D.A. v. Aviva Insurance Canada, 2018 CanLII 39443

Date: 2018-03-05

Tribunal File Number: 16-001381/AABS

Case Name: 16-001381 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:

D.A.

Applicant

and

Aviva Insurance Canada

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES:

For the Applicant: Samia M. Alam, Counsel

For the Respondent: Meredith A. Harper, Counsel

HEARD in Writing on February 5, 2018

OVERVIEW

1D.A. (“the applicant”) was involved in an automobile accident on July 26, 2013 (“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, Aviva Insurance Canada, and applied to the Licence Appeal Tribunal (the “Tribunal”) when the disputed benefits were denied.

3The respondent 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 non-earner benefits (“NEBs”), because she failed to commence her appeal within two years of the date that her claim for benefits was denied as required by s. 56 of the Schedule.

4The Tribunal issued an order dated November 16, 2017 for a hearing of the preliminary issue.

PRELIMINARY ISSUE

5Is the applicant barred from appealing the respondent’s denial of her claim for NEBs under s.56 of the Schedule because her appeal was filed more than two years after the insurer refused them?

FINDINGS

6I find that the appeal is not statute-barred under s.56 of the Schedule. The respondent’s preliminary issue is dismissed without costs. The dispute over NEBs may proceed to a hearing.

REASONS

7Under 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”.

8If 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.”

Previous version of Schedule applies to this case.

9Prior to April 1, 2016, parties to a dispute over automobile accident benefits (“AABs”) were required to submit their dispute to the Financial Service Commission of Ontario (FSCO), as the applicant in this case did. The prescribed dispute resolution (“DR”) process at that time required mediation, and if that failed, the applicant could proceed to either arbitration or court.

10The accident occurred in 2013 and the parties engaged in dispute resolution (DR) for the claimed NEBs before the Tribunal was assigned jurisdiction over automobile accident benefits (AABs) disputes on April 1, 2016.

11The Schedule that was in place in 2013 applies to the applicant’s substantive rights in this matter.²

Extension of Limitation Period in this Case

12In 2013, both the Insurance Act and the Schedule set out the two-year limitation period within which an insured person was required to submit for DR (mediation and then arbitration or court) of denied AABs, but it also provided for a 90-day extension of the limitation period where an applicant filed for mediation before the expiry of the two-year limitation period.³

13On April 1, 2016, reform of the automobile accident benefits (AABs) system dispensed with mandatory mediation and gave the Tribunal exclusive jurisdiction over AABs disputes. However, transition provisions were enacted, including a provision that arbitration proceedings commenced at FSCO but not completed before the transition date continue at FSCO after that date.⁴ If a party had completed a FSCO mediation but did not apply for a FSCO arbitration before April 1, 2016, then their only avenue to dispute the claim is at the Tribunal.

14Section 56(2) of the Schedule prescribed that “an arbitration […] may be commenced within 90 days after the mediator reports to the parties”⁵ (i.e. on the results of their attempt at mediation). I interpret this section as also applying to commencing appeals to the Tribunal.

15Against this background, the parties agree that:

i. The applicant’s claim for NEBs was denied on June 9, 2014.

ii. The applicant filed an application for mediation of the disputed NEBs with FSCO on November 6, 2015, well within the timeline for acting on the denial.

iii. They executed a Consent to Fail Mediation form⁶ on November 19, 2015.

iv. The mediator’s report was issued on April 20, 2016.

v. On May 27, 2016, the applicant sought to have the NEB issue added to the rest of its arbitration file at FSCO. Her request was opposed by the respondent. It was initially allowed. On appeal by the respondent, the initial decision was reversed and the NEB issue was barred from FSCO on January 10, 2018.⁷

vi. The applicant commenced her appeal to the Tribunal on July 15, 2016 – within 90 days of the mediator’s report.

Is the Applicant’s Appeal to the Tribunal Statute Barred?

16I am not persuaded by the respondent’s case for a statute-bar against the applicant’s claim for NEBs. The elements of its case, and the reason I found each unpersuasive are as follows:

i. The respondent contends that “an insurer’s clear denial must always trigger the two-year limitation period”. This doesn’t address the plain language of s.56(2) of the Schedule, which expressly prescribes an extension and the condition for it. This contention fails to persuade me that June 9, 2016 – two years after their denial of the NEB claim – is the effective limitation expiry date in this matter.

ii. The respondent makes no clear argument on why I should reject the date of the mediator’s report as the beginning of an extended limitation period for this appeal. It offers no support for its bald assertion that the 90-day extension began on the date of the agreement to fail the mediation. It leaves me to interpret and apply s.56(2) of the Schedule according to its plain meaning.

iii. The respondent writes at some length about how the applicant could and should have added the NEB mediation to arbitration under the old process or filed an appeal with LAT before June 9, 2016, the date it posits as the end of the limitation period. It fails to explain how this has any bearing on the prescribed right of the applicant to a period of 90 days after the mediator’s report to file her appeal. I see no support for the idea that the applicant’s prescribed right to an extension to the limitation period is somehow conditional on her conduct of her case.

iv. The respondent implies some negative inference from the fact that the applicant “strangely waited” to ask for a mediator’s report until April 14, 2016, five months after the failed mediation, but again fails to explain why that should have any bearing on the limitation period, while neglecting to mention that it could have requested the report at an earlier date itself. I was not made aware of any prescribed timeline for the issuance of mediator’s reports, nor was any argument offered that the applicant was legally required to request the report before the regulatory transition date of April 1, 2016 in order to preserve her rights.

17I find decisions by other adjudicators in similar cases to be persuasive. In C.S. and Unifund⁸ and in PC and State Farm⁹, Tribunal arbitrators found that where applicants had filed for mediation at FSCO within two years after denial of their claims, they were entitled to the 90-day post-mediator’s report extension. Their reasoning was helpful to me in determining this issue.

18As a result of the foregoing, I find that the applicant filed her appeal with the Tribunal within the 90 day extended limitation period prescribed by s.56(2) of the Schedule in 2013. Accordingly, her appeal is not statute-barred, and it may proceed.

Discretion to Extend Limitation Periods under the LAT Act

19Under s.7 of the Licence Appeal Tribunal Act,¹⁰ the Tribunal may extend the time for filing an appeal of a denial of benefits beyond the legislated limitation period if it is satisfied that there are reasonable grounds for doing so.

20There are four factors for determining whether an extension of limitation period should be granted:

i. The existence of a bona fide intention to appeal within the appeal period;

ii. The length of the delay;

iii. Prejudice to either party; and

iv. The merits of the appeal.¹¹

21The respondent asserts correctly that “limitations are important”, that “they provide certainty”, “ensure that evidence is maintained” and ensure that “claimants do not ‘sleep on their rights’”.¹² I find its line of argument to be inapplicable to this case, because:

i. None of it assertions speak to the core issue of the applicant’s right – under specific, prescribed conditions -- to an extension of the limitation period in this case.

ii. None of the benefits of limitations mentioned are at risk in this case because both parties have been actively engaged in this dispute from the get-go. The respondent does not claim that its case on the merits of the NEB claim would be prejudiced in any way by an extension of the limitation period in this case.

iii. The respondent does not challenge the merits of the NEB appeal, and I have no reason to doubt that the NEB dispute warrants a hearing on the substantive evidence.

22I agree with the applicant that she would meet the four-part test for a “Section 7 extension”, if one were necessary, because:

i. The evidence clearly shows her bona fide intention and effort to file an appeal within the appeal period. She was engaged in the DR process.

ii. Any delay is not lengthy: at worst the delay is five weeks after the expiry of the basic two-year limitation period for appeals cited by the respondent.

iii. There is, as noted, no claim by the respondent that proceeding with the appeal will result in prejudice against it.

iv. The respondent does not challenge the merits of the NEB appeal, and I have no reason to doubt that the NEB dispute warrants a hearing on the substantive evidence.

23The respondent argues that an extension of limitation periods should be granted in “the rarest cases” and based on some reasonable explanation or excuse for delay. I find that contributions to delays in dealing with the NEB issue this proceeding arose from factors beyond the applicant’s control, namely the implementation of a new DR process, appeals forum and – importantly – the respondent’s resistance to adding the NEB dispute to the proceeding on procedural grounds throughout the process.

24Although I do not find it necessary to invoke s.7 of the LAT Act in determining this matter, I find that the applicant’s claim for NEBs in this case meets the criteria for granting such an extension.

COSTS

25Rule 19.1¹³ 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”.

26Both parties in this matter have requested that the Tribunal award costs.

27Having found for the applicant, there is no basis for me to find that she has acted in the manner prescribed by Rule 19.1 as the condition for a cost award. The respondent’s cost request is denied.

28The respondent has raised procedural concerns and preliminary issues at various stages of the proceedings in this matter. It acted within its rights in doing so, and some of its positions were upheld. As a result I find no evidence that it has acted unreasonably, frivolously, vexatiously, or in bad faith in this matter. The applicant’s request for costs is denied.

CONCLUSIONS

29The application is not statute-barred. The appeal should proceed to a hearing.

30The Tribunal shall schedule a case conference with the parties to resume settlement discussions in this matter, and if necessary, to set the substantive issues down for a hearing.

31There is no basis for a cost award to either party respecting the preliminary issue in this matter. Both cost requests are denied.

Released: March 5, 2018

___________________________

Christopher A. Ferguson, Adjudicator

Footnotes

1. 1O.Reg. 34/10
2. 2O.Reg. 34/10, June 1, 2013-December 16, 2013 – sections of which were not revoked until April 1, 2016.
3. 3Insurance Act, RSO 1990, c.I.8, s.281.1
4. 4Insurance Act, RRO 664, s. 21
5. 5O.Reg. 34/10, June 1, 2013-December 16, 2013
6. 6In effect, they agreed that mediation would not work and agreed to proceed straight to arbitration of their dispute under the two-step dispute resolution process in effect at that time.
7. 7The reasoning by the Director’s Delegate is that she made her application to add the NEBs to the FSCO arbitration after April 1, 2016 and therefore FSCO had no jurisdiction to hear it. The decision has no effect on her LAT application, which was never mentioned.
8. 8C.S. and Unifund Assurance Company, 2016 CanLII 104570, submitted by the applicant.
9. 9P.C. and State Farm Insurance Company, 2016 CanLII 106198, submitted by the applicant.
10. 10S.O. 1990, c.12
11. 11Manuel v. Registrar, Motor Vehicle Dealers Act 2002, 2012 ONSC 1492 (Div. Ct.) at para. 14 – submitted by the applicant.
12. 12It quotes Katanic v. State Farm Mutual Automobile Insurance Co., 2013 ONSC 5103 para.25
13. 13Licence Appeal Tribunal Rules of Practice and Procedure, Version I (April 1, 2016)