2011 SKCA 24 Date:, 2011 SKCA 24

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 24 Date: 20110223 Between: Docket: 1735 Saskatchewan Government Insurance Appellant - and – Emilia Becker and Automobile Injury Appeal Commission Respondents Coram: Richards, Smith and Ottenbreit JJ.A. Counsel: Robert G. Kennedy, Q.C. for the Appellant Sharon H. Pratchler, Q.C. for the Automobile Injury Appeal Commission

Appeal: From: The Automobile Injury Appeal Commission Heard: January 18, 2011 Disposition: Appeal dismissed Written Reasons: February 23, 2011 By: The Honourable Madam Justice Smith In Concurrence: The Honourable Mr. Justice Richards The Honourable Mr. Justice Ottenbreit Smith J.A. I Introduction [ 1 ] This appeal is brought by Saskatchewan Government Insurance (“SGI”) from a decision of the Automobile Injury Appeal Commission, pursuant to s. 194(1) of The Automobile Accident Insurance Act , R.S.S. 1978, c. A-35, which permits an appeal to this Court on a question of law.

The appellant argues that the Appeal Commission lacked jurisdiction to hear the appeal, or, alternatively, lost jurisdiction when the appeal became moot, or, alternatively, lacked jurisdiction to award recovery as it did, rather than referring the matter back to SGI. The Appeal Commission appeared on the appeal to make submissions solely in relation to its jurisdiction. The respondent, Emilia Becker, relied on the submissions of the Appeal Commission.

II Background Facts [ 2 ] On October 17, 2006 the respondent Emilia Becker, then 11 years old, was an unrestrained passenger in a school bus that failed to yield the right of way, struck another vehicle and rolled. She was unconscious at the scene of the accident and was initially diagnosed with a concussion. When she did not progress as expected, follow-up tests disclosed a moderate brain injury. She also suffered multiple abrasions and bruising, a punctured lung and a fractured thumb which healed uneventfully. She was entitled to personal injury benefits pursuant to The Automobile Accident Insurance Act .

Heather Becker and Mark Becker are her parents. [ 3 ] In November 2006, Emilia returned to school for one hour a day, progressing to two hours a day by Christmas. In January and for part of February 2007, she returned to school full time. However, she experienced dizziness, severe headaches, difficulty with concentration and memory, was irritable and suffered extreme fatigue, often falling asleep at school. She also suffered motor disabilities including difficulty in walking up the stairs, an inability to run or to ride her bicycle.

Prior to the accident she had been an excellent student and also excelled in a number of physical activities including ballet, jazz and tap dancing at a competitive level. [ 4 ] In February 2007, Dr. Nanson, a neuropsychologist recommended that Emilia attend school for half days, in the mornings only, because her symptoms were made worse by fatigue. Dr. Nanson recommended that she be at home in the afternoon with parental supervision to nap and rest, and reduce the risk of falls when she was dizzy.

Other medical reports filed with SGI discussed the role of parental involvement in careful monitoring of Emilia’s activities to avoid problems of fatigue, monitor her symptoms, and to supervise regular therapy to relearn the motor and mental skills she had lost. [ 5 ] It was intended that Emilia would return to school full time in September 2007, but in the summer of 2007 she was referred to the Children’s Program at Wascana Rehabilitation Centre that would continue to January 23, 2008, to deal with continuing cognitive difficulties in motor planning and perceptual skills that were affecting her gross and fine motor skills.

It is a policy of the Program for a parent to be in attendance when a child is at therapy in the Children’s program. It was not considered to be appropriate for Emilia to be looked after by a babysitter for this purpose. [ 6 ] Sharon Hoiland, SGI injury representative, was responsible for Emilia’s claim during this period. She felt that it would be a benefit

for Emilia to have a parent involved in her care. The family lived on a farm and Emilia’s age, symptoms and behavioural difficulties made it difficult to employ alternative care for her. Between October 2006 and September 2007 Heather Becker took an unpaid leave from her full time employment to look after Emilia and her two siblings, all of whom had been injured in the same accident. In September 2007 Heather Becker negotiated a contract with her employer to work at 35% of her former full time wage, allowing her to work around Emilia’s

schedule of appointments, lunch time, after school and other times when Emilia was tired, confused or had severe headache. [ 7 ] There is no express provision in the Act authorizing reimbursement of the parent of an injured insured minor who takes off work to care for the injured child for lost wages, although SGI has a written policy permitting recovery of lost income of a parent for up to 21 days when an injured child is hospitalized and in acute care.

In the instant case, however, SGI accepted the view of medical advisors and school officials that Heather Becker’s presence was beneficial to Emilia’s treatment and recovery and decided to reimburse her for the income lost for almost a year up to the fall of 2007 when Emilia was expected to return to school full time. SGI considered this to be an ex gratia payment, authorized by s. 206 of the Act , on the basis that parental income recovery is not a “legislated benefit”. [ 8 ]

Section 206 of the Act provides as follows: 206 If the insurer considers that the payment of a claimant’s claim is in the interest of the insurer and the better administration of this Part, the insurer may authorize an ex gratia payment to be made to that claimant. [ 9 ] When almost a year had expired, SGI considered it had gone as far as it could go on an ex gratia basis, and notified Mark and Heather Becker, by letter dated August 20, 2007 that it would discontinue payment at the beginning of the school year.

This letter commented: ….As our office has pointed out in the past, salary for parents is only covered when the patient is in acute care. Our office did agree to continue Heather’s salary to provide time for alternate arrangements. As this has continued for 10 months, our office will be discontinuing this payment upon the beginning of the school year. [ 10 ] This letter did not include notice of a claimant’s right to ask for mediation or to appeal the insurer’s decision as is required of a letter respecting the claimant’s entitlement to benefits by s. 189(1) of the Act .

A more formal decision letter was, however, provided on November 28, 2007. This letter, addressed to Heather Becker, provided, in part, as follows: As you are aware our office did cover your full salary up to and including September 7, 2007. As of this date our office is prepared to cover your salary for time required to miss to attend Emilia’s medical appointments. We are not in a position to cover your salary for any other time missed. I understand the school is prepared to provide taxi service for Emilia to attend band.

As we have previously discussed there is no legislation provision to provide funding for your salary, but our office will provide you the appeal option for this decision. If you don’t agree with the decision made regarding the benefits, please let me know. You can ask me to have my supervisor call you to discuss the decision. You also have the right to apply for an appeal of our decision on the benefits. The letter then set out the procedure for filing an appeal.

In neither of the letters did SGI suggest that it had determined that it was no longer necessary or desirable for Heather Becker to take time off work to look after the care and rehabilitation of Emilia. [ 11 ] An appeal to the Appeal Commission was brought in Emilia’s name.

The appeal indicated: “We are applying for SGI to pay the difference between what Heather’s salary was prior to the collision and what she earned at her reduced hours for the dates: September 5, 2007 - January 24, 2008.” III The Procedure Before the Appeal Commission [ 12 ] At the appeal hearing, SGI was represented by counsel but the Beckers were not. Before the Appeal Commission, SGI submitted that the payments made to reimburse Heather Becker’s lost income (referred to by SGI as “income replacement benefits”) were gratuitous and not provided for by the Act .

It pointed out that the Commission cannot order it to make an ex gratia payment and argued that it must therefore dismiss the appeal. The Commission ruled that it would reserve its decision on that issue and hear evidence on the merits of the claim, since all parties and witnesses were already before it. At the conclusion of the hearing, the Commission requested that SGI provide a copy of its Acquired Brain Injury Guidelines. After reviewing the guidelines and the legislation, it asked the parties to reconvene to answer questions about Emilia’s entitlement to rehabilitation benefits.

[ 13 ] SGI replied that the Commission had no jurisdiction to adjudicate this issue, since the payments made had, in its view, been ex gratia , and asked for the questions the Commission had to be put in writing.

The Commission complied, asking the parties to make submissions as to whether Emilia was entitled to benefits such as custodial care from her mother under s. 112(2) of the Act , and the Acquired Brain Injury Guidelines and, as to whether, on the assumption that SGI thought compensating the mother for her lost income while caring for her daughter was either necessary or advisable, it had reasonably terminated that benefit. The Commission indicated it was prepared to receive submissions in writing on these points. [ 14 ] Section 112(2) of the Act provides as follows:

(2) Subject to the regulations, the insurer may take any measure it considers necessary or advisable to contribute to the rehabilitation of an insured, to lessen a disability resulting from bodily injury and to facilitate the insured’s recovery from the accident. [ 15 ] At this point, rather than make submissions to the Commission, on September 23, SGI wrote to Heather and Mark Becker making a formal offer to settle the matter by paying the lost wages claimed, provided that Emilia withdraw her appeal and that Heather and Mark Becker execute a “Final Release” in relation to any economic loss arising from these circumstances.

This was followed up on October 31, 2008, in a letter addressed to Emilia, as follows: After further consideration, we have decided to withdraw our decision letter dated November 28, 2007 (the “Decision Letter”) and make the payment you have requested. As you well know the Decision Letter was the basis of your appeal. As such, the withdrawal of the Decision Letter has the legal effect of rendering your appeal moot. Further, in our view, the Appeal Commission now has no foundation to adjudicate this matter and no further jurisdiction.

We are enclosing a cheque in the amount of $10,838.62 which is the difference between your mother’s full-time net salary in 2006 at the time of the collision and her new contract at 35 percent minus payments made by SGI for your mother accompanying yourself to medical appointments, plus pre-judgment interest in the amount of $357.78 from September 17, 2007, to present. We understand you may have out of pocket expenses related to your appeal and would ask that you please advise us as to these costs and provide back-up documentation so that we may reimburse you the same to the legislated cap of $2,500.

In order to be clear this payment is made ex gratia . Please note, it is our intention to appear at the next scheduled date for the appeal only and solely to advise the Appeal Commission of the actions we have taken. SGI also wrote to the Commission, reiterating its position that the Commission was without jurisdiction to pursue the enquiries it had raised. [ 16 ] The hearing reconvened on November 6, 2008.

At this point, SGI took the position that the November 2007 decision letter had been “withdrawn”, by the letter of October 31, 2008, the payment requested had been made, and the right of appeal no longer existed. Emilia and her parents stated that they had not accepted SGI’s settlement (no payment had in fact been made) and wanted the appeal to continue.

Emilia, in particular, stated that she believed the appeal was not just about money, but about the entitlement to the benefit, and she wanted the appeal to continue for the benefit for other families who might face similar situations. [ 17 ] The Commission ruled that it was seized with the matter and would continue, giving leave to the parties to make further submissions on the new jurisdictional point, relating to SGI’s purported withdrawal of its decision letter. SGI expressly declined to make any submissions as to whether s. 112(2) and the regulations entitled Emilia to the benefit claimed.

Rather, it relied on its submission that the matter was now moot and the Commission had no jurisdiction to render a decision.

III The Decision of the Commission [ 18 ] On the question of whether the appeal had been rendered moot by SGI’s purported withdrawal of its letter of decision and offer of settlement, the Commission took the view that the appeal was that of the insured, and could not be discontinued without the insured’s consent. [ 19 ] In relation to the question of whether the Commission lacked jurisdiction over the matter because the payments in question were ex gratia , the Commission began with the following observation:

[56] We start from the premise that no-fault benefits are a statutory insurance scheme funded by insureds, and we think it follows that SGI cannot spend those monies except in accordance with the statutory scheme. If SGI is routinely making payments for a process or thing then it must be the money is being spent within the statutory scheme or SGI is spending money on a regular basis for which it is not authorized. In other words, you can’t spend money you are not authorized to spend.

SGI may, of course, make payments under s. 210 at its sole and unfettered discretion but if it is using ex gratia payments on a regular basis then, in our view, it means there is something wrong with the legislation or else the

interpretation of it. [2009 SKAIA 006] [ 20 ] Noting its disappointment that SGI had declined to make any submissions on the interplay between the written acquired brain injury policy, the Act , and Emilia’s entitlement to rehabilitation benefits under the Act , the Commission then went on to analyze these aspects of the compensation scheme, focusing on s. 112(2) of the Act , set out above, and s. 12(

e) of the Personal Injury Benefits Regulations , which provides for funding: (ii) to lessen the insured’s disability; and (iii) to facilitate the insured’s recovery from an accident to improve his or her earning capacity and level of independence. [ 21 ] Concluding that these provisions, properly interpreted, could cover income replacement benefits for a parent of a brain injured child, where the parent’s presence was considered necessary or advisable to lessen the Appellant’s disability and facilitate her recovery, the Commission concluded as follows: [61] The question we now must ask is whether the mother’s care was necessary or advisable to lessen the Appellant’s disability and facilitate her recovery and “… to improve…her earning capacity and level of independence”.

Considering those words generally and broadly so as to have application to a young child, we interpret “improve her earning capacity” as being a long term effect. Based on the medical reports and assessments filed respecting the Appellant’s abilities and progress, the testimony of the occupational therapist and educator, and the parents, we are satisfied that the care the Appellant’s mother provided was both necessary and advisable from the date of the accident and gradually decreasing to when the Appellant finished therapy at WRC Children’s Program.

SGI too thought the mother’s care was necessary and/or advisable because it funded it for almost a year. Leaving aside the question of whether it is a so- called legislated benefit, the only disagreement was when the payment should terminate. [62] SGI terminated payment of the mother’s wage loss when the Appellant returned to school full-time in the fall of 2007. The Appellant however was just starting rehabilitative therapy WRC Children’s Program and there was substantial evidence the Appellant still required supervisory and parental care with school, tasks of daily living and mobility.

At first blush it might seem reasonable to terminate funding when the Appellant returned to school full time, but we conclude that it wasn’t reasonable given she had just started rehabilitation therapy for documented cognitive and mobility problems. [63] Children, fortunately, tend to be resilient in recovering from injuries, including brain injuries. This does not mean that they should not get proper treatment, or that such treatment should be compromised because a parent is not available to maximize treatment goals, or to sound a warning if the treatment goes awry.

We do not require “Cadillac” treatment: we do insist on reasonable and effective treatment. For children, this will require parental participation at a reasonable level. The mother’s decision to work part time during this critical period was principled, responsible, and both necessary and advisable to facilitate her daughter’s recovery. [ 22 ] The Commission concluded that funding for Emilia’s mother’s net wage loss for the period September 7, 2007 to January 23, 2008 was not reasonably terminated and ordered SGI to make that payment together with pre-judgment interest.

IV Analysis [ 23 ] The appeal raises three issues, all questions of law for which the appellate standard of review is correctness: 1. Did the committee err in continuing to entertain the appeal in spite of SGI’s letters of September 23 and October 31, 2008? 2. Did the Committee err in concluding that the Act and Regulations, properly interpreted, were broad enough to authorize payment of the benefit in question in appropriate circumstances? 3.

Assuming that the first two questions are answered in the negative, did the Commission have jurisdiction to make an award pursuant to s. 112(2) rather than referring this matter back to SGI? [ 24 ] It is our view that the Commission did not err in the exercise of its jurisdiction and that the appeal should be dismissed. [ 25 ] SGI’s letters of September 23 and October 31, 2008 were clearly not an unconditional agreement to settle the issues raised on the appeal. The first required Heather and Mark Becker to sign a release and the latter was expressed to be solely on the basis of an ex gratia payment.

Acceptance of this offer would have left the insured with no basis for any further claim had further need for her mother’s

extended care become necessary. Further, the settlement was clearly not accepted by Emilia or her parents, who wanted this issuedetermined. Finally, mootness of an issue does not necessarily deprive an adjudicator of jurisdiction over an appeal, but is a matter ofdiscretion. The appellant relies on Borowski v. Attorney for Canada, (SCC), [1989] 1 S.C.R. 342, but this decisionsimply stands for the proposition that a court, as an incident of control over its procedure, has discretion to decline to adjudicate aquestion that has become moot.

In the instant case, the Commission clearly accepted Emilia’s decision to continue the appeal todetermine the point of principle at issue. It was within the Commission’s jurisdiction to hear this matter despite SGI’s settlement offer. [26] The issue of statutory

interpretation raises two subsidiary issues that should be addressed. The first is that the appellant argues thatin determining the entitlement to this benefit pursuant to s. 112(2) of the Act, the Commission unilaterally “changed the appeal” from oneconcerning “income replacement” to one concerning rehabilitation benefits. [27] This argument should be soundly rejected. SGI’s characterization of this benefit as an ex gratia payment of “income replacement”was exactly what was at issue in this appeal. Nothing in the notice of appeal to the Commission confines the issue in this way.

It was, inmy view, clearly within the Commission’s jurisdiction to determine whether this characterization of the benefit was correct in the courseof determining the appellant’s entitlement to continuation of the benefit. [28] Secondly, the appellant argues that the Commission strayed from interpreting the Act, and decided, instead, on the basis of what itthought the Act ought to provide. I do not agree with this

interpretation of what the Commission did. The point made by the Commissionwas that the fact that SGI felt compelled to fall back on ex gratia payments to cover payments deemed necessary or desirable for therehabilitation of an insured suggested that SGI had failed to give a proper

interpretation to the Act. This, in my view, is a sound point.Section 206 authorizes payments to be made in the interest of the insurer, for the better administration of the Act. Clearly this would, forexample, authorize SGI to expend funds to settle contentious but doubtful claims, for example to avoid the costs and risks of litigation.

The widespread use of this provision, however, simply to fund benefits for an insured not otherwise authorized by the legislation seemsquestionable, and the sense that such benefits ought, as a matter of logic, to be provided, invites a more careful scrutiny of the legislationto determine whether it does, in fact, authorize such benefits. [29] Section 112(2), on the other hand, by its clear wording gives SGI an extremely broad discretion to make payments considerednecessary or advisable to contribute to the rehabilitation of an insured.

In my view, the Appeal Commission did not err in concluding that,where a parent’s presence is considered necessary or advisable for the proper recovery or rehabilitation of a child who suffered anacquired brain injury, this provision is broad enough to authorize funding necessary to make that presence possible. I agree with theCommission that in appropriate circumstances, this could include replacement of lost income to make it possible for the parent to beavailable to the child.

As the Commission rightly pointed out, SGI clearly had considered Heather Becker’s presence to be necessary ordesirable, a determination supported by the medical and other evidence, and it did not contest the point that circumstances had notchanged to render it unnecessary at the time the funding was discontinued. [30] I would conclude that the Appeal Commission did not err in its

interpretation of the Act and the Regulations. [31] Finally, it is my view that the Commission had jurisdiction to order the payment of this benefit to the insured rather than refer thematter back to SGI to exercise its discretion under s. 112(2). Section 193(7)(

b) expressly authorizes the Appeal Commission to “makeany decision that the insurer is authorized to make pursuant to this Part.” SGI declined to make any submissions as to whether thepayments should be made pursuant to s. 112(2) and did not otherwise contest the insured’s contention that the circumstances thatjustified the initial payment had not changed for the period of the claim. In these circumstances it was not necessary for the AppealCommission to refer the matter back to SGI. [32] The appeal is dismissed with costs to the Appeal Commission.

DATED at the City of Regina, in the Province of Saskatchewan, this 23rd day of February, A.D. 2011. “Smith J.A.”________________________ Smith J.A.

I concur “Richards J.A.” ____________ Richards J.A. I concur “Smith J.A.” _______________________ for Ottenbreit J.A.