D.G. v. RSA Insurance Company, 2020 CanLII 35518

D.G. vs. RSA Insurance Company

Citation: D.G. vs. RSA Insurance Company, 2020 ONLAT 19-004884/AABS

Tribunal File Number: 19-004884/AABS

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, R.S.O. 1990, c. I.8, in relation to statutory accident benefits.

Between:

D.G.

Applicant

and

RSA Insurance Company

Respondent

PRELIMINARY ISSUES DECISION

ADJUDICATOR: Craig Mazerolle

APPEARANCES:

Representative for the Applicant: Adrian Lomaga, Counsel

Representative for the Respondent: Nestor Kostyniuk, Counsel

Held by Written Hearing: September 30, 2019

OVERVIEW

1The applicant was injured in a motor vehicle accident on April 30, 2015. To assist in her recovery, she sought medical benefits from the respondent, pursuant to the Statutory Accident Benefits Schedule (the “Schedule”).¹ When the respondent refused to pay for some of these benefits, the applicant applied to the Tribunal.

2In response to this application, the respondent raised a limitation defence in accordance with s. 56 of the Schedule. That is, since it alleged that the applicant failed to challenge the denial of attendant care and housekeeping benefits within two years, she is now barred from contesting these claims before the Tribunal.

3In response, the applicant has asked for this defence to be dismissed. She is also seeking costs for this part of the proceeding.

4For the reasons to follow, I find that the applicant is entitled to proceed with her application for an attendant care benefit (limited to any services incurred after the 104-week mark) and a housekeeping benefit. No costs will be awarded.

ANALYSIS

5Section 56 of the Schedule requires an applicant to commence a proceeding “in respect of a benefit… within two years after the insurer’s refusal to pay the amount claimed.” The denial must be clear and unequivocal before this limitation period will commence, and it is the insurer’s onus to demonstrate such a denial exists.²

Parties’ Initial Positions

6In its initial submissions, the respondent argued that it provided clear and unequivocal denials of these two benefits over two years before the applicant proceeded with her application at the Tribunal.

7First, according to the respondent, the attendant care benefit was denied on October 28, 2016. The applicant did file an application with the Tribunal disputing this denial on January 5, 2017, but she ultimately removed it as an issue in dispute during a case conference later that year. This issue was not brought before the Tribunal again until a further application was filed on April 24, 2019—well outside of the two-year limitation period.

8Then, for the housekeeping benefit, the respondent claimed it was denied this benefit on August 31, 2015. It was first brought before the Tribunal in the application submitted on April 24, 2019. This late filing is again outside of the two-year limitation period.

9In response, the applicant raised several grounds to challenge this defence. First, the applicant argued that there were never clear and unequivocal denials of the benefits. Specifically, a housekeeping benefit was not paid because she was not entitled to this category of funding until she was deemed catastrophically impaired (“deemed CAT”). Put another way, until she received this designation and, by extension, the ability to obtain this benefit, there could be no denial. Further, following this CAT designation on March 11, 2019, the respondent scheduled an assessment to determine the applicant’s entitlement to an attendant care benefit—evidence that the earlier “denial” of this benefit was not, in fact, a denial.

10Second, in accordance with the words “amount claimed” in s. 56, the applicant submitted that a benefit can only be denied after the specific sum being requested has been provided to the insurer. The amount of the housekeeping benefit being claimed was not presented to the respondent until receipts were forwarded on April 29, 2019. The amount of incurred attendant care services was first submitted to the respondent on May 31, 2019.

11Third, by citing the Court of Appeal for Ontario’s decision in Haldenby v. Dominion of Canada General Insurance Co.³, the applicant contended that the respondent never denied her entitlement to the attendant care benefit, but rather it only found her entitlement to be $0.00 per month (in a Form 1 dated October 6, 2016).

12Finally, the applicant argued that applying the limitation periods in this case would defeat the consumer protection mandate of the accident benefit regime, as described by the Supreme Court of Canada in Smith v. Co-operators General Insurance Co.⁴ That is, until an insured is deemed CAT, benefits for housekeeping and ongoing attendant care services are not available without extended coverage. Therefore, since the applicant was not deemed CAT until March 11, 2019, allowing the respondent to rely on denial dates before this designation would be unfair.

13In the alternative, the applicant argued that s. 7 of the Licence Appeal Tribunal Act, 1999⁵ should be used to permit her to continue with her outdated application. Briefly, the applicant submitted that she would experience significant prejudice if she was unable to pursue these disputed benefits.

Court of Appeal for Ontario’s Decision in Tomec

14Following the delivery of the respondent’s reply submissions, the Court of Appeal for Ontario released its decision in Tomec v. Economical Mutual Insurance Company on November 8, 2019.⁶ Briefly, the Divisional Court⁷ had held below that the applicant could not pursue her claim for attendant care and housekeeping benefits, due to her failure to comply with the two-year limitation period found in an earlier version of the Schedule, i.e., the Statutory Accident Benefits Schedule –Accidents on or after November 1, 1996.⁸ Similar to the present dispute, the Divisional Court had been asked to determine whether the start of these limitation periods were dependant on the applicant being deemed CAT (a designation that did not arise until well over two years after the dates when these benefits had been allegedly denied). It did not accept this line of reasoning, and instead concluded that the limitation period commences on the date a benefit is denied, regardless of whether a CAT designation would affect one’s entitlement.

15In overturning this decision, the Court of Appeal concluded that the limitation periods were triggered when the applicant was deemed CAT, and, by extension, when she “discovered” her possible entitlement to these disputed benefits. That is, while the Divisional Court found that the Schedule, 1996 contained a “hard limitation period” (i.e., one not governed by this discoverability principle), the Court of Appeal found that it was unreasonable and “absurd” to require insured persons to challenge the denial of a benefit before they could meet the statutory test for entitlement. In other words, the Court found that a “hard limitation period” would not uphold the consumer protection mandate of the accident benefits regime, as it would require insured persons to bring premature proceedings merely to protect their right to possibly access these benefits at a later date.

16Arguing that the reasoning in this decision applied to the present dispute, the applicant asked that I consider Tomec in this proceeding. I ordered further submissions from the parties on the relevance of this decision.

17The applicant submitted that, in accordance with the Court of Appeal’s finding on discoverability, she could not have “discovered she was entitled to seek payment” of the disputed benefits until she was deemed CAT on March 11, 2019. Therefore, her April 24, 2019 application was within the limitation period under s. 56.

18The respondent attempted to distinguish Tomec from the matter at hand. First, the applicant in Tomec had been granted attendant care and housekeeping benefits within 104 weeks of the accident, so the dispute was about ongoing entitlement (versus initial entitlement in the present case). Second, the denial of the housekeeping benefit was clear and unequivocal in the present case, as evidenced by the applicant’s decision not to contest this denial in her January 2017 application. Third, the applicant in Tomec “demonstrated need for attendant care and housekeeping benefits based on incurred expenses submitted before and after attaining the catastrophic impairment designation.” The applicant in the case at hand did not provide similar evidence prior to being deemed CAT.

Application to the Present Case

19First, I find that the applicant is entitled to pursue her claim for a housekeeping benefit. Though the respondent attempted to distinguish this part of her application from Tomec, I find it is a similar set of circumstances to those addressed by the Court of Appeal. That is, it would be an unfair and “absurd” if the applicant had been required to contest this denial before the Schedule would have allowed her to access this category of benefits. As such, I find that she only discovered her claim to a housekeeping benefit on March 11, 2019. This part of her April 2019 application is, therefore, within the two-year limitation period.

20I reach a similar conclusion for any attendant care expenses claimed after the 104-week mark. Section 20 of the Schedule (as it was written at the time of the accident) states that—unless deemed CAT—an insured person can only receive attendant care benefits up to 104 weeks following the accident. While the applicant received a valid denial prior to the 104-week mark, she could not have been aware of her possible entitlement after this date until she was deemed CAT. As such, requiring her to contest a denial for a period when she could not have been entitled to payments would have resulted in the “absurd” situation described in Tomec.

21Further, it is unlikely that she would have incurred any attendant care expenses after the 104-week mark until she was deemed CAT. Without any evidence of these incurred expenses, the applicant would have largely guaranteed that she would have been unsuccessful had she tried to claim this hypothetical entitlement. Such a proceeding would have again been one of the “absurd” outcomes that the Court of Appeal is attempting to avoid with its decision.

22Finally, I find that the applicant is not entitled to continue with her claim for any attendant care services that predate the 104-week mark. I am satisfied that the applicant received a valid denial of this benefit on October 28, 2016. The Explanation of Benefits sent on this date clearly stated that the respondent found her entitlement to be $0.00 per month. It also provided her with a detailed report explaining its reasoning. The applicant did not contest this denial within the two-year limitation period, and instead removed it from the application she filed in January 2017.

23Though the applicant relied on paragraph 33 of Haldenby to argue that an entitlement to zero is not a denial, this decision is distinguishable from the case at hand. Specifically, the appellant in Haldenby argued that, if an income replacement benefit is found to $0.00 per week (on account of deductions from post-accident income), this reduction to zero should constitute a denial of benefits. The Court did not accept this line of reasoning:

… the appellant takes the position that s. 15, which allows the insurer to deduct from benefits payable 80 per cent of the income which a person may receive from employment, can result in the benefit payment amount being reduced to zero during the time the person returns to work under s. 16. The appellant argues that this may be perceived as a termination or refusal to pay, triggering the limitation period and thereby forcing the person to launch an appeal when the person has no complaint at the particular time. In our view, this issue does not arise out of the operation of s. 15. By s. 24(8) a refusal must be in writing and must provide reasons. Where the amount of the benefit payable is zero, that is not a refusal by the insurer to pay a benefit. Therefore, the limitation period is not triggered by the operation of s. 15.

As opposed to the case at hand, where the insurer found the applicant did not require attendant care services (effectively, an “entitlement” of zero), Haldenby addressed a situation where an insured person is entitled to a benefit, but other sources of income reduces the amount payable to zero. Put another way, this hypothetical calculation had nothing to do with whether the insurer found an insured person met the entitlement test for an income replacement benefit, but rather the weekly amount equalled zero after considering other forms of income.

24I do not then accept the applicant’s argument regarding the words “amounts claimed” in s. 56. The denial in October 2016 was sent in response to the applicant submitting a Form 1 stating that she required attendant care services in the amount of $676.65 per month. Though it is true that these amounts could not have been payable until there was evidence that the services had been incurred, it cannot be said that an amount had not been “claimed” through the submission of this Form 1.

25Further, I do not accept the applicant’s argument that there was no actual denial of the attendant care benefit in October 2016, due to the respondent’s plans to assess her entitlement to this benefit with a further examination in April 2019. Insurers have an ongoing obligation to adjust a claim, and so its decision to assess the applicant’s entitlement (even after a clear denial) is not an indication that it has waived its right to rely on a limitation period.

26The applicant cited Garminder v. Co-operators General⁹ for the proposition that requesting this further examination raised reasonable doubts as to whether the respondent had, in fact, denied the benefit. I can distinguish the reasoning in this case from the present matter, as Arbitrator Murray found that the insurer had taken “the active step of initiating the review” of the insured. In the present case, it appears the respondent was reacting to an updated Form 1 from the applicant.

27Finally, I do not find this present matter is an appropriate case to engage the discretion granted to the Tribunal by s. 7 of the LAT Act. This provision states that, “if the Tribunal is satisfied that there are reasonable grounds”, the Tribunal may, among other things, allow applicants to proceed with applications that are not in compliance with s. 56. The applicant cited 17-007052 v. Unica Insurance Inc.¹⁰ as a guide for how the Tribunal is to apply this discretionary power. Factors adjudicators should consider include: length of the delay; prejudice to the parties; merits of the appeal; and whether there was “a bona fide intention to appeal within the appeal period”. Adjudicator Ferguson cautioned that these factors “act as a guideline – they are not elements that must be met before an extension can be granted”.

28As noted by both parties in their initial submissions, the applicant did originally contest the October 2016 denial of an attendant care benefit in her January 2017 application. However, she later withdrew this claim during a case conference in May 2017. Dropping this part of her claim is a strong indication that there was no intention of pursuing this matter. Further, since she decided to remove this issue from dispute, any prejudice that might befall the applicant is a result of her own actions. Finally, I would add that the delay is fairly significant. Taken together, and regardless of whether the appeal has merit, I am not satisfied that it is appropriate for me to use the discretion afforded under s. 7 of the LAT Act.

COSTS

29Rule 19 of the Tribunal’s Common Rules of Practice & Procedure states that costs may be awarded where a party has “acted unreasonably, frivolously, vexatiously, or in bad faith” in a proceeding. The applicant did not provide any submissions for why the respondent’s conduct during met this standard, and I have not observed any behaviour that would reach this high threshold. No costs shall be awarded.

ORDER

30I find that the applicant is entitled to proceed with her application for an attendant care benefit (limited to any services incurred after the 104-week mark) and a housekeeping benefit.

Footnotes

1. 1Effective September 1, 2010, O. Reg. 34/10.
2. 2C.C. v. Economical Insurance Company, 2018 CanLII 140347 (ON LAT), at paras. 12-15.
3. 32001 CanLII 16603 (ON CA), [2001] O.J. No. 3317 (“Haldenby”).
4. 42002 SCC 30.
5. 5S.O. 1999, c. 12, Sch. G (the “LAT Act”).
6. 62019 ONCA 882 (“Tomec”).
7. 7Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664.
8. 8O. Reg. 403/96 (“Schedule, 1996”), s. 51.
9. 9A12-006193 (FSCO, October 22, 2013).
10. 102018 CanLII 83523 (ON LAT), at paras. 19-20.