Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664

CITATION: Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664

DIVISIONAL COURT FILE NO.: 615/17

DATE: 2018-10-02

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Morawetz R.S.J., Whitten and Gray JJ.

BETWEEN:

SOTIRA TOMEC

Applicant

– and –

ECONOMICAL MUTUAL INSURANCE COMPANY

Respondent

COUNSEL:

William Keele, for the Applicant

Lisa Armstrong and Shalini Thomas, for the Respondent

Kathryn Chung, for the Licence Appeal Tribunal

HEARD at Toronto: June 28, 2018

REASONS FOR JUDGMENT

Gray J.

[1] In this application, the court is required to grapple with the difficult question of whether a limitation period is a “hard” one, that is, one that bars a claim regardless of whether the claimant is aware of whether he or she has a claim; or whether it may be relieved against where the claimant only becomes aware that he or she has a claim sometime after the limitation period expires.

[2] The applicant seeks judicial review of a decision of the Licence Appeal Tribunal, by which the Tribunal ruled that the applicant’s claim for attendant care and housekeeping benefits under the Statutory Accident Benefits Schedule is statute barred.

[3] For the reasons that follow, the application is dismissed.

Background

[4] The applicant was injured in a motor vehicle accident on September 12, 2008, and sought benefits pursuant to the Statutory Accident Benefits Schedule (“SABS”), O.Reg 403/96.

[5] The applicant had been struck while walking across an intersection, and she sustained a variety of injuries including multiple fractures in her left shoulder. She was hospitalized and required surgery.

[6] On October 13, 2008, the applicant submitted an application for accident benefits to the respondent respecting her claim under the SABS. She was found to be entitled to, and received, attendant care and housekeeping benefits from the date of her application for benefits up to September 12, 2010, which was two years from the date of the collision.

[7] The applicant received attendant care benefits from October 12, 2008 until September 12, 2010, 104 weeks after the collision.

[8] The applicant initially applied for housekeeping benefits on October 14, 2008. She was paid housekeeping benefits from the date of her initial application until September 12, 2010, 104 weeks after the collision.

[9] On August 10, 2010, Dr. Harold Becker submitted an application for approval of an assessment or examination to the respondent for a file review to evaluate the issue of catastrophic impairment.

[10] On August 26, 2010, the respondent sent the applicant a letter enclosing an application of benefits form. Both the letter and the form contained the following paragraphs:

In accordance with Section 18(2) of the Statutory Accident Benefits Schedule, no attendant care benefit is payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined by the Statutory Accident Benefits Schedule.

In accordance with Section 22(3) of the Statutory Accident Benefits Schedule, no payment for housekeeping and home maintenance benefits are payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined the Statutory Accident Benefits Schedule.

[11] The letter also contained the following paragraph:

Please note that should you disagree with our assessment of your claim and wish to dispute, mediation must be commenced within 2 years from your receipt of this letter. The dispute process has been outlined in the Explanation of Benefits Payable (OCF-9/59) which is attached for your records.

[12] On May 5, 2014, the applicant’s treating orthopedic surgeon prepared an updated report, in which he noted that the development of osteoarthritis in her left knee as a result of the collision necessitated the use of a cane. He also noted, for the first time, contracture of the soft tissues around her shoulder joint, including the capsule, glenohumeral ligaments and rotator cuff tendon complex resulted in permanent and untreatable loss of movement. He also emphasized functional limitations caused by her left shoulder injury were magnified because her right arm was limited by congenital weakness before the accident.

[13] On May 13, 2015, Dr. Harold Becker submitted an Application for Determination of Catastrophic Impairment to the respondent. He opined that the applicant had sustained a catastrophic impairment as a result of the collision of September 12, 2008.

[14] Between August 26, 2015 and September 17, 2015, the applicant underwent a number of examinations in response to the application submitted by Dr. Becker. A physiatrist concluded that the applicant met and surpassed the threshold for catastrophic impairment. On November 4, 2015, the respondent notified the applicant that it had accepted her application for catastrophic impairment.

[15] The respondent denied payment of past benefits owing, and denied ongoing attendant care benefits and housekeeping benefits on the basis that these benefits had been denied at the two-year mark pursuant to ss.18(2) and 22(3) of the SABS, and the applicant had not mediated this denial within two years of that date.

[16] On September 29, 2016, the applicant filed an application to the Licence Appeal Tribunal regarding her denial of the attendant care and housekeeping benefits subsequent to the expiry of the period of 104 weeks after the accident.

[17] The respondent raised a preliminary issue of whether the applicant’s claim for attendant care and housekeeping benefits was barred by the operation of limitation periods in the Insurance Act and the SABS.

[18] The Licence Appeal Tribunal held a hearing on June 19, 2017. At the hearing, the applicant sought to call Dr. Becker as a witness to explain the results of the catastrophic impairment request he submitted following his review in August, 2010. The Vice-Chair of the Tribunal refused this request for three reasons:

1. The sole purpose of the hearing as agreed at an earlier case conference was to give oral submissions;
2. The applicant did not give sufficient notice as required in the Tribunal’s Rules to call an expert witness; and
3. The vice-chair was not satisfied that Dr. Becker’s testimony would add to the legal issue to be determined at the hearing.

[19] On September 7, 2017, the Vice-Chair rendered her decision on the preliminary issue, and found that the applicant is barred from proceeding with her application for attendant care benefits and housekeeping benefits despite having a catastrophic impairment because she did not dispute the stoppage of those benefits within two years of the respondent’s denial.

[20] The Vice-Chair first considered whether the respondent’s letter dated August 26, 2010, and attached form, constituted a “denial”, sufficient to trigger the two-year time limit for applying for mandatory mediation. She applied the criteria discussed in Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129. She held that the letter constituted a clear and unequivocal denial of the applicant’s entitlement to ongoing attendant care and housekeeping and home maintenance benefits. In so concluding, the Vice-Chair also referred to the decision of the Court of Appeal in Turner v. State Farm Mutual Automobile Insurance Co. (2005), 195 O.A.C. 61 (C.A.).

[21] In the result, the Vice-Chair found that the two-year time limit to dispute the denial began to run as of August 26, 2010. She held that since the applicant did not dispute the denial until she commenced her proceeding on September 29, 2016, she missed the two-year time limit and was therefore barred from proceeding with her application with respect to attendant care and housekeeping and home maintenance benefits.

[22] The Vice-Chair rejected the applicant’s argument that the denial in August, 2010 could not be valid because she had not been found to be catastrophically impaired and was therefore not eligible to claim attendant care and housekeeping and home maintenance benefits. The Vice-Chair held that this did not absolve the insured from his or her obligation to adhere to the two-year time limitation period when faced with a clear and unequivocal refusal to pay the benefits. She stated that this conclusion was consistent with the decision of the Court of Appeal in Sietzema v. Economical Mutual Insurance Co., 2014 ONCA 111, 118 O.R. (3d) 713. In that case, the court held that even if the reasons given by an insurer are legally incorrect, the two-year limitation period nevertheless commences to run on the date of the denial. She also referred to the statement of the Court of Appeal in Haldenby v. Dominion of Canada General Insurance Co. (2001), 55 O.R. (3d) 470 (C.A.), at para. 30:

There is no provision in the Schedule for an insured to reapply for a benefit once it has been terminated, the only remedy open after an insurance benefit has been terminated by an insurer is to appeal the termination in the two-year time period.

[23] The Vice-Chair also dismissed the applicant’s argument that the limitation period does not begin to run until the applicant discovers that she is catastrophically impaired. She held that the limitation period is triggered by the insurer’s refusal to pay a benefit and does not encompass the doctrine of discoverability. She referred in this connection to the decision of this court, written by O’Leary J., in Kirkham v. State Farm Mutual Automobile Insurance Co., [1998] O.J. No. 6459 (Div. Ct.); leave to appeal refused [1998] O.J. No. 2872 (C.A.).

Submissions

[24] The applicant submits that there are three questions for the court to consider:

a) Whether the common law doctrine of discoverability applies to the relevant limitation periods;

b) Whether there was, in fact, a clear and unequivocal denial of a benefit in the circumstances;

c) Whether there was a denial of natural justice in refusing to hear the evidence of Dr. Becker.

[25] The applicant submits that the appropriate standard of review is correctness.

[26] The applicant acknowledges that there are some decisions of this court in which it has been determined that the standard is reasonableness. However, she submits that the first two issues are questions of law that are of general application and the tribunal has no particular expertise in resolving them. The third issue does not require a standard of review analysis if it is concluded that a denial of natural justice occurred.

[27] The applicant points out that a catastrophic impairment designation is a prerequisite for eligibility to claim attendant care or housekeeping benefits beyond the 104 week mark. Accordingly, absent such designation she has no eligibility for such benefits and cannot claim them. Thus, the failure to pay the benefits was not due to the insurance company’s refusal to pay them, but rather was due to her inability to claim them.

[28] The applicant submits that the provisions of the Act must be interpreted with these considerations in mind. When that it done, it must be concluded that the limitation period did not commence to run until the applicant was in a position to claim the benefits. Any other conclusion would run afoul of well-established authority, to the effect that a limitation period commences to run only when a claimant becomes aware that a claim can be made. The applicant relies particularly on Peixeiro v. Haberman, [1997] 3 S.C.R. 549.

[29] The applicant submits that the principle of discoverability applies universally to all causes of action, unless the statute has explicitly displaced the principle. She submits that the legislature has not explicitly displaced the principle here.

[30] The applicant submits that while it was within the discretion of the Tribunal to decline to hear the evidence of Dr. Becker, it was a denial of natural justice to refuse to hear his evidence in this case. The Tribunal noted in its decision that it would have been open to the applicant to file an application for a designation of catastrophic impairment in 2010, but that she waited five years before she did so. She submits that the evidence of Dr. Becker might well have shed light on why an application was not submitted in 2010.

[31] Counsel for the respondent submits that this court should decline to entertain this application because the applicant has failed to exhaust the internal remedy of seeking reconsideration of the Tribunal’s decision.

[32] On the merits of the application, the respondent submits that the errors alleged by the applicant really amount to one question: namely, whether the doctrine of discoverability applies to the limitation period or periods in issue here.

[33] The respondent submits that the appropriate standard of review is reasonableness. Counsel submits that this has been held to be the case in a number of decisions of this court. Counsel notes that in a recent decision of the Supreme Court of Canada, Edmonton (City) v. Edmonton East (Capalano) Shopping Centres Ltd., 2016 SCC 47, [2016] 2 S.C.R. 293, it was held that expertise is something that inheres in a tribunal as an institution, and submits that adjudicators can be presumed to hold relative expertise in the interpretation of legislation that gives them their mandate, as well as related legislation they may encounter.

[34] Counsel notes that in a recent decision of this court, Guarantee Co. of North America v. Do (2015), 126 O.R. (3d) 585 (Div. Ct.), it was held that the standard of reasonableness applied to a case involving a limitation period.

[35] The respondent submits that the applicant’s argument regarding discoverability has been rejected by this court in Kirkham, supra. Counsel submits that O’Leary J. clearly held that an insured must commence his or her proceeding within two years after the insurer’s refusal to pay, or the claim is statute barred. Further, as clearly stated by the Court of Appeal in Haldenby, supra, there is no provision in the legislation that allows an insured to reapply for further benefits after her benefits have been terminated by the insurer. The only remedy is to appeal the termination of benefits within the two-year period.

[36] The respondent submits that the Vice-Chair made a clear finding of fact that the respondent’s letter and attached form, both dated August 26, 2010, contained a clear and valid refusal to pay further attendant care benefits and housekeeping benefits beyond September 12, 2010, as well as a description of the dispute resolution process. As clearly contemplated in Turner, supra and Sietzema, supra, the two-year limitation period commenced to run then.

[37] The respondent submits that the Vice-Chair’s refusal to hear the evidence of Dr. Becker was both reasonable and correct. The applicant had violated both the Tribunal’s Rules and the understanding reached at a pre-hearing conference in seeking to call Dr. Becker at the last moment. Furthermore, it was perfectly reasonable for the Tribunal to hold that Dr. Becker’s evidence was not relevant to the strictly legal issue that the Tribunal was to determine.

[38] Counsel for the Licence Appeal Tribunal submits that the appropriate standard of review is reasonableness. Furthermore, the court should decline to entertain this application because the applicant did not pursue the internal Tribunal remedy of reconsideration, and did not appeal the Tribunal’s decision as permitted by s.11 of the Licence Appeal Tribunal Act, 1999. Counsel relies on the decision of the Court of Appeal in Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, 111 O.R. (3d) 561.

[39] Counsel submits that even though the case involves the Tribunal’s interpretation of the Insurance Act and the Schedule to it, this is legislation that is closely connected to the Tribunal’s function. Accordingly, the standard of review is presumed to be reasonableness.

[40] Counsel submits that the central issue in dispute is not a true question of jurisdiction, a question of central importance to the legal system as a whole, a question that is outside the Tribunal’s specialized area of expertise, or a constitutional question.

[41] Counsel submits that pursuant to the reasoning of the Supreme Court of Canada in Edmonton (City), supra, the expertise of the Tribunal in interpreting the legislation should be presumed. Moreover, she points out that ss.280(2) and (3) of the Insurance Act constitute strong privative clauses protecting the Tribunal’s decisions. Thus, it should be concluded that the legislature intended that a high degree of deference should be accorded the Tribunal’s decisions.

[42] Counsel submits that as long as the Tribunal’s decision is within the range of interpretive outcomes that can be supported using the ordinary principles of statutory interpretation, this court should defer to the Tribunal’s decision.

Analysis

[43] In order to determine the appropriate standard of review, and ultimately the result of this application, it is necessary to examine the relevant statutory and regulatory provisions. I have attached as an Appendix to these reasons the relevant provisions.

[44] I am not persuaded that there was any denial of natural justice in the refusal to hear the evidence of Dr. Becker. There had been virtually no advance notice that he would be called, and it had been understood that the hearing was to hear oral submissions only. The Vice-Chair was not convinced that Dr. Becker’s evidence would assist in resolving the legal issue. This was a decision that she was perfectly entitled to make. There is no merit to this argument.

[45] It should be noted that at the time of the applicant’s injury, the statutory and regulatory provisions were somewhat different than they are now. I have included in the Appendix the provisions of the Insurance Act as they then existed, and as they now exist, and I have included the relevant provisions of the Statutory Accident Benefits Schedule, which is a Regulation made pursuant to the Act.

[46] In summary, at the time of the accident, the relevant limitation period was contained in s.281.1(1) of the Insurance Act, which provided:

S.281.1(1) A mediation proceeding or evaluation under s.280 or 280.1 or a court proceeding or arbitration under s.281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.

[47] The current limitation period is contained in s.51 of the Statutory Accident Benefits Schedule, as follows:

51 An application under subsection 280(2) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed.

[48] Under either version of the relevant limitation period, there are two issues that arise:

a) Has there been a “refusal to pay the benefit claimed”, or “refusal to pay the amount claimed” as the case may be?

b) Must a proceeding be commenced within two years after the refusal, whether or not the claimant qualifies for payment of the benefit at the time of the refusal?

[49] On the first issue, there can be little doubt that the standard of review is reasonableness. For the most part, it involves a factual determination, or at its highest is a question of mixed fact and law. A high degree of deference is appropriate.

[50] In this case, the Vice-Chair took into account the analysis of the Supreme Court of Canada in Smith v. Co-operators General Insurance Co., supra, and analyzed the evidence. Attendant care benefits and housekeeping benefits had been paid for almost two years. The applicant was clearly told that they would be discontinued, and she was advised about her rights of appeal. The Vice-Chair’s determination that there was a refusal to pay the benefit was reasonable.

[51] With respect to the second issue, the determination of the appropriate standard of review is not as clear. To some extent, it can be said that the Insurance Act and the SABS are dealt with by the Tribunal on a regular basis, and one can assume that the Tribunal has acquired a degree of expertise, or at least familiarity, in their application.

[52] However, the issue in this case involves a determination of the applicability, or otherwise, of the doctrine of discoverability to a statutory limitation period. To a large extent, this is an issue of general application that is of some importance to the legal system as a whole. It is doubtful that the Tribunal has any particular expertise in its application. To a large degree the determination of whether or not the principle applies in a particular case depends upon canons of construction of legislation, overlaid with policy considerations, that have little to do with insurance issues.

[53] Clearly, this court in Kirkham, supra, thought the appropriate standard was correctness. Paragraph 5 of the endorsement of O’Leary J. reads as follows:

5. While the Director’s Delegate came to the correct decision as to the limitation period created by Section 281(5) we feel it important to note had he reached the wrong decision, such decision would not have been protected by curial deference. The Legislature gave an injured insured the choice of pursuing a benefits claim in either the court or by arbitration under the Insurance Act. The Legislature could not have intended that the limitation provision set out in Section 281(5) could vary dependent on where the claim was made. The court in interpreting the limitation provision is restricted to a standard of correctness. For consistency and fairness the Ontario Insurance Commission must be bound by the same standard.

[54] O’Leary J. took into account the fact that, in 1998, proceedings could be brought either in court or before a tribunal. Because the court would be restricted to a correctness standard, it had to be the case that a decision of the tribunal could only be reviewed on the same basis.

[55] While that rationale no longer applies (the only remedy now is through the Licence Appeal Tribunal), nevertheless there are other features that might suggest a standard of correctness in this particular case. As noted, it can be strongly contended that the issue here is a general question of law that goes beyond the expertise of the Tribunal. The question of whether the discoverability principle applies must be uniformly answered for all Vice-Chairs deciding cases under the Insurance Act.

[56] In the final analysis, in view of the result on the merits, it is unnecessary to come to any definitive conclusion as to the standard of review. As stated by Goudge J.A. in Turner, supra, at para. 7, “[t]here is no need for us to deal with the proper standard of review to be applied in this case because, even on a correctness standard, there is no error.” See also the reasons of Sopinka J. in Canadian Assn. of Industrial, Mechanical and Allied Workers, Local 14 v. Paccar of Canada Ltd., [1989] S.C.J. No. 107, [1989] 2 S.C.R. 983, at paras. 43 and 44.

[57] The current version of the Limitations Act, 2002, ties the commencement of the standard two-year limitation period to “the day on which the claim was discovered.” Before the enactment of that Act, a limitation period, generally speaking, commenced to run on the day the cause of action arose. As a general proposition, it was held that a cause of action did not arise until a claimant became aware that he or she had a claim. In Kamloops v. Nielsen, [1984] 2 S.C.R. 2, Wilson J., for the majority, referred at p.40 to “[t]he injustice of a law which statute-bars a claim before the plaintiff is even aware of its existence.” The same policy consideration was referred to by Major J. in Peixeiro, supra, at para. 39.

[58] Notwithstanding these policy considerations, there nevertheless is a narrow category of limitation periods that can be considered to be “hard” limitation periods that are triggered by a fixed and known event. In such a case, a claim can be barred even before the claimant is aware that he or she has a claim.

[59] A good example is Levesque v. Crampton Estate, 2017 ONCA 455, 136 O.R. (3d) 161.

[60] In that case, the plaintiff sued the estate of a deceased priest and his Church for damages arising from a sexual assault by the priest. The priest died in 2010. The action was commenced in 2013. The Church cross-claimed against the priest’s estate in 2014. In 2015 the claim against the estate was dismissed on consent. The estate then brought a motion to dismiss the cross-claim, relying on s.38(3) of the Trustee Act, which provides:

38 (3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.

[61] The Court of Appeal held that this limitation period barred the cross-claim, even though the Church could not have commenced it before it was served with the claim in 2013. Any claim, including a cross-claim, had to be commenced within two years of the date of death, which occurred in 2010.

[62] Strathy C.J.O. for the court stated at para. 51 of his reasons:

The Limitations Act, 2002 is based on discoverability. Section 18(1) deems the claim to be discovered on the date the claim is served on the person who seeks contribution or indemnity. In contrast, s.38(3) of the Trustee Act is a “hard” or absolute limitation period. It is triggered by a fixed and known event – the death of the party against whom a claim is made.

[63] At para. 56, Strathy C.J.O. stated “[t]he result of the application of the strict rule in the Trustee Act can sometimes be harsh. In this case, its application results in a claim being time-barred before it is discovered.”

[64] In the case before us, the legislature has tied the commencement of the limitation period to a fixed and known event, namely, the refusal to pay the benefit claimed. The benefits claimed were attendant care and housekeeping benefits. The insurer refused to pay them beyond September 12, 2010. The limitation period commenced to run then.

[65] Like the result in Levesque, the result in the case before us may be considered harsh. It was not determined that the applicant was catastrophically impaired until 2015. Had she been catastrophically impaired, and had disputed the insurer’s refusal to pay attendant care and housekeeping and home maintenance expenses within a period of two years after September 12, 2010, she would qualify for payment of those expenses. However, as found by the Tribunal, the insurer had clearly and unequivocally refused to pay those expenses as of September 12, 2010. Pursuant to the clear words of the limitation period, which ties it to a period of two years after the insurer’s refusal to pay the benefit claimed, the claim is time barred.

[66] In the case of a hard limitation period, there are policy considerations on both sides. In the case of the Insurance Act, and claims under the SABS, an insurer has no control over when an insured applies for a designation of catastrophic impairment. An insurer would not continually assess a claimant if ongoing expenses are not being submitted. Presumably, the legislature thought it important to provide for a reasonable period, after which an insurer’s obligation would be discharged, whether or not meritorious claims may be discovered later.

[67] In my view, in view of the decision of this court in Kirkham, from which leave to appeal to the Court of Appeal was refused, and those of the Court of Appeal in Haldenby, Turner and Sietzema, this application must be dismissed.

[68] In view of this conclusion, it is unnecessary to decide whether the application should be dismissed on discretionary grounds, as argued by the respondent and by the Tribunal.

[69] As agreed at the hearing of the application, the applicant shall pay costs to the respondent fixed in the amount of $8,750 all-inclusive. There will be no order as to costs in favour of or against the Tribunal.

___________________________ Gray J.

I agree

Morawetz R.S.J.

I agree

Whitten J.

Date of Release: October 2, 2018

APPENDIX

EXCERPTS FROM INSURANCE ACT and STATUTORY ACCIDENT BENEFITS SCHEDULE

(a) Insurance Act (version in effect as of September 12, 2010)

Dispute resolution

279. (1) Disputes in respect of any insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled shall be resolved in accordance with sections 280 to 283 and the Statutory Accident Benefits Schedule. R.S.O. 1990, c. I.8, s. 279 (1); 1993, c. 10, s. 1.

Opting out

(2) Any restriction on a party’s right to mediate, litigate, appeal or apply to vary an order as provided in sections 280 to 284, or on a party’s right to arbitrate under section 282, is void except as provided in the regulations. 1996, c. 21, s. 34 (1).

Meaning of “insured person”, ss. 279 to 284

(3) For the purposes of this section and sections 280 to 284,

“insured person” includes a person who is claiming funeral expenses or a death benefit under the Statutory Accident Benefits Schedule. R.S.O. 1990, c. I.8, s. 279 (3); 1993, c. 10, s. 1.

Orders

(4) The Director and every arbitrator appointed by the Director shall determine issues before them by order and may make an order subject to such conditions as are set out in the order. R.S.O. 1990, c. I.8, s. 279 (4); 1996, c. 21, s. 34 (2).

Interim orders

(4.1) The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator. 1993, c. 10, s. 32 (2); 1996, c. 21, s. 34 (3).

Power to bind parties

(5) If an insurer or an insured is represented in a mediation under section 280, an evaluation under section 280.1, an arbitration under section 282, an appeal under section 283 or a variation proceeding under section 284, the mediator, person performing the evaluation, arbitrator or Director, as the case may be, may adjourn the proceeding, with or without conditions, if the representative is not authorized to bind the party he or she represents. 1996, c. 21, s. 34 (4).

Mediation

280. (1) Either the insured person or the insurer may refer to a mediator any issue in dispute in respect of the insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which the insured person is entitled. R.S.O. 1990, c. I.8, s. 280 (1); 1993, c. 10, s. 1; 1996, c. 21, s. 35 (1).

Starting the process

(2) The party seeking mediation shall file an application for the appointment of a mediator with the Commission.

Mediator’s appointment

(3) The Director shall ensure that a mediator is appointed promptly.

Mediation

(4) The mediator shall enquire into the issues in dispute and attempt to effect a settlement of as many of the issues as possible within the time prescribed in the regulations for the settlement of the type of dispute in question.

Extension of time

(5) The parties may by agreement extend the time for the completion of the mediation process, even if the time for completion has expired.

Notice of failure

(6) If at any time before a settlement is effected the mediator is of the opinion that mediation will fail, he or she shall forthwith notify the parties.

Idem

(7) Mediation has failed when the mediator has given notice to the parties that in his or her opinion mediation will fail, or when the prescribed or agreed time for mediation has expired and no settlement has been reached. R.S.O. 1990, c. I.8, s. 280 (2-7).

Report

(8) If mediation fails, the mediator, in addition to any notice required to be given, shall prepare and give to the parties a report,

(a) setting out the insurer’s last offer and the mediator’s description of the issues that remain in dispute;

(b) containing a list of materials requested by the parties that have not been produced and that, in the opinion of the mediator, were required for the purpose of discussing a settlement of the issues; and

(c) containing a recommendation as to whether or not the issues in dispute should be referred for an evaluation under section 280.1.

Same

(9) The mediator may give his or her report to a person performing an evaluation under section 280.1 or an arbitrator conducting an arbitration under section 282. 1996, c. 21, s. 35 (2).

Neutral evaluation

280.1 (1) If mediation fails, the parties jointly or the mediator who conducted the mediation may, for the purpose of assisting in the resolution of the issues in dispute, refer the issues in dispute to a person appointed by the Director for an evaluation of the probable outcome of a proceeding in court or an arbitration under section 282.

Evaluator’s appointment

(2) The Director shall ensure that a person is appointed promptly to perform the evaluation.

Information

(3) The insurer and the insured person shall provide the person performing the evaluation with any information that he or she requests.

Opinion and report

(4) The person performing the evaluation shall give the parties,

(a) an oral opinion on the probable outcome of a proceeding in court or an arbitration under section 282; and

(b) a written report,

(i) stating that the issues in dispute were evaluated by the person,

(ii) identifying the issues that were evaluated,

(iii) identifying the issues that remain in dispute,

(iv) setting out the insurer’s last offer, and

(v) containing a list of materials requested by the person performing the evaluation that were not provided by the parties.

Same

(5) The person who performed the evaluation may give his or her written report to an arbitrator conducting an arbitration under section 282. 1996, c. 21, s. 36.

Litigation or arbitration

281. (1) Subject to subsection (2),

(a) the insured person may bring a proceeding in a court of competent jurisdiction;

(b) the insured person may refer the issues in dispute to an arbitrator under section 282; or

(c) the insurer and the insured person may agree to submit any issue in dispute to any person for arbitration in accordance with the Arbitration Act, 1991. 1996, c. 21, s. 37.

Limitation

(2) No person may bring a proceeding in any court, refer the issues in dispute to an arbitrator under section 282 or agree to submit an issue for arbitration in accordance with the Arbitration Act, 1991 unless mediation was sought, mediation failed and, if the issues in dispute were referred for an evaluation under section 280.1, the report of the person who performed the evaluation has been given to the parties. 1996, c. 21, s. 37.

Payment pending dispute resolution

(3) Subject to subsection (4), if mediation fails, the insurer shall pay statutory accident benefits in accordance with the last offer of settlement that it had made before the failure until otherwise agreed by the parties or until otherwise ordered by a court, by an arbitrator acting under this Act or the Arbitration Act, 1991, or by the Director. 1996, c. 21, s. 37.

Same

(4) If a dispute involves a statutory accident benefit that the insurer is required to pay under subsection 268 (8) and no step authorized by subsection (1) has been taken within 45 days after the day mediation failed, the insurer shall pay the insured in accordance with the last offer made by the insurer before the failure until otherwise agreed by the parties or until otherwise ordered by a court, by an arbitrator acting under this Act or the Arbitrations Act, 1991, or by the Director. 1996, c. 21, s. 37.

(5) Repealed: 2002, c. 24, Sched. B, s. 39 (5).

Limitation period

281.1 (1) A mediation proceeding or evaluation under section 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed. 2002, c. 24, Sched. B, s. 39 (6).

Exception

(2) Despite subsection (1), a proceeding or arbitration under clause 281 (1) (a) or (b) may be commenced,

(a) if there is an evaluation under section 280.1, within 30 days after the person performing the evaluation reports to the parties under clause 280.1 (4) (b);

(b) if mediation fails but there is no evaluation under section 280.1, within 90 days after the mediator reports to the parties under subsection 280 (8). 2002, c. 24, Sched. B, s. 39 (6).

(b) Insurance Act (current version)

Dispute Resolution — Statutory Accident Benefits

Definitions

279 For the purposes of sections 280 to 283,

“insured person” includes a person who is claiming funeral expenses or a death benefit under the Statutory Accident Benefits Schedule; (“personne assurée”)

“Licence Appeal Tribunal” means the Licence Appeal Tribunal established under the Licence Appeal Tribunal Act, 1999. (“Tribunal d’appel en matière de permis”) 2014, c. 9, Sched. 3, s. 14.

Resolution of disputes

280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. 2014, c. 9, Sched. 3, s. 14.

Application to Tribunal

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1). 2014, c. 9, Sched. 3, s. 14.

Limit on court proceedings

(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review. 2014, c. 9, Sched. 3, s. 14.

Resolution in accordance with Schedule

(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule. 2014, c. 9, Sched. 3, s. 14.

Orders, powers and duties

(5) The regulations may provide for and govern the orders and interim orders that the Licence Appeal Tribunal may make and may provide for and govern the powers and duties that the Licence Appeal Tribunal shall have for the purposes of conducting the proceeding. 2014, c. 9, Sched. 3, s. 14.

Orders for costs, other amounts

(6) Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:

1. Orders, including interim orders, to pay costs, including orders requiring a person representing a party to pay costs personally.

2. Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule. 2014, c. 9, Sched. 3, s. 14.

280.1 Repealed: 2014, c. 9, Sched. 3, s. 14.

Protection of benefits after Tribunal resolution

281 (1) After the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits to the insured person on the basis of an alleged change of circumstances, alleged new evidence or an alleged error except as provided under this section. 2014, c. 9, Sched. 3, s. 14.

When benefits may be reduced

(2) The insurer may reduce benefits if,

(a) the insured person agrees;

(b) the insurer is authorized to do so as a result of a successful appeal of the Licence Appeal Tribunal’s decision; or

(c) the insurer is authorized to do so by the Licence Appeal Tribunal. 2014, c. 9, Sched. 3, s. 14.

281.1 Repealed: 2014, c. 9, Sched. 3, s. 14.

(c) Statutory Accident Benefits Schedule (in effect as of September 12, 2010)

Time Limit for Proceedings

51. (1) A mediation proceeding or evaluation under section 280 or 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer’s refusal to pay the amount claimed. O. Reg. 403/96, s. 51 (1).

(2) Despite subsection (1), a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Insurance Act may be commenced within 90 days after the mediator reports to the parties under subsection 280 (8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later. O. Reg. 403/96, s. 51 (2).

Note: On April 1, 2016, the day section 14 of Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 comes into force, section 51 of the Regulation is revoked and the following substituted: (See: O. Reg. 45/16, s. 5)

(d) Statutory Accident Benefits Schedule (Current version)

Time Limit for Proceedings

51. An application under subsection 280 (2) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed. O. Reg. 45/16, s. 5.

CITATION: Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664

DIVISIONAL COURT FILE NO.: 615/17 DATE: 2018-10-02

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Morawetz R.S.J., Whitten and Gray JJ.

BETWEEN:

SOTIRA TOMEC

Applicant/Appellant

-and-

ECONOMICAL MUTUAL INSURANCE COMPANY

Respondent

REASONS FOR JUDGMENT

Gray J.

Date of Release: October 2, 2018