G.S. v. Certas Direct Insurance Company, 2019 CanLII 119737

Citation: G.S. vs Certas Direct Insurance Company, 2019 ONLAT 19-002059/AABS & 19-000392/AABS

Tribunal File Number: 19-002059/AABS

19-000392/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:

G.S.

Applicant

and

Certas Direct Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

PANEL:

Jesse A. Boyce

APPEARANCES:

For the Applicant:

Mitchell Kent, Paralegal

For the Respondent:

Patrick M. Baker, Counsel

HEARD:

In Writing on: August 26, 2019

OVERVIEW

1The applicant, G.S., was injured in separate motor vehicle accidents on August 14, 2015 and November 30, 2015, respectively. G.S. sought benefits from the respondent, Certas Direct, pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the "Schedule").

2G.S. claimed entitlement to income replacement benefits ("IRB") in the amount of $400 per week in two separate applications. For added clarity, the August 14, 2015 accident claim was filed with the Tribunal on January 11, 2019 and bears the Tribunal file number 19-002059/AABS. The November 30, 2015 accident claim was also filed with the Tribunal on January 11, 2019 and bears Tribunal file number 19-000392/AABS. Certas accepted entitlement to the first claim for IRBs but disagreed on the quantum and denied the second claim on the basis that G.S. did not meet the disability criteria. G.S. disagreed and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the "Tribunal") for dispute resolution.

3A case conference was held, but the parties could not resolve the issues in dispute, prompting this written hearing on the following issue. Certas raised the preliminary issue that G.S. is statute-barred from proceeding with his application due to his failure to file his application within the two-year limitation period. On consent, the parties agreed to combine the two applications for the purposes of this hearing.

PRELIMINARY ISSUE

4The following preliminary issue was raised by Certas:

(i) Is the applicant's claim for IRBs statute-barred pursuant to s. 56 of the Schedule?

RESULT

5I find that G.S. is statute-barred from proceeding with his claim for IRBs since he failed to commence his application within two years after a valid denial by Certas. Further, I decline to exercise the discretion afforded by s. 7 of the Licence Appeal Tribunal Act² to extend the limitation period.

6However, G.S. may proceed with his application on the remaining issue in dispute between the parties in 19-002059/AABS, being the IRB quantum payable to G.S. for the period from August 22, 2015 to the termination date of September 15, 2016, plus any applicable interest and an award under s. 10 of O. Reg. 664.

BACKGROUND

19-002059/AABS – August 14, 2015 accident

7Following the accident of August 14, 2015, G.S. applied to Certas for certain benefits. In a letter dated October 8, 2015, Certas advised G.S. that he may be entitled to IRBs and, to that end, requested an OCF-2 and OCF-3. G.S. submitted a completed OCF-3, which Certas received on November 18, 2015. Certas then advised G.S. that it still required an OCF-2 and certain financial information to determine the quantum of the IRB.

8G.S. submitted a further OCF-3 on May 10, 2016. Certas then arranged for an insurer's examination ("IE") to address ongoing entitlement to IRBs. In an explanation of benefits letter dated September 16, 2016, Certas terminated G.S.'s IRB based on the findings in the IE report that he did not meet the Schedule's test for entitlement.

9On December 15, 2016, G.S. requested that Certas appoint a forensic accountant to calculate his payable IRBs (for the period before their termination), despite the fact that G.S. had not provided the financial documents Certas requested. Again, Certas requested the documents.

10Instead, G.S. provided Certas with a forensic accounting report dated June 28, 2018. Certas wrote to G.S. and, again, requested the outstanding financial documents in order for its accountants to calculate the IRB amount.

11On January 11, 2019, G.S. filed his application with the Tribunal, claiming ongoing entitlement to an IRB beyond September 16, 2016. The two-year limitation period to dispute Certas' denial elapsed on September 16, 2018, nearly four months earlier. The only remaining dispute was quantum from the date of the statutory waiting period to the termination date.

12An accounting report prepared by BDO for Certas, dated January 31, 2019, calculated the IRB's quantum based on available financial records for the period August 22, 2015 to September 16, 2016.

19-000392/AABS – November 30, 2015 accident

13Following his second accident on November 30, 2015, G.S. applied to Certas for benefits on April 18, 2016. In a letter dated April 26, 2016, Certas denied G.S. entitlement to IRBs based on the fact that he was not employed on the date of the accident.

14G.S. submitted an OCF-3 to Certas dated June 18, 2016 indicating that he met the disability test for IRB. Certas responded via letter dated June 22, 2016, reiterating its denial that he did not qualify for an IRB.

15The two-year limitation period to dispute Certas' denial elapsed, at the latest, on June 22, 2018. G.S. did not submit his application to the Tribunal until January 11, 2019.

ANALYSIS

Section 56 and Smith v. Co-operators

16I find, unequivocally, that G.S. failed to dispute his entitlement to both of his claims for IRBs at the Tribunal within the two-year limitation period provided for in the Schedule. Accordingly, I find that he is statute-barred from proceeding with his claim for entitlement.

17Section 56 of the Schedule provides that an application under ss. 280(2) of the Insurance Act in respect of a benefit shall be commenced within two years after the insurer's refusal to pay the amount claimed. In order to engage the limitation period, the insurer is required to provide a clear, unequivocal denial of a benefit.

18Notices of refusal to pay benefits must contain straightforward and clear language, must be directed towards an unsophisticated person, must outline the dispute resolution process and the relevant time limits that govern the process and must provide valid medical or other reasons for the denial.³ If an insurer's notice to an insured does not meet these basic requirements within the timelines prescribed, the denial may be invalid, and the two-year limitation period under the Insurance Act may not be triggered. In a similar vein, the Court of Appeal has consistently held that, as long as an insurer provides a valid refusal, a limitation period should be strictly applied. In addition, a clear and unequivocal notice given by the insurer terminating the insured's benefits is sufficient to trigger the limitation period.⁴

19On review of the explanation of benefits and subsequent correspondence, I find that all of Certas' denials were proper and in accordance with the Schedule's requirements and the principles of Smith.

20I find that the notices of refusal to pay benefits contained straightforward and clear language (including timely notice G.S. was not eligible for an IRB), were directed towards an unsophisticated person (the language is simple and clear), outlined the dispute resolution process (the standard form outlining the options is attached), stated the relevant time limits that govern the process (the two-year warning notice is bolded and prominent) and provided valid reasons for the denial (first on the basis that G.S. was determined to not meet the eligibility test in an IE and, second, on the basis that he was not employed at the time of the accident). I find no evidence to suggest either denial was improper, despite G.S.'s contention that no "official" start date for the initial IRB was ever provided. Further, G.S. argues he was employed in the period prior to the accident; however, even if Certas' reasons for denial on this basis were legally incorrect, it is well-settled that the limitation period begins to run on the date of denial.

21Accordingly, I find Certas provided G.S. with a valid denial of IRBs on both applications. The denials were clear and unequivocal and provided G.S. with the requisite information to determine whether to dispute the denials while also triggering the limitation period. G.S. then failed to commence his applications to the Tribunal in time. On these facts, I find he is statute-barred from proceeding on the issue of IRB entitlement.

22Finally, I agree with Certas that ongoing correspondence between the parties on how to calculate IRB quantum or what was required does not affect the running of the limitation period on entitlement following a valid denial and termination of IRB. I agree with Certas that the remaining dispute between the parties is on the IRB quantum payable to G.S. solely for the period August 22, 2015 to the termination date of September 15, 2016, which Certas acknowledges G.S. is entitled to. This issue should proceed before the Tribunal. However, any dispute on G.S.'s entitlement to IRB beyond September 15, 2016 is statute-barred, as Certas issued valid denials that G.S. failed to dispute in time.

Section 7 of the LAT Act

23To G.S.'s credit, he focused his responding submissions instead on s. 7 of the LAT Act, arguing that the Tribunal should exercise its discretion to extend the limitation period and permit him to proceed with his applications for entitlement at the Tribunal.

24Section 7 of the LAT Act affords the Tribunal statutory discretion to extend the time for commencing a proceeding in certain circumstances if it is satisfied that there are reasonable grounds for applying for the extension and for granting relief. There are four factors that the Tribunal weighs in determining whether the justice of the case requires that an extension 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 the other party; and iv) the merits of the appeal.⁵ These four factors are not strict elements that must each be met in order to grant an extension of time. Rather, they are a guide to assist in determining the justice of the case. Whether to grant an extension of time depends on the specific circumstances of each case.⁶

25Having determined that Certas' denials were clear and unequivocal, justice still requires that the Tribunal consider whether an extension of the limitation period should be granted. I find G.S. has not provided compelling evidence to justify exercising the Tribunal's discretion to extend the limitation periods under section 7 of the LAT Act.

26First, G.S. argues he always had a bona fide intention to appeal his denial within the two-year period. He offers a number of submissions: G.S. argues he was waiting for Certas to determine the quantum of his IRB before proceeding in order to "help the process go more smoothly"; that he gave Certas "the benefit of the doubt" and "ample time" to calculate his IRB; that he made several attempts to contact Certas to check the status of the IRB calculation; that Certas only provided the accounting report three weeks after his application to the Tribunal; and finally, oddly, that he "realized he needed to file an application with the Tribunal as soon as possible as the limitation period had expired." In response, Certas states that G.S. has not offered a cogent argument or evidence that he had a bona fide intention to appeal.

27I agree with Certas. It is unclear what G.S. is arguing in his submissions on this factor or how it conveys a bona fide intention to appeal, other than an attempt to place the blame for his untimely application at Certas' feet. If G.S.'s argument is to be taken on its face, it is a tacit admission that he willfully ignored the limitation period in order to "allow" Certas time to calculate his IRB. If this is the case, then his own argument is undermined by the fact that both applications to the Tribunal were submitted prior to even receiving the accounting report he was allegedly waiting for and, as it pertains to the second accident, where there was no accounting report to wait on. In any event, I find this factor favours Certas, as G.S. has not provided compelling evidence of a bona fide intention to appeal within the limitation period.

28Second, G.S. argues that the length of the delay in file 19-002059/AABS is "only just under 4 months past the two-year limitation period" and that once the holidays are factored in, the "real length of the delay would be about approximately three and a half months, which is less than a quarter of a year." G.S. made no submissions on the length of delay in file 19-000393/AABS, which was over six months. In response, Certas argues that even if the holidays were discounted, G.S. still failed to appeal the denial in time and that his lack of argument on delay for the second accident is evidence that the length of the delay is inexcusable. I agree with Certas. While the Tribunal has exercised its discretion under s. 7 to extend a limitation period for several months in unique cases, I find that G.S. has not provided compelling reason why the delays in appealing either IRB denial is acceptable here.

29Third, G.S. submits that there is no prejudice to Certas because a four-month delay is "not an extreme length of time, nor an excessive amount of time" when compared to how long his claim has been ongoing. In response, Certas submits that barring an application will always result in more prejudice to an applicant than it will to an insurer and urges the Tribunal to weigh the prejudice accordingly. Generally, I agree. However, I find Certas would not be completely without prejudice, as it relied on the certainty of a limitation period and continued to adjust the file in good faith and would be forced to defend the second accident claim without IEs from that period. While G.S. focused on delay, I find the prejudice factor weighs slightly in his favour.

30Fourth, with regards to the merits of his claim, G.S. offers a number of submissions: he cites other issues remaining in dispute, notably a post-104 IRB, his initial entitlement, the quantum of the IRB and "other disputes"; argues that Certas has only conducted one IE on his IRB entitlement; that Certas has not refuted the third party accountants calculation of his IRB; and that the issue of an award is still intertwined. In response, Certas dismisses G.S.'s arguments over post-104 IRB entitlement and other benefits, that conducting one IE does not cut to the merit of the dispute and that it rejected the accounting report provided by G.S. and conducted its own. In sum, Certas argues G.S. has not demonstrated the merits of his claim.

31I agree with Certas. I find G.S.'s submissions do not actually address the merits of his appeal on his entitlement to IRB for either application. I do not follow his arguments on how the remaining issues in dispute indicate that this issue has merit. Similarly, I fail to see how conducting only one IE is somehow proof of the merits of an appeal where Certas has agreed to entitlement for a certain period for the first accident and denied entitlement to the second accident based on the fact that G.S. was not working. I agree with Certas' response that it clearly disagreed with G.S.'s accounting report in conducting its own and, in any event, do not follow how this is evidence of merit. For these reasons, I find this factor weighs in favour of Certas.

32In conclusion, I find G.S. has not provided compelling evidence for the Tribunal to exercise its discretion under s. 7 of the LAT Act to extend the limitation period on an otherwise valid denial by Certas.

CONCLUSION

33I find G.S. may proceed with his application on the remaining issue in dispute between the parties in 19-002059/AABS, being the IRB quantum payable to G.S. for the period from August 22, 2015 to the termination date of September 15, 2016, plus any applicable interest and an award under s. 10 of O. Reg. 664. The parties should contact the Tribunal upon receipt of this decision to schedule a case conference on the remaining substantive issues.

34I find G.S. is statute-barred under s. 56 of the Schedule from proceeding with his claim in 19-002059/AABS for entitlement to IRB beyond September 16, 2016 as he did not dispute the valid denial by Certas in time and has not provided compelling evidence for the Tribunal to extend the limitation period under s. 7 of the LAT Act.

35I find G.S. is statute-barred under s. 56 of the Schedule from proceeding with his claim in Tribunal file 19-000392/AABS, as he did not dispute the valid denial by Certas until well after the two-year limitation period elapsed and has not provided compelling evidence for the Tribunal to extend the limitation period under s. 7 of the LAT Act.

Footnotes

1. 1O. Reg. 34/10.
2. 21999 S.O. 1999, Ch. 12, Sch. G, at s. 7. ["LAT Act"]
3. 3Smith v. Co-Operators General Insurance Company, 2002 SCC 30, at para 14. ["Smith"].
4. 4See, for e.g., Sietzema v. Economical Insurance, 2014 ONCA 111 and Turner v. State Farm, 2005 CanLII 2551 (ON CA), 2005 OJ No. 351 (C.A.).
5. 5Manuel v. Registrar, Motor Vehicle Dealers Act, 2002, 2012 ONSC 1492.
6. 6A.F. v. North Blenheim Mutual Insurance Company and N.L. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT), at paras. 28-30.