M. T. G. v. Aviva General Insurance, 2019 CanLII 94025

i. 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

ii. Tribunaux décisionnels Ontario Division de la sécurité des appels en matière de permis et des normes

iii.

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. Gregory Flude, Vice-Chair

Date: July 16, 2019

File: 17-002122/AABS

Case Name: M. T. G. v. Aviva General Insurance

Written Submissions By:

For the Applicant: Jillian Van Allen, Counsel

For the Respondent: Mai T. Nguyen, Counsel

OVERVIEW

1The respondent, Aviva General Insurance ("Aviva"), requests a reconsideration under section 18.1 of the Licence Appeal Tribunal (LAT) Rules of Practice and Procedure, Version 1 (April 1, 2016) (hereinafter "the Rules") of a preliminary issue decision.

2The applicant was injured in an automobile accident on August 4, 2014 and sought benefits from Aviva pursuant to the Statutory Accident Benefits Schedule – Accidents September 1, 2010, O. Reg. 34/10 (the “Schedule”). In particular, he sought an income replacement benefit (“IRB”), which Aviva agreed to pay for several months before terminating it. The issue that the adjudicator had to determine was whether the applicant brought his application to dispute that termination within the applicable limitation period.

3After considering the evidence and applying the doctrine of discoverability, the adjudicator found that the date upon which the applicant knew or ought to have known that his claim had been denied was August 17, 2015. Based on this key finding, she held that he had applied to the Tribunal within the limitation period and, therefore, permitted his claim to proceed to a hearing. As explained in further detail below, her finding was based on a significant error of fact or law. Had she not made that error, she would likely have reached a different decision.

4This finding is not the end of the matter. The applicant has raised two other issues:

a. Has the limitation period expired because the applicant has not yet received a Report of Mediator from the Financial Services Commission of Ontario (“FSCO”) such that a statutory 90-day extension to the limitation following receipt of a mediators report has not yet expired?

b. Should the Tribunal exercise its discretion under s. 7 of Licence Appeal Tribunal Act, 1999, R.O. 1999 c. 12 Sched. G (the “LAT Act”) to extend the time for filing beyond the limitation period.

5I find that the 90-day statutory extension is not available to the applicant. There is no evidence that the applicant properly followed FSCO procedure to confirm that he still sought mediation. The FSCO letter informing the parties that it was closing its file was ambiguous concerning the grounds upon which the file was being closed, and the applicant took no steps to clarify the position, nor, in the 10 months between FSCO closing its file and the commencement of the application to this Tribunal, did he ever enquire of FSCO why the Report of Mediator had not been sent. It was incumbent on the applicant to pursue his remedies rather than take no action.

6The applicant raised the application of s. 7 of the LAT Act for the first time in its responding submissions to Aviva’s request for reconsideration. Aviva has been denied the opportunity to reply to those submissions, so it will be given the opportunity to make further submissions on that point.

STANDARD OF REVIEW

7Rule 18.1 is the rule governing reconsiderations. Aviva relies on 18.2(b), which, at the relevant time, provided the following ground for reconsideration:

The Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different decision.

8Rule 18.2(b) places the onus squarely on Aviva to point to a significant error of fact or law that would have impacted the outcome. Accordingly, only if the adjudicator’s decision is significantly in error should I interfere. If her decision shows no significant error, then it must be allowed to stand.

THE HEARING DECISION

Chronology

9In arriving at her decision that the date upon which the applicant first became aware that his claim for an IRB had been denied was August 17, 2015, the adjudicator wrestled with a fact situation complicated by the fact that Aviva determined the IRB’s quantum only after it terminated the benefit. I will set out the chronology below to provide some clarity:

• August 14, 2014 – The applicant was injured in an automobile accident. Soon after, he applied for an IRB, to which Aviva determined he was entitled from one week post-accident.
• February 10, 2015 – Aviva sent the denial letter to the applicant and his counsel terminating the applicant’s IRB effective February 11, 2015 on the basis that he did not suffer a complete inability to carry out the essential tasks of his employment. Both the applicant and his counsel deny receiving this letter. They point out that there is an error in the address included on the letter: rather than being addressed to Apt. 40 at the applicant’s home address, the denial was addressed to Box #40. In fact, notwithstanding that the applicant deposed under oath that he had given his address as Apt. 40, the address actually provided by the applicant in his Application for Benefits is “40-1440 [street name].”
• March 23, 2015 – The applicant’s counsel admits that he received a compact disc containing Aviva’s accident benefits file concerning the applicant. The disc contained 77 pages of documents, including the denial letter. It appears that neither he nor his law clerk reviewed the documents in this file until at the earliest August 2017.
• July 10, 2015 – Aviva sent a letter to the applicant and his counsel indicating that it had calculated the IRB at $223.94 per week. The letter enclosed a cheque in the amount of $5,887.38, being the amount owing up to the date of termination on February 11, 2015. This letter was addressed in the same manner as the denial letter – that is, to Box #40 at the applicant’s street address. The applicant received this letter and cashed the cheque. His counsel apparently did not, and the applicant did not forward a copy.
• July 27, 2015 – Apparently unaware of the Aviva’s previous correspondence terminating and calculating the IRB, the applicant’s counsel wrote to Aviva enclosing an accountant’s report and asking Aviva to calculate the IRB’s quantum immediately. A second letter of the same date demanded payment.
• August 11, 2015 – The applicant’s counsel wrote again to ask for an update on the IRB.
• August 17, 2015 – Aviva wrote to the applicant’s counsel advising that it had paid the IRB for the period up to February 11, 2015 and had sent a cheque to the applicant.
• October 20, 2015 – The applicant’s counsel asked Aviva to forward the explanation of benefits outlining the IRB’s denial. Aviva replied on October 22.
• March 22, 2016 – The applicant applied to FSCO for mediation.
• April 1, 2016 – This Tribunal assumed sole jurisdiction for adjudicating disputes under the Schedule. After this date, FSCO processed applications for mediation filed before April 1, 2016 but accepted no new applications.
• May 18, 2016 – FSCO scheduled a mediation for May 28, 2016.
• May 26, 2016 – The applicant’s counsel submitted a Request for a Failed Mediation Report to FSCO.
• May 28, 2016 – FSCO sent a form letter to the parties indicating that it was closing its file. While the letter cites four possible reasons for the action, no specific reason is identified.
• March 31, 2017 – The applicant filed his application with this Tribunal.

10From the above chronology, the adjudicator concluded that the applicant first received notice that his claim was denied was August 17, 2015. There is a slight error in this date. Although the letter was sent on August 17, there is no allowance for delivery. Thus, the actual date of notice, according to the adjudicator’s reasoning, should have been August 23, 2015. Nothing, however, turns on this discrepancy.

11The applicant filed two affidavits on the preliminary issue motion: one he swore himself, the second sworn by his counsel. While the adjudicator stated that she gave “very little weight” to the applicant’s affidavit, it seems that in fact she placed no reliance on it at all. With respect to counsel’s affidavit, the adjudicator pointed out clearly wrong statements, yet she relied on the chronology counsel set out about the events from February 2015 through the end of October 2015 to come to the conclusion that the operative denial date was August 17, 2015.

12The applicant’s affidavit is nine paragraphs in length and addresses the denial letter and the July 10, 2015 letter and cheque. The applicant makes two key statements that the adjudicator questioned: he does not recall receiving the denial letter in February 2015, and, if he had, he would have forwarded it to his counsel. The adjudicator determined from other evidence that he received the July 10 letter and cheque and did not forward that to his counsel, so she discounted his statements that he would have forwarded the February 10 letter if he had received it and, as a result, gave very little weight to his affidavit.

13The adjudicator then reviewed the application filed with the Tribunal. She noted that, in the application, the applicant stated that the date of denial was July 10, 2015. Based on her review of his affidavit, she found that the applicant had chosen July 10, 2015 as a “strategic date chosen past the actual date of denial in order to start the ‘limitation clock’ later in the year and thereby retroactively and unilaterally extend the limitation.” Since there were only two dates in issue, February 10 and July 10, 2015, it flows directly from this finding that the adjudicator did not accept the applicant’s evidence that he did not receive the denial in February 2015. Indeed, the above statement indicates that she was of the opinion that he deliberately misled the Tribunal on that point for strategic reasons.

14The adjudicator then turned her attention to the affidavit from the applicant’s counsel. She noted that counsel deposed that his office did not receive the denial letter until October 22, 2015. This statement is clearly wrong. In fact, the adjudicator notes the parties’ agreement that counsel’s office had received the letter, at the latest, on March 23, 2015. The applicant’s counsel had requested that Aviva forward its claims file which was sent to the applicant’s counsel on March 20, 2015. The claims file included the denial letter.

15Thereafter, the adjudicator reviewed the correspondence between applicant’s counsel and Aviva. That correspondence clearly shows that counsel was unaware of the denial letter through the spring and summer of 2015 despite it being in his file. Particularly in July 2015, counsel clearly believed that Aviva has not yet calculated the IRB’s quantum and, likewise, was unaware that the benefit had already been denied. She noted that counsel first became aware of the payment and denial when he received Aviva’s letter dated August 17, 2015, which she then accepted as the beginning of the limitation period. Since the application to this Tribunal was dated March 31, 2017, the Adjudicator concluded that it was filed within the two-year limitation period. She found it unnecessary to address the question of whether the limitation period was extended by the failure of FSCO to issue a Report of Mediator.

ANYALYSIS OF THE START OF THE LIMITIATION PERIOD

16The applicable limitation period in effect on the date of the accident was set out in both s. 281.1 of the Insurance Act, R.S.O 1990 c. I. 8 (the “Act”) and in s. 56 of the Schedule. In each case, the period is defined as two years from the date of Aviva’s refusal to pay the “amount claimed” in the case of the Schedule and the “benefit claimed” in the case of the Act. Nothing turns on the slight difference in wording.

17Under the dispute resolution scheme that was in place in 2014, an injured person could not proceed to arbitration or to court to dispute entitlement to benefits unless there had first been an application to FSCO for mediation. Where the limitation period expired during the time when the parties were awaiting a report from the mediator, both the Act and the Schedule provide for an extension of the limitation period for 90 days from the receipt of the Report of Mediator. I will address the applicant’s argument that the limitation period has not yet expired because he applied for mediation and never received a Report of Mediator later in these reasons.

18Applying the statutory provisions, the applicant had two years from the date on which Aviva told him it was terminating his entitlement to an income replacement benefit. In my view there are three potential dates, none of which includes August 17 (or 23), 2015. The first date is February 15, 2015, five days after Aviva sent the denial letter. The second date is March 23, 2015, the date upon which the applicant’s counsel acknowledges receipt of Aviva’s claim file including the denial letter. The third date, and the date the applicant chose in his application, is July 10, 2015, the date when the applicant received the IRB calculation and the cheque. In my view, the adjudicator’s factual findings and the evidence establishes February 15, 2015 as the effective date.

19Dealing with the July 10 date first, the Adjudicator found that the selection of the July 10 date was deliberately chosen “past the actual date of the denial “retroactively and unilaterally” to delay the start of the limitation period. In light of this finding, there is no logic in her finding that the date of denial was August 17, 2015. Indeed, given that there is no dispute that the applicant received Aviva’s IRB calculation, cheque, and termination via the July 10, 2015 letter, one wonders how the denial date could be any date after this letter. Thus, it flows inexorably from this finding that the “actual date of denial” was before July 10.

20There are only two possible dates before July 10 that could constitute the date of denial: February 15 and March 23, 2015, both of which result in the applicant filing his application with the Tribunal beyond the two-year mark. Of the two, I am driven to conclude from the evidence that the applicable date is February 15, 2015.

21In reviewing that evidence, I note that the applicant did not depose that he did not receive that denial letter on or about February 15, 2015. He deposed that he “does not recall receiving” the denial letter. To lend weight to the suggestion that he did not receive the denial letter, he deposed that, had he received it, he would have forwarded it to his counsel. The adjudicator pointed out that he did not forward the other crucial correspondence to his counsel, the July 10, 2015 letter with the entitlement calculation and enclosed payment.

22In giving “very little weight” to the applicant’s affidavit, and in finding his selection of July 10, 2015 as the date of denial in his application was a “retroactive and unilateral attempt to move the denial date past the actual denial date,” the Adjudicator found, without actually stating it, that the applicant had received the denial letter on or about February 15, 2015.

23The adjudicator correctly directed her mind to the service provisions in s. 64(18) of the Schedule, that, in the absence of evidence to the contrary, a document sent by regular mail is deemed received on the fifth day after mailing. This provision addresses exactly this fact situation. It places an onus on the party asserting that it did not receive correspondence sent by regular mail to provide proof to the contrary. The applicant deposed that the letter was not properly addressed yet he received other correspondence addressed in the same manner, most notably, the cheque. Further, the adjudicator did not accept his evidence that he did not receive the denial letter, yet she does not then make the necessary finding that the denial letter is deemed to have been received on February 15, 2015. In my view, not to do was an error that, had it not been made, would have affected the outcome of the matter.

24Similarly, the adjudicator made an error of law by ignoring the March 23, 2015 disclosure date. She correctly stated that the elements of discoverability address when the applicant or his counsel knew or ought to have known that the claim for an IRB had been denied. In her analysis, she focused on the date that the applicant’s counsel became functionally aware that the claim for an IRB had been denied, mid-August 2015, but ignored the other arm of the test. There is no doubt that counsel was unaware of the contents of his file through the summer of 2015. Indeed, as evidenced by his correspondence during that time, he continued to deal with Aviva on the basis that entitlement was still a live issue. Aviva was quick to respond to his late July and August enquiries by informing him in its August 17, 2015 letter that the amount had been calculated and payment had been made to the cut-off date.

25On March 23, 2015, the applicant’s counsel received Aviva’s claims file on a compact disk, including the denial letter. That disclosure was not extensive. It comprised 77 pages. The adjudicator distinguished the case of Velasco v. North York Chevrolet Oldsmobile Ltd., 2011 ONCA 522 (“Velasco”) on the basis that electronic disclosure in that the case was in excess of 700 pages and had, buried in it, information that had not appeared to be a live issue between the parties. She found that the applicant’s entitlement to an IRB in the current matter was a live issue between the parties, yet she failed to consider, without further explanation, the impact of counsel’s receipt of the CD on the question of discoverability.

26My difficulty with the adjudicator’s discoverability analysis is that it relies on the actions of counsel and his staff to conclude that, because they failed to read their file, the limitation period did not begin to run. Were the discoverability test limited to when a party knew of an event, then this argument might have some substance, but it is not so limited. The adjudicator does not address the objective element in her analysis.

27Notwithstanding questions surrounding the impact of the March 23 date on discoverability, the evidence as found by the adjudicator supports a denial date of February 15, 2015 as there was no credible evidence to the contrary that the applicant did not received the letter on or about that date.

90 DAYS FOLLOWING REPORT OF MEDIATOR

28Given her finding that the limitation period had not expired when the applicant filed his application with the Tribunal, the adjudicator did not address the argument raised by the applicant that the limitation had not yet started to run because no report of mediator had been received from FSCO. Since I have found that the denial date is February 15, 2015, I shall address that argument now.

29Effective April 1, 2016, the Act was amended to transfer jurisdiction for dispute resolution under the Schedule to this Tribunal. Notably, the previous requirement that a party could not proceed to arbitration before FSCO or to court until it had applied for mediation at FSCO was repealed. This change meant that the provisions in the Act and Schedule extending the limitation period for 90 days following a Report of Mediator was also repealed. There were no transitional provisions in the legislation to address the plight of applicants who had applied to FSCO for mediation within the limitation period, but received the mediator’s report after both the expiry of the limitation period and after April 1, 2016 when all disputes under the Schedule had to be brought before this Tribunal.

30The lack of transition provisions created a class of litigants who had followed the only dispute resolution procedure open to them prior to April 1, 2016, an application for mediation at FSCO, but found themselves after April 1, 2016 beyond the limitation period for filing an appeal to this Tribunal. In several decisions, this Tribunal held that it was not the intent of the Legislature to strip these litigants of their rights. It held that, in such circumstances, the 90 day extension applied. (See, for instance, 16-000588 v State Farm Insurance Company, 2016 CanLII 106918 (ON LAT)).

31This applicant does not fall within the class of litigants described above. He applied to FSCO for mediation in March 2016, approximately one year before the limitation period expired. After April 1, 2016, there was no barrier to him commencing an application to this Tribunal to resolve his dispute. Prior attendance at mediation was no longer mandatory.

32The applicant argues that, since he did apply for mediation prior to April 1, 2016, he should be given the benefit of the 90 day extension as he has not yet received the Report of Mediator. I disagree on several grounds.

33On May 28, 2016, the applicant was advised that FSCO was closing its file. He took no steps to advise FSCO that he was still awaiting a Report of Mediator. He simply let the matter lie for 10 months before applying to this Tribunal. To accept the applicant’s position that as long as he has not received a Report of Mediator the limitation period has not yet run results in there effectively being no limitation period for this applicant. FSCO closed its file and there will be no Report. In my view, it was incumbent on the applicant to take steps to clarify FSCO’s letter of May 28, 2018 closing the file in light of his recent request for a failed mediation report.

34The FSCO May 28, 2016 closure letter is also instructive. It sets out, but does not identify, four potential grounds for closing the file. Of the four grounds, only two are applicable: a report will be issued, and the parties failed to confirm attendance seven days before the meeting. I have addressed the former ground above in finding that the applicant had to take steps to enquire about the status of his report. The latter ground, failure to confirm, raises the possibility that the parties, in fact, abandoned the mediation.

35The requirement and consequences of a failure to confirm attendance are clearly set out in FSCO’s letter setting up the May 28 mediation appointment. The parties were required to confirm attendance by email with FSCO 7 days before the mediation date. The appointment letter states: “Failure to complete this confirmation will result in the file being closed, without a Report of Mediator being issued” [emphasis added]. Counsel’s affidavit is silent on whether the parties confirmed their attendance at the mediation as required by FSCO practice. Counsel simply deposes that he sent a failed mediation request form two days before the mediation. It is likely, in these circumstances, that FSCO closed the file on this ground. Whatever the reason, it was incumbent on counsel to approach FSCO with his concerns and not simply let them languish.

EXTENSION UNDER S. 7 OF THE LAT ACT

36The applicant asks me to exercise my discretion under s. 7 of the LAT Act to “extend the time for giving the notice either before or after the expiration of the limitation of time so limited.” This argument was not raised in the applicant’s original submissions, but the timing of those submissions is germane to my consideration of them. For the reasons set out below, I will give Aviva the opportunity to make short written submissions on the application of s. 7 of the LAT Act.

37The applicant’s written submissions for the preliminary issue hearing were due on August 25, 2017. On December 13, 2017 the Tribunal released its reconsideration decision in A.F. v. North Blenheim Mutual Insurance Company, N.L. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT) (“North Blenheim”). In North Blenheim, the Executive Chair recognized an obligation on Tribunal members to bring the provisions of s. 7 of the LAT Act to the attention of the parties when considering limitation period defences. She remitted these matters back for a hearing on the application of s. 7 to their particular facts. Thus, it was incumbent on the adjudicator in this matter to draw the parties’ attention to s. 7 of the LAT Act and ask for submissions. North Blenheim holds that her failure to do so was a reversible error.

38A consequence of the fact that the application of s. 7 was not in issue in the original hearing is that Aviva did not address it in its submissions for reconsideration. It was raised for the first time in the applicant’s responding submissions. I am left with two options. The first is to remit the matter back for a hearing on the application of s. 7. The second is to give Aviva the opportunity to file submissions in response to the applicant’s submissions on this point. In the interests of ensuring an efficient, proportionate and timely resolution of the matter, I will give Aviva 15 days from the release of this decision to make short submissions of no more than 3 pages, double-spaced on the applicability of s. 7 of the LAT Act.

DECISION

39Having considered the submissions of the parties, I find that the adjudicator made a significant error of law such that the Tribunal would likely have reached a different decision. Notwithstanding this finding, the question of the application of s. 7 of the LAT Act remains to be decided as Aviva has not had an opportunity to respond to it. Aviva has 15 days from the release of these reasons to make submissions, as set out above, on the application of s. 7 of the LAT Act.

D. Gregory Flude

Vice-Chair

Tribunals Ontario – Safety, Licensing Appeals and Standards Division