Fridays with Rogers Partners
At our weekly meeting, Sarah Sevier discussed the recent decision of the Ontario Court of Appeal in Morrissey v. Wawanesa Insurance Company, 2024 ONCA 602, allowing a plaintiff’s appeal, finding that both the Licence Appeal Tribunal and Division Court erred in their interpretation and application of O. Reg. 403/96, Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996 (the “1996 Schedule”) and O. Reg. 34/10, Statutory Accident Benefits Schedule – Accidents on or After September 1, 2010 (the “2010 Schedule”), including transitional provisions.
Procedural History
The plaintiff, Mr. Steven Morrissey (“Mr. Morrissey”), was catastrophically injured in a motor vehicle accident in 2000 and has been receiving attendant care benefits (“ACBs”) from Wawanesa Insurance Company (“Wawanesa”).
In 2018, Mr. Morrissey submitted a claim using the prescribed Form 1 for increased benefits to cover additional expenses incurred from 2015 onwards, pursuant to s. 16(2) of the 1996 Schedule. Wawanesa denied the claim, leading Mr. Morrissey to seek review from the Licence Appeal Tribunal (“LAT”) for review.
The LAT awarded Mr. Morrissey additional intermittent care benefits on a go-forward basis from April 2018 – the date of the Form 1 submission – but denied retroactive ACBs. The LAT based this decision on Mr. Morrissey’s failure to provide evidence of “urgency, impossibility or impractically”, which the LAT deemed necessary for compliance with s.42(5) of the 2010 Schedule. Further, LAT limited Mr. Morrissey’s benefits under the assumption that the definition of “incurred” in s. 3(7)(e) of the 2010 Schedule applied to Mr. Morrissey’s claim.
The LAT refused Mr. Morrissey’s request for reconsideration.
On appeal at the Divisional Court, Mr. Morrissey did not seek to disturb the factual findings of the Adjudicator. The key issues on appeal were (1) whether Mr. Morrissey was entitled to submit a Form 1 for payment of retractive ACBs, (2) whether the definition of “incurred” in the 2010 Schedule applied to his claim, and (3) the applicable rate of interest.
The Division Court upheld the LAT decision, finding that the LAT correctly relied on a series of adjudicative decisions outlining a need for urgency, impossibility or impractically for retroactive filing for ACB claims. The Divisional Court further agreed that Mr. Morrisey was required to provide evidence in accordance with the definition of “incurred” in s. 3(7)(e) of the 2010 Schedule.
Issues on Appeal
Mr. Morrissey contended that the Adjudicator at the LAT and the Divisional Court:
- Erred in law in interpreting s. 42(5) of the 2010 Schedule as requiring him to meet a test of “urgency, impossibility, or impracticability” as a precondition to submitting a Form 1 for retroactive ACBs; and
- Erred in law in concluding that the definition of “incurred” in the 2010 Schedule requires Mr. Morrissey to substantiate the attendant care expenses.
Analysis
Issue 1: The Adjudicator and Divisional Court erred in their interpretation of s. 42(5)
The Ontario Court of Appeal (“ONCA”) held that both the Adjudicator and Divisional Court failed to properly interpret s. 42(5), finding that there is no evidentiary threshold of urgency, impossibility, or impracticability is required as a reason for delayed filing with retroactive claims.
Contrary to the position of Wawanesa, the ONCA found no basis for holding that s. 42(5) dictates an eligibility requirement for retroactive claims. On a plain reading of the provision, s. 42(5) speaks to the timing of the payment. Specifically, s. 42(5) permits, but does not oblige, an insurer to make an exception to the requirement of a completed Form 1 before beginning to pay ACBs.
The ONCA supports this conclusion by stating that the LAT and Divisional Court erred in their reliance of T.K. v. Unica Insurance Inc., 2017 CanLII 15835 (Ont. LAT) (“T.K.”), in which the Adjudicator suggests that insureds should provide evidence that demonstrates, urgency, impossibility or impracticality when filing retroactive forms for ACBS.
The ONCA specifically points out that the LAT and Divisional Court failed to consider the full extent of the reasons in T.K. in addition to the case of Kelly v. Guarantee Company of North America, 2014 ONFSCDRS 128 (FSCO Arb.). If the LAT and Divisional Court had properly analyzed these cases, it would have revealed that the Adjudicator’s did not set an evidentiary threshold, but rather iterated that an insurers discretion to grant ACBs prior to a submission of Form 1 should be based off available evidence.
Section 42(5) provides as follows:
An insurer may, but is not required to, pay an expense incurred before an assessment of attendant needs that complies with this section is submitted to the insurer.
Issue 2: The definition of “incurred” from the 2010 Schedule does not apply to the claim
The ONCA held that the definition of “incurred” in 3(7)(e) of the 2010 Schedule, read in conjunction with transitional provisions from both the 1996 and 2010 Schedules, does not apply to Mr. Morrissey’s claim.
The ONCA accepted that the transitional provisions dictate that the amount to be determined falls under the provisions of the 1996 Schedule, while the procedure for payment falls under the 2010 Schedule. However, the ONCA clearly stated that this conclusion did not dispose of the matter.
The ONCA held that under specific analysis of the transitional provisions, most provisions of the 1996 Schedule establishing entitlement to benefits continue to apply to pre-September 1, 2010, accidents. The transitional provisions are explicit as to what specific parts of the Schedules apply, and when.
S. 3(1.2) of the transitional provisions of the 1996 Schedule clearly states that Schedule 24 and Parts X, XI, XII, XIII and XV do not apply after August 2010. Moreover, pursuant to s. 2(2) of the transitional provisions of the 2010 Schedule, Parts VIII and IX (other than ss 50(2) to (5)) and Parts X, XI and XII – as they read immediately before O. Reg. 251/15 came into force – “apply with such modifications as are necessary in respect of benefits provided under the 1996 Schedule with respect to accidents that occurred on or after November 1, 1996, and before September 1”. There is no mention of s. 3(7)(e). Accordingly, Mr. Morrissey’s accident in the year 2000 should not be subject to the narrow definition of “incurred” in the 2010 Schedule.
This conclusion was critical to Mr. Morrissey as the definition of “incurred” under s. 3(7)(e) of the 2010 Schedule limits the expenses claimed for ACBs to goods or services provided by a qualified provider or other person who has incurred an economic loss. By contrast, the 1996 Schedule, did not define the term, relying on case law which interpreted “incurred” to permit ACBs to be paid when goods or services were provided by an unqualified person without evidence of an economic loss, and even if the goods or services were not actually supplied, if they were reasonably necessary, and the amount of the expense could be determined with certainty.
Section 3(7)(e) sets out the following definition of “incurred”:
3(7) For the purposes of this Regulation,
…(e) … 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
The following are the relevant parts of s. 3, the transitional provisions from the 1996 Schedule as well as Section 2 of the 2010 Schedule:
3 (1) In this section,
“New Regulation” means Ontario Regulation 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010), made under the Act.
(1.1) Subject to subsection (1.3), the benefits set out in this Regulation shall be provided under every contract evidenced by a motor vehicle liability policy in respect of accidents that occur on or after November 1, 1996 and before September 1, 2010.
(1.2) Section 24 and Parts X, XI, XII, XIII and XV do not apply after August 31, 2010.
(1.3) No amount referred to in this Regulation shall be paid after August 31, 2010.
(1.4) An amount that would, but for subsection (1.3), be paid under this Regulation after August 31, 2010 shall be paid under the New Regulation, but in the amount determined,
(a) under this Regulation, other than section 24; or
(b) under subsections 25 (1), (3), (4) and (5) of the New Regulation. [Emphasis added.]
2 (2) Subsections 25 (1), (3), (4) and (5), Parts VIII and IX, other than subsections 50 (2) to (5), and Parts X, XI and XII, as they read immediately before Ontario Regulation 251/15 came into force apply with such modifications as are necessary in respect of benefits provided under the Old Regulation with respect to accidents that occurred on or after November 1, 1996 and before September 1, 2010 and, for that purpose, the following rules apply:
2. An amount that would, but for subsection 3 (1.3) of the Old Regulation, be paid under the Old Regulation after August 31, 2010 shall be paid under this Regulation in the amount determined,
i. under the Old Regulation, other than under section 24 of that Regulation, or
ii. under subsections 25 (1), (3), (4) and (5)….
Conclusion & Takeaways
For the reasons discussed above, the ONCA allowed the appeal and set aside the order of the Divisional Court. This case holds significance as it appears to overturn LAT precedent discussing the need for “urgency, impossibility, or impracticability” when retroactive Form 1s are filed. Further, the case clarifies the interpretation of key statutory accident benefit provisions and will likely have an impact on claims for ACBs moving forward. Namely, it clarifies the evidentiary thresholds required for individuals looking to increase their ACBs pre- and post-2010.
However, it should be noted that the ONCA decision does not address arguably relevant sections of the SABS (there are similar provisions in both the 1996 and 2010 versions). Specifically, the decision did not address sections 32(1), 34 and 42(9) of O. Reg. 34/10. It is unclear whether these sections were put before the Bench. From the decision, it appears likely they were not. The text of these sections are as follows:
Section 32(1) – A person who intends to apply for one or more benefits described in this Regulation shall notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day.
Section 34 – A person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.
Section 42(9) – Subject to subsection (12), new assessments of attendant care needs may be submitted to an insurer at any time there are changes that would affect the amount of the benefits.
Notably, sections 32, 24, and 42 are all within “Part VIII – Procedures for Claiming Benefits”. While there may not have been a subsection within section 42 requiring Mr. Morrissey to provide a reasonable explanation for the delay in submitting the “retroactive” Form 1, when the circumstances of his need for attendant care changed, he had a duty to notify his insurer of that change under s. 32 and 42(9). If there was a delay in notifying the insurer with the updated Form 1, he could provide a reasonable explanation for that delay and receive retroactive attendant care benefits so long as they were incurred (in this case, under the pre-2010 standard of “incurred”).
The ONCA correctly held that the LAT’s standard of “urgency, impossibility, or impracticability” was beyond the requirements of the SABS, but a “reasonable explanation” expressly contemplated in s. 34 the SABS would reasonably have been the applicable test for the submission of the retroactive Form 1. Section 34 balances the insured person’s need for increased care when their impairments worsen with the prejudice to an Insurer when a $6,000 Form 1 is submitted on a retroactive basis against a history of sub $500 s. 25 and s. 44 Form 1s.
Accordingly, there may be an opportunity in the future to revisit the issues raised in this case.