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:
C.C.
Appellant
and
Economical Insurance Company
Respondent
DECISION
PANEL:
Christopher A. Ferguson, Adjudicator
APPEARANCES:
For the Applicant:
Stephanie Rasic, Counsel
For the Respondent:
Tim Crljenica, Counsel
HEARD:
In Writing on: October 1, 2018
REASONS FOR DECISION
OVERVIEW
1The applicant CC was involved in an automobile accident on March 3, 2014 (“the accident”), and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 20101 (the ''Schedule'').
2The applicant applied for benefits from the respondent, Economical Insurance (“Economical”), and applied to the Licence Appeal Tribunal (the “Tribunal”) when the disputed benefits were denied.
3Economical has raised a preliminary issue that could prevent the Tribunal from hearing this appeal. It asserts that the applicant is “statute barred” (explained below) from appealing its refusal to pay claimed income replacement benefits (“IRBs”), because he failed to commence his appeal within two years of the date that his claim for benefits was denied as required by s. 56 of the Schedule.
PRELIMINARY ISSUES
4The Tribunal issued an Order dated August 24, 2018 for a hearing of the preliminary issue that directs me as follows:
i. Does the respondent’s (i.e. Economical’s) letter of June 23, 2014 provide a clear and unequivocal denial of the applicant’s (i.e. CC’s) claim for IRBs?
ii. If the answer to issue 1 is “yes”, then is the applicant CC barred from appealing the respondent Economical’s denial of his claim for IRBs under s.56 of the Schedule because his appeal was filed more than two years after the insurer refused them?
FINDINGS
5Economical’s denial letter of June 23, 2014 provides a clear and unequivocal denial of CC’s claim for IRB; accordingly I find that the appeal is statute-barred under s.56.
REASONS
6Under s.56 of the Schedule, an appeal of an insurer’s denial of a benefit must be commenced within two years after the insurer’s refusal to pay the amount claimed. The two years is called the “limitation period”.
7If an appeal is not filed within the two-year limitation period prescribed by s. 56, then the Tribunal cannot hear it: the appeal is effectively dismissed without a hearing. The appeal is said to be “statute barred.”
8Section 11 of the Schedule prescribes that a person receiving an IRB may return to work or start new work without affecting his or her entitlement to resume receiving IRBs if he or she is unable to continue working as a result of the accident. This only applies to the period during the first 104 weeks after receiving the IRB.
9Economical sent CC a letter dated June 23, 2014 stating that no IRB payments would be paid after June 4, 2014 – the date that CC had resumed working.
10CC filed his appeal with the Tribunal on April 26, 2018. This was almost two years after the expiry of the limitation period.
11The parties agree that this dispute turns solely on whether or not the respondent’s letter of June 23, 2014 was a “clear and unequivocal” denial of the applicant’s claim for IRBs. If it was, then the appeal is statute-barred, and the Tribunal cannot hear it. If it was not, then I will order the matter to be heard.
What is meant by a clear and unequivocal denial of the IRBs?
12For an insurer to be able to rely on the limitation period, it must provide the applicant a valid refusal of benefits that states a clear and unequivocal denial, it must give reasons for the denial, and it must provide a description of the dispute resolution process.2
13The reasons given by the insurer must be sufficient to permit the insured person to decide whether or not to challenge its refusal to pay for claimed benefits.3
14A denial notice must be “in straightforward and clear language, directed towards an unsophisticated person.”4
15The onus is on the insurer to establish that the applicant has received the proper notice of denial and that the denial was clear and unequivocal.5
Was the respondent’s letter of June 23, 2014 a clear and unequivocal denial of the IRBs?
16Economical submits that its denial of benefits was clear, unequivocal and included all of the required elements, including:
i. A clear statement to CC, “you do not qualify for an income replacement benefits beyond June 8, 2014.”
ii. A reason for denial – CC’s return to work on June 8, 2014, citing s.37(2)e of the Schedule; and,
iii. Notification of CC’s right to appeal Economical’s decision and a description of the process to follow for doing so: this included a warning of the two-year limitation period for commencing a dispute of the decision to terminate benefits.
17CC acknowledges that his appeal “started well after the perceived limitation period”. However, he submits that Economical’s letter of June 23, 2014 “was equivocal and unclear”. He contends that, as a result, the two year limitation clock has not started.
18CC argues that Economical’s letter did not make it clear to him that his IRB claim was being denied. He argues that the wording was properly construed to mean that his IRBs were not payable while he was back at work, but that his IRB eligibility had not been denied. He claims that Economical’s request to him to contact them within 10 business days should their information about his return to work be incorrect led him to believe that he could revive his IRB claim should he leave work or be “terminated”.
19In support of his position, CC draws parallels between this case and SR v. Aviva,6 in which the Tribunal found a denial to be unclear because of a direction to the applicant in that case, who had returned to her job, to re-apply for IRBs should she have to leave work due to her accident-related injuries. CC argues that Economical’s statement about correcting any mistake it might have made about CC’s return to work or employment status created the same ambiguity found in SR v. Aviva.
20I find that the respondent insurer’s letter of June 23, 2014 constituted a clear and unequivocal refusal to pay further IRBs, because:
i. It included all of the above-noted required elements of a sufficient denial in language I found to be clear and unequivocal.
ii. I find that the information included in it was perfectly adequate to enable CC to decide whether or not he wanted to challenge Economical’s decision and clear enough to trigger CC to consider that option.
iii. CC’s suggested interpretation of Economical’s request to correct any wrong information is implausible, in my opinion. The statement does not, in my reading, reduce the clarity of the denial at all.
i. CC’s statements as his subjective belief about what the denial letter meant do not constitute evidence, and in any event are irrelevant because the test applied to this issue is an objective one.7
ii. I find SR v. Aviva distinguishable from this case because in the former, the insurer’s instructions with respect to a return to work created some ambiguity for the applicant: in this case no such statement was made, and I do not agree that any parallel is to be found in Economical’s letter.
21My findings lead me to determine that the letter of June 23, 2014 was a clear and unequivocal denial of the applicant’s claim for IRBs. Accordingly, CC’s appeal is statute-bar and may not proceed.
CONCLUSIONS
22CC’s application is statute-barred. CC’s appeal is dismissed.
Date of Issue: December 11, 2018
___________________________
Christopher A. Ferguson
Adjudicator
Footnotes
- O.Reg. 34/10
- Smith v. Co-operators General Insurance Company, 2002 SCC 30, 2002 SCC 30, [2002] 2 S.C.R. 129 cited by both parties (“Smith”)
- GP v. Aviva Insurance Company of Canada, 2017 CanLII 77379 (ON LAT) at para. 22, led by Economical (“GP”
- Smith see footnote 1 and GP.
- 17-004556 v Aviva Insurance Canada, 2018 Canlll 13157 (ONT LAT), at para 20-22, led by CC.
- SR v Aviva Insurance Canada, 2018 CanLII 13157 (ON LAT)
- Turner and State Farm Mutual Automobile Insurance Co. (FSCO Appeal P00- 00046, 1 February 2002) at p. 7, aff'd 2005 CanLll 2551 (ONCA)