S.K. v. Technology Insurance Company Inc., 2020 CanLII 61457

Citation: S. K. vs. Technology Insurance Company Inc., 2020 ONLAT 19-003749/AABS

Released Date: 06/19/2020

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:

S.K.

Applicant

and

Technology Insurance Company Inc.

Respondent

Monica Chakravarti

For the Applicant:

Yousef Jabbour, Counsel

For the Respondent:

Kadey Schultz, Counsel

HEARD:

By Way of Written Submissions

BACKGROUND

1On August 22, 2016, the applicant was involved in a motor vehicle accident (the “Accident”). As a result of the accident, the applicant claimed benefits under the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'') which were denied by the respondent. The applicant commenced an application at the Licence Application Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2Following the appeal to the Tribunal, two case conferences took place. At both case conferences, the applicant and respondent confirmed the issues in dispute proceeding to a hearing. Those issues in dispute include the following seven issues listed¹ below:

a. The Social Worker Fees: A medical benefit for social work submitted in the amount of $1,380.00.

b. The HST Expenses: HST expenses for three separate treatment plans, in the amount of $260.00 per treatment plan.

c. CAT Assessments: Cost of three separate neuropsychological assessments in the amounts of $2,294.54, $3,541.42 and $3,192.00

3As part of the issues in dispute between the applicant and the respondent was the question of whether the applicant is statute-barred pursuant to section 56 of the Schedule from proceeding with the above seven issues in dispute because the applicant did not dispute the denial of the above benefits within two years of the respondent’s refusal of the benefits.

4The applicant filed an appeal with the Tribunal on March 27, 2019. What I must decide is whether by March 27, 2017 the applicant was properly notified of the respondent’s refusal to pay the above noted benefits in dispute and therefore was the application to dispute the benefits commenced within two years of the insurer’s refusal to pay the amount claimed?

RESULT

5The applicant is barred from proceeding with the following issue in dispute:

a. The applicant’s claim for a medical rehabilitation benefit in the amount of $1,380.00 for social work services recommended by Elite Specialist Group, in an OCF 18 submitted on November 25, 2016 and denied on December 12, 2016 is statute barred pursuant to section 56 of the Schedule.

6The following claims are not barred pursuant to section 56 of Schedule:

a. The HST Expenses: HST expenses for three separate treatment plans submitted on November 8, 2016, December 29, 2016 and the third one on December 29, 2016, in the amount of $260.00 per treatment plan.

b. CAT Assessments: Cost of three separate neuropsychological assessments in the amounts of $2,294.54, $3,541.42 and $3,192.00 as per the three treatment plans submitted January 31, 2017.

ANALYSIS

7Pursuant to section 56 of the Schedule, an application with the Tribunal shall be commenced within two years after the insurer’s refusal to pay the amounts claimed. The two years noted in section 56 is also colloquially known as the limitation period.

8Section 38(8) provides that the following must be done when the insurer refuses to pay for a medical benefit. Specifically, section 38(8) states the following:

Within 10 business days after it receives the treatment and assessment plan, the insurer shall give the insured person a notice that identifies the goods, services, assessments and examinations described in the treatment and assessment plan that the insurer agrees to pay for, any the insurer does not agree to pay for and the medical reasons and all of the other reasons why the insurer considers any goods, services, assessments and examinations, or the proposed costs of them, not to be reasonable and necessary.

9Jurisprudence from the Supreme Court of Canada and Court of Appeal for Ontario have provided direction on what is required when the insurer provides notice of its refusal to fund benefits. In particular, the notice and denials therein must be clear and unequivocal, stated in a clear and straightforward manner using clear language directed towards an unsophisticated person, and must allow the insured to understand the reasons so that the insured can decide whether to challenge the refusal or not.²

10The social work treatment plan (The SW Treatment Plan) was received by the respondent on November 25, 2016.

11On December 12, 2016, the respondent sent a letter to the applicant and stated in part that it agreed to partially pay the SW Treatment Plan.

12The applicant has referred to December 12, 2016 as the date of the denial of the SW Treatment Plan and the respondent agrees that they see December 12, 2016 as the date of when the limitation period commences. While I am mindful that the respondent partially approved this treatment plan, for the sake of simplicity and to avoid confusion, I will refer to the partial approval as the “denial” since, in effect, it is also the insurer’s denial of the balance of the SW Treatment Plan. I will also refer to the letter and the date of December 12, 2016 as the denial letter and the date of denial, respectfully.

a) Parties’ Positions

13The applicant provides three arguments as to why this dispute is not statute-barred. The respondent in its submissions responds to these three arguments.

14Firstly, the applicant submits that the respondent made a mathematical error in its calculation of the partial payment. Specifically, the applicant submits that the respondent meant to approve the cost of ten sessions of social work planning but instead approved the cost of one session of social work planning. The applicant submits that, based on this error, the respondent is obligated to pay the costs of ten sessions of the social work planning.

15The respondent submits that, even if it did make a mathematical error, such error does not make its denial of the balance of the SW Treatment Plan any less clear and unequivocal.

16Secondly, the applicant submits that the respondent did not provide medical reasons and all other reasons as to why it considered the SW Treatment Plan or the proposed costs not to be reasonable or necessary and, therefore, the denial of the benefit is not in accordance with the Schedule and “the limitation period” never started to run.

17The respondent submits that it provided a reason and the reason the SW Treatment Plan was partially denied was because the insurer reduced the hourly rate from $140.00 to $135.00.

18Lastly, the Applicant submits that this was not a proper denial because, contrary to section 38(8) of the Schedule, the respondent failed to respond to the SW Treatment Plan within ten business days.

19The respondent submits that its failure to respond within ten business days does not “override” the requirement of section 56. The respondent further submits that the language in section 56 refers only to the insurer’s refusal to pay the amount claimed and does not provide or even imply that the limitation periods commences only if the insurer provided a refusal with ten business days.

20Based on the submissions and the evidence filed, I find that the respondent properly denied the SW Treatment Plan in its letter of December 12, 2016.

21I am guided by the jurisprudence and the principles in the Supreme Court decision of Smith v Cooperators that the two-year period begins to run when the insurer refuses to pay. The Court found that a proper notification of the refusal to pay must be told to the applicant in straightforward and clear language directed to an unsophisticated person.

22In this case, the applicant has not pointed to how or why it considers the letter of December 12, 2016 to be ambiguous or not clear.

23The letter of December 12, 2016 to the applicant provides the following:

“your insurer agrees to partially pay for the good, services, assessments and/or examinations specified in the OCF-18”

and

“Social workers are unregulated providers. While we are not restricting the hourly rate to the unregulated provider rate, we are restricting the rate to an industry accepted rate of 135.00/hr. Planning time has been limited to a reasonable quantity.”

24A plain and common sense reading of the denial letter is that the insurer stated that it would only pay a portion of the SW Treatment Plan, the reason being that the insurer reduced the hourly rate of the social worker to $135 per hour.

25Again, the applicant has not suggested how this message was ambiguous or unclear.

26Turning to the applicant’s submission that there was a mathematical error, the applicant submits that the respondent intended to approve ten social work planning sessions but through a mathematical error approved only one. The applicant however does not provide any submissions as to why or how this mathematical error relates to the applicant not bringing the application relating to the SW Treatment Plan to the Tribunal within two years of the respondent’s refusal to pay the full amount of the SW Treatment Plan.

27While I appreciate that a mathematical error was made, the fact of the matter is that the applicant submitted a SW Treatment Plan for $4,901.00. The respondent partially approved it for $3,521.00 on December 12, 2016. In other words, there was a clear denial of the balance of the SW Treatment Plan as of December 12, 2016.

28The question of whether the denial was legally, factually or, in this case, mathematically correct is an issue for the adjudicator on the merits of the denial. With respect to the date of the denial, it is based on when the respondent clearly and unequivocally denied the SW Treatment Plan and that, as stated in the reasons above, was on December 12, 2016.

29The second argument raised by the applicant is that the respondent did not provide medical reasons and all other reasons as to why it was denying the benefit in accordance with the Schedule. The purpose of the respondent providing clear and unequivocal reasons for its denial is to allow the applicant to decide whether or not to challenge the denial. Without the applicant knowing the reason why the benefit is denied, he cannot decide whether the denial is something that can be challenged.

30The respondent provided its reason for the denial in that it stated that it was restricting the hourly rate of the social worker. The question is was this reason clear, could it be understood by an unsophisticated person and was it straightforward. The answer to this is yes. The respondent clearly articulated why it was only partially paying the SW Treatment Plan. Whether the reason was correct is immaterial as it was enough of a reason, in my view, for the applicant to decide if he would challenge this reason or not.

31The final argument raised is that, because the respondent failed to respond within ten business days, it was an improper denial. I am guided by this Tribunal’s decision in K.K. v Coseco Insurance Company,³ and agree that the language in section 56 which refers to the two-year limitation period refers only to the insurer’s refusal to pay the amount claimed. There is nothing in this section or the Schedule which provides or implies that the limitation period commences only if the insurer has provided a refusal of benefits within the 10 business days provided for in section 38(8) of the Schedule.

32I also accept the submissions that the Schedule’s remedy for an insurer’s failure to respond within 10 business days lies in section 38(11)2. That section entitles the applicant to the goods and services consumed starting on the 11th business day and ending on the day in which notice is provided. There are no submissions as to whether the services were incurred, or anything is being claimed for the period between the 11th business day following the SW Treatment Plan and the denial of the SW Treatment Plan on December 12, 2016.

33On December 12, 2016 the respondent denied the SW Treatment Plan and, as such, the applicant failed to commence his application within two years of the denial of the SW Treatment Plan and therefore pursuant to section 56 of the Schedule, the applicant is prohibited from having this issue proceed to a hearing.

II. HST PAYMENT

34The applicant submitted three treatment plans that were partially approved. The portions of the treatment plans that were denied were the HST payments of $260.00 per each plan.

35The respondent provided a letter dated November 22, 2016 in response to the treatment plan of November 8, 2016. The respondent provided a letter dated January 27, 2017 in response to the two treatment plans of December 29, 2016.

36The applicant submits that the three denial letters were not denials but rather the respondent stated that HST was payable to companies that were HST registered.

37The respondent submits that the plain reading of its denial letters is that the HST is not payable and not subject to consideration until the HST registration proof was provided.

38I find that the denial letters of November 22, 2016 and January 27, 2017 were not clear and unequivocal. The letters were indeterminate in that they stated two different things at the same time. Specifically, the letters stated that the insurer agrees to partially pay for the goods and at the same time state that the provider provide their HST number “in order that we [the respondent] may consider payment of taxes as submitted.”

39While the respondent provided the holding in M.M v Royal and Sun Alliance Insurance Company of Canada⁴ to support its position that the request for further information in a denial letter does not render it invalid, the case provided is distinguishable. In M.M the denial letter was clear and specifically stated

the insurance company has determined that you [M.M.] are not entitled to a specified benefit. Please consider receipt of this letter as appropriate notice of refusal of your application for a specified benefit in accordance with Section 36 and Section 54 of the Statutory Accident Benefits Schedule.

40In the matter at hand the denial is not clear. While in the wording above in the denial letter quoted in the M.M decision states clearly that the insurer has determined that M.M was not entitled to the benefit, in the case at hand the respondent told the applicant in its letter that it would partially pay the treatment plans and that , in order to consider the payment of the HST portion, it required the provider’s HST number. At no time did the respondent use any other language that, in my view, denotes that the respondent has made a clear and determinate decision to deny a portion of the benefit.

41In keeping with the jurisprudence from the Court of Appeal and the Supreme Court and bearing in mind that the Schedule is consumer protection legislation, I find that the rationale provided for the non-payment of the HST was not a clear denial. It was ambiguous and indeterminate. Therefore, the dispute with respect to the payment of the HST of the treatment plans is not statute-barred.

III. CAT Assessments

42The applicant submitted three separate treatment plans each dated January 31, 2017 for three neuropsychological assessments of differing spheres.

43The applicant submits that the respondent did not deny these three treatment plans, rather it agreed that the treatment plans were reasonable and then stated that it required a section 44 assessment to determine the reasonableness of the cost of the treatment plan.

44The respondent submits that it clearly and unequivocally stated that the proposed cost is not reasonable, and that this was enough for the applicant to decide if he was going to dispute this reason for the denial or not.

45The letter of February 14, 2017 to the applicant from the respondent states the following:

The reason for your insurer’s denial of the above noted plans is that, while the need for a Neuropsychological Assessment is warranted, the cost associated with the recommended components/assessments is not reasonable as per the FSCO Fee Guidelines. An insurer examination is required to assist your insurer in deciding whether these expenses are considered reasonable or necessary. Details of the scheduled Independent Medical Examination will follow. Your attendance will not be required.

46This is not, in my view, a clear or unequivocal denial. It is the respondent telling the applicant that the respondent has not made a decision regarding the treatment plans. Specifically, the respondent told the applicant that the insurer needs an insurer examination to decide whether these expenses were reasonable and necessary.

47The letter of February 14, 2017 even goes so far as letting the applicant know that details of the insurer examination will follow.

48The applicant submits that it never received the notice of examination nor any insurer examination reports with respect to the cost of the above treatment plans and, therefore, they were never denied.

49The respondent has not provided an insurer examination responding to the above three neuropsychological assessments nor have they provided a further letter indicating an update or change in their position regarding the three treatment plans.

50Therefore, I agree with the applicant that the costs of the treatment plans are not denied and therefore the limitation period in section 56 of the Schedule is not triggered and the applicant is not statute-barred from bringing his application for these three neuropsychological treatment plans to the Tribunal.

51The applicant further submits that, pursuant to section 25(1)(5) of the Schedule and related jurisprudence, the cost of the assessment cannot be denied. I find that these submissions go to the merits of whether the applicant is entitled to the cost of the assessments and shall be left to the hearing adjudicator.

IV. EXTENSION OF LIMITATION PERIOD

52The applicant has requested that I exercise my discretion and extend any limitation period. Based on my findings above, this request would now only be applicable to the Social Worker treatment plan.

53However, the applicant has provided me with no evidence or details of any exceptional circumstances or reasons as to why the application for the SW Treatment Plan was not brought to the Tribunal as per the Schedule. Without this I cannot and will not extend the time limit prescribed in Section 56 of the Schedule as it relates to the SW Treatment Plan.

V. OTHER SUBMISSIONS

54The applicant had requested in each of the three categories of treatment plans that I order the benefits paid. I am unable to consider this request. This hearing deals with the preliminary issue of whether the applicant is statute-barred pursuant to section 56 of the Schedule from bringing his application to the Tribunal for the above noted treatment plans. The hearing that is scheduled will address the merits of those treatment plans in dispute.

CONCLUSION and ORDER

55The applicant is barred from proceeding with the following issue in dispute and the following issue will not proceed to the hearing:

56The following claims are not barred pursuant to section 56 of Schedule and will proceed to the hearing: