Citation: QSZ vs. TD General Insurance Company, 2020 ONLAT 19-000403/AABS

Released Date: 03/27/2020

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:

Q. S. Z.

Applicant

and

TD General Insurance Company

Respondent

DECISION AND ORDER

ADJUDICATOR:

Derek Grant

APPEARANCES:

For the Applicant:

Andrea Triolo, Counsel

For the Respondent:

Jennifer Kelly, Counsel

HEARD: In Writing

November 18, 2019

1The applicant, Q.S.Z., was involved in an automobile accident on February 8, 2015, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').¹ Q.S.Z. was not paid income replacement benefits (“IRBs”) by the respondent, TD, and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2TD raised the limitation period under section 56 of the Schedule as a preliminary issue in response to Q.S.Z.’s claim for entitlement to IRBs. The parties were unable to resolve the preliminary issue at the case conference and agreed to proceed to a written hearing on the preliminary issue.

3TD’s position is that Q.S.Z. is statute barred from proceeding with her claim as she failed to apply to the Tribunal within 2 years of TD’s refusal to pay the amount claimed for IRBs. Q.S.Z.’s position is that to date, she has not received any letter from TD Insurance indicating a denial or reason for non-payment of her income benefits. On January 9, 2019, as Q.S.Z.'s income benefit was never paid and never denied, Q.S.Z. filed her appeal with the Tribunal. Q.S.Z. stated she is unable to return to work as a result of the injuries she sustained from the accident.

PRELIMINARY ISSUE

4The order of Adjudicator Kaur, dated June 18, 2019, noted the preliminary issue in dispute as follows:

(i) Is Q.S.Z. statute-barred from proceeding with her application at the Tribunal for failing to dispute T.D.’s denial within 2 years in accordance with section 56 of the Schedule?

RESULT

5I find that TD failed to properly deny Q.S.Z.’s application for IRBs. As such, I find that Q.S.Z. may proceed with her claim before the Tribunal.

ANALYSIS

6TD’s contends that the IRB was clearly denied and Q.S.Z. is statute-barred from pursuing her claim for IRB based on the following:

(i) The Employer's Confirmation Form (OCF-2) is a mandatory document needed in order for an insurer to calculate their insured's entitlement to income replacement benefits. It was therefore reasonable for the respondent to demand that a completed form be submitted before granting the applicant with payment of income replacement benefits;

(ii) TD’s letter dated November 10, 2015 made it clear to Q.S.Z. that the IRB would not be paid. At the very latest, Q.S.Z.'s ability to challenge TD's refusal to pay IRBs, would have therefore commenced on that day;

(iii) TD sent three letters to Q.S.Z. which indicated that TD would not be able to calculate and pay Q.S.Z. IRBs until she submitted a completed OCF-2. TD submits that its refusals were therefore clear and unequivocal such that an unsophisticated individual would understand them.² As the letters also explained the dispute resolution process, TD further submits that its refusal to pay Q.S.Z. income replacement benefits was valid; and

(iv) Q.S.Z. has not provided a reasonable explanation as to why did she not comply with TD’s requests to produce a completed OCF-2. TD has also not been provided with a reasonable explanation as to why Q.S.Z. has not produced a completed OCF-2 or any other documentation to calculate her entitlement to income replacement benefits to date.

7TD submits that its refusal to pay Q.S.Z. IRBs pursuant to s.33 of the Schedule crystalized on March 27, 2015, 14 days after its request that Q.S.Z. submit a completed OCF-2. As Q.S.Z. failed to file her Tribunal application before March 27, 2017, she is therefore barred under section 56 of the SABS from doing so now.

Did TD’s letters regarding IRBs contain clear and unequivocal denials?

March 13, 2015 letter

8I find the March 13, 2015 letter from TD contains no clear and unequivocal denial. I will address my analysis and reasons below.

9The insurer issued a letter to Q.S.Z. dated March 13, 2015 which advised Q.S.Z. of her entitlement to IRB. The letter further states:

(i) Please be advised we are unable to calculate your entitlement to the Income Replacement Benefit as we require the following information: your Employer’s Confirmation Form (OCF-2) and copies of your Employment Insurance benefit statements.

(ii) We have enclosed an Employer’s Confirmation Form (OCF-2) for your convenience.

10The letter also includes additional information regarding additional benefits that Q.S.Z. is and is not entitled to.

11Despite not having received the OCF-2, the letter contains no indication that the IRB is denied. As such, I find that the March 13, 2015 letter does not trigger the limitation period.

May 29, 2015 letter

12A second letter from TD dated May 29, 2015 provided the following notice to Q.S.Z.:

(i) On March 13, 2015 we wrote to you regarding our determination for your specified benefits. It has been determined that you are entitled to an Income Replacement Benefit.

(ii) On March 13, 2015 we had requested for some information. In order for us to make an Income Replacement benefit (IRB) calculation we require a completed Employer’s Confirmation Form (OCF-2) as well as your Employment Insurance paystubs. We have enclosed an Employer’s Confirmation Form (OCF-2) for your convenience. Please return the requested information within 14 days of receipt of this notice. Upon receipt of the requested information we will gladly calculate your Income Replacement Benefit (IRB).

13Again, the May 29, 2015 letter contained no denial of the IRB benefit.

August 19, 2015 letter

14TD sent a third letter, dated August 19, 2015, and in its letter, advised Q.S.Z. of the following:

(i) Please note that a clerical error was made in our letter dated March 13, 2015.

(ii) Your Disability Certificate (OCF-3) indicates that you are substantially unable to perform the essential tasks of your employment and are eligible for this benefit.

(iii) In order for us to calculate this benefit, please submit an Employer’s Confirmation Form (OCF-2).

(iv) Your Disability Certificate (OCF-3) indicates that you suffer a complete inability to carry on a normal life. However, you are not eligible for this benefit (non-earner benefit) as you are eligible for the Income Replacement Benefit.

15It should be noted that TD did allow Q.S.Z. to submit the OCF-2 in 14 days, rather than the 10-day limit pursuant to section 33(1) of the Schedule. Once again, the August 19, 2015 letter contained no denial of the IRB.

November 6 and November 10, 2015 letters

16On November 6, 2015, Q.S.Z. advised TD that it was her intent to return to work, and that she did not intend to pursue IRBs. TD responded on November 10, 2015 and notified Q.S.Z. that the insurer examinations would be cancelled and provided contact information for further inquiries.

17TD’s response in the November 10, 2015 letter is as follows:

(i) Thank you for your letter dated November 6, 2015.

(ii) As stated in your letter (November 6, 2015), you do not wish to pursue the Income Replacement Benefits. As a result, we have cancelled your Section 44 Assessments.

18Aside from providing contact information for Q.S.Z.’s reference, there is no request made by TD for further documentation regarding the IRB. Significantly, and contrary to TD’s claim, there is no discussion in the November 10, 2015 letter that the IRB would be denied if further documentation was not provided within a certain timeframe.

19TD’s November 10, 2015 letter did not contain a request for further information pursuant to s.33(1) of the Schedule. In addition to the absence of a request for information, the November 10, 2015 letter also did not advise Q.S.Z. of the insurer’s right pursuant to s.33 (6) to refuse to pay the IRB for any period that Q.S.Z. did not comply with the s.33(1) request.

March 3, 2016 letter

20Q.S.Z. notified TD via the March 3, 2016 letter, that she resigned from her employment as a result of injuries sustained in the subject accident. Q.S.Z. further advised that she would once again be claiming entitlement to the IRB. The letter advised TD that the employer was provided with the required OCF-2 to complete and same would be provided to TD upon receipt.

21Q.S.Z. disagrees that this proceeding is similar to the case that TD relies on, LAT decision 16-004212 v Allstate Insurance Company of Canada³ ("16-004212"). TD relies on that case as authority that a refusal of a benefit stems from a period of non-compliance in accordance with s.33, which can then trigger a section 56 limitation period.

22Although I am not bound by previous LAT decisions, I find the 16-004212 decision helpful in clarifying my finding. For the reasons that follow, I agree with Q.S.Z. that 16-004212 is distinguishable from the subject proceeding. In 16-004212, the insured had been provided with two specific letters from the insurance company:

(i) the first letter dated December 17, 2012, which stated that if no documents were received by January 14, 2013, there would be no further payments of benefits;

(ii) the second letter dated February 8, 2013, which stated that the insured was in non-compliance and benefits were no longer payable. The second letter also included an Explanation of Benefits which had checked off the box "not eligible/stoppage of benefit".

23Further, the adjudicator in 16-004212 states at para. 17⁴ that "a s.33 request cannot trigger a limitation period" but "the refusal to pay a benefit that stems from a s.33 request can".

24The adjudicator in 16-004212 relies on the Supreme Court of Canada’s decision in Smith v. Co-operators General Insurance⁵ for the principle that a "valid refusal must be clear and unequivocal such that an unsophisticated individual would understand it”.⁶

25The adjudicator in 16-004212 found the following equates to a clear and unequivocal denial:

(i) the language "no income replacement...benefit is payable [to the applicant]";

(ii) the clear language of the word "no";

(iii) notice that if the applicant did not comply with the request then the insurer will withhold payment of benefits;

(iv) direction of the insured person to the Explanation of Benefits which checks off the "not eligible/stoppage of benefit" box; and

(v) the language in the Explanation of Benefits which states no benefit is payable effective January 14, 2013.

26TD relies on the March 13, May 29, and August 19, 2015 letters as "denials" of Q.S.Z.’s entitlement to IRBs, however, none of these letters say the IRB is denied or that Q.S.Z. is ineligible. The letters contain no notice that if Q.S.Z. does not comply TD will withhold payment of the benefit. In contrast, the letters continually suggest that the IRB is payable upon receipt of the OCF-2.

27Additionally, although each of TD’s letters contained the right to dispute information, I find that this also does not meet the test set out in Smith or in 16-004212. Further, the right to dispute notices that TD relied on state in the first paragraph that an applicant has a right to dispute if their accident benefits claim "has been reduced or denied by your insurance company". None of TD’s 2015 letters contain the words “reduced” or “denied”. It should also be noted that these letters do not contain any reference in whole or in part, to s.33.

28Further, TD relied on their letter dated November 10, 2015, as confirmation that no IRBs would be paid. I agree with Q.S.Z. that the suggestion that an insurer can write any letter and attach a standard right to dispute notice to rely on as a clear and unequivocal denial has far reaching and problematic implications for all potential persons who receive any correspondence from their insurer. This is particularly true, as shown with TD’s three 2015 letters, that TD attaches the right to dispute to all correspondence, irrespective of its content.

CONCLUSION

Applicability of the two-year limitation period

29I find that Q.S.Z. is not statute-barred pursuant to section 56 of the Schedule. The limitation period has not been triggered as TD’s letters contained no clear and unequivocal denials of the IRB.

ORDER

30As a result, and for the reasons stated above, Q.S.Z. may proceed with her claim before the Tribunal.

Released: March 27, 2020