S v. Intact Insurance Company, 2019 CanLII 34593

Date: 2019-03-05

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:

S

Applicant

and

Intact Insurance Company

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

Paralegal for the Applicant: Gjergji Laloshi

Counsel for the Respondent: Safina Khan

HEARD In Writing on: December 15, 2018

REASONS FOR DECISION

OVERVIEW

1The applicant, “S”, was involved in an automobile accident on July 5, 2015, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule''). He applied for dispute resolution services to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) when Intact denied his claims.

2Intact has raised a preliminary issue that could prevent the Tribunal from hearing S’s appeal of its decision to deny his claim for an income replacement benefit (IRB). It asserts that the applicant is statute-barred from appealing its refusal to pay IRBs, because S failed to commence his appeal, within two years of the date that his claim for benefits was denied, as required by s. 56 of the Schedule.

3S has claims for medical benefits which are unaffected by this preliminary issue.

Issues

4The issue to be decided by the Tribunal is:

1. Is S statute-barred from proceeding with his appeal of Intact’s refusal to pay IRBs?

RESULT

5S’s IRB appeal may not proceed. It is statute-barred.

REASONS

6Under 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.”

7If 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.”

Chronology of Events

8The evolution of this IRB appeal is undisputed. The dispute is about how to interpret the law as it applies to the facts.

9Intact’s denial of S’s IRB was effective April 1, 2016.

10The Tribunal’s application form was submitted by S’s legal representative on May 16, 2018.

11S was self-employed as a truck driver at the time of the accident. His primary client was a road transport carrier company called “ACC”.

12Following the accident of July 5, 2015, S returned to work on July 8, 2015, and worked through September 30, 2015, at which point due to ongoing accident related impairments he stopped working. S returned to work on December 2, 2015 with modified hours and duties, until January 2016 when he returned to full time hours and duties.

13An accounting report dated February 22, 2016 was completed by Great Oak VFA Inc. in pursuant to s. 7(4) of the Schedule which included an analysis of S’s post-accident income and a calculation of his IRB entitlement.

14On March 17, 2016 Intact issued a letter terminating S’s IRBs based on as a result of the finding of s.44 insurer’s examinations (IEs), which concluded that he no longer suffered a substantial inability to perform the essential tasks of his pre-accident employment as a result of the accident.

15Intact terminated S’s IRBs effective April 1, 2016.

16In compliance with s.37 of the Schedule, Intact informed S of the reasons for the termination of the specified benefit, as well as provided an addendum with information about the rights and responsibilities of the claimant to dispute the decision.

17In October 2017, S stopped working with ACC. He resumed work in November 2017 in a less strenuous position with a firm called “LGDS”.

18In April 2, 2018, S decided that he could not continue with his employment tasks, and discontinued work with LGDS, except for a failed attempt to work (May 14-16, 2018). S claims that he has been unable to work since.

19S filed his appeal, as noted, on May 16, 2018.

S’s Position

20It is uncontested that the limitation period for an appeal does not begin to run until and unless a proper notice of denial is issued by the insurer.

21S argues that the limitation period did not begin to run on April 1, 2016, because Intact’s notice of denial was deficient.

22In support of his contention, S cites Smith² a case in which the Supreme Court laid out the standard for notifying claimants of their statutory rights to dispute resolution:

i. The language must be straightforward and clear, directed towards an unsophisticated person.

ii. At a minimum, disclosure should include a description of the most important points of the process and the relevant time limits that govern the entire process.

iii. No refusal can said to be given by the insurer if there has not been adequate compliance with the requirement.

iv. The use of a standard form prescribed or approved by the regulator does not relieve the insurer of its obligations under the Schedule.

v. The standards are “true to the purpose of consumer protection.”

23S submits that Intact’s notice of denial was deficient because it included information about a dispute resolution process that involved applying for mediation and then for arbitration with FSCO, a process which was repealed and replaced with the current Tribunal process effective April 1, 2016. S argues that Intact, as a sophisticated insurer, knew or ought to have known about the legislated change in process and should have issued a notice that accounted for it. In S’s view, it therefore follows that Intact’s notice failed to meet the requirements of s.54 of the Schedule, which requires the insurer to provide the applicant of his or her right to dispute any refusal to pay a claimed benefit. Accordingly, he argues, the limitation period on his appeal had not begun to run when he filed his appeal.

Intact’s Position

24Intact submits:

i. Its notice of denial, issued on March 17, 2016 was adequate and compliant. It submits that the limitation period was triggered on April 1, 2016.

ii. S filed his appeal respecting IRBs after the prescribed two year limitation period; therefore, S’s appeal is statute-barred.

iii. Its notice of denial was consisted with the requirements of Smith: clear, unequivocal and appropriate for an unsophisticated reader.

25Intact urges me to apply a “plain reading of s.56”. It does not address the issue of whether or not the information included in the “right to dispute” portion of its denial was accurate. It cites Haldenby³ in reminding me of the importance of limitation periods for ensuring timeliness, fairness, the preservation of evidence and finality in the administration of justice.

26After reviewing the parties’ arguments and submitted jurisprudence, I find that S’s appeal was filed beyond the limitation period. This is because:

i. I find that Intact communicated information about S’s right of appeal that was accurate as of March 17, 2016 and complied with the standard for clarity set by Smith. I find no legal basis on which to conclude that this notice was improper or invalid.

ii. Intact’s notice provided S with the knowledge he needed to take next steps. Providing information sufficient to trigger action by the applicant is, in my view, the key point of disclosure. The steps described, if taken within the limitation period, would have resulted in a rapid redirection of his appeal to the appropriate forum: FSCO was returning applications filed after April 1, 2016 and applicants had access to updated information on the website.

iii. There is no evidence or any reason to believe that the information in Intact’s notice was in any way the cause of S’s delay in filing his appeal with the Tribunal. He makes no such claim: the evidence is that he filed his appeal with the Tribunal immediately after stopping work for the last time,⁴ and in fact S suggests other reasons for his delay, which I will address below.

iv. At paragraph 35 of his submissions, S submits that,

“were he to file an application within the 2 years, which happened to be a period in which he was working mostly full time, with periodic stops when the pain became unbearable, he would have been grossly prejudiced in being able to prove that he had a substantial inability to perform the tasks of his employment, despite the fact that he was currently working, albeit in pain. Very likely his claim would have been dismissed, and there is a strong probability it would be found to be a frivolous or vexatious application, in complete contradiction for s.8 of the LAT Act, which may result in the tribunal ordering costs against the Applicant.”

v. The foregoing findings lead me to conclude that any deficiency in Intact’s notice did not in fact influence the timing of S’s appeal, and ought not be used to overcome the limitation period.

EXTENDING THE LIMITATION PERIOD

27Under s.7 of the Licence Appeal Tribunal Act⁵ (LATA), 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.

28S requests an extension to his limitation period under s.7. Intact does not address this request in its submissions.

29There are four factors for determining whether an extension of limitation period should be granted:

1. the existence of a bona fide intention to appeal within the appeal period;
2. the length of the delay and the explanation for it;
3. any prejudice to the responding party (in this case Intact) caused or worsened by the delay;
4. the merits of the appeal.

30These four factors act as a guideline – they are not elements that must be met before an extension can be granted, but they act as a guideline to determining the just decision in each case.⁶ However, the general rule is that time for an appeal is not extended unless the applicant has shown that these factors apply to an extension: the applicant bears the onus of establishing the necessary factual foundation.⁷

31After finding what I did about Intact’s notice of denial, I have decided S’s appeal should remain barred and no extension should be granted. My reasons are that the criteria for extension are simply not met:

i. I find no basis to believe that S had a bona fide intention to file his appeal for IRBs within the limitation period. He provides in his own submissions evidence to the contrary.

ii. Nothing in the language of Intact’s notice creates a reasonable explanation for S’s not appealing the denial within the limitation period. Again, there is evidence that this was not a factor in his decision to file late. Even a short delay requires reasonable explanation: there is none in this case.

iii. The merits of S’s case for IRBs has been acknowledged by him to be weak. This weakness led him to delay his appeal, in the face of IEs rebutting his claim. He offers no explanation of how the merits of his case would somehow have improved over time.

iv. As a result of the foregoing conclusions, I find that three of the four criteria for extension are simply not met.

32The prejudice to S of imposing the statute bar is manifest. The prejudice to Intact of proceeding is proportionally much lower, in financial terms, and minimal in terms of its ability to defend BS’s claim. It has IEs in hand from its denial of S’s initial IRB claim and can have easily arrange for fresh IEs or addenda to the originals. The “balance of prejudice” in this case would favor allowing the appeal to proceed. However, in my view this prejudice is insufficient to warrant a s.7 extension because:

i. I find that S placed himself at risk of statute-bar by waiting as long as he did to file his appeal.

ii. Prejudice to the applicant should not be a determining factor when, as in this case, none of the other criteria for extension are met, and are in fact contradicted.

iii. The important objectives of limitation periods noted in Haldenby should not be set aside lightly for what amounts, in my view, to S’s mismanagement of his IRB appeal file.

33My decision is that S’s claim for IRBs may not proceed. The claim is statute-barred.

CONCLUSION

34S’s appeal is not to proceed. It is statute-barred.

35S’s request for an extension to the limitation period under s.7 of the LATA is denied.

Footnotes

1. 1O.Reg. 34/10
2. 2i.e. Smith v. Cooperators General Insurance Co., [2002] 2 S.C.R 129, 2002 SCC 30
3. 3i.e. Haldenby v. Dominion of Canada General Insurance Company, 2001 CanLII 16603 (ON CA), [2001] O.J. No. 3317 (CA) (“Haldenby”)
4. 4That is to say, he was not misdirected into filing for mediation or arbitration with the wrong forum – FSCO – which means that there was no delay caused by the information in the notice of denial.
5. 5S.O. 1990, c.12
6. 6A.F. and North Blenheim Mutual Insurance Co. & N.L. and North Blenheim Mutual Insurance Co., 2017 CanLII 87446 (ON LAT), cited by BS.
7. 7Ibid.