Tribunal File Number: 16-000588/AABS
Case Name: 16-000588 v State Farm Insurance Company
In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.
And in the matter of a motion brought by the Respondent seeking an order dismissing the Application as being brought outside the limitation period set out in s. 56 of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg 34/10.
Between:
P. C.
Applicant
and
State Farm Insurance Company
Respondent
REASONS FOR DECISION AND ORDER
Order made by: D. Gregory Flude, Vice-Chair
Date of Order: December 14, 2016
Appearances:
Counsel for the Applicant: Frank Van Dyke
Counsel for the Respondent: Michael Taylor
Heard in Writing: November 15, 2016
OVERVIEW:
The applicant was injured in a motor vehicle accident on February 18, 2014. He has applied to the Tribunal for the resolution of a dispute with the respondent insurance company over his entitlement to a non-earner benefit in the amount of $185.00 per week commencing 26 weeks after the accident.
The respondent has brought this preliminary motion to strike out the Application on the basis that it was commenced beyond two years from the date of denial. The respondent raises two grounds in support of its position: either there was an application for benefits in March 2014 that was denied, or there never was an application for benefits. Based on my finding on the first ground, I do not find it necessary to address the second ground.
I find that the Application was brought within the limitation period. In doing so I have taken the respondent’s position at its highest and accepted its submissions on the date of the refusal of the benefit and the adequacy of the refusal notice. I have had to consider the transitional period following the transfer of jurisdiction to hear appeals of this nature from the Financial Services Commission of Ontario (FSCO) to this Tribunal effective April 1, 2016.
ANALYSIS
Prior to April 1, 2016, the two year limitation period for claims for benefits was set out in s. 281.1 of the Insurance Act, R. S. O. 1980 c. I. 8 (“pre-April 1 Act” or “current Act” as applicable) and in the Statutory Accident Benefits Schedule – Effective September 1, 2016 (the “Schedule”). At issue in this motion is s. 282.1 (2)(b) of the pre-April Act and the Schedule. This provision extended the two year limitation period in cases where an applicant filed for mediation before it expired. In the event that the mediation failed to resolve the dispute, the limitation period was extended for 90 days following the date upon which the mediator issued a report to the parties that the mediation had failed. This allowed parties to proceed to arbitration and still be within time.
S. 281.1 was repealed effective April 1, 2016 and the limitation period was left in s. 56 of the Schedule. With the transfer of jurisdiction from FSCO to the Tribunal, the two stage dispute resolution process – parties had to first mediate their dispute before they could move on to arbitration before FSCO or commence a court proceeding – was ended. We are now in a transitional period where some parties who applied for mediation prior to the expiration of the limitation period in their cases received a report of a failed mediation both after April 1, 2016 and after the expiration of the limitation period. Does the fact that they proceeded under the pre-April 1 Act preserve the 90 day extension or does the current Act and Schedule override the 90 day extension? I conclude that the 90 day extension is preserved in these cases.
The applicant filed a Disability Certificate with the respondent on March 4, 2014. The certificate indicated that the applicant did not meet the test for entitlement to a non-earner benefit. Accordingly, in an Explanation of Benefits form dated May 15, 2014, the respondent notified the applicant that he was not entitled to non-earner benefits. The respondent relies on the form as the date upon which the limitation period clock began to run. For the purposes of this motion, I accept the respondent’s position.
On March 4, 2016, within the two year limitation period, the applicant filed for mediation with FSCO. Mediation was scheduled for May 31, 2016. Due to a high volume of applications for mediation filed just prior to the transfer of jurisdiction to this Tribunal, FSCO required parties to confirm in advance that they would attend at the scheduled mediation. The applicant confirmed but the respondent did not. On May 27, 2016, the Friday immediately preceding the Monday mediation date, FSCO notified the parties that the mediation had been canceled.
On June 1, 2016, the applicant filed an Application by an Injured Person for Auto Insurance Dispute Resolution under the Insurance Act with the Tribunal. The respondent takes the position that the limitation period expired on May 15, 2016. The applicant argues that he had 90 days from May 27, 2016 to commence proceedings before this Tribunal. I agree with the applicant.
Neither party was able to point to any transition provisions that specifically address this issue. That leaves me to decide the issue from first principles. I find for the applicant because the position taken by the respondent has the potential to have absurd results that, in my view, could not have been intended by the Legislature in creating the new automobile dispute resolution regime.
Prior to April 1, 2016 this Tribunal could not accept applications for dispute resolution. An aggrieved person seeking dispute resolution had no option but to apply for mediation at FSCO. If I am to accept the respondent’s argument, that after April 1, 2016 there is no 90 day extension, then all of those applicants whose limitation period expired prior to April 1, 2016, but who had applied for mediation and not received a report of a mediator by that date were left without a remedy. They could not apply to FSCO for arbitration since it had no further jurisdiction to accept applications for arbitration. According to the respondent’s interpretation, they also could not apply to this Tribunal because the limitation period had run its course. This clearly is an absurd outcome.
The respondent argues that this applicant faced no such restrictions. His limitation period did not expire until after April 1, 2016. It was open to the applicant to apply to this Tribunal at any time from April 1 to May 15, 2016. This interpretion requires me to read into the provisions of the two pieces of legislation a distinction that is neither stated nor does the language bear.
In the pre-April 1 Act, a party was required to request mediation as a precursor to commencing any other proceeding (arbitration or court). The legislation then gave those parties an added period within which to commence other proceedings – 90 days from the report of the mediator. The legislation takes a practical approach. Regardless of when the limitation period expires, the limitation period is extended for 90 days beyond the date of receipt of the mediator’s report.
Finally, the respondent argues that the applicant failed to get a mediator’s report from FSCO. To accept this argument, I must conclude that the repondent’s refusal to cooperate had the effect of stripping the applicant of the 90 day extension of the limitation period granted by s. 282.1 (2)(b) of the pre-April Act . The mediation was canceled because of the respondent’s refusal to confirm its attendance. It would be a manfiestly unfair result if the respondent could defeat the applicant’s claim because it chose not to cooperate. While noting that s. 281.1 (2)(b) mandates certain content to be included in the mediator’s report, the intention of the statute is that parties attempt to resolve their dispute by way of mediation before commencing litigation. Only if mediation failed, could a party take the next step. I can think of no greater proof of the failure of mediation than the refusal of one party to attend. I find that the respondent’s refusal to attend as evidence by the applicant’s submissions and FSCO’s report of and the cancelation of the mediation as a result satisfies the requirement to provide a report.
Order:
- The respondent’s motion to dismiss the Application on the grounds that it was commenced beyond the two year limitation period is dismissed.
Date of Issue: December 14, 2016
D. Gregory Flude, Vice-Chair