Tribunals Ontario Safety, Licensing Appeals and Standards Division 77 Wellesley Street West, Box 250 Toronto ON M7A 1N3 Tel: 1-844-242-0608 Fax: 416-327-6379 Website: www.slasto-tsapno.gov.on.ca
Tribunaux décisionnels Ontario Division de la sécurité des appels en matière de permis et des normes 77 rue Wellesley Ouest, Boîte no 250 Toronto ON M7A 1N3 Tél. : 1-844-242-0608 Téléc. : 416-327-6379 Site Web : www.slasto-tsapno.gov.on.ca
RECONSIDERATION DECISION
Before: D. Stephen Jovanovic, Member
File: 17-002867/AABS
Case Name: S.S. v. Economical Mutual Insurance Company
Written Submissions by:
For the Applicant: Nigel G. Gilby and Gregory R. Wilson, Counsel
For the Respondent: Lisa Armstrong and Shalini Thomas, Counsel
OVERVIEW
1This decision deals with a request for reconsideration by the applicant of a decision of the Tribunal dated August 10, 2018 whereby the adjudicator dismissed the applicant’s application for attendant care benefits (ACBs) and housekeeping/home maintenance benefits (HHMBs). The dismissal was based on the adjudicator’s conclusion that the claim for the benefits was out of time and statute barred.
2The applicant submits that the adjudicator made significant errors of law when he concluded:
(i) the [respondent’s] October 4, 2011 letter was not unclear or ambiguous, or was rendered unclear and ambiguous once the insurer subsequently paid the benefits it had previously denied;
(ii) a subsequent payment does not negate a previous denial;
(iii) the respondent can prematurely deny benefits;
(iv) the inclusion of Charter values was inappropriately raised or not applicable; and
(v) the discoverability principle is not applicable to benefits which require a catastrophic designation prior to entitlement.
3For the reasons that follow, the request for reconsideration is dismissed and the decision of the adjudicator is confirmed. The above alleged errors will be dealt with in somewhat revised versions below.
BACKGROUND
4The applicant was injured in a motor vehicle accident on July 29, 2009 and subsequently submitted an application for benefits to the respondent pursuant to the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the Schedule). The denial of the claim for benefits led to an application to the Tribunal by the applicant, although not until May 2017. During a case conference, the parties agreed that a preliminary issue, whether the claim for the benefits was statute-barred because it was not made within two years of the respondent’s denial of the claim, would be decided on the basis of written submissions.
5The crux of the dispute between the parties was the interpretation and effect of a “denial letter” dated October 4, 2011. The applicant submitted the denial was “unclear and ambiguous” in regard to a denial of the benefits claimed as opposed to the denial of the status of a catastrophic impairment. The adjudicator held that the letter “clearly and unequivocally communicated to the applicant that his ACB would no longer be payable effective immediately and his Housekeeping would no longer be payable after a certain date.” Accordingly, the letter triggered the running of the two-year limitation period as it was a refusal to pay the amount claimed.
6The adjudicator went on to find that the denial letter was valid notwithstanding that it referred to sections from the 2010 Schedule rather than the 1996 Schedule. He also found that a subsequent payment by the respondent did not “negate” a previous denial as the limitation period had already expired. Additionally, he agreed with the respondent’s position that catastrophic impairment benefits may be denied before a finding of a catastrophic impairment has been made.
7The adjudicator rejected the applicant’s section 15 Charter argument as he found that the applicant did not comply with the requirements of the Tribunal’s rule 11 in that notice was not given to the Attorney General of Canada and Ontario. Lastly, he held that the principle of discoverability did not apply to the applicant’s claim.
8For all of the foregoing reasons, the application was dismissed.
ANALYSIS
Was the October 4, 2011 letter from the respondent a valid denial of the claim for benefits?
9The applicant had been paid certain benefits by the respondent up until the October 4th letter in which the respondent advised that he did not meet the definition for catastrophic impairment and wrote, in part, the following:
As such your Accident benefits claim will remain within Non-Catastrophic limits of $100,000 for medical/rehabilitation. The following has been paid to date:
Medical/Rehabilitation benefits: $43,139.40
The Attendant Care benefit for expenses incurred more than 104 weeks after the accident per S20. (2) of SABS, as such this benefit is stopped effective immediately. We have issued a payment for the month of August 2011 in the amount of $1,280.25 in good faith.
Further to our letter dated July 21, 2011 we confirm as you do not meet the definition for catastrophic impairment, your housekeeping and home maintenance benefits remain stopped effective July 29, 2011.
10The applicant takes the position that this letter is “unclear and ambiguous” in regard to the denial of ACBs and HHMBs as it was sent to communicate the catastrophic impairment determination. As such, it cannot be read as a denial triggering the two-year limitation period. The applicant cites the Court of Appeal decision in Machaj v. RBC General Insurance Company, 2016 ONCA 257 in support of his submission.
11In Machaj, the insured completed an OCF-19 seeking a catastrophic impairment determination but no specific benefits. The court wrote the following:
We do agree with the appellant that the line of authority culminating in Do establishes that there is a clear distinction to be drawn between the claim for determination of catastrophic status and a claim for the specific benefits to which an insured person is entitled if found to have suffered a catastrophic injury. Do stands for the proposition that the two-year limitation period only applies to claims for specific benefits and not to a claim for a determination of catastrophic injury status. In our opinion, by adding the words “and you therefore you do not qualify for the increased benefits”, the respondent insurer was doing nothing more than telling the appellant that she lacked status to claim increased benefits. The additional words did not convert what was, in substance, a denial of a catastrophic determination into a denial of specific benefits that would trigger the commencement of the two-year limitation period.
12The adjudicator did not refer to Machaj in his decision but wrote that the letter “met the requirements as outlined in the Schedule [s. 49] as it clearly and unequivocally communicated to the applicant that his ACB would no longer be payable effective immediately and his Housekeeping would no longer be payable after a certain date.” In this matter, the respondent was paying benefits and wrote to explain why it was terminating the payments. The respondent also made a determination as to catastrophic status. In my view, the adjudicator did not make a significant legal error as the respondent did clearly and unequivocally advise the applicant of the termination of specific benefits, unlike the situation in Machaj.
13The applicant submits that the information in the October 4th letter about the dispute resolution process was unclear and ambiguous regarding the denial of extended ACBs and HHMBs. The adjudicator was aware of the deficiencies in the letter, noting that the references to the Schedule were to the 2010 version rather than the 1996 one, which was the correct version given the date of the accident. However, he concluded that the letter met the requirements of the Schedule and was in compliance with the principles set out in Smith v. Co-operators General Insurance Company, [2002] S.C.R. 129.
14Gonthier J. for the majority in Smith wrote the following about section 71 of an earlier version of the Schedule, equivalent to section 49:
In my opinion the insurer is required under s. 71 to inform the person of the dispute resolution process contained in ss. 279 to 283 of the Insurance Act in straightforward and clear language, directed towards an unsophisticated person. At a minimum, this should include a description of the most important points of the process, such as the right to seek mediation, the right to arbitrate or litigate if mediation fails, that mediation must be attempted before resorting to arbitration or litigation and the relevant time limits that govern the entire process. Without this basic information, it cannot be said that a valid refusal has been given.
15Having reviewed the letter, I cannot find that the adjudicator made a significant legal error in concluding that the letter constituted a valid refusal. Further the adjudicator clearly considered and applied the Smith v. Co-operators principles. At paragraph 15 of his decision he wrote:
In my opinion and based on Smith v. Co-operators regardless of whether the sections were incorrect, there is no ambiguity with respect to whether or not the benefit is being denied. It is clear that the benefit is being terminated and the letter goes on to outline the dispute resolution process and the time limits that govern that process. As a result, my finding is that the denial letter complies with Smith v. Co-operators and it is a valid denial which starts the limitation clock.
Did the subsequent payment of benefits negate the earlier denial and extend the limitation period?
16The respondent received further medical information, after the two-year limitation period expired, and decided that the applicant did suffer a catastrophic impairment and reinstated certain benefits as of August, 2014. The applicant submits that decisions in T.N. v. Personal Insurance Company, FSCO A06-000399 and Rudnicki v. Certas Direct Insurance Company, FSCO A00-000930 support his position that this subsequent reinstatement negated the October 4, 2011 denial.
17The adjudicator dealt with both of these decisions and noted that in each case the subsequent payments were made before the expiry of the limitation period. He found that a payment made after the expiry of the limitation period cannot revive a right that had been extinguished. The applicant has not provided any authorities I his reconsideration submissions that would suggest the adjudicator was wrong in so concluding.
Could the respondent deny catastrophic impairment benefits before a finding of catastrophic impairment was made?
18The adjudicator held that “the respondent may deny benefits prematurely that the applicant has yet to apply for, or for claims that have yet to crystalize” citing the decision in Katanic v. State farm Mutual Automobile Insurance Company, 2013 ONSC 5103 and Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111. The adjudicator’s finding was consistent with previous Tribunal decisions in 17-003105/AABS v. Brant Mutual Insurance Company, 2018 CanLII 8083 (ON LAT); 18-003910 v. Co-operators General Insurance Company, 2019 CanLII 43893 (ON LAT) and 18-008999 v. Unifund Assurance Company, 2019 CanLII 51323. These last three decisions were not mentioned in the parties’ submissions and I cite them for completeness of the caselaw on the issue.
19The applicant seeks to distinguish the cases relied on by the adjudicator but offers no decision to support his position other than 16-000216 v. Aviva Insurance Company of Canada, 2016 CanLII 78332 (ON LAT). In that case, the Tribunal found that the limitation period in section 281.1 of the Insurance Act was not applicable for two reasons: first, the insured did not actually apply for the benefit that was purportedly the subject of the denial and second, the denial was invalid in any event as it was not clear and unequivocal. In this matter the applicant was receiving benefits and the denial of the further payment was clear and unequivocal.
20The applicant also submits that sections 39(12) and (15) of the 1996 Schedule support his position that the respondent could not prematurely deny benefits. However, as the respondent points out, this argument was not made before the adjudicator and a reconsideration request should not be based on arguments that were not advanced at the hearing.
21In my view, the applicant has not established that the adjudicator made a significant error of law in finding that the respondent could deny a claim that had not yet crystalized.
Did the adjudicator commit a significant legal error in declining to deal with the applicant’s section 15 of the Charter of Rights and Freedoms argument?
22Section 15(1) of the Charter reads as follows:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
23The applicant submitted, according to the adjudicator, that the respondent’s interpretation of the limitation provisions was contrary to section 15 as it created two classes of catastrophically injured victims: those whose catastrophic determination was made in close proximity to the accident and those whose determination was delayed.
24The adjudicator declined to consider the applicant’s argument finding that he failed to comply with Rule 11 of the Tribunal’s Rules which set out specific requirements when a constitutional issue is raised. The applicable Rule 11 reads as follows:
Notice of a constitutional question shall be served on the Attorney General of Canada and the Attorney General of Ontario and all other parties, and delivered to the Tribunal in the following circumstances:
(a) The constitutional validity of an Act of the legislative Assembly of Ontario or Parliament of Canada (or of a regulation or by-law made under such an Act) or of a rule of the Common Law is in question; and/or
(b) A remedy is claimed under section 24(1) of the Canadian Charter of Rights and Freedoms in relation to an act or omission of the Government of Canada or the Government of Ontario.
A Notice of Constitutional Question Form must ne delivered as soon as the circumstances requiring the notice become known and, in any event, at least 15 days before the question is to be argued.
25The applicant submits that the adjudicator made a significant error of law in finding that Rule 11 applied because, as he puts it:
With respect, it was not the Applicant’s intention to raise a constitutional question. Instead, the Applicant was attempting to raise the importance of balancing Charter values with the statutory objectives of the Insurance Act when interpreting the applicability of the limitation period to a claimant whose disability has deteriorated to the level of a catastrophic impairment more than two years after the expiry of attendant care and housekeeping and home maintenance benefits under the non-catastrophic level of benefits.
Ensuring the inclusion of Charter values in an administrative decision maker’s interpretation of legislation, or the application of the legislation, is distinct from raising a constitutional question, and therefore, notice of constitutional question is not necessary.
26The applicant concludes his Charter submission by stating “Therefore, considering the respondent’s interpretation of the limitation provision is contrary to the Charter value of equality without discrimination, the respondent’s position should not be accepted over that of the applicant.”
27As pointed out by the respondent, the applicant’s Charter argument is considerably longer than the four paragraphs of his submission to the adjudicator. However, in my view the arguments fail to satisfy Rule 18.2(b) in that I am not satisfied that even of the adjudicator made a significant error of law, the “Tribunal would likely have reached a different decision.”
28Section 281.1 of the Insurance Act was interpreted by the Divisional Court in Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664 in a somewhat similar situation. The court wrote the following:
In the case before us, the legislature has tied the commencement of the limitation period to a fixed and known event, namely, the refusal to pay the benefit claimed. The benefits claimed were attendant care and housekeeping benefits. The insurer refused to pay them beyond September 12, 2010. The limitation period commenced to run then.
Like the result in Levesque, the result in the case before us may be considered harsh. It was not determined that the applicant was catastrophically impaired until 2015. Had she been catastrophically impaired, and had disputed the insurer’s refusal to pay attendant care and housekeeping and home maintenance expenses within a period of two years after September 12, 2010, she would qualify for payment of those expenses. However, as found by the Tribunal, the insurer had clearly and unequivocally refused to pay those expenses as of September 12, 2010. Pursuant to the clear words of the limitation period which ties it to a period of two years after the insurer’s refusal to pay the benefit claimed, the claim is time barred.
In the case of a hard limitation period, there are policy considerations on both sides. In the case of the Insurance Act, and claims under the SABS, an insurer has no control over when an insured applies for a designation of catastrophic impairment. An insurer would not continually assess a claimant if ongoing expenses are not being submitted. Presumably, the legislature thought it important to provide a reasonable period, after which an insurer’s obligation would be discharged, whether or not meritorious claims may be discovered later.
29That interpretation of the limitation provision leaves no room for doubt as to its meaning, as harsh as it may be in some circumstances. In any event, the applicant has not presented any authorities to establish that the time of the onset of a disability somehow breaches section 15 of the Charter.
Did the adjudicator commit a significant legal error that the discoverability principle did not apply to the applicant’s claim?
30The applicant’s request for reconsideration does not have any submissions on this point. However, I would point out that the Divisional Court’s decision in Kirkham v. State Farm, 1998 OJ No. 6459 decided that the discoverability principle did not apply in the scheme of statutory accident benefits, as found by the adjudicator.
CONCLUSION
31The applicant’s request for reconsideration is dismissed and the Tribunal’s decision of August 10, 2018 is confirmed.
D. Stephen Jovanovic, Member
Tribunals Ontario – Safety, Licensing Appeals and Standards Division
Released: July 12, 2019