Nova Scotia Court of Appeal confirms province’s subrogated right to claim against an insurer for nursing home costs arising from auto injuries

Nova Scotia’s Court of Appeal confirmed in a 3-1 majority decision released on Feb. 23 that Nova Scotia’s Department of Health has a subrogated right to claim against an insurer for nursing home costs arising from injuries sustained in a motor vehicle accident.

In Slauenwhite v. Keizer, Jean Slauenwhite was 81 years old in Dec. 15, 2004, when she was a passenger in a car driven by Erna Keizer, then 78.

Keizer drove her vehicle off the road into a rock cliff, and Slauenwhite suffered a permanent loss of eyesight. Slauenwhite’s injury meant she was unable to return to her apartment at Musquodobit Harbour.

After a lengthy hospital stay, Slauenwhite moved into a nursing home. The province subsidized the costs of the nursing home.

The province claimed the nursing home subsidy from Keizer’s insurer, citing the Health Services and Insurance Act of Nova Scotia (HSIA). The legislation was amended in 1992, allowing the province to charge an annual levy against the province’s motor vehicle insurers to collect health-related services resulting from motor vehicle accidents.

The majority in the Appeal Court ruling rejected the defendant insurer’s reference to an apparent exclusion contained in Subsection 18(10) of the HSIA.

Subsection 18(10) of the act reads: “This section applies except where personal injury has occurred as the result of a motor vehicle accident in which the person whose act or omission resulted in the personal injury is insured by a policy of third-party liability insurance on or after the date this subsection comes into force.”

The majority ruled that ss. 18 must be read in its entirety. The larger context, the court found, is that the legislation allows the province to recover 100% of its health care costs either by means of the 1992 levy or by means of subrogation for those items not covered by the levy. In Slauenwhite, the levy did not cover nursing home costs.

“I recognize that it is not apparent why in 2002 the legislature reverted to having the province attempt to recover its nursing home care costs by subrogation rather than through the levy, given that the levy was apparently a superior and more cost effective means of collection,” the majority ruled. “We know from the Hansard excerpts that the implementation of the levy in 1992 involved negotiations with the Insurance Board of Canada, but we cannot speculate as to whether a failure to reach an agreement with the Bureau in 2002 as to additional health services being added to the levy caused the legislature to revert to subrogation for services not covered by the levy.”