Safety, Licensing Appeals and Standards Tribunals Ontario

Licence Appeal Tribunal

Automobile Accident Benefits Service

Mailing Address: 77 Wellesley St. W., Box 250, Toronto ON M7A 1N3 In-Person Service: 20 Dundas St. W., Suite 530, Toronto ON M5G 2C2 Tel.: 416-314-4260 1-800-255-2214 TTY: 416-916-0548 1-844-403-5906 Fax: 416-325-1060 1-844-618-2566 Website: www.slasto.gov.on.ca/en/AABS

Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario

Tribunal d'appel en matière de permis

Service d'aide relative aux indemnités d'accident automobile

Adresse postale : 77, rue Wellesley Ouest, Boîte n^o^ 250, Toronto ON M7A 1N3 Adresse municipale : 20, rue Dundas Ouest, Bureau 530, Toronto ON M5G 2C2 Tél. : 416 314-4260 1 800 255-2214 ATS : 416 916-0548 1 844 403-5906 Téléc. : 416 325-1060 1 844 618-2566 Site Web : www.slasto.gov.on.ca/fr/AABS

RECONSIDERATION DECISION

Before: Linda P. Lamoureux, Executive Chair

Date: June 12, 2017

File: 16-001985/AABS

Case Name: 16-001985 v. Aviva Insurance Company of Canada

Written Submissions By:

For the Applicant: No submissions.

For the Respondent: Michal Baura and Michelle Friedman

Overview

[1]. On March 31, 2017, the Licence Appeal Tribunal (the “Tribunal”) issued its final decision in this matter under the Statutory Accident Benefits Schedule – Effective after September 1, 2010¹ (the “Schedule”). The Tribunal held that, among other things, the applicant, F.T., was entitled to the cost associated with a treatment plan for psychological services, along with interest at a rate of 2 per cent per month compounded monthly.

[2]. On April 20, 2017, the respondent, Aviva Insurance Company of Canada (“Aviva”), asked me to reconsider the Tribunal’s decision. Aviva argues that the Tribunal erred in determining the applicable interest rate. For the reasons that follow, I grant Aviva’s request and vary the Tribunal’s decision.

The Facts

[3]. F.T. was injured in an automobile accident on October 20, 2014, as a result of which he sought benefits under the Schedule. This included a request for funding for 12 psychological counselling sessions that a psychologist recommended for F.T. in a treatment plan dated December 14, 2015. Aviva denied this request on February 9, 2016. F.T. also sought other benefits that led to disputes with Aviva, ultimately leading F.T. to file an application with the Tribunal on August 11, 2016.

[4]. The Tribunal heard the parties’ disputes in an in-person hearing on February 14 and 15, 2017. In its decision issued on March 31, 2017, the Tribunal held that F.T. was entitled to the cost associated with the treatment plan for psychological services, along with the payment of interest thereon. The Tribunal dismissed the remainder of F.T.’s claims.

[5]. In addressing F.T.’s entitlement to interest on the overdue benefit, the Tribunal held, at paras. 49-50, as follows:

Section 46(2) of the Schedule provides that if payment of a benefit is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue at the rate of 2 per cent per month compounded monthly.

The applicant is entitled to interest on the overdue payment of the psychological treatment plan.

[6]. As Aviva highlights correctly, the Tribunal’s reference to s. 46(2) is mistaken. (The Tribunal references the section in the previous version of the Schedule – i.e., Statutory Accident Benefits Schedule - Accidents on or After November 1, 1996² – concerning overdue payments.) As Aviva also points out, s. 51 is now the relevant section. Aviva argues that, based on s. 51(3), the applicable interest rate is 1 per cent per month compounded monthly. On that basis, Aviva asks that I vary the Tribunal’s decision.

[7]. By letter dated April 24, 2017, the Tribunal provided F.T. with an opportunity to respond to Aviva’s request for reconsideration. F.T.’s counsel advised the Tribunal that he would not file any responding submissions.

Discussion and Reasons

[8]. Aviva is correct that the Tribunal failed to identify the proper interest rate. Aviva is also correct that the current version of s. 51 applies. That section was the relevant law at the time that payment for the benefit at issue became payable. Still, the applicable rate is not as Aviva suggests.

[9]. The relevant portion of s. 51 reads as follows:

Overdue payments

51. (1) An amount payable in respect of a benefit is overdue if the insurer fails to pay the benefit within the time required under this Regulation.

(2) If payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount in accordance with this section for each day the amount is overdue.

(3) Interest is payable at the rate of 1 per cent per month, compounded monthly, from the date on which the amount becomes overdue until the earlier of the following dates:

1. The date on which the overdue amount is paid.

2. The date, if any, on which interest becomes payable in accordance with subsection (4).

(4) In case of a dispute 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, interest on the benefits in dispute is calculated at the prejudgment interest rate described in subsection 128(3) of the Courts of Justice Act that is used for past pecuniary loss, and is payable for the period that begins on the date on which an application to the Licence Appeal Tribunal is brought under subsection 280(2) of the Act and ends on the date a settlement is reached or a decision is issued that finally disposes of the dispute.

[10]. These sections provide that where a Schedule-related claim becomes the subject matter of an application to the Tribunal, the applicable interest rate on an overdue payment varies. More specifically, there is a separate rate for each of two different periods:

• Before an application is commenced. The rate specified in s. 51(3) of the Schedule – i.e., 1 per cent per month, compounded monthly – applies from the date on which the amount becomes overdue to the date upon which a party commences an application with the Tribunal;
• After an application is commenced. Thereafter, the prejudgment interest rate described in subsection 128(3) Courts of Justice Act³ and which, pursuant to s. 127(2) of that Act and O. Reg. 339/07 enacted thereunder, the Ministry of the Attorney General posts on its website⁴ – i.e., currently 0.8 per cent per annum – applies until the date upon which the application is settled or disposed.

[11]. Thus, the interest rate ordered by the Tribunal was a clear error of law that, if corrected, would have resulted in this matter being decided differently.

Conclusion

1. I therefore grant Aviva’s request for reconsideration and vary the Tribunal’s decision to provide that interest is payable in accordance with s. 51 of the Schedule.

Linda P. Lamoureux

Executive Chair

Safety, Licensing Appeals and Standards Tribunals Ontario

Released: June 12, 2017

Footnotes

1. 1O. Reg. 34/10.
2. 2O. Reg. 403/96.
3. 3R.S.O. c. C.43.
4. 4See here: https://www.attorneygeneral.jus.gov.on.ca/english/courts/interestrates.php.