had the Legislature intended that failure to provide timely notice would oblige insurers to pay the entirety of the goods and services set out in a treatment plan, I find that it would have clarified such an intention in s. 38(11) by stipulating that the items described in the treatment plan are payable without any temporal consideration. Instead, that obligation is limited to items “that relate to” a defined period, demonstrating the Legislature’s intention to limit any mandatory requirement to pay to expenses actually incurred during the “shall-pay” period.
Disposition
[19] For the foregoing reasons, I find that Adjudicator erred in law in the reconsideration decision when he concluded that Aviva was obligated to pay the treatment plan under s. 38(11)2 of the SABS.
[20] The appeal is therefore allowed. The reconsideration decision is set aside and the decision of first instance is reinstated.
[21] For greater certainty, Aviva is only required to pay for the incurred goods, services, assessments and examinations described in the treatment plan for the period commencing November 30, 2016 and ending on June 5, 2017.
[22] Aviva is entitled to its costs of the appeal fixed in the amount of $6,000. Those costs are payable by the insured respondent within 60 days.
McCarthy J.
I agree _______________________________
McWatt A.C.J.S.C.
I agree _______________________________
Swinton J.
Released: Oct 26, 2022
CITATION: Aviva General Insurance Company v. Catic, 2022 ONSC 6000
DIVISIONAL COURT FILE NO.: 753/21
DATE: 20221026
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
McWatt A.C.J.S.C., Swinton, and McCarthy JJ.
BETWEEN:
AVIVA GENERAL INSURANCE COMPANY
Appellant
– and –
VESNA CATIC
Respondent
REASONS FOR DECISION
McCarthy J.
Released: October 26, 2022