Released Date: 06/29/2020
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:
M.H. and T.H.
Applicants
and
Economical Insurance Company
Respondent
DECISION AND ORDER
ADJUDICATOR:
Avril A. Farlam, Vice Chair
APPEARANCES:
For the Applicants:
Jennifer Mitchell
Counsel
For the Respondent:
Nadine Rizk
Counsel
Heard by way of written submissions
REASONS FOR DECISION AND ORDER
OVERVIEW
1The applicant [M.H.] (“applicant”) is the mother of [A.H.] who died at the age of seven years in a motor vehicle accident on July 30, 2018 (“accident”). The applicant sought death and funeral benefits (“benefits”) pursuant to the Statutory Accident Benefits Schedule1 - Effective September 1, 2010 (the ''Schedule'').
2The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“Tribunal”) for dispute resolution dated April 26, 2019 following which Economical Insurance Company (“respondent”) paid $6,000.00 for funeral benefits and $10,000.00 for death benefits to [A.H.]’s parents on May 3, 2019. After payment, the applicant withdrew the claims for death and funeral benefits but claims interest and an award.
PRELIMINARY ISSUE – TITLE OF PROCEEDINGS
3The applicant submits that both she and [A.H.]’s father [T.H.] are the applicants in the application to the Tribunal, despite the title of proceedings on the Tribunal’s case conference Direction made October 30, 2019. The respondent opposes this on the basis that [T.H.] was not truly an applicant, never intended to pursue an application and/or has abandoned his application. The respondent relies on the applicant’s brief at the case conference which listed only [A.H.]’s mother, correspondence for the case conference and the fact that only [A.H.]’s mother was listed as a proposed witness and that [A.H.]’s father did not attend the case conference.
4I find that both [A.H.]’s mother [M.H.] and her father [T.H.] are applicants in this proceeding and the title of proceedings is amended accordingly pursuant to Rules 3.1 and 3.6 of the Common Rules of Practice & Procedure, Licence Appeal Tribunal, Animal Care Review Board, Fire Safety Commission, October 2, 2017. [A.H.]’s father is a co-applicant named in the application to the Tribunal. No Notice of Withdrawal was filed by [T.H.] or Order made removing him as a party to the proceeding. After the application was filed with the Tribunal, the respondent wrote to both [M.H.] and [T.H.] in a letter addressed jointly to both of them confirming that payment would be coming to them. The respondent was aware that both parents were claimants and paid both of them. Applicant’s counsel submits that her documents for the case conference were styled in keeping with the Tribunal’s title of proceedings and I accept that explanation. [T.H.] is not required to be named as a prospective witness and it was up to the adjudicator conducting the case conference to decide whether or not to proceed in [T.H.] absence. The adjudicator decided to do so and there is nothing on the record indicating that the respondent objected to this.
ISSUES
5The issues to be decided are:
i. Are the applicants entitled to interest on any overdue payment of benefits?
ii. Are the applicants entitled to an award under Ontario Regulation 664 because the respondent unreasonably withheld or delayed the payment of benefits?
RESULT
6The applicants are not entitled to interest. There is no special award.
LAW
7Section 26(1) of the Schedule provides that an insurer shall pay a death benefit and s. 27(1) of the Schedule provides that an insurer shall pay a funeral benefit for an insured person who dies as a result of the accident, subject to time and monetary restrictions which are not relevant here.
8Section 43(1) of the Schedule provides that if a person is entitled to a death benefit and a funeral benefit, the insurer shall pay the benefit within 30 days after the insurer receives an application for the benefit. Under s. 43(2) if the insurer refuses to pay these benefits, the insurer shall give the person a notice of the refusal and the medical and any other reasons for the refusal within 30 days after the insurer receives the application for the benefit.
9Section 51(1) of the Schedule provides that payment of a benefit is overdue if the insurer fails to pay within the time required by the Schedule. Under s. 51(2) if payment is overdue, the insurer shall pay interest on the overdue amount in accordance with this section for each day the amount is overdue. Under s. 51(3) provides that interest is payable at the rate of 1 per cent per month, compounded monthly, from the date on which the amount becomes overdue until the earlier of the following dates:
The date on which the overdue amount is paid.
The date, if any, on which interest becomes payable in accordance with subsection (4).
10Section 51(4) provides that in the case of a dispute in respect of an insured person’s entitlement to statutory accident benefits or the amount of the benefits to which an insured person is entitled, interest on the benefits in dispute is calculated at the prejudgment interest rate in s. 128(3) of the Courts of Justice Act used for past pecuniary loss and is payable for the period that begins on the date on which an application to the Licence Appeal Tribunal is brought under s. 280(2) of the Act and ends on a date a settlement is reached or decision issued that finally disposes of the dispute.
11The onus is on the applicants to establish entitlement to interest.
Positions of the Parties
12The applicants submit that interest is owing on the benefits from February 22, 2019 to April 26, 2019 in accordance with the rate indicated in s. 51(2) and 51(3) of the Schedule and from April 26, 2019 to the date of this decision in the amount calculated in accordance with s. 51(4) of the Schedule. In the alternative, the applicants submit that interest is owing on the benefits from February 22, 2019 to April 26, 2019 at the rate calculated in accordance with s. 51(2) and s. 51(3) of the Schedule and from April 26, 2019 to May 3, 2019 at the rate calculated in accordance with s. 51(4) of the Schedule.
13The respondent submits that no benefit payments were overdue because no benefit was payable prior to April 2019, after which time the benefit was paid promptly and within the timeline contemplated by the Schedule.
ANALYSIS
Are the Applicants Entitled to Interest?
14For the following reasons, I find that the applicants have not met their burden of proof to establish entitlement to interest on the overdue payment of benefits of $16,000.00 made May 3, 2019. The documentary evidence establishes the following facts which are not substantially in dispute.
15Through counsel, the applicant [M.H.] submitted to the respondent an Application for Accident Benefits (OCF-1) for the benefits on September 5, 2018.
16The respondent wrote to the applicant [M.H.] on September 18, 2018 asking for a completed Application for Accident Benefits (OCF-1), Application for Death and Funeral Benefits (OCF-4), copy of [A.H.]’s birth and death certificates and documentation/information on dependency (“eligibility documentation”) so that eligibility to the benefits could be determined.
17The applicants submitted an Application for Death and Funeral Benefits (OCF-4) to the respondent on January 23, 2019 without the eligibility documentation.
18The applicants sent correspondence to the respondent inquiring as to the status of the application on March 6, 2019, April 3, 2019, April 12, 2019.
19A Tribunal application dated April 26, 2019 was sent to the respondent together with the eligibility documentation requested by the respondent on September 18, 2018.
20On May 3, 2019 the respondent acknowledged receipt of the completed Application for Accident Benefits (OCF-1), Application for Death and Funeral Benefits (OCF-4), confirmed eligibility for the benefits and paid $16,000.00 without interest.
Was the payment to the applicants overdue?
21I find that the applicants are not entitled to interest because there was no overdue payment of benefits.
22The applicants argue, correctly, that s. 51 of the Schedule provides that a benefit is overdue if the insurer fails to pay it within the time required under the Schedule and that s. 43(1) of the Schedule requires the insurer to pay death and funeral benefits within 30 days after receiving the application for the benefit. The applicants argue that the payment was overdue on February 22, 2019 which is 30 days after the applicants submitted an Application for Death and Funeral Benefits (OCF-4) to the respondent on January 23, 2019. I disagree.
23The Application for Death and Funeral Benefits (OCF-4) was not complete on January 23, 2019 because the applicants had not submitted to the respondent the eligibility documentation requested by the respondent on September 18, 2018. I find that the eligibility documentation was essential information required by the respondent to determine eligibility, such as the birth and death certificates of [A.H.]. Applicants’ counsel, who assisted the applicants throughout, also appears to have recognized the eligibility documentation as essential information at the time.
24The applicants admit in their submissions that, in April 2019, counsel discovered that the birth and death certificates, receipts and invoices had not been sent to the respondent along with the application as previously believed and intended and sent the eligibility documentation to the respondent April 26, 2019. I find that the Application for the Death and Funeral Benefits (OCF-4) was complete on April 26, 2019.
25On May 3, 2019, after receiving the complete application, the respondent paid the benefits.
26Section 43(1) of the Schedule provides that if a person is entitled to a death benefit and funeral benefit, the insurer shall pay the benefit within 30 days after the insurer receives an application for the benefit. A purposive interpretation of “application for the benefit” must mean that the application must be complete. The insurer cannot assess the eligibility for the benefit if the application is not complete.
27I find that the respondent paid the benefit less than 30 days after it received the completed application. Therefore, the respondent’s payment was not overdue at any time and no interest is payable.
28The case law submitted by the applicants is not of assistance given the finding of fact that the benefits were paid shortly after the completed application for the benefits was submitted to it.
29The applicants have not met their onus to establish that the payment for the benefits was overdue and they are entitled to interest.
Are the Applicants Entitled to an Award under Ontario Regulation 664?
30Section 10 of Ontario Regulation 664 provides that a special award may be granted if the respondent unreasonably withheld or delayed payments. There was no payment unreasonably withheld or delayed. The respondent paid shortly after receiving the completed application for the benefits. There is no award.
ORDER
31For the reasons above, the applicants are not entitled to interest. There is no special award.
Released: June 29, 2020
Avril A. Farlam
Vice Chair