In this case, the Saskatchewan Court of Appeal considered a number of issues surrounding payments that Saskatchewan Government Insurance had made to the mother of a brain-injured infant as "income-replacement," to allow her to stay home and care for her daughter.
SGI had attempted to characterize these payments as "ex gratia", and argued that it had no obligation to continue them.
The Automobile Injury Appeal Commission (the "Commission") disagreed, holding that the payments must have been authorized under the relevant legislation, as "you can't spend money you are not authorized to spend."
The appeal by SGI from a decision of the Commission ordering SGI to pay income replacement benefits to the mother of an injured child was dismissed where the Commission properly concluded that benefits paid to the mother were covered by Personal Injury Benefits Regulations and were not merely ex gratia payments.
Saskatchewan Government Insurance v. Becker,  S.J. No. 154, February 23, 2011, Saskatchewan Court of Appeal, R.G. Richards, G.A. Smith and R.K. Ottenbreit JJ.A.
On October 17, 2006, Emilia Becker, then 11 years old, was a passenger in a school bus involved in an accident. Emilia suffered a moderate brain injury and experienced dizziness, severe headaches, and difficulty with concentration and memory. Prior to the accident, she had been an excellent student. In 2007, a neuropsychologist recommended that Emilia attend school for half days because her symptoms were made worse by fatigue. The neuropsychologist recommended that she be at home in the afternoon with parental supervision to nap and rest for the rest of the day.
The SGI injury representative responsible for Emilia's claim during the initial period felt that it would be a benefit for Emilia to have a parent involved in her care and SGI compensated Emilia's mother, Heather Becker, for time that she was away from her employment to look after Emilia. SGI considered the payments to Heather Becker to be ex gratia as there was no express provision in the Act authorizing reimbursement of the parent of an injured insured minor who takes time off work to care for the injured child. After almost a year had expired, SGI notified Heather Becker that it would discontinue payments at the beginning of the school year and would no longer be making the ex gratia payments. An appeal to the Commission was brought in Emilia's name seeking an order that SGI pay the difference between Heather's salary prior to the collision and what she earned at her reduced hours while looking after Emilia. SGI took the position that the Commission had no jurisdiction to adjudicate the issue since the payments had been ex gratia. SGI also requested that the Commission put any questions it had in writing concerning potential issues in the appeal. The Commission complied and asked 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, as to whether, on the assumption that SGI thought compensating Heather Becker for lost income while caring for her daughter was either "necessary or advisable", it had reasonably terminated that benefit. Section 112(2) of the Automobile Accident Insurance Act, R.S.S. 1978, c. A-35, provided 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.
After receiving questions from the Commission, SGI elected to not make further submissions and, instead, made 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 the circumstances. When the hearing before the Commission reconvened, SGI took the position that the requested payment had been made and, therefore, the right of appeal no longer existed. Emilia and her parents took the position that they had not accepted SGI's settlement and wanted to continue with the appeal.
At the hearing, the Commission ruled that it was seized with the matter and concluded that Heather's care was necessary or advisable to lessen Emilia's disability and facilitate her recovery. The Commission further concluded that funding for Emilia's mother's net wage loss for the time period at issue was not reasonably terminated and ordered SGI to make that payment together with prejudgment interest. SGI appealed this decision.
The Court of Appeal reviewed the correspondence concerning the settlement offer and held that this offer had clearly not been accepted by Emilia or her parents who wanted the issue determined. The Court reviewed s. 112(2) of the Act and found that, by its clear wording, it gave SGI an extremely broad discretion to make payments considered necessary or advisable to contribute to the rehabilitation of an insured. In the Court's view, the Commission did not err in concluding that, where a parent's presence is considered necessary or advisable to the proper recovery or rehabilitation of a child who suffered an acquired brain injury, this provision was broad enough to authorize funding necessary to make that presence possible. The Court further concluded that the Commission had jurisdiction to order the payment of the benefit to the insured rather than referring the matter back to SGI under s. 112(2) as s. 193(7)(b) of the Act expressly authorized the Commission to "make any decision that the insurer is authorized to make pursuant to this Part".
In the result, SGI's appeal was dismissed.