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:
[M.M.]
Appellant(s)
and
Royal & Sun Alliance Insurance Company of Canada
Respondent
DECISION AND ORDER
VICE-CHAIR: D. Gregory Flude
Appearances:
For the Appellant: Alex Nikolaev, Counsel
For the Respondent: Lora Castellucci, Counsel
Heard: In Writing Hearing: May 27, 2019
REASONS FOR DECISION AND ORDER
OVERVIEW
1The applicant, M.M., was involved in an automobile accident on April 17, 2016, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'') O. Reg 34/10. He is in a dispute with the respondent, Royal & Sun Alliance Insurance Company of Canada (“Royal”) over his entitlement to a non-earner benefit (“NEB”), among other things. He applied to this Tribunal to resolve the dispute on August 10, 2018.
2Royal asserts that it denied him the NEB on May 18, 2016 and as such, M.M. has applied to this Tribunal too late. The two-year limitation period set out in the Schedule has expired. Further, Royal argues that there are other letters of denial prior to August 10, 2016 that would also lead to the conclusion that M.M. did not apply to the Tribunal on a timely basis.
3The parties have asked me to determine the limitation period question as a preliminary issue, prior to proceeding to a hearing. My determination of that questions turns on a consideration of whether the May 18, 2016 denial letter relied on by Royal is clear and unequivocal in its denial.
PRELIMINARY ISSUES
4The preliminary issues identified in the case conference report are as follows:
i. Whether the application is statute barred pursuant to the Workplace Safety Insurance Act?
ii. Whether the applicant is statute barred from claiming the non-earner benefit due to the limitation period?
5Neither party argued the workplace safety issue so I will proceed on the basis that it is no longer in dispute.
RESULT
6I find that the May 18, 2016 denial letter is clear and unequivocal. The limitation period expired on May 18, 2018. Since the applicant’s Application for Dispute Resolution was not received by the Tribunal until August 10, 2018, he missed the limitation period.
CHRONOLOGY
7Since the focus of my deliberations is on the timing and content of the various letters sent by both Royal and their adjusting firm, Crawford and Company (Canada) Inc., I will set them out here before looking at the applicable law. I will also only refer to Royal, since Crawford was only ever acting on Royal’s behalf to collect information and adjust the file.
8M.M. submitted an Application for Benefits (“OCF-1”) on May 2, 2016 and received a response from Royal on or about May 18, 2016 stating that he was not entitled to a “specified benefit” since he had not submitted the appropriate form, a Disability Certificate (OCF-3).
9The term “specified benefit” is defined in the Schedule. The May 18 letter explained to M.M. the meaning of “specified benefit,” to mean “an income replacement benefit, non-earner benefit, caregiver benefit or a payment for housekeeping or home maintenance services.”
10From June 13, 2016 through March 2017, Royal, through its adjuster sent several letters to M.M. advising him, in substance, that he was not entitled to any benefits until he had provided the documentation Royal had requested.
11In November 2017, M.M.’s chiropractor, Dr. Ranjith Mahendranathan, completed an OCF-3. He purported to email it directly to Royal, not Crawford who had been handling the file. It appears Dr. Mahendranathan used the incorrect email address. Royal did not receive an OCF-3 prior to the commencement of this proceeding.
ANALYSIS
12Entitlement to a NEB is set out in section 12(1) of the Schedule as follows:
(1) The insurer shall pay a non-earner benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies any of the following conditions:
The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit.
13The question of whether there is sufficient evidence to support M.M.’s claim that he suffered a complete inability within the 104-week period and did not qualify for an income replacement benefit is an evidentiary matter to be determined at a full hearing. The question I must determine is whether his appeal to this tribunal was launched within two years of the date of a clear and unequivocal denial of his claim for benefits as set out in Smith v. Co-Operators, 2002 SCC 30, [2002] 2 SCR 129 (“Smith”).
14Smith addresses the failure of an insurance company to clearly and unequivocally set out the appeal procedure in a denial letter. The focus of the decision does not address the substance of the denial letter. Rather it focusses on the failure of the insurance company to fully explain the steps required to appeal a denial. However, the Supreme Court also had concerns with the substance of the letter.
15The insurer sent two letters of denial: one to Ms Smith and one to her counsel. The letter to Ms Smith stated:
We have assessed your claim for accident benefits. This form tells you how we calculated your benefits. If you disagree with our assessment, please contact us immediately.
If we cannot settle the application to your satisfaction, you have the right to ask for mediation through the Ontario Insurance Commission. You can contact them in Toronto at (416) 250‑6750 or toll free at 1‑800‑668‑0128.
16In addressing this issue at paragraph 20 of the majority decision. Gonthier J. states:
There is some doubt in my mind as to whether the notice given by the respondent in this case would even be considered a refusal in a non-technical sense, absent the refusal letter sent to the appellant’s solicitor. The notice says, inter alia, “If you disagree with our assessment, please contact us immediately. If we cannot settle the application to your satisfaction, you have the right to ask for mediation . . .”. There is an equivocal sense of indeterminacy in the decision of the insurer giving the reader the impression that the insurer may very well change its stance if it is contacted for a discussion of the matter.
17I take it from the Supreme Court’s comments in paragraph 20 of the Smith decision that where a purported denial letter has an “equivocal sense of indeterminacy” then it fails to clearly and unequivocally deny the sought-after benefit and the limitation period does not begin to run. M.M. submits that, on the current facts, the denials set out in the various letters are, at best, conditional denials and, to encapsulate his submission, they incorporate an “equivocal sense of indeterminacy.”
18Royal argues that its letter of May 18, 2016 is a clear and unequivocal denial. The dispute is set out in the two letters set out below:
(i) Letter dated May 18, 2016 – As you did not submit a disability certificate with your application, this letter provides notice that the insurance company has determined that you are not entitled to a specified benefit. Please consider receipt of this letter as appropriate notice of refusal of your application for a specified benefit in accordance with Section 36 (3), and Section 54 of the Statutory Accident Benefits Schedule [emphasis added].
You may still submit a Disability Certificate (OCF-3), however you should be aware of Section 36 (3) of the SABS. [emphasis in original]
(ii) Letter of June 13, 2016 - We provided you with notice that you were required to provide the requested information/ documentation within 10 business days and that in accordance with Section 33 (6), the insurer would not be liable to pay benefits in respect of any period during which you failed to comply with the subsection (1).
The requested information/ documentation was required to be submitted to our office on June 9, 2016 and therefore you are now considered in non-compliance with this section. As a result, you are not entitled to payment of specified benefits such as Income Replacement Benefits, Attendant Care or Medical and Rehabilitation Benefits from the period commencing June 9, 2016 until such time as you provide the requested information/ documentation.
If you do provide the requested information/ documentation, the insurer will resume payment of your benefits, but they will only pay amounts withheld during the period of non-compliance if you provide a reasonable explanation for the delay in complying with this section.
Therefore, if you would like to make a claim for any withheld benefits, we also require that you provide an explanation for the delay. [emphasis added]
(iii) There are several later letters but they address defects in the OCF-1, medical benefits, and the application of workplace safety legislation.
19I find that Royal’s letter of May 18, 2016 is a clear and unequivocal denial of a “specified benefit” that started the running of the limitation period. The letter was identified “specified benefit” to include a NEB.
20M.M. submits that further correspondence from Royal contained the necessary equivocation to offend the Smith doctrine because it advises the applicant that he may still be entitled to a NEB once he files the appropriate documentation. I disagree.
21If I am to accept M.M.’s submission, the practical effect would be that Royal could never communicate further with the applicant on the topic of a specified benefit after May 18, 2016. That runs directly counter to Royal’s duties to M.M. Royal had an obligation to consider any documents submitted by M.M. and re-assess its denial decision. Failure to do so on an ongoing basis may well attract an award under section 10 of O. Reg 664. In fact, what Royal did in its correspondence, was set out the basis for its denial on May 18, 2016 and in subsequent correspondence it advised M.M. how to correct that defect by providing an OCF-3 and other documents it requested. M.M. declined to follow the instructions up to and including his failure to submit an OCF-3 prior to the commencement of this application.
November 30, 2017 OCF-3
22M.M. argues that Dr. Mahendranathan submitted an OCF-3 dated November 30, 2017 on December 4, 2017 and, thus, the limitation period was stayed. It now seems to be common ground that Dr. Mahendranathan sent this form to the wrong email address. M.M. now wants to visit the consequences of Dr. Mahendranathan’s actions on Royal. I find he cannot do so for two reasons.
23With the exception of one letter from counsel for M.M. dated May 6, 2016 and a June 26, 2017 letter from Royal to M.M. enclosing an accident benefits package, all other adjusting correspondence came from Crawford. Crawford identified itself in its May 12, 2016 correspondence as the adjuster on the claim. Why M.M. is sending correspondence or causing correspondence on his behalf to be sent directly to Royal in December of 2017 is not explained in the materials.
24There is also a question over the email error. The email was addressed to lori.ippolito@rsa.com. In fact, Ms Ippolito’s email is lori.ippolito@rsagroup.com. M.M.’s counsel had, in fact, corresponded with Royal by email on May 6, 2016 by sending its email to rsa_newclaims@rsagroup.com [emphasis added].
25There is also a second consideration. M.M. alleges that he believed he had submitted an OCF-3 in December 2017. The limitation period expired in May 2018. There is no explanation for his lack of activity over the six-month period from December to May. A simple enquiry about the status of his claim at any time during that period would have identified the fact that Royal had not yet received the OCF-3.
26In light of these considerations, I find that the consequences of M.M.’s error, or the error of his healthcare practitioner, coupled with his inactivity for six months cannot be visited on Royal.
[Section 7](https://www.canlii.org/en/on/laws/stat/so-1999-c-12-sch-g/latest/so-1999-c-12-sch-g.html#sec7_smooth) of the [Licence Appeal Tribunal Act, 1999](https://www.canlii.org/en/on/laws/stat/so-1999-c-12-sch-g/latest/so-1999-c-12-sch-g.html)
27Notwithstanding that this preliminary issue hearing dealt with the application of a limitation period, neither party raised s. 7 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12 Sched. G (the “LAT Act”). In A.F. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT) (“North Blenheim”) the Executive Chair addressed a situation where neither counsel raised section 7 of the LAT Act. In the view of the Executive Chair, it is incumbent on the hearing adjudicator to draw the parties’ attention to the section and invite submissions.
28North Blenheim dealt with a matter that was filed with the tribunal in August 2016. At that time the tribunal had assumed jurisdiction over cases involving the Schedule in April 2016 and there was still a measure of uncertainty about procedures before the Tribunal. North Blenheim recognizes this uncertainty and gives the hearing adjudicator an obligation to assist in the transition by pointing out important statutory and procedural provisions. As parties become more familiar with proceedings before the tribunal it becomes harder to determine if the failure to raise section 7 is a result of confusion or is a tactical position taken by the parties in the litigation. In short, with greater familiarity, the utility of North Blenheim may be time limited.
29Notwithstanding my concerns outlined above, I am prepared to give the parties the opportunity to address section 7 of the LAT Act. I require the parties to make short written submissions on the application of section 7 of the LAT Act.
ORDER
30I find that M.M. filed his application for a NEB beyond the two-year limitation period.
31The parties may make short submissions on the application of section 7 of the LAT Act.
i. M.M. shall make written submissions of not more than three pages, double spaced, 12-point Arial or Times New Roman font within 15 days of the release of this decision.
ii. The respondent may make written submissions within 15 days of receiving the M.M.’s submissions, also limited to three pages, double spaced, 12-point Arial or Times New Roman font
iii. There will be no reply submissions.
Released: January 24, 2020
___________________________
D. Gregory Flude
Vice-Chair