O.D. v. Allstate Insurance Company of Canada, 2020 CanLII 47270

Citation: O.D. vs. Allstate Insurance Company of Canada 2020 ONLAT 19-008965/AABS

Released Date: 07/10/2020

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:

O.D. Applicant

and

Allstate Insurance Company Of Canada Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR: Sandeep Johal

APPEARANCES:

Paralegal for the Applicant: Kateryna Vlada

Counsel for the Respondent: Diana M. Oliveira

Heard: By way of written submissions

OVERVIEW

1The applicant was injured in an automobile accident on December 16, 2016 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant applied submitted his Application for Accident Benefits (OCF-1) on December 28, 2016 and a Disability Certificate (OCF-3) dated January 4, 2017 signed by the applicant’s chiropractor, Dianna Bakalovski. Ms. Bakalovski check-marked “yes” to the question of whether the applicant has a substantial inability to perform the essential tasks of his/her employment, which is the income replacement benefit (“IRB”) test. The OCF-3 also reflects a check-marked “yes” to the question of whether the applicant has a complete inability to carry on a normal life, which is the non-earner benefit (“NEB”) test.²

3On January 12, 2017 an Explanation of Benefits (OCF-9) advised that the applicant may be eligible for IRBs and is not eligible for NEBs.

4Section 35 of the Schedule states that the applicant must elect whether an IRB or an NEB is the benefit he or she wishes to receive.

5On February 6, 2017 the applicant’s representative sent a letter to the respondent advising that the applicant does not wish to pursue the IRB benefit.

6On February 9, 2017 the respondent sent an OCF-9 acknowledgment that the applicant does not wish to pursue IRBs.

7The applicant also applied for two physiotherapy treatment plans which were denied on August 2, 2017 (“physiotherapy plan 1”) and August 29, 2017 (physiotherapy plan 2”). The respondent denied physiotherapy plan 1 as it is statute barred and physiotherapy plan 2 was denied because the applicant did not attend a s. 44 insurer examination (“IE”). The applicant disagreed with these denials and submitted an Application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) on August 14, 2019.

8The respondent raised a preliminary limitation issue at the case conference that the applicant filed his Tribunal application beyond the two-year limitation period. As a result, this written preliminary issue hearing was scheduled on the issue of whether the applicant applied outside the limitation period for the NEB and two physiotherapy treatment plans.

9In the applicant’s written submissions, he withdraws his appeal of the denials for physiotherapy treatment plans 1 and 2.

PRELIMINARY ISSUE

10Is the applicant statute barred from pursuing his claim for NEBs to the Tribunal due to the expiry of the limitation period in s. 56 of the Schedule?

RESULT

11The applicant’s appeal of the NEB was filed beyond the two-year limitation period, and I find that under s. 7 of the Licence Appeal Tribunal Act,³ the justice of the case does not warrant the extension of the limitation period.

ANALYSIS

12Section 56 of the Schedule sets out that the application to dispute a denial of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed.

13To determine whether a denial is proper it must be in accordance with the principles outlined in Smith and Co-Operators General Insurance Company.⁴ According to the Smith case the refusal to pay the benefit must contain straightforward and clear language, it must be directed towards an unsophisticated person, it must outline the dispute resolution process and the relevant time limits that govern the process, and it must provide valid or other reasons for the denial. If the respondent’s notice to the applicant does not meet these basic requirements, the denial is invalid and the two-year limitation period in the Schedule is not triggered.

14In Seitzema v. Economical Insurance,⁵ the Court of Appeal found that a denial was valid if it gave the applicant a clear notice of their rights to mediation, followed by arbitration, litigation or neutral evaluation if the applicant wished to dispute the refusal and a clear notice of the two-year limitation period. Furthermore, Seitzema is also authority for the position that once a clear and unequivocal notice is given by the insurer cancelling the insured’s benefits, that was sufficient to trigger the limitation period, notwithstanding that the insurer gave legally incorrect reasons for cancelling the benefit.⁶

15In the present case, the respondent submits the denial of the NEB met the criteria as set out in Smith which started the limitation clock and the applicant applied eight months and two days beyond the limitation period. Furthermore, the respondent’s position is that even if the denial letter was legally incorrect, its notice was still a clear denial of benefits and was sufficient to trigger the limitation period.

16The applicant submits that following the receipt of the OCF-1 and the OCF-3 the respondent did not pay the NEB and it did not provide a medical reason for the denial. The reason for the denial was that the applicant was self-employed and working at the time of the accident. It is the applicant’s position that this is a mischaracterization of the test for entitlement to an NEB and does not constitute a proper denial and therefore the respondent failed to comply with s. 36(4) of the Schedule.⁷

17A review of the OCF-9 dated January 12, 2017,⁸ clearly states with respect to the NEB, “as you were self-employed and working at the time of the accident, you are not eligible for this benefit” and at the top of the page in bold it states, “If you disagree with this determination, you have the right to dispute it according to the procedure described in Part 6 on page 3 of this form.” In Part 6 of the form it explains the applicant’s rights to dispute the denial with the heading WARNING: TWO YEAR TIME LIMIT and it details the process on how to file an application with the Tribunal to dispute the denial. (emphasis in original).

18In my view, the OCF-9 was in compliance with the Schedule and the requirements from Smith and Seitzema. The refusal provided a clear refusal, (as you were self-employed and working at the time of the accident, you are not eligible for this benefit) which was directed to an unsophisticated person and it also outlined the dispute resolution process with a warning of the two-year limitation period in bold.

19The respondent relies upon the Tribunal decision of N.V. v. Allstate Insurance Company of Canada,⁹ in support of its position that it does not matter if the reason for the denial was not correct in law or that its denial did not provide medical reasons and relies upon the following paragraph of Adjudicator Boyce in N.V.:

In submissions, N.V. argues that the notice was unclear and did not provide medical and other reasons. In my view, terminating an IRB because an applicant returned to work is a perfectly valid “other” reason that does not require a medical component. N.V.’s return to work is not disputed. If N.V. could work and chose to return to work, he was no longer entitled to an IRB by his own actions. [The insurer] does not have to conjure or fabricate a medical reason to justify N.V.’s decision simply to satisfy Smith. Further, and to be frank, I am not sure how the notice could have been any clearer.¹⁰

20I agree with the reasoning in N.V. and adopt it for the purposes of this hearing. In the present case, I find that the notice was clear; the NEB was being denied as the applicant was self-employed and working at the time of the accident. In accordance with N.V. I find this to be a valid “other” reason that does not require a medical component. In accordance with Smith, I find that the denial was clear and unequivocal to an unsophisticated person to allow them to understand that the NEB was being denied and it provided the dispute resolution process to dispute it.

21The applicant’s alternative submissions are that the he is entitled to dispute his eligibility for the NEB and relies upon s. 7 of the Licence Appeal Tribunal Act.¹¹

22As a result, I will now turn to discuss whether or not the limitation period should be extended as a result of the LAT Act.

Should the Limitation period be extended by virtue of section 7 of the LAT Act?

23The Tribunal has jurisdiction to extend the time for filing of an appeal pursuant to section 7 of the LAT Act,¹² which reads:

Despite any limitation of time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal under section 11 or any other Act, if the Tribunal is satisfied that there are reasonable grounds for applying for the extension and for granting relief, it may,

a) extend the time for giving the notice either before or after the expiration of the limitation of time so limited; and

b) give the directions that it considers proper as a result of extending the time.

24In Manuel v. Registrar, Motor Vehicle Dealers Act, 2002,¹³ the Divisional Court ruled that the overriding consideration on a request for an extension of time is whether the justice of the case requires that the extension be granted. The factors to be considered in making this determination are:

a. The existence of a bona fide intention to appeal within the appeal period;

b. The length of the delay;

c. Prejudice to the other party; and

d. The merits of the appeal.

25The appellant has the onus to establish that the justice of the case requires the granting of the extension, but he or she need not satisfy all four factors. Rather, the analysis requires a balancing of the conclusions reached when applying the facts of the case to the factors.

Did the applicant have a bona fide intention to appeal?

26The applicant submits that his intention to appeal within the appeal period is demonstrated by the fact that the file remained active and he was continuing to attend for treatments and apply for benefits. He fully participated in insurer examination assessments at the respondent’s request and made efforts to resolve his claim including offers on settling the NEB.

27The respondent’s position is that making a settlement offer on the NEB is not an intention to appeal, it is an attempt at settlement negotiations. Furthermore, there is no case law or authority for the applicant’s position that a file staying open or active is an intention to appeal.

28I agree with the respondent; having settlement negotiations and continuing with treatment or attending insurer examinations is not evidence of a bona fide intention to appeal within the appeal period. There must be evidence of steps taken to file an appeal of the disputed benefit within the limitation period in order to satisfy this factor. As a result, I find that the first factor is not in support of the applicant.

The length of the delay

29The length of the delay in filing the appeal application is over eight months. The applicant submits it is not too excessive and submits that the delay is outweighed by the period of time he was wrongfully denied the NEB and he should not be penalized for appealing a decision that was wrongfully made. The applicant relies upon the Tribunal case of V.M.L. v. Aviva General Insurance Company,¹⁴ and Manuel that all four factors do not have to be satisfied as long as the justice of the case requires granting of the extension.

30The respondent submits that a delay of over eight months is not insignificant and if the issue was to proceed to a hearing, the hearing would take place more than four years after the denial of the NEB. The respondent relies upon 17-006956 v. Guarantee Company of North America,¹⁵ where it was held that a delay in that case of two years was lengthy and that the total delay is a major factor in determining the issue.

31In Manuel it was held that a short delay in itself is not sufficient to grant an extension of time as all four aspects need to be considered and no one element necessarily is determinative but there must be a explanation for the delay. In Manuel, there was no explanation for the delay and that was part of the reason for the extension not being granted. In the present case, there is no explanation for the delay other than the applicant’s submission that it is not excessive. I would disagree; eight months is an excessive delay and considering that a hearing on the merits may well be over four years since the denial, I find that the total delay as stated in 17-006956 v. Guarantee Company of North America is a factor in determining the issue.

32As a result, I find that the applicant has not provided a reasonable explanation for the length of the delay and this factor is not in support of the applicant.

Prejudice to the respondent

33The respondent submits it is prejudiced because it would have to locate, produce and rely on old evidence that may not be available anymore, such as information from a decoded OHIP summary which only goes back seven years, medical records which are destroyed after some time, fading memories of any witnesses which would make evidence less reliable and adjusters who are no longer with the company and/or are no longer in the same role. Furthermore, the respondent is prejudiced because it did not have an opportunity to intervene early to provide rehabilitation or investigate the claim in a timely manner or limit its potential exposure.

34The applicant submits that the respondent has not demonstrated any prejudice, all the same information is available to the respondent, and prejudice would flow to him by not granting an extension of time.

35The third factor is prejudice to the other party and any prejudice the applicant may suffer as a result of not granting the extension of the limitation period is not what this factor entails. In my view, the respondent would suffer prejudice as a result of having to defend against an NEB claim that dates back over four and a half years. Fading memories of any witnesses would make the evidence less reliable and the respondent may also be prejudiced as a result of adjusters who are no longer with the company.

36As a result, I find this factor to be in support of the respondent that it may suffer from prejudice should the limitation period be extended.

Merits of the appeal

37This factor does not require me to make a determinative ruling on the merits, but on the facts to assess whether the applicant has a reasonable chance of success.

38The applicant submits the OCF-3 and a psychological report from Dr. Gabidulina dated May 12, 2017,¹⁶ in support of his position that the applicant can no longer engage in many activities that he once used to prior to the collision including playing pool or working and he has difficulties performing basic tasks such as sitting, standing, walking, bending and lifting and he can no longer perform housekeeping activities.

39The respondent submits that even though the applicant returned to work and someone who returns to work may still be eligible for a NEB, those chances for the applicant are slim.

40In my view, this written hearing was a preliminary issue hearing and not on the merits of the applicant’s case. A detailed analysis of proving entitlement to the NEB is not necessary in deciding whether this factor would support the applicant. Even if I were to find that the applicant’s case had some merit, that would make this the only factor that may possibly be in support of the applicant’s request to extend the limitation period.

41As mentioned above, all four factors do not need to be satisfied; however, an analysis and balancing all the factors as discussed above is required. After a consideration of the four factors, I find that the applicant did not have a bona fide intention to appeal within the appeal period and did not provide an explanation for the delay. Combined with some prejudice that would result to the respondent, I conclude that the justice of the case does not warrant extending the limitation period for the applicant to dispute the NEB denial.

ORDER

42The applicant’s appeal of the NEB was filed beyond the two-year limitation period, and I find that under s. 7 of the Licence Appeal Tribunal Act, the justice of the case does not warrant the limitation period to be extended.

Footnotes

1. 1O. Reg. 34/10.
2. 2Respondent’s Written Submissions at Tab 3.
3. 3S.O. 1990, c.12 (“LAT Act”).
4. 42002 SCC 30, at para. 14.
5. 52014 ONCA 111 at para. 14.
6. 6Ibid at para. 13.
7. 7To pay within 10 business days or provide a notice explaining the medical and any other reasons for its denial.
8. 8Respondent’s Written Submissions at Tab 4.
9. 92020 CanLII 376 (ON LAT) (“N.V.”).
10. 10N.V. at para. 6.
11. 11S.O. 1999, c.12, Sched. G. (“LAT Act”).
12. 12Ibid.
13. 132012 ONSC 1492 (“Manuel”).
14. 142020 CanLII 12745 (ON LAT) at paras. 21, 24; and Manuel at para. 40.
15. 152018 CanLII 110952 (ON LAT) at para. 27.
16. 16Applicant’s Written Submissions Brief at Tab 2.