2013 SKCA 138 Date:, 2013 SKCA 138

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 138 Date: 2013-12-17 Between: Docket: CACV2250 Dennis Scott Appellant - and - Saskatchewan Government Insurance Respondent REVISED JUDGMENT: The text of the original judgment has been corrected with text of the erratum (released January 22, 2014)appended. Coram: Ottenbreit, Caldwell and Herauf JJ.A. Counsel: Kenneth Noble, Q.C., for the appellant Steven Haichert for the respondent Appeal: From: 2012 SKAIA 10 , 2012 SKAIA 010 Heard: September 11, 2013 Disposition: Appeal allowed

Written Reasons: December 17, 2013 By: The Honourable Mr. Justice Ottenbreit In Concurrence: The Honourable Mr. Justice Caldwell The Honourable Mr. Justice Herauf OTTENBREIT J.A. I. Introduction [1] This is an appeal by Dennis Scott under s. 194 of The Automobile Accident Insurance Act, R.S.S. 1978, c. A-35 (the “Act”), froma decision of the Automobile Injury Appeal Commission (the “Commission”). The Commission dismissed his appeal of a decision bySaskatchewan Government Insurance (“SGI”) refusing to pay maintenance costs, repair costs or operational costs associated with a lappool which had been built for Mr.

Scott by SGI to assist him to rehabilitate injuries he suffered in a motor vehicle accident whichoccurred in 2005. [2] For the reasons hereinafter set forth, the appeal is allowed. II. background and facts [3] Mr. Scott was injured in a vehicle accident on December 23, 2005, and suffered serious injuries to the spine, whereby he wasrendered an incomplete quadriplegic. After significant therapy at the Wascana Rehabilitation Centre in Regina, Mr. Scott, who lives inWhitewood, began an out-patient program at the Centre and would travel there approximately two times per week for rehabilitation.

Whitewood is approximately a two hour drive from Regina. [4] Water therapy became a significant part of his rehabilitation program. Mr. Scott would swim at the Centre, the Sandra SchmirlerFitness Centre in Regina and, during one summer, at a town near Whitewood. However, the four hour round trip from Whitewood to theCentre drained Mr. Scott’s energy, especially when coupled with his attempts to return to part-time employment. He believed that thetrip to and from the Centre diminished the benefits he received from the pool therapy he took there. [5] As a result, Mr.

Scott asked SGI to build a swim spa for him and after providing SGI with a letter from his doctor indicating thatthe pool, although not medically necessary was medically advisable for him, SGI agreed to fund the swim spa. As part of SGI’s decisionto fund a swim spa, SGI indicated that it would pay an annual recreation allowance benefit of $692.00 to contribute toward anymaintenance or upkeep costs associated with the swim spa. [6] Mr. Scott appealed the decision to build the swim spa because he believed a lap pool would be more beneficial.

After providingevidence of a physiotherapist with respect to a lap pool, SGI agreed to fund the building of a lap pool and enclosure, and agreed toallocate and pay the sum of $278,782.09 toward that project. [7] The decision to build the lap pool was contained in a letter dated July 8, 2010. SGI was not prepared to pay Mr. Scott for anymaintenance costs, repair costs or upkeep costs associated with the lap pool other than the annual recreation allowance benefit indicatedearlier. [8] Mr.

Scott appealed the decision of SGI to the Commission which after a hearing rendered a decision cited at 2012 SKAIA 10, 2012 SKAIA 010. III. decision of the AUTOMOBILE injury appeal COMMISSION [9] Although the Commission had a number of appeals from Mr. Scott before it, for the purposes of this appeal, only theCommission’s focus on the decision of SGI to pay no more than the recreational allowance benefit for any maintenance costs, repaircosts or operational costs associated with Mr. Scott’s lap pool is germane. [10] On his appeal before the Commission, Mr.

Scott provided evidence of increased costs associated with the lap pool enclosure. These costs included chemicals and maintenance of $390.00 per month plus taxes, additional insurance costs of $1,220.00 per year andadditional property taxes of approximately $1,673.00 per year. The witnesses who testified agreed that the increased insurance andproperty tax costs were based on the increased value of Mr. Scott’s property resulting from the addition of the lap pool and enclosure. Although additional SaskEnergy costs to heat the lap pool could not be quantified, Mr.

Scott testified he had been informed this would beapproximately $150.00 to $200.00 per month. The additional power hook-up together with a separate power meter would costapproximately $500.00.

[ 11 ] The evidence indicated that Mr. Scott and his family were prepared to perform all the daily maintenance tasks associated with the lap pool. In total, the additional costs for Mr. Scott as a result of the lap pool, accepting uncertainties, would be approximately $10,000.00 per year. [ 12 ] The decision of the Commission dismissing Mr. Scott’s appeal was not unanimous.

The majority of the Commission, relying on one of its previous decisions, determined that neither s. 112 of the Act nor s. 12 of The Personal Injury Benefits Regulations empowered the Commission to order payment of the operating costs for the pool: [75] We conclude the panel in I.S . did not consider it had the ability, pursuant to s. 112 of the Act or s. 12 of the Regulations to order SGI to pay the estimated $1,100.00 operating costs associated with the operation of the pool, which the panel identified as additional heating, power and chemical costs.

We agree with this position. [76] Though the panel in I.S . did not deal with the increased insurance or property tax costs associated with the pool, we can see no distinction between these costs and the operating costs associated with the lap pool and enclosure in that there is no provision in the Act or Regulations to assist the Appellant in this regard. [ 13 ] The majority of the Commission after reviewing its previous jurisprudence interpreted s. 112 as a definitional

section that sets out the kinds of benefits that can be obtained: [110] In our opinion, SGI is able to exercise its discretion, pursuant to s. 112 of the Act , in regard to the “mode” of the pool therapy treatment or how the pool therapy treatment is implemented. It is this decision that is open to challenge, on a reasonableness standard. ... [113] SGI exercised their discretion in regard to rehabilitation benefits in this case. However, as stated, SGI applied this discretion to the implementation of the pool therapy treatment.

The exercise of the discretion does not however, permit SGI to deviate from the provisions of the Act and/or the Regulations . … [126] It is difficult if not impossible to read either s. 112 or Regulation 12 in a more liberal fashion without adding words to either the

section or the regulation. In addition, to do this would amount to this panel not following previous Commission precedent which is something we are not prepared to do. [127] If the legislature intended that operating costs or added expenses should be covered in the Regulations , it would be expected that such intention would be clearly set out.

It is not. [ 14 ] The majority concluded as follows: [130] We conclude SGI is not required to pay for the “Increased Pool Costs” associated with the Appellant’s lap pool other than utilizing the recreational allowance as SGI has agreed to do. [ 15 ] The dissenting member of the Commission concluded that SGI should pay for the increased costs Mr. Scott claimed because s. 112(2) of the Act and s. 12(

e) of the Regulations are broad enough to provide for the payment of expenses related to the operation of his lap pool. She further concluded that if s. 12(

e) of the Regulations was not broad enough to allow payment of operating expenses for the pool, then where it is silent with respect to rehabilitation expenses, the wider discretion afforded to SGI by s. 112(2) of the Act allows SGI to consider whether reimbursement of the operating expenses would be considered a measure which lessened a disability or facilitated recovery from the accident as stated in the

preamble of s. 112 . She stated: [160] In my opinion, the Operating Expenses are a necessary and advisable expense which is clearly and logically linked to rehabilitation of the Appellant. They are necessary access costs associated with the provision of the lap pool which SGI has agreed to as rehabilitation for the Appellant. [ 16 ] The dissenting member determined that Mr. Scott’s appeal was governed by Saskatchewan Government Insurance v. Becker , 2011 SKCA 24 , 366 Sask.

R. 254: [168] The Saskatchewan Court of Appeal held that Section 112(2) of the Act , by its clear wording gives SGI an extremely broad discretion to make payments considered necessary or advisable to contribute to the rehabilitation of an insured. … [170] I adopt the Court of Appeal

interpretation of the extremely broad discretion afforded to SGI pursuant to section 112(2) . …

[ 17 ] The dissenting member concluded as follows: [193] In my opinion, SGI has the discretion to take any measure pursuant to section 112(2) which is necessary or advisable to facilitate the insured’s recovery. Reimbursement of the Operating Expenses is a measure that facilitates recovery and I would direct SGI to pay for those expenses that are measurable and directly linked to the operation of the lap pool and its enclosure. In this case, the Appellant was able to separate the expenses associated with the operation of the lap pool and its enclosure from any other personal expenses.

It is those Operating Expenses that are measurable that are payable. ... [200] In conclusion, I find that the Operating Expenses are provided for under Section 112(2) of the Act and that the Appellant is entitled to [be] reimbursed for those expenses. They are a necessary expense associated with his rehabilitation and recovery of his accident injuries. IV. ISSUES [ 18 ] Mr. Scott raises 12 issues in his factum. These issues can be reduced to one question of law which can be stated as: did the Commission err in interpreting ss. 112(1) and 112(2) of the Act and s. 12(

e) of the Regulations so as to preclude SGI from having the power to reimburse Mr. Scott the operating expenses associated with the lap pool. V. ANALYSIS [ 19 ] The relevant parts of the Act read as follows: 2(jj) “prescribed” means prescribed in the regulations; … 112(1) In this section, “rehabilitation” includes any or all of the following measures, programs and treatments that the insurer considers necessary or advisable to contribute to the rehabilitation of an insured, to lessen the insured’s disability caused by the accident and to facilitate the insured’s recovery from the accident: (

a) physical and acquired brain injury programs and treatment; (

b) occupational and vocational training and programs; (

c) alterations to an insured’s residence; (

d) modification or purchase of a motor vehicle for an insured; (

e) purchase of special equipment for an insured; (

f) any additional prescribed measure, program or treatment.

(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.

(3) The total combined maximum benefits payable to an insured pursuant to this Division and Division 7 is $5,000,000 for each accident in which a person suffers bodily injury. The relevant part of the Regulations reads as follows: 12 If the insurer considers it necessary or advisable for the rehabilitation of the insured, the insurer may provide the insured with one or more of the following: (

a) funds: (

i) to acquire, once during the insured’s life, one motor vehicle that is equipped to be used and operated by the insured; or (ii) to reimburse the insured for extraordinary costs required to adapt a motor vehicle for the use of the insured; (

b) funds to reimburse the insured for extraordinary costs required:

(

i) to alter the insured’s principal residence; (ii) if alteration of the insured’s principle residence is not practical or feasible, to relocate the insured; or (iii) to alter the plans for or construction of a residence that is being planned or constructed for the insured at the date of the accident; (

c) funds to reimburse the insured for extraordinary costs required to alter the insured’s principal residence, if: (

i) the insured is moving in order to accommodate an approved academic or vocational rehabilitation plan; or (ii) the insured was a dependant at the date of the accident and is moving from the family home; (

d) funds to reimburse the insured for acquiring any or all of the following: (

i) wheelchairs and accessories; (ii) mobility aids and accessories; (iii) medically required beds, equipment and accessories; (iv) specialized medical supplies; (

v) communication and learning aids; (vi) specialized bath and hygiene equipment; (vii) specialized kitchen and home-making aids; and (viii) cognitive therapy devices; (

e) funds: (

i) to pay for the insured’s occupational, educational or vocational rehabilitation if the rehabilitation is consistent with the insured’soccupation prior to the accident and his or her skills and abilities after the accident; (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. [20] Mr. Scott’s arguments before us are essentially that the analysis of the dissenting member of the Commission panel was correct. He argues that s. 112(2) of the Act and s. 12(

e) of the Regulations should receive a wide and liberal

interpretation which would allowpayment of the operating costs sought, either on the basis that it is encompassed by the words of the sections of the Act and Regulationsor should be implied. SGI submits that neither s. 112 of the Act nor s. 12(

e) of the Regulations properly interpreted is broad enough toallow the funding of operating costs for the lap pool. [21] In making its decision, the majority of the Commission concluded that it did not consider it had the ability pursuant to s. 112 of theAct or s. 12 of the Regulations to order SGI to pay the operating costs associated with the operation of a pool. In this respect it erred. [22] The facts of this case are undisputed. SGI had agreed that the lap pool was an approved form of rehabilitation for Mr. Scott.

Theupshot of this is that SGI admits that it determined the lap pool was considered necessary or advisable for the rehabilitation of theappellant pursuant to s. 112 of the Act. [23] In my view the

interpretation of s. 112 of the Act and the relevant Regulations is governed by Becker. The Commission’s decision,cited as Becker v. SGI, 2009 SKAIA 6 , 2009 SKAIA 006, determined that s. 112(2) of the Act and s. 12(e)(ii) and (iii) of theRegulations properly interpreted allowed SGI to pay income replacement benefits for the parent of a brain injured child where theparent’s presence was considered necessary or advisable to lessen her disability and facilitate recovery.

Of note is that incomereplacement benefits for a parent of the claimant were not “explicitly” a kind funded by s. 12(e)(ii) and (iii) of the Regulations. [24] When SGI appealed Becker to this Court, Smith J.A. determined that the Commission did not err in its

interpretation of the Act andRegulations as follows: [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. [25] It is remarkable that the majority of the Commission made no mention of Becker as part of its analysis despite the fact that Becker

had clearly been decided before the decision of the Commission in this case was issued. The dissenting member of the Commission wasclearly aware of Becker. [26] The modern principles of statutory

interpretation are well known as originally described by Elmer A. Driedger, in TheConstruction of Statutes (Toronto: Butterworths, 1974), at p. 67: Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context, in their grammatical andordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. This principle was declared to be the preferred approach of the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, at para. 21, and has become the usual process of statutory

interpretation applied by Courts in Canadaever since. The Rizzo approach has been consistently applied in this jurisdiction, most recently in Saskatchewan Government Insurancev. Gorguis, 2013 SKCA 32, 360 D.L.R. (4th) 607. Becker can be fairly said to signal that a narrow, technical

interpretation of s. 112 ofthe Act and s. 12 of the Regulations is to be avoided. This interpretative approach makes sense because the Act can be considered to beconsumer protection legislation (Saskatchewan Government Insurance v. Schmidt, 2008 SKCA 167, 306 D.L.R. (4th) 183). The Actimposes a mandatory program of regulation or benefit distribution to those injured in Saskatchewan. The interpretive approach to such aprogram was aptly stated by McIntyre J. in Maple Lodge Farms Ltd. v.

Canada, (SCC), [1982] 2 S.C.R. 2, at p. 7: 7 In construing statutes such as those under consideration in this appeal, which provide for far-reaching and frequently complicatedadministrative schemes, the judicial approach should be to endeavour within the scope of the legislation to give effect to its provisions sothat the administrative agencies created may function effectively, as the legislation intended. … [T]he courts should, wherever possible,avoid a narrow, technical construction, and endeavour to make effective the legislative intent as applied to the administrative schemeinvolved. … [27]

Section 12 of the Regulations is not to be interpreted as in any way limiting the discretion reposed in SGI in s. 112 for addressingrehabilitation. It is the determination of whether a rehabilitative measure is considered necessary or advisable which drives the paymentfor that rehabilitative measure. In light of Becker, the ability of SGI to fund rehabilitation under s. 112(2) cannot be read to be limitedonly to those kinds of expenses listed in the Regulations. [28] I conclude that the majority of the Commission erred in its

interpretation of the ambit of s. 112 of the Act and s. 12(e)(ii) and (iii) ofthe Regulations. [29] The decision of the Commission is therefore set aside. In light of this, the question of the proper disposition is raised. In thisrespect, I digress for a moment with respect to the nature of the operating expenses claimed by Mr. Scott. Mr. Scott set out, in my view,two categories of expenses. One relates solely to the operation of the pool, such as chemicals, electrical and energy costs. The other setof expenses relates to increased taxes and insurance.

It strikes me that such items as increased taxes and insurance are more referable tothe capital addition of the pool to Mr. Scott’s house rather than pure operating costs related to his day-to-day rehabilitation. Although itwould be open to SGI to also pay these costs in their discretion given the wide ambit of s. 112(2), nevertheless it is also open for SGI toproperly exercise its discretion not to pay these costs in view of the fact that Mr. Scott has received a potential substantial increase to thecapital value of his property as a result of the construction of the pool.

The potential increase in the value of the home based on theaddition was recognized by the dissenting member of the Commission where she stated at para. 194: 194 With respect to SGI’s submission that the Appellant was receiving a windfall due to the increase in property value of theAppellant’s home there was inadequate evidence about the extent of this increase in value other than it increased property taxes andinsurance costs.

If in fact there were a proven windfall to the Appellant due to the increase in his property value with the addition of thelap pool and its enclosure, which I am not denying, then it would seem reasonable that some or all of the increased taxes and insurancecosts as they relate to the pool and its enclosure could be borne by the Appellant due to the increase in the value of his home. However,due to the lack of evidence regarding value, I could not justifiably arrive at that conclusion in this appeal. [30] That said, SGI shall pay Mr.

Scott’s on-going operating costs for the pool as claimed by him, except for increased taxes andinsurance, for so long as the pool is a necessary or advisable rehabilitative measure in accordance with the Act and Regulations. The taxand insurance expenses are remitted to SGI for the proper exercise of its discretion under s. 112 of the Act and the Regulations as towhether or not those expenses shall be paid as well. [31] Mr. Scott shall be awarded costs for this appeal to be assessed under column 3.

He is also entitled to his costs at the hearing beforethe Commission on the basis of double column 4 of the Queen’s Bench tariff. DATED at the City of Regina, in the Province of Saskatchewan, this 17th day of December, A.D. 2013. “Ottenbreit J.A.” Ottenbreit J.A. I concur “Caldwell J.A.”

Caldwell J.A. I concur “Herauf J.A.” Herauf J.A. Dennis Scott v. Saskatchewan Government Insurance CACV2250 2013SKCA138 released December 17, 2013 Erratum released January 22, 2014 Please make the following modification to the above noted judgment: Paragraph [31] of the decision in this matter issued December 17, 2013, is being replaced with the following: [31] Mr. Scott shall be awarded costs for this appeal to be assessed under column 3. He is also entitled to his costs at the hearing before the Commission on the basis of double column 4 of the Queen’s Bench tariff.