Z.M. v. State Farm Mutual Automobile Insurance Company, 2020 CanLII 58837

Citation: Z.M. vs. State Farm Mutual Automobile Insurance Company, 2020 ONLAT 18-012546/AABS

Released: June 11, 2020

Tribunal File Number: 18-012546/AABS

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:

Z.M.

Applicant

and

State Farm Mutual Automobile Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Kate Grieves

APPEARANCES:

For the Applicant:

Kevan Wylie, Counsel

For the Respondent:

Jean-Claude Rioux, Counsel

HEARD:

Oral and Written Submissions

OVERVIEW

1The applicant was involved in an automobile accident on July 25, 2011, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The applicant claimed non-earner benefits following the accident. The respondent sent the applicant an Explanation of Benefits terminating the non-earner benefits on August 2, 2012. More than 5 years later the applicant retained a lawyer, and then on December 21, 2018 filed an application for dispute resolution at the Licence Application Tribunal - Automobile Accident Benefits Service (“Tribunal”). She initially claimed an income replacement benefit. In May of 2019 the applicant brought a motion to change her claim for an income replacement benefit to a claim for a non-earner benefit. The respondent raised the preliminary issue giving rise to this hearing.

PRELIMINARY ISSUE

2The following preliminary issue was raised by the respondent:

a. Is the applicant barred from proceeding with her application for non-earner benefits because the two-year limitation period for applying under s. 56 of the Schedule had expired?

RESULT

3The applicant is statute barred from proceeding with her claim for non-earner benefits because she failed to commence her application within two years after a valid denial from the respondent. I decline to extend the limitation period.

ANALYSIS

4The limitation period for accident benefits claims is set out in s. 56 of the Schedule. It states that applications to dispute the denial of a benefit shall be commenced within two years after the insurer’s refusal to pay the benefit.

5The respondent argues that there was a clear and unequivocal denial of the non-earner benefits on August 2, 2012, triggering the limitation period, and the applicant did not appeal the denial within two years.

6The applicant relies on Tomec v Economical¹ and argues that she did not discover that she was able to dispute the non-earner benefit until she retained a lawyer in 2018 because she is illiterate in English and she did not understand the Explanation of Benefits dated August 2, 2012.

7For the reasons that follow, I find that there was a valid denial of the non-earner benefits triggering the limitation period.

Valid Denial

8I must first determine if the respondent’s denial was proper in accordance with the principles set out in Smith v Co-Operators General Insurance Company.² The Supreme Court held that notice of refusal to pay benefits must contain straightforward and clear language, must be directed toward an unsophisticated person, must outline the dispute resolution process and the relevant time limits that govern the process, and must provide medical or other reasons for the denial.

9Based on my review of the Explanation of Benefits dated August 2, 2012, I find that there was a valid denial. The denial satisfied all of the requirements stated above.

Discoverability

10The applicant submits that she could not read or understand the Explanation of Benefits, and therefore she had not discovered a cause of action. She testified that she relied on others for translation, including her son, friends and neighbors. She also testified that she knew the insurer was not paying the benefits.

11In my view, the applicant has misapplied Tomec. While the Court of Appeal determined that the limitation period under the Schedule is not a hard limitation period, the Court held that a limitation period does not commence before an applicant is eligible to receive the benefit. In the subject case, the applicant was eligible for the non-earner benefits on January 9, 2012, twenty-six weeks after the accident.

12To find that a limitation period is not triggered because the applicant was illiterate in English would foster great uncertainty, counter to the principles set out in the Supreme Court’s decision in Pioneer Corporation v Godfrey.³

13The discoverability date is the date on which a reasonably diligent person would have known she had a cause of action. Between the date of the denial on August 2, 2012 until she hired a lawyer five years later, the applicant did not take any action to pursue her claim.

14The clear and unequivocal denial of the non-earner benefit was sent to the applicant on August 2, 2012, and she was advised of her right to dispute the denial in accordance with Smith v Cooperators. The applicant’s cause of action arose on August 2, 2012. The two-year limitation to dispute the denial was triggered and she failed to commence her application within two years after a valid denial from the respondent.

Section 7 of the Licence Appeal Tribunal Act

15The applicant further pleads that, if there was a valid denial then the limitation period should be extended under section 7 of the Licence Appeal Tribunal Act (“LAT Act”). Section 7 of the LAT Act states:

Extension of Time

7. Despite any limitation of time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal or an appeal from a decision or order of 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.

16The respondent submits the Tribunal does not have jurisdiction to extend the limitation period using section 7 of the LAT Act in accordance with the reconsideration decision in 18-001196/AABS v Certas. The respondent acknowledged that the decision is currently under appeal, and submits that if the Tribunal does have jurisdiction to extend the limitation period, there are no grounds for doing so.

17If the Tribunal has jurisdiction to extend the limitation period, I find there are insufficient grounds to grant such relief in this case.

18The Executive Chair set out the four factors to consider for granting an extension under section 7 of the LAT Act in A.F. v North Bleinheim Mutual Insurance Company.⁴

1. The existence of a bone fide intention to appeal within the appeal period;
2. The length of the delay;
3. Prejudice to the other party; and,
4. The merits of the appeal.

19The length of the delay is significant, more than five years. Between August 2, 2012 and February 26, 2018, the applicant did not demonstrate a bone fide intention to appeal. The applicant admitted during cross-examination that she knew that the insurer was not paying her benefits. She was given several opportunities to explain why she waited more than five years to consult a lawyer, but provided nothing that could reasonably be considered an explanation. The respondent would suffer significant prejudice if relief were granted, given the long delay.

20I am not satisfied that there are reasonable grounds for applying for the extension or granting relief.

CONCLUSION

21The applicant is statute barred from proceeding with her claim for non-earner benefits because she failed to commence her application within two years after a valid denial from the respondent. If the Tribunal has jurisdiction to extend the limitation period pursuant to section 7 of the LAT Act, I find there are insufficient grounds to grant such relief in this case.

Footnotes

1. 1Tomec v Economical Mutual Insurance Company 2019 ONCA 882.
2. 22002 SCC 30 at para 14.
3. 3Pioneer Corporation v Godfrey, 2019 SCC 42 at para 47.
4. 4A.F. v North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT), 16-002336/AABS.