The decision of the License Appeal Tribunal authored by Adjudicator Paul Gosio in Mirzaie v. Wawanesa Mutual Insurance Company, serves as a reminder that Section 16 of the of the Statutory Accident Benefits Schedule (“the Schedule”) does not entitle applicants to a ‘windfall’ as a result of an accident.
Background
In 2011, the Applicant was badly injured in a car accident and was found by his insurer to be catastrophically impaired under the Schedule.
The Applicant obtained a Housing Accessibility Report authored by Jeffrey Baum. In that report, Jeffrey Baum opined that the “improbability and absurd costs of renovating the Applicant’s high-rise building into a single-level detached home” made it more reasonable to purchase and renovate a new house to accommodate the Applicant’s long-term care needs. Jeffrey Baum based his housing report on an occupational therapist, Mr. Tamir’s recommendation that the Applicant should reside in a single-level detached home so he can have a pet, a backyard, sunlight and open space.
Based on Jeffrey Baum’s housing report, the Applicant submitted an OCF-18 treatment plan to his insurer for a rehabilitation benefit of $1,277,130.00 for the purchase of a new home. The insurer rejected the plan on the basis that it was not reasonable and necessary. The Applicant then brought a LAT Application to dispute his insurer’s denial.
The Law
Section 16 of the Schedule sets out the regulatory framework for rehabilitation benefits. Under Section 16(1) of the Schedule:
“Rehabilitation benefits shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person in undertaking activities and measures described in subsection (3) that are reasonable and necessary for the purpose of reducing or eliminating the effects of any disability resulting from the impairment.”
Section 16(3)(i) of the Schedule lists the activities and measures referred to in subsection (1):
“Home modifications and home devices, including communications aids, to accommodate the needs of the insured person, or the purchase of a new home if it is more reasonable to purchase a new home to accommodate the needs of the insured person than to renovate his or her existing home.”
The applicant bears the onus of establishing, on a balance of probabilities, that the disputed rehabilitation benefit is reasonable and necessary. Sections 16.1(1), 16.4(b) and 16.4(c) of the Schedule allows the housing benefit required at the existing home to be redirected to a new home. However, the insurer is not obligated to pay the cost of the purchase of a new home above the cost of modifying the existing home.
The Result
In scrutinizing Jeffrey Baum’s housing report, Adjudicator Gosio noted that there needs to be a connection between the proposed modifications and the applicant’s accident-related impairments. Of note was the fact that Mr. Tamir’s recommendation that the Applicant live in a single-level detached home was made because he found that he required 24-hour care. Since attendant care was not an issue in dispute, Adjudicator Gosio found that it was unreasonable of Jeffrey Baum to not consider possible modifications to the Applicant’s existing apartment and/or to a ground floor apartment.
The insurer is not obligated to pay the costs of a new home over the costs of modifying the existing home. Therefore, one must determine the modification costs of the existing home notwithstanding it may never actually be modified. Accordingly, Jeffrey Baum’s failure to assess the cost of modifying the Applicant’s existing apartment prevented the insurer from determining its cost obligations concerning the purchase of a new home. Given these significant flaws in Jeffrey Baum’s housing report, Adjudicator Gosio held that the Applicant failed to discharge his onus of establishing the housing benefit was reasonable and necessary.
Takeaways
The lessons from the Licence Appeal Tribunal’s decision in Mirzaie are two-fold. Firstly, a housing report will carry little weight if it proposes modifications unrelated to the applicant’s accident-related impairments. Secondly, Mirzaie reinforces the principle articulated by FSCO Arbitrator Makepeace in 1994 in the oft referenced decision of MacMaster v Dominion of Canada General Insurance Co., [1994] OICD No 122, 1994 CarswellOnt 4976, that the purpose of Section 16 of the Schedule is to enable the applicant to return to their pre-accident level of function, as opposed to providing a windfall (at para 77 as incorporated by RT v. Economical 2019 CanLII 43901 (ON LAT) at para 14). Accordingly, the applicant is not entitled to hold out for a multi-million-dollar house and accept nothing less. Instead, Section 16 of the Schedule requires the applicant to cooperate with the insurer to reach a solution that, while it may not be ideal, is workable and reasonable.
