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:
SC
Applicant
and
TD Home and Auto Insurance Company
Respondent
DECISION
ADJUDICATOR: Christopher A. Ferguson
Appearances:
For the Appellant: Matthew Barteaux, Counsel
For the Respondent: Rachel Pano, Counsel
Heard: In Writing Hearing: June 12, 2019
REASONS FOR DECISION
Overview
1SC was injured in an automobile accident on May 12, 2004, and sought benefits pursuant to Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996 (“the Schedule''). He applied for dispute resolution services to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“the Tribunal”) when the respondent, TD, denied his claims.
2TD has raised a preliminary issue that could prevent the Tribunal from hearing SC’s appeal of its decision to deny his claim for attendant care benefits (ACBs) and housekeeping benefits (HKBs). It asserts that SC is statute-barred from appealing its refusal to pay ACBs and HKBs because SC failed to commence his appeal within two years of the date that his ACB and HKB claims were denied, as required by s. 51 of the Schedule.
3On May 10, 2018, the Tribunal ordered a written hearing on the preliminary issue for August 7, 2018 and further ordered that “within 30 days of the written decision on the preliminary issues being released, the parties will contact the Tribunal to schedule a case conference resumption to address the substantive issues.”
4On October 15, 2018 the Tribunal ordered an adjournment of the preliminary issue hearing to January 14, 2019. That hearing was stayed pending determination of an interlocutory motion by SC. The Tribunal issued its final decision on that motion on June 11, 2019 and denied any further adjournment. Accordingly, I will proceed to determine the preliminary issue.
5I note that in addition to the disputed claims for ACBs and HKBs, SC has claimed an award under Ontario Regulation 664 because the respondent unreasonably withheld or delayed the payment of benefits.
Preliminary Issues
6The issues to be decided by the Tribunal are:
Is SC barred from proceeding with his claim for ACBs because he failed to commence his application within two years after TD’s refusal to pay the amount claimed?
Is SC barred from proceeding with his claim for HKBs because he failed to commence his application within two years after TD’s refusal to pay the amount claimed?
RESULT
7SC’s appeal is statute-barred pursuant to s.51 of the Schedule.
ANALYSIS
8Under s. 51(1) 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 year anniversary is called the “limitation period.”
9If an appeal is not filed within the two-year limitation period prescribed by s. 51, then the Tribunal cannot hear it: the appeal is effectively dismissed without a hearing. The appeal is said to be “statute-barred.”
10It is uncontested by the parties 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.
11Under s. 39 of the Schedule, the insurer must provide the insured person a notice that tells him or her which, if any, expenses described in the assessment of attendant care needs the insurer agrees to pay; and advises him or her that the insurer requires him or her to be examined under s. 42, if the insurer has not agreed to pay all expenses described in the assessment of attendant care needs.
12For an insurer to be able to rely on the limitation period in s.51, it must provide the applicant a valid notice that provides a clear and unequivocal denial, gives reasons for the denial, and outlines the dispute resolution process.1
Chronology of Events
13The evolution of this appeal is undisputed. The dispute is about how to interpret the law as it applies to the facts.
14SC sustained significant orthopedic and internal injuries as a result of the accident, including fractures to his pelvis, clavicle and ribs. He underwent multiple surgeries, including surgery to his pancreas, liver and intestines. He remained in hospital for four months. He remains on strong pain medication.
15Following his discharge from the hospital, SC was provided with nursing and attendant care from the Ministry of Health and Long Term Care ("CCAC") as primary care.
16An Application for Benefits (“OCF-1”) dated May 26, 2004 was sent to TD. ACBs and HKBs were not claimed in the OCF-1.
17An assessment of attendant care and housekeeping needs was conducted on SC in his parent’s residence where he was staying. The assessment occurred on September 14, 2004 and on September 21, 2004 and were conducted by Maria Paulsson, occupational therapist (OT). Ms. Paulsson initially assessed SC’s attendant care needs at $232.20 per month, but after the follow-up visit on September 21 ultimately concluded and reported that SC was entitled to $0.00 for ACBs and HKBs.
18Multidisciplinary assessments (MDAs)2 were conducted with SC on May 30-31, 2005. The conclusion was that SC was not disabled from self-care and housekeeping duties. Copies of these assessments were sent to SC on June 22, 2005 with a covering letter that encouraged him to discuss the findings with his family physician.
19TD sent an Explanation of Benefits (“OCF-9”) to SC dated June 23, 2005 in which it informed him that it was refusing to pay ACBs or HKBs. The amounts claimed by SC for these benefits are indicated as $0.00 in the OCF-9. The amounts listed as payable for these benefits is also indicated as $0.00.
20The letter to which the OCF-9 was attached was incorrectly dated June 22, 2004.
21On December 8, 2015, TD determined that SC was catastrophically (“CAT”) impaired as a result of the accident.
22SC indicates submitted claims for ACBs and HKBs, to TD on March 21, 2016 and that he was denied the claimed benefits of April 22, 2016.
23In December 4, 2017, SC filed this appeal with the Tribunal.
TD’s Position
24TD submits:
i. It issued a clear and unequivocal denial of SC’s claim for ACBs and HKBs on June 23, 2005. It submits that the limitation period was triggered on that date. In detail, TD submits that its denial OCF-9 included as reasons for why it would refuse to pay ACBs and HKBs:
a. the Form 13 dated November 17, 2004 from Ms. Paulsson assessing SC’s attendant care and housekeeping needs at $0.00; and
b. the multi-disciplinary assessments conducted on May 30-31, 2005 which determined “that you [SC] are not substantially disabled from your housekeeping and self-care activities.”
ii. Its OCF-9 included the required information about SC’s right to dispute its decision, the steps to be taken and a warning about the limitation period.
iii. Even if its denial was “legally incorrect”, it would still trigger the limitation period.4
iv. SC took no steps to appeal or dispute TD’s denial until December 7, 2017 when it applied to the Tribunal – 12 years after TD’s refusal to pay ACBs or HBKs.
v. TD urges me to apply a plain reading of s.51. SC was late in commencing his appeal, and provided no reasonable explanation for his delay.
SC’s Position
25SC submits:
i. The 2005 denial was not clear and unequivocal. The covering letter was incorrectly dated and the OCF-9 refers to ACBs and HKBs that SC had not yet claimed. It was confusing to an unsophisticated person. Accordingly, the limitation period did not begin on June 23, 2005.
ii. SC urges me to rely on Smith5 -- in which the Supreme Court of Canada emphasized the importance of consumer protection in insurance law and the need for “bright-line boundaries between the permissible and the impermissible” – in finding TD’s notice deficient.
iii. The limitation period begins when a claim is made and refused.6 SC did not claim ACBs and HKBs in 2005: even TD’s OCF-9 indicates $0.00 for these benefits, and never received any ACB or HKB payments. It is absurd to suggest that a limitation period can begin before a claim is even made.7
iv. The limitation period began on April 22, 2016 and ended on April 22, 2018. SC’s appeal dated December 4, 2017 was well within that period. His appeal should proceed.
26It is important to note that SC’s submissions do not suggest that any of the contents asserted by TD as included in the OCF-9 were not included. There is no suggestion that the language used in the OCF-9 was unclear. SC does not argue that any of the required elements of an OCF-9 are missing. SC does not deny receiving the assessment reports from TD.
Findings
27I find that the evidence is clear and uncontested that SC made no claim for ACB/HBKs: his OCF-1 did not include ACB/HBKs and TD’s OCF-9 is perfectly clear that the claim for ACB/HBKs in this case was $0.00.
28TD’s submissions refer to a “stoppage” of benefits, but TD does not dispute SC’s statement that ACBs were never paid. No stoppage in the meaningful, practical sense of the term occurred.
29After reviewing the parties’ arguments and submitted jurisprudence, I find that SC’s appeal is statute barred. This is because:
i. TD’s 2005 denial was clear, unequivocal and included all of the required elements of a valid denial, including medical reasons and disclosure of SC’s right to dispute TD’s decision and the consequences of failing to do so within two years. TD’s denial was accompanied by or quickly followed by, the assessment reports upon which TD’s decision was based.
ii. I do not find that a typographical error on the covering letter or the entry of $0.00 as “amount claimed” or the reference to “stoppage” render the 2005 denial unclear or equivocal. The denial was perfectly clear that TD was refusing to pay ACBs, and that its reasons were medical.
iii. SC’s reliance on Smith, while understandable, is unpersuasive to me because in that case, the majority found that the limitation period had not begun to run because the insurer failed to notify the insured person of the limitation period as a feature of the dispute resolution process. No such gaping omission was made in TD’s denial in this case. A similar conclusion was reached by the Court of Appeal in Sietzema.
iv. Having found that the denial was clear and unequivocal, I am bound by the decision in Sietzema in which the court determined that a “legally incorrect” denial may still trigger a limitation period. That case, like this one, involved denial of a benefit for which the applicant had not yet applied.8
v. SC’s assertion that an insurer cannot deny a benefit that has not yet been claimed relies in part on MR. But in that case, a Form 1 had not been completed or submitted by the claimant: because a prescribed element of an ACB application was missing, a claim could not be said to have been made. In this case, a Form 1 was submitted to TD and formed the basis for a claim and denial. The Form 1 was obtained by TD after an assessment to which SC consented and submitted.
vi. SC points me to no authority for any conclusion that TD is prevented from adjusting his claim proactively and notifying him that it will refuse to pay ACBs. TD did not sneak up on SC: SC cooperated with TD’s adjustment of his claim and he does not claim to have been unaware of the purpose of multiple assessments by TD’s assessors. He was provided copies of the assessments that TD relied on and encouraged to discuss them with his doctor.
vii. SC does not explain why he waited over a decade, until he had been determined to be CAT impaired, to apply for ACBs. But it is clear that TD’s refusal to pay was based on medical reasons and in no way linked to SC’s CAT determination. It is also clear from his comments at para.14 of his Response submission, that he had reason to contest the findings set out in the Form 1 at the time of refusal. A valid denial was issued, SC knew he was being denied ACBs and why, and he failed to appeal TD’s refusal to pay ACBs within the limitation period.
viii. SC’s attempt to claim ACBs in March 2016 fails because “there is no provision in the Insurance Act or the Schedule which allows a claimant to reapply for further benefits after an insured person’s benefits have been terminated by the insurer. The only remedy for the insured person is to appeal the termination of benefits within the two-year period.”9
30I find that TD’s denial notice was valid for the purposes of triggering the limitation period. Accordingly, SC’s appeal is statute barred.
CONCLUSION
31TD’s request to bar SC’s appeal is allowed.
32SC’s appeal may not proceed.
Released: June 19, 2019
___________________________
Christopher A. Ferguson
Adjudicator
Footnotes
- Smith v. Co-Operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, cited by both parties.
- Orthopedic and Neurological examinations and a Functional Abilities Evaluation (FAE).
- “Form 1” is the prescribed Assessment of Attendant Care Needs form on which detailed assessment needs and costs information is entered.
- TD cites Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111(CanLll), 118 OR (3d) 713 as the basis of this contention. I will refer to this decision as “Sietzema”.
- Smith v. Co-Operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, at paragraph 16.
- SC cites M.R. v. Aviva Insurance Company of Canada, 2016 CanLII 78332 (ON LAT) for this assertion
- SC cites Guarantee Co. of North America v. Do, 2015 ONSC 1891, 125 O.R. (3d) 585 (ONSC) (“Do”) for this assertion
- Sietzema para.12-16, citation at footnote 4.
- Sietzema, para.16, citing Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 CanLII 16603 (ON CA), 55 O.R. (3d) 470, at para. 30```