M.B. v. Aviva Insurance Canada, 2017 CanLII 87160

Safety, Licensing Appeals and Standards Tribunal 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 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 Date: December 12, 2017 File: 16-002325/AABS Case Name: M.B. v. Aviva Insurance Canada

Written Submissions By: For the Applicant: Alexander Voudouris, Counsel For the Respondent: Shivani Mehta, Counsel

Overview

1This request for reconsideration arises from a preliminary issue hearing before the Licence Appeal Tribunal (the “Tribunal”) under the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the “Schedule”). The preliminary issue asks whether M.B. is barred under s. 55(1)2 of the Schedule from applying to the Tribunal given her failure to attend an insurer examination. The Tribunal ruled against M.B., who now asks me to reconsider that decision. For the reasons that follow, I grant her request.

The Facts

The accident

2M.B. was injured in a motor vehicle accident on November 21, 2013. Despite the accident, she continued to work for almost the next 21 months until September 1, 2015, when she underwent neck surgery.

The initial IRB claim

3After the surgery, she was unable to work. She therefore applied to Aviva under the Schedule to receive an income replacement benefit (“IRB”). To that end, an occupational therapist, Dr. Chawla, completed a Disability Certificate (OCF-3) dated November 27, 2015, indicating that M.B. was substantially unable to perform the essential tasks of her pre-accident employment and, thus, eligible to receive the IRB.

Aviva requests IEs

4Aviva did not immediately approve the IRB. Instead, it sent M.B. an Explanation of Benefits (“EOB”) dated December 17, 2015, requesting that M.B. attend five insurer examinations (“IEs”). Aviva’s EOB explained that the purpose of the IEs was to “review [her] initial entitlement to [IRBs].” Before describing the IEs in greater detail, the letter also offered the following general “medical reason” to explain why they were being scheduled: “[t]he impairments identified do not appear clearly or directly caused by the accident.” The letter then went on to detail each of the five IEs. With respect to three of them, the letter repeated the same “medical reason” to explain why they were being scheduled.

5M.B. attended the IEs in January 2016. The assessors who completed them concluded that M.B. suffered a substantial inability to perform the essential tasks of her pre-accident employment. Thus, by EOB dated February 17, 2016, Aviva informed M.B. of these results, making clear that she was entitled to an IRB. For that same reason, the EOB also requested further employment and income information from M.B. in order to determine her IRB’s quantum. Based on Aviva’s submissions, I understand that Aviva then began paying the benefit as of September 8, 2015, one week after M.B.’s surgery.

Aviva requests further IEs

6The dispute underlying this request for reconsideration arose shortly thereafter, once Aviva recognized that M.B. was actually in the “post-104 period” – that is, when the Schedule’s test for entitlement to an IRB changes. Within the 104-week mark, entitlement to an IRB turns on whether an insured is substantially unable to perform the essential tasks of her pre-accident employment: see s. 5(1)1. After the 104-week mark, the relevant test asks whether the insured is completely unable to engage in any employment or self-employment for which she is reasonably suited by education, training, or experience: see s. 6(2)(b).

7Recognizing that M.B.’s claim was now in the post-104 period, Aviva sent M.B. a letter dated April 19, 2016, asking her to submit an updated OCF-3 “[i]n order to determine if [she] continue[d] to be eligible for [IRBs].” The letter also notified M.B. that she “may also be required to attend an examination under section 44 to assist [Aviva] in determining whether [she was] still entitled to [IRBs].” Aviva later received an updated OCF-3 dated May 24, 2016.

8However, before it received the updated OCF-3, Aviva requested further IEs. Relying on M.B.’s OCF-3 of November 27, 2015, which was dated in the post-104 period, Aviva sent M.B. an EOB dated April 26, 2016, requesting a further five IEs. The EOB explained that Aviva requested the IEs “to review [M.B.’s] ongoing entitlement to Post 104 [IRBs].” Before describing the IEs, the letter offered the same general “medical reason” that appeared in its earlier EOB of December 17, 2015: “[t]he impairments identified do not appear clearly or directly caused by the accident.” Aviva offered no further medical reason for any of the IEs that its letter then went on to detail.

M.B. fails to attend

9The parties dispute what happened next. Their respective accounts are as follows:

• Aviva’s version. Aviva’s version is that it tried to accommodate M.B., who would not make herself reasonably available for the IEs. M.B.’s legal representative advised Aviva that M.B. was in school and, because of this commitment, was available only on weekends. However, M.B.’s legal representative further advised that M.B. would attend the IEs if they were rescheduled for any time in June 2016. For that reason, Aviva sent M.B. a further EOB dated May 17, 2016, rescheduling the IEs for dates in June and July. M.B.’s legal representative responded by letter dated May 24, 2016, saying again that M.B. was available only on weekends and asking that the IEs be rescheduled for such time, while offering that M.B. was also available on June 10 and 17. In response, Aviva wrote by letter dated May 25, 2016, referencing the parties’ agreement to reschedule the IEs to June 2016, and asserting that M.B.’s availability only on weekends and June 10 and 17 was not reasonable. Aviva received no response.
• M.B.’s version. M.B.’s version is told through three affidavits. In the first, M.B. swears that throughout 2016 she was enrolled in college, which she attended Monday through Friday from 1:00 p.m. to 6:00 p.m., and that her college’s policy required her to attend at least 80% of her classes. M.B. swore that at “all material times” she was and remains willing to attend “properly scheduled [IEs], so long as they reasonably accommodate [her] schedule and time constraints.” The remaining affidavits were sworn by individuals who were or are employed in the law firm representing M.B. They make two basic points. First, M.B. “could not attend the Insurer’s Examination scheduled in May of 2016” because of her school schedule, although M.B. was available on weekends and on June 10 and 17, 2016. Second, both affidavits disavow any agreement that M.B. would be available for the IEs provided they were rescheduled for any time in June 2016.

10In any event, M.B. did not attend the first of the five IEs, which was scheduled for June 14, 2016. As a result, by letter dated June 15, 2016, Aviva suspended her IRBs as of June 21, 2016.

M.B. applies to the Tribunal

11Two months later, on August 25, 2016, M.B. applied to the Tribunal to dispute the entitlement to the IRB.

12As it does in the usual course, the Tribunal held a case conference. During that case conference on November 21, 2016, Aviva argued that M.B.’s failure to attend the IEs meant that her application was barred by s. 55(1)2 of the Schedule. Aviva’s submissions both then and now make clear that, in response, M.B. argued that Aviva’s notice of examination was insufficient and, consequently, her application could proceed. Ultimately, the parties agreed that the Tribunal should conduct a preliminary issue hearing to adjudicate whether in fact s. 55(1)2 applied.

The Tribunal’s decision

13In its decision of May 16, 2017, the Tribunal held that M.B.’s application was indeed barred. Its key findings are as follows:

• The sufficiency of Aviva’s notice. The Tribunal acknowledged M.B.’s argument that Aviva’s notice of examination was insufficient. Specifically, M.B. argued that the reason underlying Aviva’s request for the IEs – namely that “[t]he impairments identified do not appear clearly or directly caused by the accident” – did not constitute a valid medical reason as required by s. 44(5)(a) of the Schedule. However, the Tribunal held that M.B. should have raised the argument “at the case conference or before, so that [Aviva] could have had the opportunity to either respond or remedy the notice:” see para. 11. In the Tribunal’s view, M.B. failed to give Aviva “the required notice to fully respond to this issue.” Therefore, it refused to consider whether Aviva’s notice was sufficient: see para. 12.
• The reason for M.B.’s failure to attend. As for M.B.’s failure to attend the first of the scheduled IEs, the Tribunal found that it was “clear” that M.B. was willing to attend the IEs, but that there was “a miscommunication and/or misunderstanding” between the parties concerning her availability. The Tribunal found that, given this miscommunication, “[M.B.’s] failure to attend the IEs was justified”: see para. 21.
• How the parties should proceed. Nevertheless, the Tribunal held that s. 55(1)2 applied because M.B. was “required to attend the IEs in order for [Aviva] to determine her entitlement to the benefit:” see para. 27. It also addressed the parties’ scheduling difficulties by observing that it was not reasonable for Aviva to accommodate a weekend-only schedule, and that both parties should be more flexible in arranging M.B.’s attendance. In that regard, the Tribunal suggested that Aviva should schedule shorter and more frequent assessments in the mornings, and that M.B. should make herself available during weekday mornings: see paras. 24-6.

14M.B. now asks me to reconsider the Tribunal’s decision. I agree with her that the Tribunal erred.

Discussion and Reasons

A. The timing of M.B.’s objection to Aviva’s notice

15The Tribunal’s principle mistakes were its finding that M.B. raised the sufficiency of Aviva’s notice too late, along with its resulting refusal to adjudicate the issue.

16As M.B. argues, it is immaterial when she first raised the argument. The relevant inquiry is whether the IEs were properly scheduled in accordance with s. 44 of the Schedule. This follows from a plain reading of s. 55(1)2, which provides that an insured person shall not apply to the Tribunal under the following circumstances:

The insurer has provided the insured person with notice in accordance with this Regulation that it requires an examination under section 44, but the insured person has not complied with that section. [emphasis added]

17The legislature was clear. In order to rely on s. 55(1)2, Aviva must have provided M.B. with sufficient notice – i.e., notice “in accordance with” the Schedule – that it requires an examination under s. 44. As the Financial Services Commission of Ontario (“FSCO”) put it, “an insurer’s notice to attend an IE that is ‘in accordance with’ the Schedule is one of the circumstances that must exist before the insurer can rely on [s. 55(1)2].”²

18This makes sense when one views the section purposively. Section 55(1)2 is obviously intended to afford insurers an important remedy against any insured who fails to attend an appropriately scheduled IE: the insured may not apply to the Tribunal. This remedy reinforces the theme throughout the Schedule that “an applicant for benefits must cooperate with insurers to provide information reasonably necessary to determine entitlement.”³ However, this remedy is only just if the insured has received sufficient notice of the examination. Absent such notice, an insured might be barred from commencing an application to the Tribunal for no fault of his or her own.

19Thus, sufficiency of notice is always at play whenever an insurer relies on s. 55(1)2. Given this conclusion, I find that the Tribunal erred in refusing to consider the sufficiency of Aviva’s notice before holding that s. 55(1)2 applied. That determination was not only wrong in law, but was also based on a misunderstanding of the facts. Contrary to the Tribunal’s suggestion that the M.B. failed to raise the sufficiency argument “at the case conference or before,” Aviva’s submissions make clear that, in fact, M.B. raised the argument at the parties’ November 21, 2016 case conference.

B. The sufficiency of Aviva’s notice

20That brings me to the sufficiency of Aviva’s notice.

21Again, in order to rely on s. 55(1)2 to bar M.B.’s application, Aviva must have provided her with “notice in accordance with” the Schedule that it requires an IE under s. 44. In turn, the “notice in accordance with” the Schedule to which M.B. was entitled, and which M.B.’s argument focuses on, is outlined in s. 44(5)(a). That section reads as follows:

(5) If the insurer requires an examination under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,

(a) the medical and any other reasons for the examination;

22M.B. argues that Aviva did not provide her with the necessary medical reason to explain its need for an IE. In her view, Aviva’s explanation that “[t]he impairments identified do not appear clearly or directly caused by the accident” was insufficient. I agree. As explained below, that reason was not only irrational, but was not the actual basis for Aviva’s request.

How the requirement should be interpreted

23The earliest versions of the Schedule granted insurers the right to request an IE without justification.⁴ That changed with the introduction of the Statutory Accident Benefits Schedule – Accidents On or After November 1, 1996.⁵ Section 42(2) of that regulation initially provided that, when requesting an IE, an insurer “shall state the benefit to which the examination relates.” The regulation was then amended to go further, compelling an insurer to “state the reasons why the insurer requires the examination.”⁶ Today, the Schedule demands even more, requiring insurers to provide “the medical and any other reasons” for an IE. Thus, viewed in its historical context, s. 44(5)(a) is obviously part of a legislative trend that has obligated insurers to justify their requests for IEs with progressively greater detail and clarity. That requirement should be interpreted accordingly, particularly given the fact that the Schedule constitutes remedial and consumer protection legislation.

24Moreover, the fact that the same phrase – “medical and any other reasons” – is used elsewhere in the Schedule is also significant. At various turns, the Schedule obliges insurers to provide the “medical and any other reasons” justifying its decisions. Those may be an insurer’s decision to grant or deny specific benefits,⁷ that the Minor Injury Guideline applies,⁸ or that an insured did not suffer a catastrophic impairment.⁹ Regardless of the situation, the legislature’s presumption of consistent expression requires that the phrase be interpreted consistently.¹⁰ At the same time, the phrase must also be applied in a manner that, given its varied use throughout the Schedule, allows it to remain context-sensitive.

25What, then, does the phrase “medical and any other reasons” require?

26In my view, an insurer satisfies its obligation to provide its “medial and any other reasons,” whether under s. 44(5)(a) or elsewhere, by explaining its decision with reference to the insured’s medical condition and any other applicable rationale. That explanation will turn on the unique facts at hand. Therefore, it would be unwise to attempt to outline a comprehensive approach to doing so. Nevertheless, an insurer’s “medical and any other reasons” should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal.

27This same purpose of allowing an insured to make an informed decision was also recognized in FSCO’s seminal decision in Augustin v. Unifund Assurance Company, FSCO A12-000452 (“Augustin”). In that case, the insurer, like Aviva in this case, also argued that the insured’s non-attendance at an IE triggered the application of s. 55(1)2. As in this case, the insurer’s argument required FSCO to determine whether the insurer had given the insured the required “medical and any other reasons” for the IE. Although I do not agree with the entirety of FSCO’s decision, I do agree with its comments at p. 12-3:

Given the serious consequences to an insured person of refusing to attend an IE for which proper notice has been given – barred from commencing a mediation proceeding [or, in this case, an application to the Tribunal] to dispute an insurer’s denial of medical treatment – the notice requirements set out in s. 44(5) should be strictly construed and the insurer’s notice should be closely examined to ensure it complies. The requirements are mandatory. They are there to balance the naturally intrusive nature of an IE and to ensure fairness. The insured person is entitled to make an informed decision about whether they wish to pursue their claims and attend the IE, or not. The legislature has determined that, in fairness, an insured person is entitled to specific information, including medical reasons, about why they are being required to attend an IE. I find it would be unreasonable and unfair to require them to attend without first being in possession of that information.

Why Aviva’s notice was insufficient

28Applying s. 44(5)(a) to the facts at hand, I find that Aviva’s notice was insufficient.

29As mentioned above, Aviva’s EOB of April 26, 2016 explained that it was requesting a further five IEs “to review [M.B.’s] ongoing entitlement to Post 104 [IRBs].” The only “medical reason” that it offered for the IEs was the same one that appeared in its earlier EOB of December 17, 2015, when it first requested IEs: “[t]he impairments identified do not appear clearly or directly caused by the accident.” Aviva’s subsequent EOB of May 17, 2016, which rescheduled the IEs to June and July 2016, relied on this same “medical reason.” Aviva’s position is that this reason “provides an unsophisticated party with the medical reason that the impairments do not appear clearly caused by the accident.” Going slightly further, Aviva relies on FSCO jurisprudence to equate its use of the word “appear” with “belief”, arguing that its medical reason explained its belief that M.B.’s impairment was not caused by the November 2013 accident.

30That explanation overlooks the parties’ history. Only months before, Aviva relied on the same medical reason to justify M.B.’s first set of IEs, the result of which was that Aviva agreed to pay her the IRB. In order to make that determination, Aviva necessarily accepted that M.B.’s injuries were caused by the November 2013 accident. It was therefore illogical for Aviva to suggest shortly after that it needed M.B. to attend further IEs because it believed that her impairment was not caused by that same accident. Insurers cannot satisfy their obligation under s. 44(5)(a) using reasons that are incongruous or, likewise, contrived. That would undermine the Schedule’s intent by effectively allowing them to request IEs at will.

31Moreover, Aviva’s real reason for requesting the additional IEs was something different. Aviva recognized that M.B. had eclipsed the 104-week mark and, consequently, the test for her entitlement to the IRB had become more onerous. As Aviva’s submissions before the Tribunal explain, it sent M.B. the April 26, 2016 EOB to advise her that the additional “IEs were required in order to assess her continuing entitlement to IRBs, as she was now in the post-104 week period” [emphasis added]. Aviva obviously wanted to determine if, as s. 6(2)(b) of the Schedule requires, M.B. was now completely unable to engage in any employment or self-employment for which she is reasonably suited by education, training, or experience. That explanation, if outlined clearly, might have gone a considerable way to providing M.B. with the medical reason under s. 44(5)(a) to which she was entitled. But Aviva did not offer that explanation in any way that allowed an unsophisticated person to understand, let alone make an informed decision how to respond. In the circumstances, therefore, I find that Aviva’s notice was insufficient.

32As part of its response, Aviva highlights the fact that M.B. repeatedly agreed to attend the IEs provided the examinations accommodated her availability. It argues that M.B. should be bound that agreement and, in this regard, relies on FSCO’s decision in Zhang v. Security National Insurance, A13-003889. In that case, FSCO held that the insured’s repeated assertions that she would attend IEs was “equivalent to an undertaking that the notice itself was not being placed in issue” and, on that basis, refused to allow the insured to later argue that the insurer’s notice of examination was insufficient.

33I appreciate Aviva’s concern. M.B.’s late objection to the sufficiency of its notice flies in the face of her repeated agreement to attend the IEs. That being said, s. 280(4) of the Insurance Act¹¹ requires me to resolve this dispute in accordance with the Schedule. And, as explained above, Aviva cannot rely on s. 55(1)2 to bar M.B.’s application unless it has provided her with sufficient notice, which it has not. Moreover, holding M.B. to her agreement to attend the IEs would be tantamount to finding that she waived Aviva’s obligation to provide her with sufficient notice under s. 55(1)2, a proposition with which I have difficulty. While the Schedule contemplates several instances in which insurers may or may not waive the regulation’s requirements,¹² it makes no provision for an insured to do the same. Thus, I fail to see how I can use M.B.’s previous agreement to attend the IEs to provide Aviva any relief against the Schedule’s mandatory language.

M.B.’s additional arguments

34M.B. raises a number of additional issues with the Tribunal’s decision. Given my conclusions above, I need not deal with the balance of those arguments.

Conclusion

35For the reasons above, the request for reconsideration is granted and the Tribunal’s order of May 16, 2017 is cancelled.

Linda P. Lamoureux Executive Chair Safety, Licensing Appeals and Standards Tribunals Ontario

Footnotes

1. 1O. Reg. 34/10.
2. 2Augustin v. Unifund Assurance Company, FSCO A12-000452 at p. 4.
3. 3Aviva Insurance Company of Canada v. McKeown, 2017 ONCA 563 at para. 55.
4. 4The Statutory Accident Benefits Schedule – Accidents Before January 1, 1994, R.R.O. 1990, Reg. 672 has always provided that, in respect of certain claims, an insurer “may, on reasonable notice, require an examination of the insured person”: see s. 23(2). Likewise, the Statutory Accident Benefits Schedule – Accidents After December 31, 1993 and Before November 1, 1996 O.Reg. 776/93 has always provided that, in respect of certain claims, an insurer may “as often as reasonably necessary, give an insured person notice requiring the person to be examined”: see s. 65(1). Neither version imposed any additional notice requirement.
5. 5O. Reg. 403/96.
6. 6See O. Reg. 281/03, which replaced s. 42(2). On March 1, 2006, O. Reg. 546/05 replaced s. 42 completely with a more comprehensive section that, likewise, now provides in s. 42(4)(a) that, whenever the insurer requires an insured person to be examined, the insurer shall “give the insured person a notice” that sets out “the reasons for the examination.”
7. 7See s. 36(4)(b), 36(7)(b), 37(4), 37(6)(c), 38(14)(a), 42(3), 42(13)(b), 43(2). Substantially similar wording – “medical reasons and all other reasons” – also appears in s. 38(8), which deals with the same type of scenario.
8. 838(14)(b).
9. 945(3)(b), 45(5)(b) Substantially similar wording – “medical reasons and all other reasons” – also appears in s. 38(8).
10. 10Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis Canada, 2014) at 214-23.
11. 11R.S.O. 1990, c. I.8.
12. 12See s. 38(3)(a), 40(2)3, 49(2), 64(15).