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:
[The Applicant]
Appellant
and
Co-operators General Insurance Company
Respondent
DECISION [AND ORDER]
VICE CHAIR:
Maureen Helt
Appearances:
For the Appellant: [The Applicant], Applicant A Fabio Longo & Kristy L. Kerwin, Counsel
For the Respondent: Jonathon Kahane-Rapport, Counsel
Heard: In-Person: May 17, 2019
REASONS FOR DECISION
OVERVIEW
1The applicant was involved in an automobile accident on November 22, 2003, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996 (the ''Schedule'') .The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for dispute resolution.
2The respondent filed a motion on a preliminary issue seeking an Order from the Tribunal finding that the applicant's claims for attendant care and housekeeping and home maintenance benefits are statute-barred as a result of the denial by the respondent on March 29, 2012.
NATURE OF THE MOTION
3The motion set out the following two issues:
i. Is the applicant barred from proceeding with his claim for attendant care benefits as he failed to commence his application within two years after the respondent's refusal to pay the amount claimed?
ii. Is the applicant barred from proceeding with his claim for housekeeping and home maintenance benefits (hereinafter referred to as housekeeping benefits) as he failed to commence his application within two years after the respondent's refusal to pay the amount claimed?
RESULT
4The Tribunal finds that the applicant is not barred from proceeding with his claim for attendant care and housekeeping benefits for the reasons set out below.
BACKGROUND
5The applicant was involved in an automobile accident approximately sixteen years ago, on November 22, 2003, when he was 47 years old. He was riding his bicycle without a helmet, when a car door opened, and he cycled into it.
6On March 15, 2012, the respondent received a copy of an Occupational Therapy (“OT”) In-home Assessment Report and an application for Attendant Care from the applicant.
7The respondent sent a letter to the applicant and his legal counsel dated March 29, 2012 confirming receipt of the report and the application (the Assessment of Attendant Care Needs Form 1) and denied the applicant’s attendant care and housekeeping benefits. In the letter, the respondent stated:
“As per Section 18 (2) of the Statutory Accident Benefits Schedule (SABS), no attendant care benefits are payable for expenses incurred more than 104 weeks after the accident, which would have been a date of November 18, 2005. Therefore, the Cooperators does not agree to fund the above noted Assessment of Attendant Care needs (Form 1).
8On January 3, 2014, the applicant submitted an Application to Determine Catastrophic Impairment (OCF-19). The applicant was deemed catastrophically impaired on January 8, 2015 on the basis of a marked mental/behavioural impairment.
9On May 18, 2016 and June 16, 2016, the respondent required the applicant to undergo two insurer’s examinations for attendant care benefits, making no reference to the denial in the letter from March 2012. The applicant submits that the respondent wrote to him subsequent to these examinations and advised it would be paying attendant care benefits.
10On July 15, 2016, the respondent wrote to the applicant stating:
“…attendant care is reasonable under hygiene and feeding. The monthly amount allotted is $456.68 and the services must be incurred… please submit the enclosed detailed expense form (CLG703) every 30 days. Once I receive the form and proof that expenses were incurred (as above) I will be able to reimburse you.
11On November 11, 2017, the applicant submitted an OCF-6 form claiming housekeeping expenses in the amount of $100.00 and claiming attendant care benefits in the amount of $200.00.
12On December 4, 2017, the respondent again wrote to the applicant confirming that the expenses would be paid once it was in possession of signed receipts from the service providers
13On December 18, 2017, the respondent advised the applicant that it was relying on its March 29, 2012 denial and refused payment of attendant care and housekeeping benefits.
14The applicant filed his application with the Tribunal on April 25, 2018.
ANALYSIS
15An in-person preliminary issue hearing was held with written submissions provided by the parties. At that hearing, the applicant raised several arguments as to why his claim for attendant care and housekeeping benefits should be allowed focussing heavily on the argument that the respondent’s March 29, 2012 denial is not valid as it is not clear and unequivocal.
16The respondent disputes the applicant’s arguments about the validity of the denial and also submits that the limitation period for disputing the denial expired on March 29, 2014, two years after the date of denial. In its submissions, the respondent relies on the Divisional Court’s decision in Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664 wherein a similarly worded denial constituted a clear and unequivocal denial, triggering the 2-year time limit to file an appeal with the Tribunal.
17As per section 56 of the Schedule (s. 51 in the former SABS-1996), the limitation period to dispute a denial of statutory accident benefits is within two years after the insurer’s refusal to pay the benefits claimed.
18Both parties agreed that for the limitation period to be triggered, the denial must be found to be clear and unequivocal. The denial from an insurer to an applicant must meet the “clear and unequivocal” standard and include “straightforward and clear language, directed towards an unsophisticated person.” The applicant focussed much of his submissions on the fact that the language in the March 29, 2012 letter was not clear and unequivocal and therefore the denial should be found to be invalid. The respondent argued that it was clear and even if there was some ambiguity it was “cured” by the remainder of the letter which clarified any ambiguity.
19After the hearing was completed, the Court of Appeal released its decision in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 (“Tomec”), dated November 8, 2019, overturning the Divisional Court decision with respect to the applicability of the discoverability rule in the limitation periods set out in the Schedule. The Tribunal requested supplementary submissions from the parties on the impact of the Court of Appeal’s decision. These submissions were filed in early 2020.
20Based on the analysis of the application of the discoverability rule and limitation period issue below, it is unnecessary for the Tribunal to make a finding on the validity of the denial set out in the March 29, 2012 letter.
21The facts in Tomec can be summarized as follows. In 2008, Ms. Tomec was injured in a motor vehicle accident. In 2010 she was denied entitlement to further attendant care benefits and housekeeping benefits on the basis that she had not suffered a catastrophic impairment.
22In 2015, as a result of failing health, the insurer accepted that Ms. Tomec did suffer a catastrophic impairment. Ms. Tomec, however, was denied further attendant care and housekeeping benefits even after being determined catastrophically impaired as her insurer took the position that she failed to dispute the denial from 2010 within two years. Both the Tribunal and Divisional Court upheld the denial, however, the Court of Appeal ruled differently.
23The Court of Appeal said that discoverability allows the limitation period to start to run when the material facts or cause of action have been discovered by the party who is making the claim. The Court referenced the recent Supreme Court of Canada decision in Pioneer Corporation v. Godfrey, 2019 SCC 42 (“Pioneer”) for the proposition that a person needs to know they have legal rights before such rights expire. In Tomec, this meant that the limitation period did not commence until after Ms. Tomec was determined to be catastrophically impaired as one can not seek entitlement to a benefit based on catastrophic determination until they know they are entitled to it.
24The respondent argues that the above rationale supports its position that the applicant’s cause of action commenced upon the determination of catastrophic impairment and at best, the two-year window for disputing a denial of benefits would be from January 8, 2015 to January 8, 2017.
25The respondent argues that the applicant waited over three years, after knowing that he was catastrophically impaired, to dispute his claims for denied attendant care and housekeeping benefits at the Tribunal and as such he is statute-barred from making his claim.
26I am not persuaded by the respondent’s argument. The statutory language in the Insurance Act is clear - “an application under subsection 280(2) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed”.
27In the previous and current Schedule, there is no time restriction for attendant care benefits to be claimed in catastrophic impairment cases. The denial provided by the respondent to the applicant in the March 29, 2012 letter clearly related to attendant care benefits within 104 weeks of the date of the accident.
Section 18(2) of the 1996 SABS provides:
18 (2) No attendant care benefit is payable for expenses incurred more than 104 weeks after the accident. O. Reg. 403/96, s. 18 (2).
28There is no disputing that the regulation makes it clear that no attendant care benefits are payable after 104 weeks after the accident for non-catastrophic cases. This was the basis of the respondent’s denial set out in its letter of March 29, 2012.
29However, it is important to note that the denial was under s. 18(2) not s. 18(3).
- (3) Subsections (1) and (2) do not apply in respect of an insured person who sustains a catastrophic impairment as a result of the accident. O. Reg. 403/96, s. 18 (3).
Section 18 (3) makes it clear that a person who is catastrophically impaired does not have the same limitations in claiming attendant care benefits.
30In the case before the Tribunal, the denial letter was sent before the determination of catastrophic impairment. This is similar to the facts set out in the Tomec case. The respondent argues that Tomec, however, is different in that Ms. Tomec did apply to the Tribunal within two years of her catastrophic designation which is not the case here. The question the Tribunal needs to consider is whether the limitation period commences from the date of catastrophic impairment designation or from the date that benefits claimed, based on that designation, are denied.
31The Court of Appeal in Tomec set out the following paragraph found in the Supreme Court’s decision in Pioneer in its analysis of discoverability, limitation periods and statutory interpretation:
Where a limitation period is subject to the rule of discoverability, a cause of action will not accrue for the purposes of the running of the limitation period until the material facts on which the cause of action is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence. The discoverability rule is not a universally applicable rule of limitations, but a rule of construction to aid in the interpretation of statutory limitation periods. It can therefore be displaced by clear legislative language. In determining whether discoverability applies, substance, not form, is to prevail: even where the statute does not explicitly state that the limitation period runs from “the accrual of the cause of action”, discoverability applies if it is evident that the operation of a limitation period is conditioned upon accrual of a cause of action or knowledge of an injury. Discoverability will apply where the event triggering the limitation period is an element of the cause of action because, in such cases, the legislature has shown its intention that the limitation period be linked to the cause of action’s accrual. (emphasis added)1
32The respondent, at paragraph 15 of its supplemental submissions, submits that the decision in Pioneer supports the position that the running of the limitation period starts when an individual is aware of his or her injury.
Where the running of a limitation period is contingent upon the accrual of a cause of action or some other event that can occur only when the plaintiff has knowledge of his or her injury, the discoverability principle applies in order to ensure that the plaintiff had knowledge of the existence of his or her legal rights before such rights expire.
33In other words, applying that rationale to this case, the respondent submits that “the doctrine of discoverability does not apply to [the applicant] as he knew he was catastrophically impaired within the relevant time period, yet he still failed to commence his LAT Application within the two-year limitation period.”
I disagree. The structure of the Schedule is that once an insured is denied a benefit, they have two years to apply to the LAT. I do not accept, as argued by the respondent, that the two-year limitation period commences from the finding of catastrophic impairment on January 8, 2015. In this case, there was no denial of benefits after the applicant was found to be catastrophically impaired. The denial letter in 2014 was based on the legislation, namely, no attendant care benefit is payable for expenses incurred more than 104 weeks after the accident.
34In fact, it was only on December 18, 2017 when the respondent sent a letter to the applicant advising that it was relying upon its March 29, 2012 as a denial for benefits arising after a finding of catastrophic impairment.
35Between the date the applicant was determined to be catastrophically impaired and the respondent’s letter of December 18, 2017 the respondent wrote to the applicant on at least two occasions advising that it would pay attendant care benefits.
36On July 15, 2016 the respondent wrote to the applicant:” …attendant care is reasonable under hygiene and feeding. The monthly amount allotted is $456.68 and the services must be incurred… please submit the enclosed detailed expense form (CLG703) every 30 days. Once I receive the form and proof that the expenses were incurred (as above), I will be able to reimburse you.
37On December 4, 2017 the respondent wrote to the applicant advising that it had received attendant care and housekeeping expense however they required signed receipts from the service providers.
38The correspondence, the respondent submits, was a result of one adjuster who mistakenly agreed to consider some claims for attendant care and housekeeping benefits without referring back to the denial.
39The respondent suggests it would be absurd to require insurers to have to issue a new denial letter upon learning an insured is deemed catastrophically impaired. The alternative argument, as put forward by the applicant, is that it would be absurd to allow an insurer to rely on a denial when the cause of action giving rise to the claim for benefits – namely catastrophic determination, had not yet come into existence.
40The Court of Appeal’s decision in Tomec carefully considered the language of the statute in its decision which the Tribunal finds instructive on this point of when the limitation period commences. Starting at para 42, the Court sets out the purposes of the Schedule noting that:
i. The legislature’s definition of “catastrophic impairment” is interpreted to foster fairness for victims of motor vehicle collisions by ensuring that accident victims with most health needs have access to expanded medical and rehabilitation benefits. That definition is intended to be remedial and inclusive, not restrictive.
ii. The SABS are remedial and constitute consumer protection legislation. As such, it is to be read in its entire context and in their ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature. The goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and as such, assumes an importance which is both pressing and substantial.
41The Tribunal finds that the above confirms the Court’s direction of the need to consider the purpose of the Schedule as consumer protection legislation when considering the commencement of the limitation period. The Court states at para 55: “There is a single reasonable interpretation of s. 281.1(1) of the Insurance Act and s. 51(1) of the SABS. The limitation period contained in those sections is subject to the rule of discoverability because it is directly tied to the cause of action that an insured can assert when denied benefits.”
42The language is clear, discoverability is directly tied to the cause of action that an insured can assert when denied benefits.
43In this case the applicant was denied benefits, which were based on his catastrophic designation, on December 8, 2017 at the earliest. This is when the respondent sent a letter to the applicant advising that it was relying upon its March 29, 2012 correspondence as its denial of attendant care and housekeeping benefits. While there is no disputing the importance of limitation periods in the administration of justice, the Tribunal find that the two-year mark can only begin to run, after a valid denial is given based on the cause of action. In this instance the first denial given after the designation of a catastrophic impairment was on December 18, 2017.
44The Tribunal finds that the applicant filed his appeal with the Tribunal within the two years from being denied certain benefits after having been found catastrophically impaired.
COSTS
45The applicant has requested costs of this motion. Rule 19.1 of the LAT, ACRB, FSC Common Rules of Practice and Procedure, Version 1 states that costs may be awarded when “another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith”.
46The applicant suggested that it was unreasonable for the respondent to pursue a preliminary issue that he believes to be meritless. I have been provided with no evidence that this preliminary issue was raised “unreasonably, frivolously, vexatiously, or in bad faith”. As such, I will not award any costs for this part of the proceeding.
ORDER
47The respondent’s motion to bar the applicant from proceeding with his claims for attendant care benefits and housekeeping and home maintenance benefits is dismissed.
48The parties shall contact the Tribunal within 15 days of this decision being released to schedule a case conference.
Released: April 7, 2020
___________________________
Maureen Helt
Vice Chair
Footnotes
- Pioneer Corporation v. Godfrey 2019 SCC 42, at para xx