Tribunal File Number: 17-004156/AABS
Case Name: 17-004156 v Aviva Insurance Canada
In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.
Between:
A. D.
Applicant
and
Aviva Insurance Canada
Respondent
DECISION
ADJUDICATOR: Chris Sewrattan
APPEARANCES:
For the Applicant: Vahe Avagyan, counsel
For the Respondent: Andrea D' Addese, counsel
HEARD: Written Hearing: November 7, 2017
Overview
1On August 1, 2015 the applicant and her husband1 were involved in a motor vehicle accident. The applicant was the driver and her husband was in the front passenger seat. The applicant applied for an income replacement benefit (“IRB”) under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”). Aviva Insurance Canada (“Aviva”) denied payment for some of the benefit. The applicant appeals to the Licence Appeal Tribunal – Automobile Accident Benefits Service for the IRB’s full payment.
Issues in Dispute:
2The following issues are in dispute before the Tribunal:
Is the applicant entitled to an income replacement benefit (IRB) in the amount of $400.00 weekly for the period covering August 1, 2015 to date, submitted September 15, 2015 and denied by Aviva on July 11, 2017?
Is the applicant entitled to interest on any overdue payment of the IRB?
Is the applicant entitled to an award on ground that Aviva unreasonably withheld or delayed payments to the applicant?
Is the applicant entitled to costs under Rule 19 of the LAT Rules?
Is Aviva entitled to costs under Rule 19 of the LAT Rules?
Result:
3The applicant has failed to prove her entitlement for an IRB under s. 5(1) of the Schedule. She is not entitled to an IRB for the period before October 21, 2015 or the period between May 1, 2015 and the date of this hearing. However, as a result of s. 36(6) of the Schedule, the applicant is entitled to payment for an IRB at a rate of $400 weekly for the period between October 21, 2015 and May 1, 2017. The applicant is entitled to interest on the outstanding payment in accordance with the Schedule.
4The applicant is not entitled to an award under s. 10 of Regulation 664 of the Insurance Act. An award can only issue when an insurer has unreasonably withheld or delayed a payment to which the applicant is entitled. Although Aviva delayed in responding to the applicant, Aviva did not delay in providing a payment to which the applicant is entitled.
5The applicant is not entitled to costs under Rule 19, Aviva is not entitled to costs either.
Discussion
1. Is the applicant entitled to an IRB of $400.00 weekly for the period covering August 1, 2015 to date?
6A brief factual background is necessary to frame the IRB claim. Beginning in 2007 the applicant worked as a validator. The work was largely sedentary. It entailed typing, data entry, and stapling. In April 2015, the applicant experienced left wrist pain and briefly left work to avail herself of an Employment Insurance (EI) sickness benefit. She returned to work on July 2, 2015. Three weeks before the accident, on July 6, 2015, the applicant was laid off and began to receive regular EI.
7The applicant was not employed at the time of the accident. Aviva does not contest that the applicant meets the employment eligibility criteria for an IRB: see s. 5(1) of the Schedule. Aviva does contest that the as a result of the accident the applicant suffers from a substantial inability to perform the essential tasks of her employment.
8In conclude that the applicant is entitled to an IRB of $400.00 weekly for the period between October 21, 2015 and May 1, 2017. She is not entitled to an IRB for the period before October 21, 2015 or the period between May 1, 2017 and the date of this hearing. My reasoning tracks the parties submissions, which are divided into three parts:
The IRB test generally: Entitlement prior to October 21, 2015 and between May 1, 2017 and the date of this hearing
The application of s. 36(6): Entitlement between October 21, 2015 and May 1, 2017
The application of s. 36(7): Entitlement between May 1, 2015 and the date of this hearing
1(a) The IRB test generally: Entitlement prior to October 21, 2015 and between May 1, 2017 and the date of this hearing
9The applicant has not met the test under s. 5(1) of the Schedule for entitlement to an IRB. She is not entitled to an IRB for two time periods as a result: prior to October 21, 2015, and between May 1, 2017 and the date of this hearing. The applicant must prove, among other things, that as a result of the accident she suffers a substantial inability to perform the essential tasks of her pre-accident employment: see s. 5(1) of the Schedule. The applicant has provided no evidence on her inability to perform the essential tasks of her pre-accident employment. The applicant’s IRB claim rests entirely on legal arguments about the operation of s. 36 of the Schedule.
1(b) The application of s. 36(6): October 21, 2015 to May 1, 2017
10Although the applicant has not met the test for entitlement to an IRB under s. 5(1), Aviva concedes at paragraph 31 of its factum that because of s. 36(6) the applicant is entitled to an IRB between October 21, 2015 and May 1, 2017.
11Section 36(6) requires an insurance company to pay for an IRB if the insurance company receives both an Application for Accident Benefits and Disability Certificate and does not respond with a notice of a decision within ten business days. The insurance company is required to pay for the benefit between the day the application and certificate were received by the insurance company and the day that the insurance company responded with notice of its decision. In this case, the parties agree that Aviva provided notice of its decision on May 1, 2017 and this was after the ten-business day deadline. The parties disagree on two points, and these are the remaining issues to be decided in relation to s. 36(6):
When did Aviva receive the Application for Accident Benefits and Disability Certificate? This determines the starting point of the period in which Aviva must pay for the IRB.
What is the quantum of the IRB?
12With regard to the first issue, the applicant submits that Aviva received the Application for Accident Benefits and Disability Certificate on October 1, 2015. Aviva submits that the Application for Accident Benefits was received on October 21, 2015.
13I have examined Aviva’s copies of both documents. The Disability Certificate has a facsimile receipt time stamp of October 1, 2015 at 5:33 p.m. The Application for Accident Benefits has a facsimile receipt time stamp of October 21, 2015 at 3:23 p.m. I am satisfied that the facsimile receipt stamps are correct; as a result, I find as a fact that Aviva received the Application for Accident Benefits on October 21, 2015. Since the time period for payment under s. 36(6) begins when both the Application for Accident Benefits and Disability Certificate are received, the payment period under s. 36(6) begins on October 21, 2015.
14With regard to the second issue, the parties disagree on the IRB rate between October 21, 2015 and April 9, 2017. The parties agree that the IRB rate between April 9, 2016 and May 1, 2017 is $400, the maximum allowed under the Schedule. Aviva retained an accounting firm, which assessed the time period in dispute at a rate of $50.70. The lower rate is solely due to the applicant’s tenure on EI during this time period. As the applicant submits, quite ably, EI cannot be deducted from an IRB in this manner. Sections 4(1)(a) and 47(3)(f) of the Schedule are the authorities for the applicant’s submission. Section 4(1)(a)(i) states:
“other income replacement assistance” means, in respect of an insured person who sustains an impairment as a result of an accident,
(a) the amount of any gross weekly payment for loss of income that is received by or available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan, other than, (i) a benefit under the Employment Insurance Act (Canada) Section 47(3)(f)(i) states: “temporary disability benefit” means, (f) any other periodic temporary benefit paid under an income continuation benefit plan or law, other than, (i) benefits under the Employment Insurance Act (Canada)
15Since EI cannot be deducted from the IRB in the manner contemplated by Aviva, the proper rate for October 21, 2015 and April 9, 2017 is $400. Indeed, $400 is the IRB rate for entire period of October 21, 2015 to May 1, 2017.
1(c) The application of s. 36(7): May 1 to the date of this hearing
16The applicant submits that Aviva’s failure to comply with s. 36(7) of the Schedule entitles her to payment of the IRB from May 1, 2017 onward. Section 36(7) requires an insurance company to provide the following within ten business days of an insurer’s examination (‘section 44 examination’):
- A section 44 report to:
i. the applicant
ii. the person who completed the Disability Certificate and submitted the Application for Accident Benefits
- Notice to the applicant of the medical (and other) reasons for denying a benefit
17The applicant provides four reasons why I should believe that none of section 36(7)’s requirements were met. Aviva disputes the applicant’s reasoning and lays some blame at the applicant’s feet. I do not need to go through the factual disputes between the parties in any detail. What matters, and what is vexing to the applicant’s submissions, is that I do not accept that non-compliance with s. 36(7) results in compulsory IRB payment.
18The issue is one of remedy. The applicant submits that I can exercise my power to make interim orders and compel Aviva to pay for the IRB from May 1, 2017 onward as remedy for Aviva’s failure to comply with s. 36(7). The applicant cites Nadarajah and RBC (FSCO A10-003724) as support for this position.
19I do not accept that I have the power to compel Aviva to pay for the IRB from May 1, 2017 onward. Section 36 already has a subsection, s. 36(6), which allows for compelled payment when an insurer fails to comply with the section. I expect that if the Ontario Legislature intended for adjudicators to compel payment for non-compliance with s. 36(7), that power would be found in s. 36(6). Section 36(6) does not compel payment for s. 36(7) non-compliance. The Legislature’s decision to include s. 36(6) and not provide a remedy within it for s. 36(7) non-compliance indicates that the Legislature does not intend for adjudicators to compel payment when insurance companies breach s. 36(7).
20Even if I had the power to compel payment for s. 36(7) non-compliance, I would decline to exercise it in this case. The applicant has not endured prejudice from the alleged failure to comply with s. 36(7) deserving of compelled payment. The applicant points to Justice Aitken’s decision in Roger v. The Personal Insurance Company of Canada, 2014 ONSC 1964 as an example of the prejudice that befalls an insured person when an insurance company does not comply with s. 36(7). However, as Aviva points out, Justice Aitken considered s. 36(7) in the context of a limitation period’s application. Roger does not assist. Aviva’s alleged s. 36(7) non-compliance, at best, prejudiced the applicant’s ability to challenge the denial of his IRB claim within the limitation period. But as evidenced by the very existence of this hearing, that prejudice, if it existed, did not prevent the applicant from challenging Aviva’s denial.
21In conclusion, Aviva’s alleged non-compliance with s. 36(7) of the Schedule does not entitle the applicant to payment of the IRB from May 1, 2017 to the date of this hearing.
2. Interest
22The applicant is entitled to interest for payment of the IRB for the period between October 21, 2015 and May 1, 2017. Interest is payable in accordance with the Schedule.
3. Is the applicant entitled to an award?
23The applicant seeks an award under s. 10 of Regulation 664 of the Insurance Act, R.S.O. 1990, c. I.8. Section 10 provides:
If the Licence Appeal Tribunal finds that an insurer has unreasonably withheld or delayed payments, the Licence Appeal Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, may award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.
24The applicant’s factual basis for the award is comprised of serious allegations of negligence by Aviva. The alleged conduct, if true, borders on bad faith. I take no position on the merit of the applicant’s allegations. The applicant is not entitled to a special award even if her allegations are true.
25Section 10 only allows for an award if an insurance company has “unreasonably withheld or delayed payments”. “Payment” is a critical word in this case. The applicant has not proven herself entitled to payment of an IRB: in section 1(a) of this decision I explained that I am unable to conclude that the applicant meets the s. 5(1) test. Regardless of whether Aviva’s conduct has been unreasonable – and, again, I take no position on this – Aviva did not withhold or delay an IRB payment to which the applicant is entitled. Therefore, it is impossible for Aviva to have “unreasonably withheld or delayed payments” within the meaning of s. 10 of the Regulation.
26The only IRB payment that the applicant has been granted is a function of s. 36(6). Section 36(6) grants the applicant payment because Aviva did not respond with a notice of a decision within ten business days. It is a procedural remedy. Payment is not granted because of the applicant’s substantive entitlement to payment for an IRB. It is impossible for Aviva to withhold or delay any payment to which the applicant has not proven entitlement.
Costs for the applicant
27The applicant is not entitled to costs. Under Rule 19.1 of the LAT Rules costs can issue where a party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith. The applicant seeks $7,000 in costs for, essentially, Aviva’s refusal to pay for an IRB. Aviva was in part correct to not pay for an IRB: the applicant failed to prove her s. 5(1) entitlement to an IRB in this hearing. The portion of the IRB to which the applicant is entitled is a function of conduct that occurred outside of this proceeding, and therefore outside of the scope of costs.
28I am troubled by two aspects of Aviva’s conduct in this proceeding: (1) the late acknowledgment of the applicant’s entitlement2 to partial payment under s. 36(6); and, (2) Aviva’s use of an accounting firm that is unaware, seemingly, that EI is not deductible from an IRB. Aviva is an experienced and sophisticated party at the Tribunal. Aviva’s two decisions caused the applicant to provide submissions on easily resolvable issues. I would not to characterize Aviva’s decisions as unreasonable, frivolous, vexatious, or in bad faith within the meaning of Rule 19. More is required. But I hope that Aviva learns from these avoidable lessons.
Costs for Aviva
29Aviva’s claim for costs is dismissed. An evidentiary and persuasive basis is required for costs to be issued under Rule 19. Aviva’s costs submission is a boilerplate phrase in the last sentence of its factum:
Taking into consideration the aforementioned, the respondent submits that the Applicant should be dismissed with costs awarded in favour of the respondent in accordance with Rule 19 of the Licence Appeal Tribunal Rules of Practice and Procedure.
Conclusion:
30The applicant is not entitled to an IRB for the period before October 21, 2015 or the period between May 1, 2015 and the date of this hearing.
31The applicant is entitled to payment for an IRB for the period covering October 21, 2015 to May 1, 2017 at a rate of $400 weekly. She is entitled to interest on this payment in accordance with the Schedule.
32The applicant is not entitled to an award.
33Neither the applicant nor Aviva is entitled to costs.
Released: February 26, 2018
______________________________
Chris Sewrattan, Adjudicator