Selvaratnam v. Aviva Insurance Company of Canada, 2020 CanLII 115347

Citation: Selvaratnam v. Aviva Insurance Company of Canada, 2021 ONLAT 19-005050/AABS

Release date: 03/31/2021

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:

Nishanthan Selvaratnam

Applicant

and

Aviva Insurance Company of Canada

Respondent

DECISION

ADJUDICATOR:

Cezary Paluch

APPEARANCES:

For the Applicant:

Nishanthan Selvaratnam, Applicant

Gus Triantafillopoulos, Counsel

For the Respondent:

Raji Kulmen, Representative

Patrick M. Baker, Counsel

HEARD by Teleconference:

August 20, 2020 with a written hearing component on November 23, 2020¹

OVERVIEW

1The applicant, NS, was involved in an automobile accident on September 26, 2016 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The applicant was denied certain benefits by the respondent, Aviva, and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2The sole issue in this hearing is whether the applicant is entitled to an award under section 10 of O. Reg. 664 sought in connection with payments from a partial settlement agreement whereby Aviva agreed to pay the outstanding balances at two clinics in the amount of $5,786.83, disposing of the substantive issues in dispute.

3Before turning to the relevant statuary provisions and analysis, it is helpful to briefly set out the background.

Background of Proceedings

4A case conference took place on Thursday, September 5, 2019, scheduling a hearing for March 2020. Before the hearing, the parties entered into a Partial Release and Settlement Disclosure Notice executed on March 16, 2020 (the “Partial Release”) in exchange for a withdrawal of the application. The Partial Release required the respondent to make payment in the amount of $4,195.94 to Synoptic Medical Assessment Centre (Synoptic) and $1,590.89 to Care Plus Physiotherapy (Care Plus), for a total of $5,786.83. Notably, the Partial Release did not include a date by which such payments were to be made.

5Prior to the payments being made, the applicant sent the Tribunal a Notice of Withdrawal form dated January 20, 2020. As a result, a closing letter was sent to the parties notifying them that the Tribunal had closed this file and cancelled the hearing scheduled for March 2020.

6Subsequently, problems arose with the settlement’s implementation. The problem’s source, I gather, was Aviva’s company policy that if, payments are to be sent directly to the clinics, Aviva requires evidence of the expenses having been incurred. Further, this policy requires the clinics to enter their invoices into HCAI prior to making any such payments. In this case, Aviva wanted evidence of the expenses at Synoptic and Care Plus having been incurred and wanted the clinics to enter those invoices into HCAI.

7On June 24, 2020, the applicant brought a motion requesting that the Tribunal add interest and an award to this application because, in the applicant’s view, Aviva did not comply with the settlement terms and pay the service providers’ accounts in a timely manner.

8Aviva opposed the motion on the grounds that the executed release was a bar to the requested relief. However, the respondent agreed to a combination type hearing process to resolve this motion. As a result, the Tribunal issued an Order dated July 15, 2020 scheduling a hybrid hearing allowing the applicant to cross-examine the claims adjuster responsible for his file related to the award. The parties then filed written submissions only on the issue regarding whether the applicant is entitled to an award because the respondent unreasonably withheld or delayed payments to the applicant.

9The parties have conflicting views on the respondent’s conduct and whether s. 10 applies. The applicant submits that Aviva failed to pay the outstanding amounts to Synoptic and Care Plus as required by the Partial Release despite having the documentation for five months. Aviva submits that the Tribunal lacks jurisdiction to make an award under s. 10 because this was not a situation in which Aviva simply approved benefits that had previously been denied and unilaterally reverses a decision on a disputed benefit. Simply put, Aviva’s says, its obligation to pay was governed by the Partial Release and is not a matter of entitlement under the Schedule or something that comes within the ambit of s. 10. In any event, Aviva argues, payment of both accounts plus interest was eventually made and the release was silent as to the timing of when payment was to be made.

ISSUE

10The issue to be decided in the hearing is:

1. Is the respondent liable to pay an award under O. Reg. 664 because it unreasonably withheld or delayed payments to the applicant?

RESULT

11I find the applicant is not entitled to an award.

ANALYSIS

Jurisdictional Issue – Raised by the respondent

12The jurisdiction of the Tribunal is spelled out in s. 280 of the Insurance Act, R.S.O. 1990, c. I. 8, which gives the Tribunal jurisdiction to resolve certain disputes and prohibits bringing proceedings in respect of those disputes in court. The entry point to the Tribunal’s jurisdiction is subsection 280(1), which contains the following language:

(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. [emphasis added]

13Subsection 280(2) goes on to confer jurisdiction on the Tribunal to resolve the disputes described in s. 280(1): “The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).”

14The Insurance Act is silent about the Tribunal’s jurisdiction to award special awards. However, further guidance on what falls within the Tribunal’s jurisdiction is contained in s. 10 of Automobile Insurance, R.R.O. 1990, Reg. 664, which provides as follows:

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]

15The applicant is relying on s. 10 to argue that Aviva has unreasonably withheld or delayed payment by failing to pay the outstanding amounts to the service providers as per the Partial Release. Aviva submits that the Tribunal lacks jurisdiction to make an award under s. 10 in the circumstances of this case, where Aviva's obligation to pay was governed by an executed release (i.e., Aviva would pay the outstanding balances to the two clinics) and was not a matter of entitlement or payment of benefits under the Schedule. Aviva also says that the release in this case explicitly provided that the payment of $5,786.83 represented no admission of its liability to pay.

16I agree with the respondent that the Tribunal does not have jurisdiction in this case to make an award. My plain reading of O. Reg.’s use of the words “the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule” is that the power to make an award is limited in reference to an actual payment of benefits (i.e. here the partial release indicated that the payment of $5,876.83 represented no admission of liability on the part of Aviva). As well, the words “in addition to awarding the benefits” are also significant. They suggest that a special award may only be made “in addition to awarding the benefits and interest.” Similarly, the words “at the time of the award” incorporates a required temporal factor that precludes the Tribunal from adjudicating this issue as there are no longer any benefits in dispute – i.e., an award can only be made at the same time as the awarding of the benefits.

17In short, the disagreement in this case and request for an award does not relate to the entitlement of benefits in dispute under the Schedule but, rather, to Aviva’s failure to pay the agreed settlement as per the Partial Release. At their core, the facts are still essentially about a private mutual contractual settlement agreement and not about an insurer’s failure to pay benefits. I also note that the total amount of $5,786.82 (the aggregate paid to Synoptic and Care Plus) was not in dispute before the Tribunal. Indeed, the Partial Release explicitly stated that the payment was not deemed to be an admission of liability on the part of the respondent.

18In the event if I am wrong in my determination that the Tribunal lacks jurisdiction to determine an award in these very usual circumstances, after when the matter was withdrawn and closed by the Tribunal, I have also considered the issue of entitlement to the award. However, even without the jurisdictional bar, the threshold for an award still has not been met.

Section 10 Award

19Section 10 of O. Reg. 664 provides the Tribunal authority to issue an “award” up to 50% of the amount to which an applicant is entitled at the time of the award, together with interest on all amounts then owing to the insured (including unpaid interest) at a rate of 2% per month compounded monthly, if the Tribunal finds an insurer “has unreasonably withheld or delayed payments.”

20The conduct of the insurer must rise to the level of being “excessive, imprudent, stubborn, inflexible, unyielding or immoderate.”² This is a high standard of misconduct.

21Here, the applicant requests an award representing 50% of the partial settlement plus 50% of the interest owned on the partial settlement and also interest on the special award.³ The applicant has not specified the actual amount of the award or the interest amount that he is seeking in his submissions.

22The timeline of this proceedings is relatively straightforward but necessary to understand the applicant’s reasons for bringing this motion after filing a withdrawal and this matter’s reopening.

Date

Event

Sept. 26, 2016

Car accident.

May 7, 2019

Application dated April 24, 2019 for dispute resolution received.

Sept. 5, 2019

Case Conference held and hearing scheduled for March 2020.

Jan. 20, 2020

Aviva proposes to settle the issues in dispute by paying $5,786.83 directly to the two clinics and the applicant accepts.

Jan. 23, 2020

The applicant files a Notice of Withdrawal and the Tribunal closes the file.

Jan. 30, 2020

Aviva forwards the Partial Release and Settlement Disclosure Notice to the applicant for execution (NOTE: this release required that payment be made directly to the applicant).

Feb. 8, 2020

The applicant objects to the term of the release requiring that payment be made to the applicant and explains that payment should be made to the clinics.

March 3, 2020

Aviva amends the Partial Release and Settlement Disclosure Notice to contemplate making payment directly to Synoptic Medical Assessment Centre and Care Plus Physiotherapy.

March 16 and 27, 2020

The applicant signs the Partial Release and Settlement Disclosure Notice and forwards it to Aviva on March 27, 2020.

June 18, 2020

Applicant’s counsel discovered that the amount due to Synoptic Medical has not been paid. Applicant's counsel paid the invoice.

June 19, 2020

Aviva’s counsel replies that mechanism for payment was misunderstood and the agreement was for each of the clinics to enter their invoices into HCAI and that it was company policy that, if payments are made to the clinics, there must be evidence of it being incurred.

June 19, 2020

Applicant’s counsel disagrees, stating that the release is clear and does not specify any other conditions regarding payment.

June 19, 2020

Respondent’s counsel advised that payment of $4,195.94 for the amount owing to Synoptic Medical was made.

June 24, 2020

Applicant files motion with the Tribunal to add issue of award and also to enforce payment to Care Plus Physiotherapy (the second payment).

June 25, 2020

Respondent counsel advised that the additional payment to Care Plus with interest was also made in the amount of $1,737.38 ($1,590.89 + $146.49).

23Based on the above chronology and facts, I find as a fact that there is no behaviour by Aviva that rises to the level of “excessive, imprudent, stubborn, inflexible, unyielding or immoderate” conduct warranting a s. 10 award for the following reasons:

(i) I do not find that the delay in payment was part of some scheme or systematic pattern to withhold settlement funds but, rather, was an error based on a clear miscommunication between the parties as to what was expected of each to finalize the payments. In this respect, Ms. R. Kulen, adjuster, testified in a straightforward manner and explained that this was a misunderstanding that OCF-21 were not required on HCAI. In cross-examination, Ms. R. Kulen, explained that Aviva does not have a policy to pay within 14 days but did concede that she did not clarify with respondent’s counsel whether OCF-21s were required. It appeared to me that, in all respects, this was an isolated and inadvertent error based on a company policy requiring invoices to be submitted via HCAI which Ms. Kulen was attempting to follow.

(ii) As well, once the Partial Release was signed, there was no evidence that either party had followed up with the clinics regarding the unpaid accounts. Ms.Kulen testified that no one from the clinics followed up with her nor did she call the clinics herself. There is no evidence that anyone followed upon the unpaid accounts from the date Aviva received the executed Partial Release on March 27, 2020 until the June 18, 2020 communication from applicant’s counsel to Aviva. There is also no evidence that Synoptic or Care Plus ever made inquiries with Aviva regarding payment or that they had pursued payment from the applicant. There was no attempt by the applicant to follow up with Synotic to have the clinic submit an OCF-21. Instead, applicant’s counsel decided to pay the invoice without giving the respondent any reasonable time to rectify this matter. In my view, this dispute could have easily been avoided with some follow up discussions and cooperation between the parties and the clinics. I acknowledge that the Partial Release did not explicitly require that OCF-21s were required to be submitted but it also did not state that none were required. More importantly, if this was something that Aviva was requesting, as was the case, and could have easily been provided, I queried why it was never done to avoid this entire unnecessary proceeding. Certainly, this does not rise to the level of excessive, imprudent or stubborn conduct on the part of the respondent.

(iii) There is also reference in an email dated June 19, 2020 from respondent’s counsel that the adjuster made clear during the settlement discussing that the clinics were required to enter their invoices through HCAI. In the end, this was just another example of the miscommunications between the parties at various steps that could have been avoided by someone following up to ensure that the settlement payments were made on a timely basis.

(iv) I also note that the Partial Release did not stipulate the timing of the payment and that, if the applicant wanted payment to the service providers within a specific timeframe, he should have insisted that such a timeframe be included. Nevertheless, again I simply do not see how this equates to an unreasonable withholding or delaying payments.

(v) My review of the timeline is that the respondent did not pay the clinics from March 27, 2020 (when releases were provided) until June 19, 2020 (payment of Synoptic amount) and June 25, 2020 (payment of Care Plus amount, a delay of a about three months. However, when the respondent was advised and became aware of the outstanding account with Synoptic on June 18, 2020, it took immediate action to ensure that payment was rendered as quickly as possible. It did so by making payment within a few days. Similarly, once it realized that the second payment of the to Care Plus account also remained unpaid, Aviva took further appropriate action to ensure it was paid. Again, this points to some miscommunication or inadvertent conduct, not something attracting sanction.

(vi) I also note that this was not a situation in which the applicant was to be paid the settlement funds and the delay in payment caused him prejudice. Rather the only potentially impacted parties were the service providers. Consequently, one must ask what the actual loss to the applicant was of the withholding if it only impacted the service providers. In other words, if the service providers had to wait for payment, why should the applicant be entitled to a windfall?

24Based on the record before me, I do not see that necessary threshold having been crossed. I find there is no behaviour described in the submissions or any of the evidence that rises to the level of “excessive, imprudent, stubborn, inflexible, unyielding or immoderate” conduct warranting a s. 10 award.

ORDER

25The applicant is a not entitled to an award under s. 10 of O. Reg. 664.

Footnotes

1. 1See Motion Order dated July 16, 2020.
2. 2Plowright and Wellington Insurance Company, OIC File No.: A-003985, 1993 CarswellOnt 4786, [1993] O.I.C.D. No. 62). See also S.M. vs. Unica Insurance Inc., 2020 CanLII 12718 (ON LAT); Applicant v. Aviva Insurance Canada, 2018 CanLII 39473 (ON LAT); and Applicant v. State Farm, 2017 CanLII 85692 (ON LAT).
3. 3Applicant’s Written Submissions para. 45.