E.V. v. TD Insurance Meloche Monnex, 2019 CanLII 58142

AMENDED RECONSIDERATION DECISION

Before: Maureen Helt, Vice-Chair

Date: May 15, 2019

File: 17-005168/AABS

Case Name: E.V. v. TD Insurance Meloche Monnex

Written Submissions By:

For the Applicant: Y. Yermus, Counsel

For the Respondent: R. Pano & A. Kwatra, Counsel

OVERVIEW

1This is a request for reconsideration made by the respondent (insurer) of a motion decision dated March 20, 2018 (Motion Decision). In the Motion Decision the Tribunal dismissed the respondent’s motion requesting that the Tribunal dismiss the application on the basis that there were no longer any issues in dispute.

2In this request for reconsideration, the respondent submits that the Tribunal acted outside its jurisdiction or violated the rules of natural justice or procedural fairness in dismissing its motion. The respondent also submits that the Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different result. The respondent also submitted that the Tribunal incorrectly framed the issue to be decided.

3Pursuant to her authority under s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointment Act, 2009, S.O. 2009, c.33, Sched. 5, the Executive Chair delegated to me the responsibility to decide this reconsideration request.

RESULT

4I find the Tribunal made an error in law in its interpretation of section 281 of the Insurance Act and the principle of fairness such that it would likely change the decision made. I grant the request for reconsideration and vary the Tribunal’s order. As there are no issues in dispute, I dismiss the application with the exception of the applicant’s claim for costs which the parties may make submissions on.

BACKGROUND

5On August 10, 2017, the applicant submitted an application to the Licence Appeal Tribunal (LAT) seeking a determination of whether the applicant was (1) subject to treatment within the Minor Injury Guideline; (2) whether the applicant is entitled to an income replacement benefit from April 16, 2015 to date and ongoing; (3) whether the applicant is entitled to two disputed treatment plans totalling $4,522.05 for physiotherapy services; and (4) whether the applicant is entitled to interest on overdue payments of benefits.

6As set out in the materials filed by the parties, on January 25, 2018 the respondent, by correspondence dated the previous day, agreed to pay the disputed benefits and reinstate the income replacement benefits. On January 29, 2018, the applicant sent a draft order to the respondent setting out the applicant’s entitlement to all issues in dispute plus interest. The respondent rejected the draft order.

7On February 2, 2018 the applicant wrote to the respondent claiming its right to obtain an order for entitlement. On February 7, 2018 the respondent informed the applicant that declaratory relief was not a remedy available to the Tribunal.

8On February 16, 2018 the respondent conceded all of the issues in dispute in the applicant’s application to the Insurer. This is confirmed at paragraph 33 of the applicant’s response to the request for reconsideration.

9On February 21, 2018 the Tribunal asked the applicant to provide notice of what issues remain in dispute. The applicant informed the Tribunal that the issues have not been resolved and requested a finding and Order on the issues in dispute. The respondent filed a notice motion dated February 27, 2018 asking the Tribunal to dismiss the appeal on the grounds that the appeal was frivolous and vexatious and that it was outside the Tribunal’s jurisdiction.

MOTION DECISION

10The Adjudicator dismissed the motion and held that the applicant is entitled to proceed to a full hearing on the merits of his claim and claim for costs after the hearing is concluded.

11In reaching his decision, the Adjudicator framed the question before him as “whether the payment of outstanding benefits that occurs during the LAT adjudicative process, removes LAT’s jurisdiction [to] make a decision on the application and give the insured the protection of section 281.”

12In his analysis the Adjudicator considered seemingly competing LAT and Financial Services Commission of Ontario (FSCO) decisions put forward by the parties and stated, in his Motion Decision the following:

13I find that the Primmum¹ decision gives short shrift to a protection afforded insured individuals in what is described as consumer protection legislation. To find otherwise would be to render Section 281 of the Insurance Act inoperable where an insurer concedes entitlement during the adjudicative process.

14It was on this basis that the Adjudicator dismissed the respondent’s motion to dismiss the applicant’s claim.

ANALYSIS

15The respondent requested a reconsideration of the motion decision pursuant to rule 18.2 of the Licence Appeal Tribunal (LAT) Rules of Practice and Procedure (LAT Rules). The respondent argues that:

a. The Tribunal acted outside its jurisdiction or violated the rules of natural justice or procedural fairness (rule 18.2(a)) by ordering a full hearing on the merits on a matter where the dispute over entitlement and quantum of benefits has been resolved; and

b. The Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different decision (18.2(b)) by incorrectly framing the issue to be decided; and

16I will focus on the jurisdictional challenge first.

A. Did the tribunal err or exceed its jurisdiction by ordering a full hearing on the merits?

17For the reasons that follow, I find that the Tribunal did not act outside of its jurisdiction, but that it did make a significant error of law such that the Tribunal would likely have reached a different decision. Based on the error of law I grant the request for reconsideration.

Tribunal’s Jurisdiction

18The respondent argues that the Tribunal acted outside its jurisdiction and mandate in ordering a hearing where the issues in dispute have been resolved.

19The Tribunal’s jurisdiction to resolve issues in dispute is set out in section 280 of the Insurance Act:

Section 280 provides as follows:

Resolution of disputes

280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

Application to Tribunal

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

20The respondent argues that, based on s. 280(1) and (2), LAT has the authority to resolve disputes with respect to the Applicant’s present entitlement to benefits and the quantum of those benefits, but that it does not have jurisdiction to conduct hearings where there is no live dispute with respect to entitlement or quantum. It argues that LAT’s jurisdiction does not extend to authority to resolve any disputes that may potentially arise in the future.

21The respondent relied on the decision of Vice Chair Flude in J.R. v Primmum Insurance Company, (6 February 2018) 17-001937/AABS (LAT) (Primmum). The respondent argued that once the benefits have been paid, entitlement agreed to and quantum settled, there are no remaining issues in dispute and as such the respondent should not be required to proceed to hearing.

22The respondent argued that in Primmum the Tribunal took the position that it had no jurisdiction to make a declaration that the applicant was entitled to benefits when there were no issues in dispute and that to proceed in the current situation would be to rule on a hypothetical that the insurer would at some point in the future determine the applicant is no longer entitled to the benefit and stop payment.

23In support of its position that the Tribunal does have jurisdiction to proceed to hearing when there are no longer any live issues in dispute the applicant relied on the decision in Simpson v. Allstate Insurance Co. of Canada, [2001] O.F.S.C.I.D. No 160 (Simpson)² . In Simpson, the Financial Services Commission of Ontario found that it had jurisdiction to issue an order establishing the applicant’s benefits even without any issues in dispute at the time of the hearing.

24The Tribunal considered the case law provided by the parties and decided to order a hearing (rejecting the argument that the Tribunal no longer has jurisdiction).

25In reviewing the decisions considered by the Tribunal and submitted on this request for reconsideration I do not find the Tribunal exceeded its jurisdiction. None of the decisions put forward by the parties support the respondent’s argument that the Tribunal somehow loses jurisdiction of a matter when the issues in dispute are no longer “live”. In fact, the decision relied upon by the respondent states otherwise.

26In Primmum Vice Chair Flude stated:

27I find that the issue of entitlement to an income replacement benefit has been conceded by the respondent to the date of the hearing rendering a hearing on that issue unnecessary. I do not accept that the respondent’s unilateral action of approving the benefit removes my jurisdiction in this particular case. The Tribunal’s jurisdiction to adjudicate the matter arose when the applicant filed the application. At the time there was a dispute in respect of the IRB benefit as well as interest.³

28The Tribunal then dismissed the claim because it found that by conceding to the entitlement to the benefit and the quantum of the benefit, the ''dispute between the parties with respect to that issue is now at an end. To proceed to a hearing on that issue would be a misapplication of the Tribunal’s resources".⁴

29I agree with Vice Chair Flude’s analysis and therefore dismiss the respondent’s argument with respect to jurisdiction. However, I think the respondent’s argument with respect to Primmum and there being no remaining issues in dispute is really a question of whether the Tribunal made an error of law in his decision.

i) Error of law

30The relevant test for granting a request for consideration on the basis of a significant error of law is set out in Rule 18.2(b) of the Licence Appeal Tribunal (LAT) Rules of Practice and Procedure (Rules).

31Rule 18.2(b) allows the Tribunal to review a decision for “significant errors”. This Rule does not mean that an adjudicator should reweigh all the evidence. Rather, the errors of fact or law much be significant such “that the Tribunal would likely have reached a different decision.”⁵

32Also in Taylor, at paragraph 67, the Court noted that as the Executive Chair can correct significant errors of fact or law which would have likely affected the result in a reconsideration, this suggests a correctness standard of review is to apply. The onus is on the party seeking reconsideration to establish the error of fact or law.

Section 281 of the Insurance Act

33The Tribunal’s decision dismissing the respondent’s motion turned on his analysis of sections 280 and 281 of the Insurance Act. He preferred the case law submitted by the applicant and concluded, at paragraph 16 of his decision, that “the Primmum decision gives short shrift to a protection afforded insured individuals in what is described as consumer protection legislation. To find otherwise would be to render section 281 of the Insurance Act inoperable where an insurer concedes entitlement during the adjudicative process.”

34For the reasons that follow I find the Tribunal made an error in law in its interpretation of section 281 of the Insurance Act.

Section 281 of the Insurance Act states:

1. Protection of Benefits after Tribunal resolution

281 (1) After the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits to the insured person on the basis of an alleged change of circumstances, alleged new evidence or an alleged error except as provided under this section.

2. When benefits may be reduced

281 (2) The insurer may reduce benefits if, the insured person agrees;

a. The insurer is authorized to do so as a result of a successful appeal of the Licence Appeal Tribunal’s decision; or

b. the insurer is authorized to do so by the Licence Appeal Tribunal.

35The modern rule of statutory interpretation requires me to examine the language of section 281 by examining a plain reading of the language in the section, its total context, having regard to the purpose of the Insurance Act the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids.

Plain reading

36A plain reading of section 281 suggests that section 281 is intended to give an insured procedural protection once the Tribunal issues a decision to ensure that an insurer cannot reduce benefits unless on consent, successful appeal or order of the Tribunal.

37The language of section 281 is clear: “After the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits…” The language clearly contemplates the protection afforded to those situations where the Tribunal has made a decision.

38The Tribunal interpreted s. 281 in a way that, if an insurer refused to agree to a consent order, the Tribunal must hold a hearing and issue an order. The Tribunal found that any other interpretation than the one he made, in the context of considering section 281 as part of consumer protection legislation, would result in rendering section 281 inoperable where an insured concedes entitlement during the adjudicative process.

39I do not disagree. However, I do not agree that the purpose of section 281 is to require parties and the Tribunal to proceed to hearing (or to require the insurer to agree to a consent order) when there are no longer any issues in dispute for the sole purpose of obtaining a decision or order from the Tribunal. The provision creates procedural protection when the Tribunal makes a decision; it does not impose on the Tribunal a requirement to hold a hearing when otherwise the Tribunal could choose not to. To interpret s. 281 as the applicant and the Tribunal propose would be to take away the Tribunal’s ability to control its own process.

40I also note that s. 281 would only be rendered inoperable in limited situations:

a. where there are no outstanding issues in dispute;

b. where the insurer will not consent to an order; and

c. where the Tribunal chooses not to proceed to a hearing.

In all other situations s. 281 would still be operable. Relying on this section as a means to require a full hearing on the merits when there are no issues in dispute is an incorrect interpretation of s. 281 and is, in my view, an error in law.

Context & Purpose of the Insurance Act and Consequences of Proposed Interpretation

41In the Motion Decision the Tribunal interprets section 281 as providing protection in the adjudicative process where the respondent has conceded all the issues in dispute during the adjudicative process. In fact, and as noted above, the Tribunal states that section 281 would be rendered inoperable where an insurer concedes entitlement during the adjudicative process.

42The Tribunal references the Insurance Act being consumer protection legislation. The applicant also relies on the Supreme Court of Canada decision in Smith v. Co-operators General Insurance Company ⁶ which recognizes the Insurance Act as a consumer protection legislation.

43I agree that there is no doubt that the Insurance Act is consumer protection legislation but I do not agree that it follows that section 281 should be considered as a mechanism to require a party to proceed to hearing when all the issues in dispute in the proceeding before the Tribunal have been resolved.

44The respondent submitted that the Tribunal erred in his determination that an insurer who concedes entitlement during the adjudicative process should still be forced to conduct a hearing on benefits not in dispute because to do otherwise would compromise consumer protection.

45The applicant relies on the decisions of Arbitrator Sapin in Nelson and Liberty Mutual Insurance Company (FSCO A00-00252), a decision also relied on by the Tribunal in the motion decision. The Nelson case considered the question of whether Liberty Mutual’s unilateral reinstatement of income replacement benefits could be made the subject of an arbitrator’s order.

46In Nelson the parties agreed that section 287 (the precursor to the current section 281) meant that where there is an order, an insurer cannot then unilaterally reinstate benefits without consent or an appeal to the tribunal. However, the Nelson decision is distinguishable as the issue in dispute was whether or not an Order for entitlement of ongoing benefits could be issued without consent and without a full hearing. Adjudicator Sapin stated she had no authority that would permit her to impose such an order either as a term of settlement, or on any grounds other than a hearing of the merits as it would be premature and exceed its jurisdiction.

47At para 19 of the Decision:

a. “Liberty has consistently refused to agree to an order that the Applicant is entitled to ongoing IRBs, and argues that she is not entitled to such an order absent a hearing on the merits.”⁷

48It was on this basis, where there remained a “live” issue in dispute, that the applicant explained she wanted the protection of section 287 (predecessor to section 281 of the Insurance Act). The applicant argued that it was an issue of fairness. This is quite different from the case before us where the issue of entitlement is no longer in dispute.

49The applicant also argues at paragraphs 22 and 23 of its submission that it would be unfair to “reward the respondent for engaging in brinksmanship” by engaging in an eight month adjudicative dispute before resolving the dispute and denying the applicant the opportunity to obtain a finding and order. The applicant goes on to state that it would be an affront to the consumer protection function of insurance law.

50The applicant argues the consequence of granting the reconsideration will “allow insurers to abuse this process and to weaponize it, by making it yet another hurdle for an insured to clear in order to obtain benefits, rather than as a dispute resolution mechanism”.

51I disagree with this characterization. There is no evidence before me that this is the case. On the contrary I find that if the applicant’s interpretation were allowed to stand there would be no incentive for insurers to settle before a hearing if the Tribunal is going to require them to proceed to a hearing in every instance that an applicant wants an Order for the purpose of section 281.

52I also find that there are other protections afforded to an insured in the dispute resolution process. For example, if in the future the insurer unilaterally changes the benefits without the consent of the applicant or the Tribunal, the applicant has the recourse of coming back to the Tribunal with a new application. The applicant may also seek costs or an award under Regulation 664 if the respondent acts in a manner that warrants either of those two remedies.

53The Adjudicator erred by dismissing the respondent’s motion on the basis that s. 281 required the Tribunal to make a decision. Had the Tribunal not made that error, I find it likely that he would have reached a different decision.

54For all of the reasons set out above I find that there was a significant error in law in the interpretation of section 281 of the Insurance Act such that the Tribunal likely would have reached a different decision. I therefore grant the request for reconsideration.

B. Did the Tribunal err by incorrectly framing the issue to be decided?

55Given that I have found an error in law on the basis of the interpretation of s. 281 of the Insurance Act, I do not need to consider the respondent’s second ground for reconsideration that the Tribunal incorrectly framed the issue to be decided.

OUTCOME

56According to rule 18.4 of the LAT Rules, upon consideration of a request for reconsideration, I may:

a. Dismiss the request; or

b. After providing all parties an opportunity to make submissions,

i. Confirm, vary, or cancel the decision or order; or

ii. Order a rehearing on all or part of the matter.

57Given that I have granted the request for reconsideration, I must now decide whether to send the matter back for a rehearing on the motion or whether to vary the decision. I find that I have the information necessary in order to vary the decision, and that this would be the most efficient way to determine this matter on its merits.

58In my view, the application should be dismissed because to proceed to a hearing on a matter where there are no longer any issues in dispute would not be consistent with the LAT’s mission to deliver administrative justice in a fair, independent and timely manner. In my view, it would be a misapplication of the Tribunal’s resources to proceed to a hearing when there are no longer any issues in dispute.

ORDER

59For the reasons set out above I find that there was a significant error of law in the Motion Decision such that it would likely change the decision made. I grant the request for reconsideration and vary the Tribunal’s order and dismiss this application with the exception of the applicant’s claim for costs.

60The Tribunal will schedule a written hearing on the issue of costs for June 28, 2019.

61The parties may provide their submissions on costs as follows:

a. The applicant to serve and file its submissions and evidence within two weeks of the date of this Decision

b. The respondent to serve and file its submissions and evidence within four weeks of the date of this Decision

c. The applicant to serve and file its reply submission within five weeks of the date of this Decision.

62The submission are to be no more than seven pages in length with the reply being no more than five pages in length.

Maureen Helt

Vice-Chair

Tribunals Ontario – Safety, Licensing Appeals and Standards Division

Footnotes

1. 1J.R. v Primmum Insurance Company, (6 February 2018) 17-001937/AABS (LAT)
2. 2Note, the Simpson decision was overturned at FSCO (Allstate Insurance Company of Canada and Pamela Simpson (6 June 2003), Appeal P01-00057 (FSCO); however, the applicant took the position before the Tribunal that the case still applies on limited grounds.
3. 3J.R. v Primmum Insurance Company, (6 February 2018) 17-001937/AABS (LAT) at para 5
4. 4J.R. v Primmum Insurance Company, (6 February 2018) 17-001937/AABS (LAT) at para 12
5. 5Taylor v Aviva Canada Inc., 2018 ONSC 4472 at para 70
6. 6Smith v. Co-operators General Insurance Company 2002 SCC 30 at para 11
7. 7Nelson and Nelson Mutual Insurance Company, (FSCO A00- 000253, November 8, 2001) at para 17, at Tab 6 of Brief of Authorities of Applicant