Applicant v. Aviva Insurance Canada, 2018 CanLII 39368

Date: 2018-03-02

Tribunal File Number: 17-004258/AABS

Case Name: Aviva Insurance Canada v 17-004258/AABS

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:

Aviva Insurance Canada

Respondent

and

Applicant

Applicant

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES

For the Applicant: Ben Fortino, Counsel

For the Respondent: Kimberley J. Tye, Counsel

HEARD in Writing on: February 13, 2018

OVERVIEW

1This is a preliminary issue brought by the respondent Aviva in response to an application to the Licence Appeal Tribunal (the “Tribunal”) to determine an insured person’s entitlement to statutory accident benefits. The applicant, [applicant], was involved in an accident on May 3, 2013 (“the accident”).

2[The applicant] sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'') and all of those benefits have been either approved and paid in full, or settled by her insurer, Aviva.

3[The applicant] filed an appeal with the Tribunal on July 5, 2017. Her appeal includes only the respondent’s denial that she is catastrophically impaired as defined by the Schedule. There are no specific substantive claims included in her appeal.

4Aviva contends that there is no basis for an appeal, and therefore no basis for a hearing, unless an application includes a dispute over denial of a specific substantive benefit. Its position is that the issue of catastrophic (“CAT”) impairment cannot be determined by the Tribunal on a “stand-alone” basis.

5If Aviva is correct, then [the applicant’s] appeal is dismissed, without prejudice to a future appeal on the issue of CAT determination if substantive benefits are denied.

6If I find that Aviva is incorrect, then I will order that the matter proceed to a case conference to discuss settlement of the applicant’s claim of CAT impairment, and if necessary to determine the details of a hearing in this matter.

PRELIMINARY ISSUE

7Does the Tribunal have the jurisdiction to determine if an individual has sustained a catastrophic injury where there are no associated substantive benefits in dispute?

FINDINGS

8The Tribunal has jurisdiction to determine the sole issue of whether or not the applicant is CAT impaired, regardless of the absence of an underlying dispute over entitlement to substantive benefits.

9Aviva made a request for costs in the preliminary matter. Its request for costs is denied.

REASONS

10CAT impairment is defined in s.3.1 of the Schedule.

11Section 45 of the Schedule sets out the process that an applicant must follow to apply for a determination of CAT impairment. It also prescribes the response required of the insurer to a CAT impairment application.

12There is nothing in the Schedule that requires a claimant to make a claim for a specific, substantive benefit before they can apply to the insurer for a CAT determination.

13Applicants who are determined to be CAT impaired are entitled to up to $1M in medical rehabilitation benefits and $1M in attendant care benefits over their lifetimes, which is much higher than the maximums payable for non-CAT impaired claimants.

Determining CAT at LAT

14Section 280(1) of the [Insurance Act]² (“the Act”) provides that an insured person or an insurer may apply to the Tribunal to resolve a dispute over the insured person’s entitlement to statutory accident benefits (“SABs”) or the amount of SABs that he or she is entitled to.

15Rule 2.3³ defines “Automobile Accident Benefits Service (AABS) Claim” as an application to the Tribunal pursuant to s. 280(2) of the Act seeking resolution of a dispute involving SABs.

16In this matter, as noted, there are no outstanding claims for denied benefits. [The applicant] is $46,700.00 from reaching the cap on medical and rehabilitation benefits payable to non-CAT applicants and has not, to date, claimed any attendant care benefits. Her claim for non-earner benefits (“NEBs”) has been settled.

17There is no question that SABs claimants appeal to the Tribunal when an insurer denies their claim to be CAT impaired. The Tribunal determines whether or not claimants are CAT impaired regularly. The only issue in this case is whether the Tribunal can hear such appeals in the absence of a dispute over specific, substantive benefits such as medical benefits, income replacement or NEBs.

18Aviva argues that the Tribunal has no jurisdiction in this matter because no substantive benefits have been denied. To support its argument, the respondent contends that:

i. The language of s.280 of the Act is clear that the dispute must deal with entitlement to SABs, which is reinforced by Rule 2.3.

ii. There is a line of authority which establishes a delineation between determining benefits (e.g. a medical benefit) and “designation of benefits” (e.g. CAT determination) and further establishes that the Tribunal may not determine “designation” unless it is linked to a substantive benefit that has been denied.⁴

iii. This line of authority has led arbitrators to conclude that “when there is no claim for an underlying benefit, a determination for catastrophic impairment cannot be made.” Aviva cites Mandamin v. Pafco⁵ (“Mandamin”) in this argument.

iv. The Tribunal does not have powers of declaratory relief⁶: determining CAT impairment without an impact on an underlying substantive benefit in dispute would be outside its jurisdiction, because such a decision would amount to declaratory or equitable relief. Aviva cites Y.D. v. Aviva⁷ (“YD”) in this argument.

19I do not share Aviva’s view of the statutory/regulatory provisions that bind me, because:

i. I read the language of the provisions as referring to any dispute over entitlement to SABs.

ii. As I noted above, there is nothing in the Act or the Schedule expressly requiring either the application to an insurer for CAT determination or an appeal of an insurer’s denial of a claim to CAT impairment to the Tribunal to be accompanied by a specific substantive claim.

iii. CAT determination impacts entitlement to benefits, it includes requirements and a process very similar to that for specific benefits⁸, and a claim of CAT impairment can be denied like any other benefit. I find this fact persuasive that the result of the CAT determination process can be appealed to the Tribunal.

20I find that taken together, the provisions of the Act and the Schedule do not in themselves preclude an appeal of a CAT determination on a stand-alone basis.

21I do not find the “line of authority” cited by Aviva persuasive because:

i. The court cases cited have nothing to do with jurisdiction. This “line” includes Machaj v. RBC,⁹ Do¹⁰ and McLinden v. Payne,¹¹ all of which focus narrowly on the application of limitation periods to CAT determination appeals.

ii. None of the cases speak to whether the distinction between “benefits” and “designation of benefits”, drawn with respect to limitation periods, has any bearing at all on jurisdiction to hear CAT determination on a stand-alone basis.

iii. None of the cases deal with any proposition that hearing a CAT determination without underlying substantive claims amounts to considering “declaratory relief”.

iv. I am not bound by the decision in Mandamin and I will not follow it because my reading of the case law submitted by the parties leads me to respectfully disagree with the decision in Mandamin: to reach his conclusion, the arbitrator relied on the cases noted above, which I find to be inapplicable to the question of jurisdiction over a stand-alone CAT determination.¹²

v. The Tribunal decision cited by the respondent, YD simply does not stand for Aviva’s proposition.

a. The adjudicator in that matter was not asked to address the Tribunal’s jurisdiction over CAT determination. The position advanced by the applicant in YD was an argument of the merits of ordering the insurer to pay for attendant care benefits based on principles of fairness and equity. In other words, the applicant asked the Tribunal to ignore substantive statutory provisions (i.e. s.3(7)(e) of the Schedule) and adopt another norm which produces a more satisfactory result.¹³

b. I simply am not at all persuaded to agree with the inference drawn by Aviva from the adjudicator’s remarks in YD because no “equitable remedy” is being sought here. What is being sought by [the applicant] is a decision on whether or not she is CAT impaired, which directly impacts her entitlement to benefits and which arises as an issue from a denial by the respondent in a process set out in the Schedule. She seeks a decision inside the regulatory scheme, not in spite of it.

22[The applicant] position is that:

i. “The language of the legislation is not distinguishing; whether someone claims catastrophic designation or specific substantive benefits is one in [sic] the same.”

ii. The Tribunal has recently determined CAT impairment as a stand-alone issue in two cases: A.R. v Allstate¹⁴ and G.P. and Cumis.¹⁵

23My own reading of the language, noted above, supports [the applicant’s] case.

24[The applicant’s] submissions on case law were generally unpersuasive to me.

25Based on my reading and analysis of the submissions of the parties, and my interpretation of the relevant statutory and regulatory provisions, I find that the Tribunal does have jurisdiction to determine whether or not an applicant is CAT impaired on a stand-alone basis.

Costs

26Rule 19.1 permits a party to request that the Tribunal order the other party to pay costs, where the requesting party “believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith”.

27Aviva makes no argument that [the applicant] has acted in any way as described by Rule 19.1. Its cost request is denied.

CONCLUSION

28Aviva’s preliminary issue motion is denied without costs, and [the applicant’s] appeal may proceed.

ORDER

29The parties shall attend a case conference, to be scheduled by the Tribunal in order to discuss issues in dispute and the form and details of the hearing.

30If the parties resolve their dispute before the scheduled case conference, the applicant shall notify the Tribunal immediately.

Footnotes

1. 1O.Reg. 34/10
2. 2Insurance Act, RSO 1990. C.I.8, s.280(1) and (2) after April 1, 2016 (as written on the date the appeal was filed) – I note that the language of the section is identical to the language of the section before April 1, 2016 except that the words “Financial Services Commission of Ontario” are replaced by “Licence Appeal Tribunal”.
3. 3All references to a “Rule” are made to the Licence Appeal Tribunal Rules of Practice and Procedure, Version I (April 1, 2016).
4. 4Mandamin v. Pafco (FSCO A14-009905) at page 4; Machaj v RBC, 2016 ONCA 257, at para 6
5. 5Mandamin v. Pafco (FSCO A14-009905) at page 5
6. 6“Declaratory relief” refers to a judgment or decision of a court which determines the rights of parties without ordering anything be done, deciding a substantive claim or awarding damages. By seeking a declaratory decision, the party making the request is seeking for an official declaration of the status of a matter in controversy.
7. 7Y.D. v. Aviva Insurance, 2017 CanLII 43883 (ON LAT).
8. 8Namely, an application by the insured person to the insurer, which makes a determination about entitlement.
9. 9Machaj v RBC, 2016 ONCA 257
10. 10The Guarantee Co. v. Dong Do et al., 2015 ONSC 1891
11. 11McLinden v. Payne 2010 ONSC 6868 upheld 2011 ONCA 439
12. 12In Mandamin, the arbitrator dealt with a stand-alone CAT determination dispute after he decided not to add a disputed treatment plan (TP) to the issues before him (because the TP dispute arose after jurisdiction for SABs was reassigned to the Tribunal). I read his analysis as placing great emphasis on his view that because there is no limitation period on appeals of CAT determination, leaving the applicant free to appeal the CAT denial in the future once other disputes arose, that there was no “current impact” on the Applicant’s benefits” and the question of CAT impairment was therefore “merely academic or moot and need not be answered”. I do not share this view with respect to the case before me. Neither party to this matter argued the “practical impact” on the applicant in support of their case.
13. 13Y.D. v. Aviva Insurance, 2017 CanLII 43883 (ON LAT), para. 68
14. 14A.R. v. Allstate 2018 Tribunal File #16-003415
15. 15G.P. and Cumis General Insurance Co. Ltd., 16-003144```