Financial Services Commission of Ontario
Neutral Citation: 2001 ONFSCDRS 175 Appeal Order: P00-00011
OFFICE OF THE DIRECTOR OF ARBITRATIONS
DOMINGOS ANTUNES Appellant
and
ALLSTATE INSURANCE COMPANY OF CANADA Respondent
Before: Stewart M. McMahon, Director's Delegate
Counsel: Scott Tuttle (for Mr. Antunes) Rita L. Urbonavicius (for Allstate)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The appeal is dismissed.
- Mr. Antunes is entitled to his expenses of the appeal.
November 28, 2001
Stewart M. McMahon Director’s Delegate
I. THE ISSUE
This appeal is concerned with the relationship between the two-year limitation period set out in either s. 251(5) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, or s. 26(1) of the SABS-19901, and the provisions of s. 12(5)(b) of the SABS. Allstate Insurance Company of Canada ("Allstate") paid Mr. Antunes income replacement benefits ("IRBs") for 156 weeks, at which point it terminated benefits on the basis that he did not meet the more rigorous requirements imposed by s. 12(5)(b). Mr. Antunes did not contest the termination. However, he applied for benefits approximately three years later, on the basis that he then met the criteria imposed by s.12(5)(b). Allstate denied the benefit, maintaining that Mr. Antunes had failed to institute proceedings within two years of the termination. In response to this, Mr. Antunes argues that the limitation period did not begin to run until he advanced a separate claim for "post 156-week benefits."
II. THE LEGISLATION
Section 12(1) of the SABS provides the basis for entitlement to IRBs. It reads:
The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3).
Section 12(1) does not contain any temporal limit on the insurer's obligation to pay benefits. It is payable for as long as the insured suffers a "substantial inability to perform the essential tasks of his or her occupation" (the "own occupation" test). However s. 12(5)(b) contains an important temporal limitation on the insurer's ongoing obligation to pay benefits. It imposes additional criteria applicable to a claim for any period in excess of 156 weeks. It reads:
The Insurer is not required to pay a weekly benefit under subsection (1),
(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.
Section 12(5)(b) contains two key elements. One, in addition to the "own occupation" test set out in s. 12(1), the insured must now establish that he is prevented from engaging in any suitable occupation (the "any occupation" test). Two, he must establish that he is continuously prevented from engaging in such an occupation.
The general limitation period after which any action will be barred is set out in s. 281(5) of the Insurance Act. It reads:
A proceeding in a court or an arbitration proceeding in respect of no-fault benefits must be commenced within two years after the insurer's refusal to pay the benefit claimed or within such longer period as may be provided in the No-Fault Benefits Schedule.
This two-year limitation is repeated in s. 26(1) of the SABS in the following terms:
A mediation proceeding under section 280 of the Insurance Act or an arbitration or court proceeding under section 281 of the Act in respect of benefits under this Regulation must be commenced within two years from the insurer's refusal to pay the amount claimed in the application for statutory accident benefits or, if the person has attended school or accepted, or returned to, an occupation or employment, as permitted by section 16, within two years of the insurer's refusal to pay further benefits.
III. THE FACTS
Mr. Antunes was injured in a motor vehicle accident on October 25, 1991. Allstate terminated benefits on October 28, 1994, on the basis of the family doctor's opinion that Mr. Antunes was capable of engaging in a sedentary occupation. Mr. Antunes did not contest this termination, as he did not believe that he met the "any occupation" test. However, approximately three years later, in September 1997, the same doctor opined that Mr. Antunues had developed a chronic pain syndrome and was not "fit to return to gainful employment." Mr. Antunes applied for benefits based on this opinion. Mr. Antunes claimed benefits from September 1997 onward. He made no claim for benefits in the interim between October 1994 and September 1997. Allstate denied Mr. Antunes' request for further benefits.
IV. THE PARTIES' POSITIONS
The Insurer advances two reasons for denying Mr. Antunes benefit. One, it argues that he has not been continuously disabled as of the 156-week mark, as required by s. 12(5)(b). Two, it argues that his claim is statute barred because he failed to bring his claim within two years of the termination of benefits.
Mr. Antunes argues that there is nothing in the wording of s. 12(5)(b) to suggest that he must be continuously disabled from the 156-week mark onward. He argues that s.12(5)(b) speaks only to the quality of his condition during the time that he is claiming benefits. Accordingly, he argues that it is immaterial that he was not continuously disabled from October 1994 to September 1997.
With respect to the limitation argument, Mr. Antunes argues that his present claim "pursuant to s. 12(5)(b)" is separate and distinct from his previous claim. He argues that the termination at the 156-week mark applied to the initial claim, not his present claim. He asserts that the limitation period applicable to his second claim did not begin to run until Allstate denied his claim for further benefits in September 1997.
V. ANALYSIS
The fundamental flaw in the Appellant's argument is the proposition that section 12 provides for two separate benefits, one founded upon subsection 12(1), and the other founded upon subsection 12(5)(b). To the contrary, section 12 provides for a single benefit. Subsection (5) is one of seven subsections that when taken as a whole, define; who can qualify for a benefit, what level of disability is necessary to establish entitlement, and the amount of the benefit. Subsection (5) provides two limitations on the insurer's obligation to pay a benefit that would otherwise be payable. First, no benefit is payable for the first week of disability. Second, no benefit is payable for any period in excess of 156 weeks, unless in addition to meeting all the other requirements, the insured can also establish that they are continuously disabled from engaging in any suitable occupation. These criteria are superimposed upon the criteria set out in subsections (1), (2) and (3). Subsection 12(5)(b) does not operate independently to provide for a new or additional benefit. The arbitrator expressed the point as follows:
Section 12 must be considered as a whole, not as separate and unrelated provisions. In that context, the words "for any period" in subsection 12(5)(b) can be understood to distinguish the post-156 week period from the pre-156 week period. Those words do not confer a separate and independent ground of entitlement.
The Appellant's misapprehension regarding the purpose of s. 12(5)(b) is fatal to both the limitation argument and the "continuous argument.
(i) The limitation argument
If s. 12(5)(b) does not provide an independent ground of entitlement, there can be no basis for arguing that Mr. Antunes was advancing a new or distinct claim in September 1997. It follows that there is no basis for arguing that the termination of benefits after 156 weeks, has no relationship to his subsequent demand for benefits in September 1997. The Insurer assessed its exposure to pay ongoing benefits at the 156-week mark, and determined that it had no further obligation. Acting on that conclusion, it issued a termination notice. Mr. Antunes had two years from that point to contest the termination. He failed to do so, and hence his subsequent demand for benefits in September 1997 is barred by the operation of s. 281(5) of the Insurance Act, and s. 26(1) of the SABS.
This conclusion is determinative of the appeal. However, in recognition of the parties' arguments on the nature of the "continuous" requirement of s. 12(5)(b), I will address the issue.
(ii) The "continuous" argument
As noted above, the Insurer argues that Mr. Antunes must establish that he is continuously prevented from engaging in suitable employment as of the 156-week point onward. Mr. Antunes argues that he need only establish this fact during the period that he is claiming benefits, and that it is immaterial that he was not continuously disabled from October 1994 to September 1997.
Mr. Antunes supports his argument by contrasting the wording of s. 12(5)(b) with the wording of the pre-OMPP provision, which states in part "no payments shall be made for any period in excess of 104 weeks except that if at the end of the 104 week period, it has been established that such injury continuously prevents.... "[emphasis added]. Subsection 12(5)(b) does not contain the italiasized words.
In Bouassali and Zurich Insurance Company, (FSCO A97-000029, March 14, 2000), Arbitrator Palmer noted that the omission meant "the requirement to look strictly at the time when weekly benefits end under the "own occupation" test is no longer there, but the necessity for continuity of disability remains." Director's Delegate Draper, applied similar reasoning in Zurich Insurance Company and Lanctot, (FSCO P99-00012, November 9, 1999), stating "while the focus is less obviously on the insured person's condition at 156 weeks, the requirement of continuous disability remains." In both cases, the insured's claim for a few months of benefits following a surgery that was conducted in the post 156-week period was dismissed. Arbitrator Palmer noted that although the three month disability was a "significant period" it was only a "temporary interruption" in the insured person's life. The need to focus on the person's condition at the precise moment the post 156-week test takes effect was also commented on in A.K. and Allstate Insurance Company of Canada, (FSCO A97-000385, October 29, 1998, aff. FSCO P98-00057, June 28, 1999). Mr. K suffered from a mental illness that left him capable of caring for himself at some times, but rendered him seriously disabled at others. Arbitrator Palmer dismissed the claim for ongoing benefits after 156 weeks, on the basis that the evidence did not "support a finding of continuous disability." On appeal, Director's Delegate Draper indicated that he "would be concerned if the decision suggested that an insured person with an episodic disorder can never meet the post 156-week test." However, he did not read the decision that way. Instead, he concluded that the arbitrator reviewed the evidence regarding the claimant 's condition in the post 156-week period, but found he had failed to present sufficient evidence to establish his claim.
I agree with the suggestion that the matter cannot be disposed of on the basis of an examination of the person's condition on the last day of the 156th week. As has been noted in other contexts, a snap-shot approach is rarely advisable. In my view, the person's condition must be looked at over a reasonable period of time. But this analysis must be conducted keeping in mind that s. 12(5)(b) superimposes an additional set of criteria after a defined period of time. Namely, after 156 weeks of disability. Seen in this light, the ultimate question must be: can the insured person demonstrate that as of that time, they are continuously prevented from engaging in any suitable employment?
From a conceptual point of view it is relatively easy to say that when looked at over the long term, a short-term improvement in the person's condition may not break the continuous quality of the disability. Equally, an episodic condition marked by frequent and prolonged stretches of disability, may be characterized as continuous. One needs only ask the question; would such a person be employable? However, the answer is not so obvious when it is not a brief hiatus, but a delay in the onset of the disability. Is it possible to argue that a condition that does not yet exist as of the defined time, but manifests itself later, existed continuously? Even if it is possible to argue that when looked at over the long term, a brief delay in the onset of the condition does not offend the continuous element, this argument does not assist Mr. Antunes, who concedes that he did not begin to meet the additional criteria imposed by s. 12(5)(b) until three years after the 156- week mark.
For these reasons, I agree with the arbitrator's conclusion that Mr. Antunes failed to establish that he was continuously disabled.
VI. CONCLUSION
The arbitrator's decision is affirmed. Mr. Antunes' claim for further benefits fails either on the basis that his claim is statute barred by the provisions of s. 251(5) of the Insurance Act, or on the basis that he was not continuously disabled as requried by s. 12(5)(b) of the SABS.
VII. EXPENSES
Mr. Antunes advanced novel arguments on an important point, and his mistaken belief that s.12(5)(b) provides a distinct ground of entitlement is quite widespread. In the circumstances, I award him his expenses of the appeal.
November 28, 2001
Stewart M. McMahon Director’s Delegate