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 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:

Jonathan Batty, Associate Chair

Date:

May 4, 2018

File:

16-001691/AABS

Case Name:

J.R.P., by his Litigation Guardian v. State Farm Mutual Automobile Insurance Company

Written Submissions By:

For the Applicant:

Lucy Lee, Counsel

For the Respondent:

Stacey N. Karellas, Counsel

1. This request for reconsideration relates to a decision of the Licence Appeal Tribunal (the “Tribunal”) that the two-year limitation period for commencing a proceeding had expired, and therefore the application for benefits under the Statutory Accident Benefits Schedule — Effective September 1, 2010 (the “Schedule”) could not proceed.

2. The applicant, J.R.P., argued before the Tribunal that the limitation period was stayed due to his mental incapacity. The Tribunal was not satisfied that he lacked mental capacity at the time that the limitation period was about to expire.

3. On reconsideration, J.R.P. argues that the Tribunal violated the rules of procedural fairness and made errors of fact and law in concluding that his mental incapacity during the limitation period had not been established.

4. Pursuant to her authority under s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, the Executive Chair delegated to me her responsibility to decide this request.

5. For the reasons that follow, I reject those arguments. However, I am satisfied that the Tribunal made a significant error of law by failing to consider whether to grant an extension of time to file an application pursuant to s. 7 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G (the “LAT Act”), and that this error is such that the Tribunal would likely have reached a different decision. I am further satisfied that there are reasonable grounds for granting an extension of time. Therefore, I vary the order of the Tribunal and grant an extension of time under s. 7 of the LAT Act.

Background

6. J.R.P. was injured in a motor vehicle accident on April 16, 2009. Thereafter, he was paid income replacement benefits (“IRBs”) until June 18, 2014, when the respondent, State Farm Mutual Automobile Insurance Company (“State Farm”), terminated the benefit. J.R.P. applied for mediation at the Financial Services Commission of Ontario (“FSCO”) on November 30, 2015. The mediator issued a report on April 8, 2016, indicating that the mediation had failed.

7. Under the FSCO regime, which applied immediately before April 1, 2016, the Schedule and the Insurance Act, R.S.O. 1990, c. I.8 provided, in essence, that a proceeding to adjudicate a Schedule-related dispute must be commenced at FSCO within two years after the insurer’s refusal to pay the benefit claimed or, if one applied for mediation within that two-year period, within 90 days after the mediator reports to the parties.

8. On April 1, 2016, the Tribunal assumed jurisdiction from FSCO over all new automobile accident benefit disputes commenced on or after April 1, 2016. As of that date, parties who had completed mediation at FSCO could no longer apply for a FSCO arbitration. The only option was to apply for dispute resolution at the Tribunal, which must be done within two years of the insurer’s refusal to pay the benefit claimed.

9. J.R.P. applied for dispute resolution at the Tribunal on July 29, 2016. The Tribunal determined that the application could not proceed because the statutory limitation period had expired. The Tribunal determined that the effective date of the denial was June 17, 2014, two years from that date being June 17, 2016. However, the Tribunal accepted that the 90-day extension following the release of the FSCO mediation report applied for the purpose of this application, which brought the end of the limitation period to July 13, 2016.

10. J.R.P. argued before the Tribunal that the limitation period should be stayed because he was found to be mentally incompetent. J.R.P. had submitted an affidavit sworn by a lawyer in the offices of his counsel, which described a decline in J.R.P.’s behaviour and capacity between February and December, 2016. However, the lawyer identifies November 2016 as the time that J.R.P.’s counsel first formed a belief that the applicant had lost the capacity to properly instruct her. The Tribunal noted that counsel was satisfied that J.R.P. “had the capacity to instruct her to commence an application to this Tribunal, for that is what she did.” The Tribunal concluded that J.R.P. was not mentally incompetent through July 2016, and therefore did not need to address the argument that his mental incapacity stayed the running of the limitation period. In light of that finding, the Tribunal did not proceed to determine whether mental incompetency stays the running of the limitation period.

ANALYSIS

Procedural fairness

11. J.R.P. submits that the Tribunal’s decision violates the rules of natural justice and procedural fairness. J.R.P.’s basis for relying on this ground is that his incapacity was not brought on by a single sudden incident, but rather was a gradual progress related to his drug use and the accident in question. This submission does not explain how J.R.P. believes he was denied a fair hearing. I am not satisfied that a breach of procedural fairness occurred.

Alleged errors of fact and law

12. J.R.P. submits that the Tribunal erred by jumping to the conclusion that he was mentally capable based on the fact that his counsel filed an application to the Tribunal. I disagree. The Tribunal found that the applicant was not mentally incompetent in July 2016. The Tribunal based this conclusion on the lack of evidence of J.R.P.’s incapacity around July 2016, the evidence that the appellant’s counsel did not become concerned about J.R.P.’s capacity until November 2016, and the fact that counsel was satisfied that J.R.P. had the capacity to instruct her to commence an application at the relevant time. It was open to the Tribunal to rely on that evidence.

13. J.R.P. also submits that the Tribunal made an inappropriate inference from the lack of medical documentation. J.R.P. submits that the nature of drug-related incapacity makes it unlikely there would be records documenting his level of capacity. I am not satisfied that the Tribunal erred in this regard. J.R.P. was required to present evidence of his mental incapacity if he wished to rely on it. It was open to the Tribunal to consider the lack of evidence during the critical period of time in July 2016 when the limitation period was about to expire.

Failure to consider s. 7 of the LAT Act

14. Although I am not satisfied that the Tribunal erred in rejecting J.R.P.’s argument that the limitation period should be stayed due to his mental incapacity, I am satisfied that the Tribunal made a significant error of law in failing to consider whether to grant an extension of time under s. 7 of the LAT Act.

15. The Tribunal has discretion under s. 7 of the LAT Act to extend the time for commencing a proceeding at the Tribunal. That section states:

Extension of time

7 Despite any limitation of time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal or an appeal from a decision or order of the Tribunal under section 11 or any other Act, if the Tribunal is satisfied that there are reasonable grounds for applying for the extension and for granting relief, it may,

(a) extend the time for giving the notice either before or after the expiration of the limitation of time so limited; and

(b) give the directions that it considers proper as a result of extending the time.

16. In the recent reconsideration decision in A.F. v. North Blenheim Mutual Insurance Company; N.L. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (North Blenheim), the Executive Chair determined that the Tribunal made a significant error of law by failing to consider whether to grant an extension of time under s. 7 of the LAT Act before dismissing an application on the basis that it was statute-barred. Like in the present case, the applicants in that case had filed their application to the Tribunal more than 90 days after mediation had failed at FSCO. As the limitation period was the very issue before the Tribunal in that case, the Executive Chair determined that it was a significant error for the Tribunal not to consider a statutory provision that expressly gave it the discretion to extend that limitation period. On January 2, 2018, the parties were given an opportunity to make submissions on the impact of North Blenheim on this request for reconsideration.

17. Upon consideration of the additional submissions of the parties, I am satisfied that the Tribunal erred in law by failing to consider s. 7 of the LAT Act and that the Tribunal would likely have reached a different decision had this error not been made.

18. In its additional submissions, State Farm argues that where an insurer provides a proper denial, a strict two-year limitation period is triggered. This submission is based on Smith v. Co-operators General Insurance Co., 2002 SCC 30, and Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111, as well as the Tribunal’s prior case law. The problem with this argument is that none of the cases cited consider the effect of s. 7 of the LAT Act, which provides an express power for the Tribunal to extend a limitation period.

19. As J.R.P. was arguing before the Tribunal that the limitation period should not be strictly applied due to his personal circumstances, I find that, like in North Blenheim, it was an error of law for the Tribunal to fail to consider its power to grant an extension of time under s. 7 of the LAT Act.

20. Both parties made submissions on whether the Tribunal would likely have reached a different decision had it considered s. 7 of the LAT Act. In determining whether to grant an extension of time under s. 7 of the LAT Act, the Tribunal considers the following factors, which are not strict elements that must be met in each case, but rather a guide to determining whether the justice of the case requires that an extension be granted:

• The existence of a bona fide intention to appeal within the appeal period;
• The length of the delay;
• Prejudice to the other party; and,
• The merits of the appeal.

21. J.R.P. submits that his application to mediate this issue with FSCO shows that he had a bona fide intention to appeal. He submits that a delay of 16 days is not excessive and resulted in no prejudice to State Farm. He further submits that there is significant merit to his claim, as his inability to work is related to his pain medication and drug addiction which arose as a result of the injuries sustained in the accident.

22. State Farm submits that J.R.P. did not demonstrate a bona fide interest in commencing this application, as his lawyer had difficulty contacting him around the time of his FSCO mediation and he did not take documented steps to ensure his application to the Tribunal was made prior to the expiry of the limitation period. State Farm submits that J.R.P. has not provided a reasonable explanation for the delay. With respect to prejudice, State Farm submits that the passage of time has prevented it from obtaining further information about J.R.P.’s ability to work and that J.R.P.’s lack of capacity may prevent him from attending the hearing as a witness. Finally, State Farm submits J.R.P.’s application has little merit, as the denial was based on various medical assessments that support lack of entitlement to IRBs.

23. Based on the above submissions and a review of the Tribunal’s file, I am satisfied that the Tribunal’s failure to consider s. 7 of the LAT Act is such that the Tribunal would likely have reached a different decision. I am also satisfied that there are reasonable grounds for granting an extension of time in this case.

i. Bona fide intention to appeal

24. There is evidence that J.R.P. had a bona fide intention to apply to the Tribunal for dispute resolution during the applicable limitation period. He had applied for mediation at FSCO during the limitation period. He was 16 days late in filing his application with the Tribunal. At the time that J.R.P.’s application was due, there is evidence that he was experiencing a decline in capacity as well as drug addiction and abuse. He was later assessed as lacking in capacity to instruct counsel. I find it likely that that the delay in filing his application was related to his drug abuse and declining capacity, rather than any lack of intention to do so.

ii. Length of the delay

25. According to the Tribunal’s motion decision in this matter, J.R.P. was 16 days late in filing his appeal. However, this is actually 16 days beyond the 90-day grace period following the release of the mediator’s report. This 90-day grace period is based on a version of the Schedule that is no longer in force. Under the current statutory regime, applicants must file their applications within two years of the date of the denial, which in this case was June 17, 2014. J.R.P. filed his application on July 29, 2016, being 42 days past the end of the limitation period. I have considered the delay both as 16 days past the previously applicable grace period and as 42 days past the end of the limitation period. In the circumstances, I do not find the delay to be excessive in the context of the proceeding as a whole and J.R.P.’s circumstances.

iii. Prejudice to the other party

26. State Farm submits that the delay prevented it from obtaining further information about J.R.P.’s ability to work and that J.R.P.’s lack of capacity may prevent him from attending the hearing as a witness. While the passage of time may affect the quality of the evidence available, I am not satisfied that there was a long enough delay in this case – whether 16 or 42 days – to cause any significant prejudice in that regard.

iv. Merits of the application

27. I have considered whether J.R.P.’s application has some merit. I am not required to decide whether J.R.P. will necessarily succeed on his application. J.R.B. will be required to prove he is entitled to income replacement benefits, which requires establishing that, during the applicable period, he has suffered “a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience”: Schedule, s. 6(2)(b).

28. Based on the documentation submitted with J.R.P.’s application, J.R.P. was employed as a labourer prior to the automobile accident in 2009, and following the accident he suffered a permanent physical impairment that prevents him from engaging in his pre-accident employment. The main issue for the hearing will likely be whether his accident-related impairments prevent him from engaging in a different type of employment for which he is reasonably suited. There is evidence in the file suggesting that he is capable of doing some form of paid work, for which postings may exist. There is also evidence that his psycho-social issues present additional barriers to his employment. In my view, this is a live issue for a hearing.

v. Justice of the case

29. Ultimately, an extension of time under s. 7 of the LAT Act does not require the applicant to establish each of the factors listed above. Rather, they are to be considered together in determining whether the justice of the case warrants an extension. Considering J.R.P.’s issues with substance abuse and declining capacity at the time that the limitation period was expiring, the relatively short delay, the lack of prejudice caused by the delay, and the existence of some merit to the application, I find that there are reasonable grounds to grant an extension of time.

Order

30. For the reasons set out above, I vary the order of the Tribunal and grant an extension of time under s. 7 of the LAT Act.

Jonathan Batty

Associate Chair, Licence Appeal Tribunal

Safety, Licensing Appeals and Standards Tribunals Ontario

Released: May 4, 2018```