LICENCE APPEAL TRIBUNAL

Safety, Licensing Appeals and Standards Tribunals Ontario

Date: October 3, 2016

Tribunal File Number: 16-000063/AABS

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, R.S.O. 1990, c I.8., in relation to statutory accident benefits

Between:

Applicant

Applicant

and

The Dominion of Canada General Insurance Company

Respondent

REASONS FOR DECISION AND ORDER

Adjudicator: Lori Marzinotto

Written Submissions:

For the Applicant: James Page, Counsel for the Applicant

For the Insurance Company: Lisa Van Arnhem, Counsel

Held in Writing: August 8, 2016

OVERVIEW

[1]. The Applicant was involved in an automobile accident on November 10, 2013 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).¹

[2]. The Applicant submitted an application for dispute resolution services to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”).

[3]. The Applicant is seeking both non-earner benefits (“NEB”) and income replacement benefits (“IRB”) in her Application for essentially the same time period (NEBs from September 10, 2014 to “unknown” and IRBs from October 24, 2014 to “unknown”).

[4]. The Applicant took the position that she did not have to decide which benefit, (either the NEB or IRB) she would be proceeding with at the hearing before the Tribunal. The Applicant submitted that she was not sent an election form from The Dominion of Canada General Insurance Company (“Dominion”), and therefore, did not have to make an election. The Applicant acknowledged that she was not entitled to be paid for both benefits at the same time.

[5]. Dominion submitted that an election form was not required because the Applicant had “qualified” for income replacement benefits for a short period of time, and because she reported that her self-employment income was nil, Dominion determined that $0.00 was payable to her.

[6]. The Tribunal ordered a preliminary hearing to resolve the issue of whether the Applicant would be seeking the NEB or IRB at the hearing.

Issue:

[7]. The parties agreed that the issue to be decided at the preliminary hearing is as follows:

a) Is the Applicant entitled to claim either non-earner benefits or income replacement benefits?

[8]. This preliminary issue hearing addresses only the Applicant’s ability to pursue either benefit, not whether the Applicant will be successful in her claim for either.

[9]. The Tribunal received the parties’ submissions as ordered at the July 8, 2016 case conference.

DECISION

[10]. I find that pursuant to s.35 (1) of the Schedule, the Applicant was entitled to notice from Dominion to elect the benefit she wished to receive.

[11]. The Application for Accident Benefits (OCF-1) indicated that the Applicant was unemployed, and so a Notice of Election of benefits was not required at this point. However, once the applicant provided the completed Disability Certificate (OCF-3) to Dominion on October 22, 2014, indicating that the Applicant was self-employed, the Applicant may have been eligible for either the NEB or IRB. At that point, a Notice of Election should have been provided to the Applicant, or at the very least Dominion should have advised the Applicant that she was eligible for one of the benefits.

[12]. As a result, the Applicant is entitled to seek both NEBs and IRBs in her Application, and can proceed to a hearing before the Tribunal to determine her entitlement to either benefit.

FACTS and EVIDENCE

[13]. Subsequent to her accident, the Applicant submitted an incomplete OCF-1 on January 10, 2014. The OCF-1 indicated that the Applicant was unemployed.

[14]. On multiple occasions, Dominion wrote to the Applicant requesting a completed OCF-1 as well as the required OCF-3.

[15]. On March 28, 2014, Dominion received the completed OCF-1. Again, it indicated that the Applicant was unemployed.

[16]. On March 28, 2014, Dominion acknowledged receiving the completed OCF-1. Dominion advised the Applicant that since she was unemployed at the time of the accident she may “qualify” for the NEB and that she would not be eligible for the IRB.

[17]. At that time, there was no indication from the OCF-1 that the Applicant may have been eligible for two or more of the benefits under Part II of the Schedule, i.e. IRB, NEB or Caregiver benefit.

[18]. On October 22, 2014, almost one year after the accident, Dominion finally received the requested OCF-3 from the Applicant. The OCF-3 stated that the Applicant was self-employed.

[19]. There was a discrepancy between the OCF-1 and OCF-3 in terms of the Applicant’s employment status. The OCF-1 clearly indicated that the Applicant was unemployed, while the OCF-3 indicated that the Applicant was self-employed.

[20]. On October 24, 2014, Dominion advised the Applicant that she was not eligible for an IRB because the OCF-1 indicated that she was unemployed. Dominion did this despite the fact that the OCF-3 indicated that the Applicant was self-employed. Dominion required the Applicant to attend an insurer’s examinations on November 17, 2014 and December 2, 2014, in part to determine the Applicant’s entitlement to the NEB.

[21]. On December 23, 2014, Dominion advised the Applicant that the insurer’s examinations completed in November and December 2014 indicated that the Applicant did not meet the disability test for the NEB. Dominion further noted that during the insurer’s examinations the Applicant reported running an import/export business and believed the applicant “qualified” for IRBs and would require proof of declared income and self-employment documentation in order to calculate the IRB. Based on this, Dominion determined that the Applicant was not eligible to receive the NEB.

[22]. Dominion then set up an insurer’s examination to determine the Applicant’s entitlement to the IRB. The insurer’s examination report dated April 17, 2015 indicated that the Applicant no longer suffers from a complete inability to perform the essential tasks of her employment and advised the Applicant that her eligibility for the IRB would end on May 22, 2015.

ANALYSIS and REASONING

[23]. Pursuant to s. 35(1) of the Schedule, where an application indicates that an Applicant may quality for two or more of the IRB, the NEB and the caregiver benefit², (“Part II Benefits”), the insurer shall give notice to the Applicant advising her that she must elect the benefit she wishes to receive.

[24]. Based on the completed OCF-1 in March 2014, which clearly stated that the Applicant was unemployed and not a caregiver, there was no indication that the Applicant may have been eligible for two or more of the Part II Benefits. The only benefit that the Applicant appeared to be eligible for was an NEB. At this point, there was no election to be made and Dominion correctly advised the Applicant that she was eligible for the NEB only.

[25]. Pursuant to s. 36(2) of the Schedule, the Applicant was required to provide Dominion with a completed disability certificate (OCF-3) with her application. Despite repeated requests from Dominion, the Applicant did not provide the completed OCF-3 until October 22, 2014.

[26]. The OCF-3 clearly stated that the Applicant was self-employed. Dominion either did not see “self-employed” on the OCF-3 or disregarded the fact and proceeded to send the Applicant to an insurer’s examination to determine her entitlement to the NEB. Dominion did not advise the Applicant that she may also be eligible for the IRB.

Election Triggered:

[27]. Although the OCF-3 is arguably not “the Application” as stated in s. 35(1), the OCF-3 self-employment information should have alerted Dominion to the fact that the Applicant may have been eligible for the IRB or the NEB and therefore triggered the election requirement.

[28]. On October 24, 2014, Dominion wrote to the Applicant acknowledging receipt of the OCF-3 dated September 10, 2014. Dominion acknowledged that the Applicant’s doctor indicated that she met the disability tests for the IRB and NEB. However, Dominion advised the Applicant that she was only eligible for the NEB despite the fact that the OCF-3 indicated she was self-employed. This was an error.

[29]. At this point, Dominion knew or ought to have known that the Applicant was self-employed. Accordingly, Dominion knew or ought to have known that the Applicant may have been eligible for either the NEB or IRB. As stated in paragraph 29 of Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508, 111 O.R. (3d) 321 (CA) (“Galdamez”), an insured’s status as an employed person does not in itself establish that the insured is ineligible for the NEB.

[30]. The Applicant was eligible for the NEB or the IRB at this point, and Dominion failed to advise the Applicant that she was eligible for either of the two benefits. Instead, Dominion advised the Applicant that she was only eligible for the NEB.

[31]. Dominion’s correspondence dated October 24, 2014 advising the Applicant of her eligibility for the NEB is unclear and seems to suggest that the Applicant is both eligible and ineligible for the IRB. It is worth quoting the relevant paragraph of the October 24, 2014 correspondence in order to point out the confusion:

Non-Earner Benefits

Your OCF-1 Application for Accident Benefits dated March 24, 2014 indicates that you were unemployed at the time of the accident and were unable to return to your normal activities due to your injuries. The recently received OCF-3 Disability Certificate has also noted that you suffer a “complete inability” to return to substantially all of your activities of normal life. As such, you are eligible to receive an Income Replacement Benefit and qualify for same.

The benefit is payable at $185.00 a week for the period of disability if you are determined to be entitled to same. Please note that there is also a 26 week waiting period (deductible). We will be providing you with a notice letter under s.36 to determine your initial entitlement to this benefit. A separate notice letter will follow shortly.

Furthermore, you are not eligible to receive an Income Replacement Benefit as you were not employed at the time of the accident.

[32]. The Court of Appeal in Galdamez stated at paragraph 34, “a claimant is not to be barred from receiving a non-earner benefit solely because he or she meets one of the prongs of the two-part test for obtaining an income replacement benefit”. The Applicant had met only one prong of the two-part test for an IRB; she was self-employed, as noted in her OCF-3. As such, the Applicant was eligible for either the NEB or the IRB. At this point, the Applicant had not yet attended an insurer’s examination to establish her entitlement to the NEB or the IRB.

[33]. As the Applicant was also eligible for the IRB, Dominion should have advised her that she could elect either benefit. Dominion has an ongoing duty to adjust the claim. When Dominion received the OCF-3, it knew or ought to have known that the Applicant may qualify for either the NEB or IRB. As stated previously, Dominion either did not see “self-employed” on the OCF-3 or disregarded the fact. The Tribunal makes no finding as to whether Dominion simply missed or disregarded the “self-employed” fact.

Dominion’s Submission that Applicant Qualified for IRB:

[34]. Pursuant to s. 5 of the Schedule, the insurer shall pay an IRB if the insured is self-employed at the time of the accident and suffers a substantial inability to perform the essential tasks of her employment.

[35]. The Court of Appeal in paragraph 31 of Galdamez confirmed that employment status at the time of the accident is only one of the tests to qualify for the IRB. The Applicant must also demonstrate that she meets the relevant disability test – a substantial inability to perform the essential tasks of her employment.

[36]. Dominion submits at paragraph 16 of its responding submissions that the Applicant cannot pursue both the NEB and IRB because the Applicant “qualified” for the IRB and was therefore ineligible for the NEB at any point in time. Dominion’s submissions imply that they had determined the Applicant was self-employed at the time of the accident, and not eligible for the NEB. As I have already noted, in their October 24, 2014 letter Dominion had informed the Applicant that she was eligible for the NEB because she was unemployed at the time of the accident. It was not until the December 23, 2014 letter that Dominion suggested that the Applicant was eligible for the IRB, and required proof of her self-employment income. However, at that time the Applicant only met one of the prongs of the two-part IRB test, and in accordance with Galdamez, was still eligible for the NEB.

[37]. It is unclear what Dominion now relies on to suggest that the Applicant actually “qualified” for the IRB barring her eligibility for the NEB, and at what point in time.

[38]. Correspondence dated December 23, 2014 referred to in Dominion’s responding submissions indicated that Dominion “required further information on your pre-accident employment as [we] believe that you qualify and are eligible to receive an Income Replacement Benefit.”

[39]. On January 29, 2015, Dominion sent correspondence to the Applicant indicating that they had not received the requested information to “assess your entitlement to an Income Replacement Benefit…”

[40]. Dominion later sent the Applicant to insurer’s examinations and received reports completed on April 27, 2015 by Dr. Hines (Psychiatrist) and Dr. Jaroszynski (Orthopaedic Surgeon). Based on these reports and “other medical documents” Dominion stated that the Applicant no longer suffered a substantial inability to perform the essential tasks of her self-employment and the Applicant’s “eligibility” for the IRB would cease effective May 22, 2015.

42. The reports obtained by Dominion that were completed on April 27, 2015 indicated that the Applicant did not meet the requisite disability standard and therefore she did not “qualify” for the IRB as Dominion now suggests.

43. The evidence before me on the preliminary motion does not substantiate Dominion’s argument that they found that the Applicant “qualified” for the IRB. The Applicant met the employment prong of the two-part IRB test, but not the "substantial inability" prong. In short, the Applicant never "qualified" for the IRB, and was eligible for both the IRB and NEB.

Previous Version of SABS Did Not Contain Election Provision:

44. Dominion raises the fact that the Schedule now contains s. 35(3) that indicates that the Applicant’s election for a specific Part II Benefit is final. This provision did not exist under the previous version of the SABS (O.Reg 403/96). Dominion submits that this shows the clear intention of the SABS to limit an Applicant to claiming only one of the Part II Benefits

45. At paragraph 45 of Toresho v. Primmum Insurance Company, 2015 ONSC 516, (“Toresho”), the Court agrees with the Court of Appeal in Galdamez and states that, “Concurrent actions, relating to the same time period, each claiming a different type of benefit can proceed forward to a resolution…” The trier of fact will have to determine, which benefit, if any, are payable.

46. Although the Toresho case applied O.Reg 403/96 SABS, which did not contain the finality of election, provision (s.35 (3)), there is nothing in the Schedule that prevents an Applicant from applying for both benefits where an election has not been provided to the Applicant. Both s. 5(2) and s. 12(4)(c) contain the “election” language where if the insured elected for a benefit, they are not eligible to receive another Part II Benefit.

47. In this case, the Applicant did not elect either the IRB or NEB because an election was not provided to her. The Applicant was eligible for either the NEB or the IRB and given that an election was not provided to the Applicant, she can apply for both.

48. Section 12 (1)(1) of the Schedule does not contain the “election” language but indicates that the insurer shall pay a NEB where the insured suffers a complete inability to carry on a normal life and does not qualify for an IRB. There is no dispute, and the Applicant acknowledges that she is not entitled to be paid for both benefits at the same time. If in fact the Applicant is entitled to an IRB, then pursuant to s.12 (1)(1) of the Schedule, she is not entitled to a NEB. Although Dominion now asserts that the Applicant qualified for an IRB and is therefore not eligible for a NEB, Dominion’s submissions for this preliminary hearing does not support a finding that the Applicant “qualified” for an IRB at any time.

DECISION

49. After considering the submissions, evidence and case law provided by the parties, pursuant to the authority vested in the Tribunal under s.280(2) of the Act, I order that the Applicant is entitled to seek both NEBs and IRBs in her Application.

50. The issue of the Applicant’s entitlement to either benefit will proceed to a hearing as previously scheduled to take place on October 20 and 21, 2016 along with the remaining substantive issues as indicated on the Tribunal’s order dated July 8, 2016.

Released: October 3, 2016

Lori Marzinotto

Adjudicator

Footnotes

1. 1The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2The caregiver benefit is not an issue in this case.