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
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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 no 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
File: 16-000726/AABS
Case Name: G.P. and Aviva Insurance Company of Canada
Written Submissions By:
For the Respondent: Danielle N. Wilkinson, Counsel
For the Applicant: Kwaku Bona, Agent
Overview
1On February 13, 2017, the Licence Appeal Tribunal (“Tribunal”) issued a decision on a preliminary question in a matter originating under the Statutory Accident Benefits Schedule – Accidents on or After November 1, 19961 (“Schedule”) between the applicant, G.P., and her insurer, Aviva Insurance Company of Canada (“Aviva”).
2The applicant received Income Replacement Benefits (“IRBs”) for approximately a month, until she returned to work. In 2015, more than nine years after the accident, she applied to Aviva to reinstate her IRBs on the basis that her condition deteriorated. Aviva refused.
3The issue before the Tribunal was whether the applicant should be allowed to proceed to the Tribunal to dispute her entitlement to IRBs. More specifically, the question at issue was whether the applicant properly filed her application within the limitation period mandated in s. 281.1 of the Insurance Act2 and s. 51 of the Schedule.
4The Tribunal assessed Aviva’s termination of IRBs in 2006 as the triggering event for the commencement of the limitation period. The Tribunal found that Aviva did not comply with the requirements of a proper and valid notice that an insurer must provide to an applicant when refusing to pay for an applicant’s benefits. As a result, the limitation period did not begin to run and the applicant was not out of time to dispute her claim. On this basis, the Tribunal ordered that the applicant might proceed with her application disputing entitlement to IRBs.
5On March 3, 2017, Aviva asked me to reconsider the Tribunal’s preliminary decision, arguing that the Tribunal erred in a number of ways, discussed below. On March 27, 2017, the applicant provided responding submissions.
6For the reasons that follow, I grant Aviva’s request for reconsideration, cancel the Tribunal’s decision and dismiss this application.
Background
7The applicant was injured in a car accident on August 31, 2006. She applied for and received IRBs from Aviva for only a short period – she returned to work about a month after the accident.
8At the time of her accident, the applicant’s benefits were governed by an older version of the Schedule.3 Under this version, injuries perceived to be the most minor in nature, ‘Whiplash Associated Disorder’ (“WAD”), Grades I and II, were segregated from other types of injuries through what was then known as the Pre-Approved Framework Guideline (“PAF Guideline”).4 Applicants within the PAF were only entitled to 16 weeks of IRBs.5 In order to claim IRBs beyond the 16-week PAF framework, an applicant needed to demonstrate that her injuries fell outside the PAF Guideline for Grade II WAD Injuries.6
9On October 19, 2006, Aviva sent the applicant an Explanation of Benefits (“2006 EoB”) and a letter acknowledging the applicant’s eligibility for IRBs, but nevertheless indicating that Aviva was not required to pay the IRBs for any period longer than 16 weeks. Aviva explained that this was because the applicant’s impairment fell within the PAF Guideline for WAD Grade II injuries.
10On November 26, 2015, more than nine years after the accident, the applicant advised Aviva that she is completely unable to work and that her inability to work is related to the 2006 accident. The applicant provided a medical opinion to support her claim, and requested reinstatement of her IRBs. Aviva denied the reinstatement request on December 18, 2015.
11The applicant proceeded to dispute the reinstatement of her IRBs at the Financial Services Commission of Ontario (“FSCO”) by applying for mediation. Prior to the Tribunal being granted exclusive jurisdiction over accident benefits disputes, on April 1, 2016, parties were required to undergo mandatory mediation at FSCO before proceeding to arbitration or commencing a civil action.
12The mediation at FSCO was unsuccessful. Thus, on June 30, 2016, the applicant filed an appeal pursuant to the new dispute resolution process at the Tribunal, seeking entitlement to IRBs.
13The matter proceeded to a preliminary hearing in September 2016, during which Aviva argued that it had already unequivocally denied the IRB claim in the 2006 EoB and letter advising the applicant that her entitlement to IRBs is limited to the PAF Guideline for WAD Grade II injuries and, as a result, her current claim for these benefits was time-barred.
14The applicant argued that Aviva’s termination of her IRBs in 2006 was improper. She disagreed that the 2006 EoB and accompanying letter included a clear and unequivocal denial of her IRB entitlement triggering the limitation period. Instead, the applicant focused on Aviva’s response to her request for reinstatement of IRBs in 2015 as the triggering event for the limitation period. The Tribunal agreed with the applicant’s argument.
15In a decision dated February 13, 2017, the Tribunal found that Aviva’s notice denying IRBs in 2006 was improper and that the triggering event for the time limitation was Aviva’s subsequent response in 2015. As a result, the applicant was within the statutory limitation period and, thus, permitted to proceed with her dispute.
16Aviva requested reconsideration of the Tribunal’s decision. In its request, Aviva argues that the Tribunal violated procedural fairness requirements, acted outside its jurisdiction, and made significant errors of law and fact such that the Tribunal should have reached a different conclusion.
17For the purposes of my analysis below, the relevant test for granting a reconsideration is set out in Rule 18.2(b) of the Tribunal’s Rules of Practice and Procedure (“LAT Rules”). It states that the Executive Chair will not grant a request for reconsideration unless the Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different outcome.
Reasons
18For the reasons that follow, I grant Aviva’s request for reconsideration and find that the Tribunal made a significant error in its decision to allow the applicant to proceed with her application.
19I find that the Tribunal made two errors. First, it erred in determining that Aviva’s denial of IRBs in 2006 was improper. Second, it erred in determining that Aviva’s 2015 response to the applicant’s request for reinstatement was the new triggering event for the limitation period. These errors were significant enough, in the language of Rule 18.2(b), that in the absence of these errors, the Tribunal would likely have reached a different decision.
i. The Tribunal erred in determining that Aviva’s denial of IRBs in 2006 was improper.
20I find that Aviva’s written notice in the 2006 EoB and accompanying letter met the requirements outlined in the Schedule. It clearly and unequivocally communicated to the applicant that her IRBs would no longer be payable after a specific date. Aviva also outlined the applicant’s rights to dispute the refusal, while specifically identifying the time limits to do so.
21The applicant failed to commence a dispute pursuant to the dispute resolution regime that existed at the time of Aviva’s refusal – that is, mediation within two years after Aviva’s refusal to pay the benefit claimed. Thus, the Tribunal erred when it then allowed the applicant to proceed to a hearing on the issue of IRBs.
22The relevant principles regarding limitation periods and an insurer’s refusal to pay benefits can be summarized as follows. While the Tribunal is not bound by FSCO jurisprudence, I found the following principles, and the cases from which they arise, persuasive and worth highlighting:
the notice provided to an applicant communicating an insurer’s decision to terminate or refuse accident benefits must be clear and unequivocal, and permit an applicant to decide whether or not to challenge the denial: Turner v. State Farm Mutual Automobile Insurance Company; Zeppieri v. Royal Insurance Co. of Canada; Monks and Dominion of Canada General Insurance Company7;
the notice to an applicant of an insurer’s refusal to pay benefits must also contain, in straightforward and clear language, directed towards an unsophisticated person, a description of the most important points of the dispute resolution process and the relevant time limits that govern the entire process: Smith v. Co-operators General Insurance Co. (“Smith and Co-operators”); Sietzema v. Economical Mutual Insurance Company (“Sietzema”)8;
the refusal to pay benefits may be premature and may include benefits that the applicant has yet to apply for or claims that have yet to crystalize: Bonaccorso v. Optimum Insurance Company Inc. (“Bonaccorso”); Katanic v. State Farm Mutual Automobile Insurance Company (“Katanic”)9; and Sietzema10; and
re-applying for benefits (due to relapse or fresh medical evidence) more than two years after an initial refusal will not trigger a new limitation period: Wadhwani v. State Farm Mutual Automobile Insurance Company (“Wadhwani”); Haldenby v. Dominion of Canada General Insurance Co. (“Haldenby”))11.
23In this case, Aviva’s 2006 EoB clearly stated how long IRBs would be paid and why:
The insurer is not required to pay an income replacement benefit, for the first week of the disability (Wait Period Aug 31/06 to Sept 06/06) and for any period longer than 16 weeks (Until Dec 20, 2006) after the accident, in the case of an insured person whose impairment comes within the Grade II Whiplash Guideline, if the accident occurred after April 14, 2004.
24The 2006 EoB also clearly explained the applicant’s right to dispute and provided a description of the dispute resolution process and relevant time limits. Specifically, part 6 of the 2006 EoB stated in bold type “YOUR RIGHT TO DISPUTE THE INSURER’S DETERMINATION OF YOUR CLAIM FOR STATUTORY ACCIDENT BENEFITS” and “WARNING: TWO YEAR TIME LIMIT” followed by a further explanation that stated: “You have TWO YEARS from the date of your insurer's refusal to pay, or reduction of a benefit, to arbitrate or commence a lawsuit in court…”
25In the Tribunal’s opinion, this was not a termination of benefits, but rather a “statement of entitlement” explaining to the applicant the nexus between IRBs and the PAF Guideline as outlined in the Schedule. The Tribunal’s analysis on this issue consisted of the following two paragraphs.
The characterization of the applicant’s impairments as being within the PAF was a determination of the applicant’s entitlement to benefits. The limitation of those benefits to 16 weeks was by operation of the Schedule, not a decision by the respondent to terminate those benefits at the end of 16 weeks. It is well established that the Schedule is consumer protection legislation. In my view, a lay person would not read the EoB as an unequivocal denial of benefits, but as statement of entitlement. This is particularly so for the applicant whose application for reinstatement of IRB disputes that her case is one of “an insured person whose impairment comes within the Grade II Whiplash Guideline”.
Second, should the applicant be successful in her claim that her impairments are outside the PAF, she would not be bound by the statutory limits which were based on the initial characterization of her impairments. The respondent has an obligation to continuously adjust the file and must consider the applicant’s claim that her impairments take her out of the PAF. In my view, the limitations clock starts with the respondent’s December 18, 2015 denial of the applicant’s claim that she is entitled to benefits beyond those granted by the PAF.
26In my opinion, the Tribunal made a significant error: Aviva made it clear to the applicant in the 2006 EoB that, after December 20, 2006, IRBs would no longer be payable. I find that Aviva’s communication to the applicant was a clear and unequivocal refusal to pay IRBs beyond 16 weeks.
27The requirement to provide proper notice of refusal to pay benefits is not dependent on including specific wording such as ‘refusal’ or ‘denial’. A refusal can take various forms. It may be a ‘refusal’ to pay benefits or a ‘termination’ of benefits. It may also be in the form of an explanation that reaffirms the Schedule. It may also refer to a ‘reduction’, a ‘stoppage’, or a ‘suspension’ of benefits.
28In this case, the Tribunal’s interpretation was too narrow. It essentially disregarded the fact that, in substance, Aviva’s 2006 EoB both denied IRBs beyond the PAF Guideline and informed the applicant of her right to dispute this determination. Aviva’s reliance on the language of the Schedule, the explanation of entitlement based on the PAF Guideline or the inclusion of a future end date does not take away from the clarity of its notice and the decision to no longer pay the applicant IRBs. Simply put, the explanation provided by Aviva on October 19, 2006 was that the applicant was automatically entitled to 16 weeks by virtue of the Schedule. As a result, the final payment date for IRBs was set for December 20, 2006, indicating that the IRBs were finite. This notice, together with the explanation of the right to dispute this determination, permitted the applicant to decide whether she should challenge the refusal. I therefore find October 19, 2006 to be the proper and effective refusal date from which the limitations clock began to tick.
29I also note that Aviva’s refusal to pay a benefit after a certain end date does not in itself make the refusal improper. Premature refusals may still be considered clear and unequivocal and trigger the limitation period. In Bonaccorso, the Court of Appeal found that a denial of benefits could be made before the claim had crystalized. Similarly, in Sietzema, the Court of Appeal confirmed that an insurer could refuse a benefit that has yet to be claimed.
30In its October 19, 2006 EoB and letter, Aviva provided information sufficient enough to convey to the applicant that a determination on her entitlement to IRBs had been made based on the applicant falling within the PAF Guideline. Aviva’s refusal, which projected an end date into the future, did not take away from the applicant’s ability to decide whether to challenge Aviva’s refusal. In Sietzema, the Court of Appeal found that clear notice of the right to dispute a refusal or reduction of benefits and clear notice of the two-year limitation sufficiently triggered the limitation period in the Schedule. In my opinion, Aviva’s refusal of IRBs in 2006 contained information and direction sufficient to satisfy the requirements of a proper and valid notice that triggered the limitation period. The Tribunal made a mistake interpreting otherwise.
ii. The Tribunal erred in determining that Aviva’s response in 2015 was the new triggering event for the limitation period.
(a) Subsequent claims for IRBs (including fresh medical reports) do not trigger a new limitation period
31The Tribunal erred by determining that the second refusal letter dated December 18, 2015 is the new triggering event for the limitation period.
32On November 26, 2015, Aviva received an OCF-3 and a report from Dr. West requesting that the applicant’s IRBs be brought into good standing.
33The Tribunal determined that this triggered a new limitation period. This was a significant error because an applicant cannot reapply for a denied benefit to start a fresh limitation period. The Court of Appeal in Wadhwani addressed this issue. In that case, the insured returned to work after an accident and then later stopped working because of accident-related injuries. The insured was not allowed to rely on ‘fresh medical findings’ two years after income replacement benefits were denied to reactivate the limitation period and make fresh claims for further benefits.
34Similarly, in Haldenby, the Court of Appeal provided as follows:
[t]here is no provision in the Act or the SABS which allows a claimant to reapply for further benefits after an insured person’s benefits have been terminated by the insurer. The only remedy for the insured person is to appeal the termination of the benefits within the two-year period.12
35The Tribunal focused on Aviva’s ongoing obligation to adjust its insured’s claims and consider new information as it becomes available. However, this obligation does not give rise to a new limitation period nor, in my view, does a relapse or deterioration in the insured person’s condition revive a claim that is otherwise already statute-barred. In my opinion, weekly benefits are to be treated as an ongoing claim, and, once the insurer refuses to pay or to continue paying, as Aviva did in this case, the insured person has two years to dispute that decision through the applicable dispute resolution process.
36With respect to new circumstances that may arise during the adjustment of an IRB claim, it is important to distinguish between, on the one hand, “reapplying” for benefits for which the insurer has issued a proper denial and for which a limitation period to dispute applies and, on the other, a reconsideration of benefits within the limitation period on the basis of new information. Here the tribunal confused the IRB eligibility requirements in s. 4(1)1 (to apply within 104 weeks of the originating accident) with a general limitation period.
(b) The applicant failed to commence a dispute within the limitation period
37In 2006, at the time of Aviva’s valid refusal, the dispute resolution regime required an applicant to commence mediation within two years after the insurer’s refusal to pay benefits before disputing her entitlement to accident benefits at arbitration or court.
38In Katanic, the court stated, “[l]imitations are important. They provide certainty; ensure that evidence is maintained; and ensure that plaintiffs do not sleep on their rights. This is particularly so when they are represented by counsel.”13 In this case, the applicant, represented by the same counsel throughout the entirety of the file, did not commence a dispute after receiving Aviva’s notice of refusal to pay IRBs in 2006. The applicant’s request for reinstatement of IRBs occurred on November 26, 2015, more than seven years after the limitation period expired.
39In Bonaccorso, the Court of Appeal commented on the possibility of extending a claimant’s entitlement to benefits for an indeterminate period, finding that “[it] would be inconsistent with the need for finality, certainty and the principle of diligence underlying limitation periods.”14
40While the Schedule must be interpreted from a consumer protection perspective, as per Smith and Co-operators, and while limitation periods, like exclusion clauses, should be interpreted narrowly, I agree with Aviva that the applicant’s (and the Tribunal’s) interpretation, would effectively eviscerate the purposes of the limitation period contained in the Schedule and the Insurance Act. As long as the principles and requirements for a proper notice are adhered to, such as in this case, the Schedule’s time limits cannot be set aside.
41In this case, the applicant had two years from Aviva’s refusal in 2006 to show Aviva (or an adjudicator or judge) that her impairments are outside of the PAF Guideline and warrant additional IRBs. The applicant did not do so.
Conclusion and Order
42I find that the Tribunal erred when it determined that the December 18, 2015 letter from the respondent was the effective date of denial rather than the proper refusal of IRBs on October 19, 2006 and that this error was significant enough that the Tribunal would likely have reached a different decision, pursuant to LAT Rule 18.2(b).
43As a result, I find that the Tribunal also erred when it allowed the applicant to proceed to a hearing on the issue of IRBs because the two-year limitation period for dispute had expired.
44For these reasons, I therefore grant Aviva’s request for reconsideration, cancel the Tribunal’s decision of February 13, 2017 and dismiss this application.
Linda P. Lamoureux
Executive Chair
Safety, Licensing Appeals and Standards Tribunals Ontario
Released: November 8, 2017
Footnotes
- O. Reg. 403/96.
- R.S.O 1990, c. I.8, s. 281.1.
- Supra, note 1.
- Superintendent’s Guideline No. 02/03
- Supra, note 1, s. 37.1
- Under the PAF, a claimant was generally exempted where they either: (a) had a pre-existing condition that differentiated their WAD I or WAD II injury from the norm; (b) developed additional symptoms that fell beyond a mere WAD I or WAD II injury; or (c) did not recover within the prescribed timeframes (s.37.2 of the Schedule).
- 195 OAC 61, 2005 CanLII 2551 (C.A.); [1994] O.I.C.D. No. 13 (QL); [2009] O.F.S.C.D. No. 162 (QL).
- [2002] 2 SCR 129, 2002 SCC 30 at para 14 [Smith and Co-operators]; 2014 ONCA 111 [Sietzema].
- 2016 ONCA 34 [Bonaccorso]; 2013 ONSC 5103 [Katanic].
- Sietzema, supra note 6.
- 2013 ONCA 662 [Wadhwani]; (2001) 55 O.R. (3d) 470, 2001 CanLII 16603 (C.A.) [Haldenby]
- Haldenby, supra note 9 at para 30.
- Katanic, supra note 7 at para 25.
- Bonaccorso, supra note 7 at para 17.