17-004874 v Economical Mutual Insurance Company, 2018 CanLII 83515

Date: 2018-08-13

Tribunal File Number: 17-004874/AABS

Case Name: 17-004874 v Economical Mutual Insurance Company

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:

Applicant

Applicant

and

Economical Mutual Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR: Sandeep Johal

APPEARANCES:

Counsel for the Applicant: J. Patrick Brown and Selina Andrello

Counsel for the Respondent: Lisa Armstrong and Shalini Thomas

Heard in writing on: March 12, 2018

OVERVIEW

1The applicant was injured in an automobile accident on November 25, 2011 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant applied for benefits that were denied by the respondent including a non-earner benefit (the “NEB”). The applicant disagreed with this decision and submitted an Application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”).

3The respondent raised a limitation issue that the applicant is precluded from filing an application with the Tribunal with respect to the NEB as the applicant is not in compliance with s.56 of the Schedule and did not commence the application within two years of the denial.

PRELIMINARY ISSUE

3The preliminary issue to be decided as per the case conference order dated January 26, 2018 is:

i. Is the applicant precluded from proceeding to a hearing with respect to her claim for non-earner benefits on the basis that her dispute is statute barred pursuant to section 280 of the Insurance Act and section 56 of the Schedule?

RESULT

4The applicant’s claim of the NEB was out of time and she is statute barred from bringing an application for a NEB to the Tribunal.

ANALYSIS

5The applicant, who was a minor at the time of the accident, completed an application for accident benefits. The respondent denied the NEB in a letter dated February 7, 2012. The applicant turned 18 in November 2014 but did not apply to the Tribunal for dispute resolution until July 20, 2017, exceeding the two year limitation period in s. 56 of the Schedule.

6The applicant submits that the denial was improper as it did not advise the applicant that she was not yet eligible for the NEB and it did not indicate that because the applicant was a minor, the limitation period would not begin to run until the applicant turned 18 years old.

7Upon review of the denial letter to the applicant, I find that it sets out the rights of appeal in clear and equivocal language, and I find that it complies with the requirements as set out in Smith v. Co-Operators.² With respect to whether it should have mentioned that the applicant was a minor and not eligible for the NEB until she turned 18 years old and whether that information is legally correct or not, the Court of Appeal has held that a denial letter does not need to be legally correct in order for the limitation period to begin to run.³

8The respondent submits that, once the applicant turned 18 in November 2014, she had two years from that date to dispute the respondent’s denial. In essence, the applicant had until November, 2016 to file an appeal of the denial.

9The applicant submits that the new Disability Certificate (OCF-3) dated June 21, 2016 and the respondent’s letter in response advising that it was scheduling an insurer’s examination led the applicant to believe that the respondent was not relying on the previous denial and was reconsidering its position.

10I disagree with the applicant. Once a benefit is denied, there is no provision in the Schedule for an insured to reapply for a benefit once it has been terminated. The only remedy open after an insured’s benefits have been terminated by an insurer is to appeal the termination in the two year time period.⁴

11The applicant submits cases from the Financial Services Commission of Ontario (FSCO) that applies the principle that, where the insurer misleads the applicant and induces them into a false sense of security, makes a representation that would induce a reasonable person to believe it was not relying on a previous refusal or was reconsidering its position, the insurer cannot rely on the previous refusal. The applicant is relying on Zeppieri v Royal Insurance Co. of Canada,⁵ Raffa v Personal Insurance of Canada⁶ and Garminder v Co-operators.⁷

12Although I am not bound by FSCO case law, I find all 3 cases distinguishable from the case at bar for the following reasons: The respondent did not, in any correspondence state that it was reconsidering the applicant’s entitlement to NEBs; the respondent’s letter dated August 15, 2016 in response to the applicant’s new Disability Certificate (OCF-3) dated June 21, 2016 did specifically reference the February 7, 2012 denial; and I do not find there to be any unilateral request from the respondent for information that would create a reasonable doubt. In any event, I find myself bound by the Courts’ decisions for the principle that once a clear and unequivocal denial letter is sent, the limitation period begins to run⁸, the re-applying for a benefit does not restart the limitation period⁹ and even if the original denial was legally incorrect, that does not invalidate the denial and prevent the limitation period from beginning to run.¹⁰

1. I find the denial of the NEB dated February 7, 2012 to be the valid denial of the NEB and as the applicant was a minor at the time, the limitation period did not begin to run until the applicant turned 18 years old. Therefore, the applicant had two years from her 18th birthday or until November 16, 2016 to appeal the respondent’s denial.

2. The applicant filed an appeal with the Tribunal on July 20, 2017 and therefore was out of time to dispute the NEB. In the alternative, the applicant asks the Tribunal to invoke its discretion under section 7 of the Licence Appeal Tribunal Act.

Tribunal’s Discretion to Extend a Limitation Period

14I find that the justice of the case does not require an extension of the applicant’s appeal and the applicant is statute barred from bringing a claim for NEBs to the Tribunal.

15The Tribunal has jurisdiction to extend the time for filing of an appeal pursuant to section 7 of the Licence Appeal Tribunal Act 1999, S.O. 1999, c. 12, Sched. G (the “LAT Act”) if the Tribunal is satisfied that there are reasonable grounds for applying for the extension.

16In Manuel v. Registrar, Motor Vehicle Dealers Act, 2002, 2012 ONSC 1492, the Divisional Court ruled that the overriding consideration on a request for an extension of time is whether the justice of the case requires that the extension be granted. The factors to be considered in making this determination are:

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

b. The length of the delay;

c. Prejudice to the other party; and

d. The merits of the appeal.

17The appellant has the onus to establish that the justice of the case requires the granting of the extension, but she need not satisfy all four factors. Rather, the analysis requires a balancing of the conclusions reached when applying the facts of the case to the factors.

18With respect to the first factor, it is my finding that the applicant did not have a bona fide intention to appeal within the appeal period. The applicant filed an appeal with the Tribunal on July 20, 2017. The limitation period to file an appeal for the applicant was two years after she attained the age of 18. The applicant had an opportunity to appeal the denial from February 7, 2012, the date of the denial, to November 16, 2016, the day the applicant turned 20 years old. The applicant submits their intention to appeal was formalized by submitting a further Disability Certificate (OCF-3) on June 21, 2016.

19I disagree with the applicant that the submission of an OCF-3 to the respondent is an intention to appeal a denial. In my opinion an intention to appeal is an intention to commence a proceeding with the Tribunal.¹¹ Anything short of taking steps to commence a proceeding to the Tribunal, in my opinion does not amount to satisfying the first factor in determining the test of whether an extension of time should be granted under s.7 of the LAT Act.

20The second part of the test is to consider the length of the delay. The applicant submitted an application to the Tribunal on July 20, 2017, eight months after her 20th birthday. The only explanation offered for the delay is that she believed that the previous denial that triggered the limitation period had ultimately been abandoned by the respondent. I disagree with the applicant’s submission as already discussed above. I have already determined the original denial to be clear and unambiguous. In addition, the respondent’s letter dated August 15, 2016 in response to the new OCF-3 claiming the NEB did in fact mention the February 7, 2012 denial. The applicant has not satisfied her onus and I find that waiting eight months after the limitation expiry is not a reasonable period of time in the circumstances of this case. I find the applicant has failed on the second factor for granting an extension of time.

21With respect to the third factor, prejudice to the other party, the applicant submits that the Tribunal can consider costs as compensation to the respondent under Rule 19.1.¹² I disagree with the applicant. A cost award at the Tribunal in accordance with Rule 19.1 is only for situations where a party has acted unreasonably, frivolously, vexatiously, or in bad faith. The applicant further submits there is no prejudice as no new witnesses will be needed nor will additional time be required.

22The respondent submits that prejudice would not be “limited” as suggested by the applicant because the Schedule contemplates the disability test for non-earner benefits is met within 104 weeks after the accident¹³ and the applicant’s new OCF-3 submitted on June 21, 2016 is 260 weeks after the accident and the prejudice would be significant to the respondent.

23I agree with the respondent. The prejudice to the respondent in my opinion outweighs that of the applicant. The applicant has not identified the prejudice that would be suffered by the applicant other than to suggest the Tribunal can compensate the respondent with a cost award to remedy the prejudice. However the authority for a cost award is Rule 19.1 as discussed above and it does not provide for compensation to a party to remedy any potential prejudice. I find the applicant has not satisfied the third factor.

24The fourth and final factor is to consider the merits of the appeal. Even if I were to find the applicant’s claim for an NEB has merit, I find that considering all of the factors together with the facts of the case, the justice of the case favours the respondent.

25The applicant submits that by allowing the respondent to raise a limitation defence this late in the proceeding runs counter to the purpose of the Tribunal which is to facilitate a fair, open and accessible process to ensure efficient, proportional and timely resolution of the merits of the proceeding.

26I do not agree with the applicant, the respondent is allowed to raise a defence to any claim made by the applicant and in the case at bar, a hearing on the merits of the case has not yet taken place. The respondent raised a limitation defence at the case conference which in my opinion would be the appropriate forum to do so.

CONCLUSION

27For the reasons outlined above, I find that the respondent denied the NEBs on February 7, 2012. The applicant did not comply with the two year limitation period to dispute the denial and is therefore precluded from bringing a claim to the Tribunal for with respect to the NEB.

Released: August 13, 2018

__________________________

Sandeep Johal, Adjudicator

Footnotes

1. 1O. Reg. 34/10.
2. 2Smith v. Co-Operators General Insurance Co., [2002] S.C.R. 129 (“Smith”).
3. 3Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111 (“Sietzema”).
4. 4Haldenby v Dominion of Canada General Insurance Co. (2001) 2001 CanLII 16603 (ON CA), 55 OR (3d) 470 at para 30.
5. 5[1994] OICD No. 13 (FSCO).
6. 62017 CarswellOnt 3461 (FSCO).
7. 72013 CarswellOnt 15086 (FSCO).
8. 8Smith, supra note 2.
9. 9Haldenby, supra note 4.
10. 10Sietzema, supra note 3.
11. 11A.F v North Blenheim Mutual Insurance Company, 2017 CanLii 87546 at para 31.
12. 12Licence Appeal Tribunal Rules of Practice and Procedure, Version 1 (April 1, 2016).
13. 13Section 12 of the Schedule.