J.M. v. Certas Direct Insurance Company, 2019 CanLII 94016

Citation: J.M. vs. Certas Direct Insurance Company, 2019 ONLAT 18-000052/AABS

Tribunal File Number: 18-000052/AABS

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

J.M.

Applicant

and

Certas Direct Insurance Company

Respondent

DECISION

PANEL:

Daniela Corapi, Adjudicator

APPEARANCES:

For the Applicant:

J.M., Applicant

Jono Schneider, Counsel

For the Respondent:

Diana Harris, Claims Representative

Kayley Richardson, Counsel

HEARD:

In Writing on: March 26, 2019

OVERVIEW

1This is a preliminary issue decision which deals with whether or not the Tribunal has jurisdiction to make an award under REGULATION 664¹, when benefits in dispute have been paid or reinstated prior to the hearing or a decision being rendered by the Tribunal.

2After the applicant filed a number of applications with the Tribunal, the respondent unilaterally paid or reinstated all the benefits sought by the applicant. However, the issue of an award relating to IRBs remained in dispute.

3The respondent now argues that the applicant cannot proceed to a hearing regarding his entitlement to an award on IRBs because there are no substantive issues or benefits in dispute between the parties. The applicant takes the opposite position.

4The preliminary issue which I need to determine which is whether the Tribunal has jurisdiction to make an award[2] if the substantive issues in dispute have been paid or reinstated prior to a hearing, resulting in the award remaining as a stand-alone issue.

ISSUES

5The preliminary issue identified in the case conference order is:

i. Does the Tribunal have jurisdiction to make an award order when the substantive issues in dispute related to the benefits sought by the applicant were reinstated or paid, and the award remains in dispute?

RESULT

6The Tribunal has jurisdiction to determine if the applicant is entitled to an award even when the substantive issues in dispute between the parties are no longer in dispute. The applicant is entitled to seek an award for unreasonably withheld or delayed payments in relation to IRBs.

BACKGROUND

7The applicant was injured in a motor vehicle accident on June 3, 2016 (the “accident”). He applied to the respondent for income replacement benefits (“IRBs”) and other medical benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).

8The applicant filed three applications to the Licence Appeal Tribunal (“Tribunal”) relating to the accident. The applications were filed with the Tribunal on May 15, 2017 (“First Application”), December 14, 2017 (“Second Application”) and May 10, 2018 (“Amended Application”).

9On May 10, 2018, the applicant amended his Second Application and filed an Amended Application which added two further issues: IRBs and an award in relation to withheld or delayed IRBs.

10On June 4, 2018, a case conference was held and all substantive issues relating to medical and rehabilitation benefits were resolved. During the case conference, the respondent advised that it would also reinstate the IRBs from January 4, 2018 to date. The only remaining issues in dispute were the award relating to the IRBs and the applicant’s entitlement to IRBs from February 11, 2017 to the date of reinstatement.

11On June 7, 2018, the applicant received correspondence from the respondent advising that the respondent will pay the IRBs from February 11, 2017 to date (328 days). The applicant notes that this correspondence was dated June 1, 2018; however, it was received after the second case conference.

12On August 15, 2018, a resumption of the case conference (“second case conference”) took place during which the respondent raised a preliminary issue: does the Tribunal have jurisdiction to make an award order when the substantive issues in dispute related to the benefits sought by the applicant have been “resolved” at the time of the hearing?

ANALYSIS

13The respondent did not dispute that the applicant may seek an award on the medical and rehabilitation issues; however, the respondent contested whether the applicant may seek an award on the IRB issue due the fact it was no longer in dispute after the respondent’s reinstatement and payment of the benefit.

14As with the medical and rehabilitation benefits in dispute, the IRBs were also reinstated and/or paid prior to a hearing taking place. The specific application on which the award was included is not relevant to whether or not the award can proceed as a stand-alone issue to a hearing. An award is always before the Tribunal and can be brought forward at any time, even when the substantive benefits were paid or reinstated.

15With respect to the Tribunal’s jurisdiction to resolve accident benefit disputes, this jurisdiction is clearly set out in s. 280 of the Insurance Act³:

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).

16In 2016, the above section was repealed with the changes to the Insurance Act and replaced by s. 10 of O.Reg. 664 which states:

10. If the Licence Appeal Tribunal finds that an insurer has unreasonably withheld or delayed payments, the Licence Appeal Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, may award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule. [emphasis added]

17My reading of s. 10 is that where there is a finding of unreasonable delay or withholding of payments, the legislation allows the Tribunal the discretion to make an award.

18When interpreting the words used in section 10, it is appropriate to apply principles of statutory interpretation. The respondent refers the Tribunal to Bell ExpressVu Limited Partnership v. Rex⁴, wherein the Supreme Court of Canada sets out the approach to be used in statutory interpretation:

Today there is only one principle or approach; namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

19The words “at the time of the award”, which appear in section 10, are not defined in the Schedule, or by s. 1 of the Insurance Act. The respondent argues that a plain and straightforward reading of the words “at the time of the award” should be adopted and s. 10 implies that there must be an entitlement to benefits “at the time of the award” for any amount to be ordered.

20The respondent states that section 280(1) of the Insurance Act⁵ outlines the Tribunal’s purpose as resolving disputes between an insured and insurer regarding entitlement or continuation of a benefit. The respondent argues that it can be inferred from this purpose that a “dispute” must be the “condition precedent” to advancing an application with the Tribunal, and in the absence of a dispute, there is a risk that applications which are vexatious, have no merit or are an abuse of process would prevail.

21I am not persuaded by the respondent’s view that a “dispute” must encompass a benefit for the Tribunal to adjudicate the matter. I am of the view that a dispute may also encompass any disagreement between the parties regarding accident benefits including how long it took an insured to pay a benefit that an applicant is entitled to; in other words, an unreasonably withheld or delayed payment of IRBs, such as in in these circumstances. In addition, the Tribunal may hear matters dealing with a dispute over the determinations of an impairment status, such as catastrophic impairment as a stand-alone issue or a preliminary issue.

22The applicant argues that the respondent did not relieve itself of its liability to an award for unreasonably withholding or delaying payments of the IRBs as a result of paying the IRBs prior to a hearing. The applicant refers the Tribunal to LAT jurisprudence to support its position. In LAT decision bearing file number 16-002779/AABS, the applicant made a claim for an award as a result of the insurer’s delay of paying IRBs. The Tribunal determined that even though the insurer agreed to pay the benefit that the applicant sought entitlement to, the award was still payable.

23The applicant also refers to FSCO decision Rocca and Axa⁶, where it was found that an insurer can still owe an award even after agreeing to pay a withheld and disputed benefit, within the context of the insurer withholding or delaying benefits until shortly before the hearing. This finding was reinforced in a subsequent LAT decision⁷, where the issues in dispute at the hearing consisted of a claim for costs and an award. In Rocca and Axa, the insurer argued that the adjudicator had no jurisdiction to order an award after the insurer paid some of the benefits being sought. The adjudicator held that there was nothing in s. 282(10) of the Insurance Act which allowed the insurer to defeat the imposition of an award by making payment just before the commencement of a hearing. The adjudicator stated that the withholding or delaying of benefits “until shortly before the hearing can attract an award, if the insurer’s actions are unreasonable”.⁸

24I am therefore not persuaded by the respondent’s position that an insurer could pay any benefit and at any time prior to the hearing or decision being rendered and avoid exposure to an award. In fact, the existence of an award contemplates the exact situation where an insurer reinstates or pays a benefit just prior to the hearing; an award acts as a deterrent to such conduct.

25The respondent referred to Abouzeeni and Allstate (A14-0015228) to support its position; however, the respondent failed to demonstrate how the facts in that case are analogous to the respondent’s case. The facts in Abouzeeni are distinguishable from the case before me and the respondent did not persuade me otherwise.

26In the case before me, it is clear that when the respondent approved and reinstated the applicant’s claim for IRBs during the second case conference, it was the respondent’s position that all of the issues relating to the benefits were “resolved”, including the issue of an award relating to the IRBs. In other words, if I adopted the respondent’s position regarding of the wording of section 10, once the payments are made there can be no foundation for an award. And any respondent can then delay payment of benefits until the eve of the hearing. In my opinion, this interpretation does not align with statutory interpretation principles.

27In Ontario, the Legislation Act,⁹ also provides additional guidance regarding the interpretation of legislation. Section 64(1) of the Legislation Act states that “[a]n Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects”. Further, section 64(2) provides that the rule of liberal interpretation also applies to regulations, “in the context of the Act under which [the regulation] is made and to the extent that the regulation is consistent with that Act.”

28Adopting this purposeful and contextual approach to interpreting the words which appear in s. 10, “at the time of the award”, I do not agree with the respondent’s position that the Tribunal does not have jurisdiction to grant an award in circumstances such as this - where benefits which were in dispute at the time the application (including any amended applications) was filed are no longer owing by the time of the hearing. In my opinion, the outcome of the interpretation suggested by the respondent would create an absurd result and negates the purpose of the accident benefits scheme and legislation.

29An insurer that unreasonably withholds or delays payments and waits to pay the benefits after an application id initiated at LAT may risk an award. This risk, according to my interpretation of the legislation as described above, cannot be augmented or reversed by reinstating or approving a benefit unilaterally. The respondent fails to recognize that the period of delay in anof itself may be challenged by the applicant as a ground for the award.

CONCLUSION

30The preliminary issue before me narrowly focuses on jurisdiction and whether the applicant is precluded from proceeding to a hearing on the issue of an award as it relates to the issues identified in the applications to the Tribunal. For the reasons elaborated above, I find that the applicant may proceed with his award claim in relation to IRBs.

31The Tribunal will schedule a further case conference within 60 days of the release of this decision to address the issue of the applicant’s entitlement to an award.

Footnotes

1. 1R.R.O. 1990, REGULATION 664. This has been commonly referred to as a “special award” as that was the term used in an earlier version of the regulation.
2. 3Insurance Act, RSO 1990, c I.8
3. 4[2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42
4. 5R.S.O. 1990, c. S.22
5. 6A97-000903, FSCO
6. 717-000897/AABS, 2017 69237 (ON LAT)
7. 8at para 24.
8. 92006, S.O. 2006, c. 21.