Thompson v. Aviva Canada Inc., 2020 CanLII 94811

Thompson v. Aviva Canada Inc.

Citation: Thompson vs. Aviva Canada Inc., 2020 ONLAT 19-005493/AABS

Released Date: 11/12/2020

Tribunal File Number: 19-005493/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:

Shawn Thompson

Applicant

and

Aviva Canada Inc.

Respondent

DECISION

ADJUDICATOR: Brian Norris

APPEARANCES:

For the Applicant: Michael Brill

For the Respondent: Aimee M. Draper

Heard by way of written submissions

OVERVIEW

1Shawn Thompson, the applicant, was injured in an automobile accident on February 2, 2015 and sought benefits from the respondent pursuant to O. Reg. 34/10, known as the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”). The respondent refused to pay for income replacement benefits and the applicant has applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of this dispute.

ISSUES

2The preliminary issue for this hearing is:

1. Is the applicant barred from proceeding with his claim for income replacement benefits (“IRBs”) as a result of the expiration of the limitation period?

RESULT

3The applicant is barred from proceeding with his claim for IRBs as a result of the expiration of the limitation period.

4A case conference will be scheduled in order to address the remaining substantive issues in dispute.

BACKGROUND

5The applicant was the driver of a vehicle which was struck from behind by another vehicle. He went to the hospital following the accident but was released after back and neck x-rays were taken and showed no fractures. A few days later he visited his family physician and was prescribed physiotherapy.

6The applicant applied for accident benefits from the respondent about seven months following the accident, on August 13, 2015. Later, the applicant submitted a disability certificate dated December 10, 2015. It noted that he suffered a complete inability to carry on a normal life and was unable to perform the essential tasks of his employment. He elected to claim income replacement benefits (“IRBs”) via an OCF-10 dated March 9, 2016.

7Following the applicant’s election, the respondent conducted insurer’s examinations (“IEs”) on the applicant pursuant to section 44 of the Schedule. Following the IEs, the respondent determined that the applicant no longer qualified for IRBs. The respondent wrote to the applicant on November 8, 2016 and advised it will stop paying IRBs effective November 22, 2016.

8The applicant then wrote to the respondent on November 21, 2016 and requested payment of IRBs for the period from February 9, 2015 to November 22, 2016. The respondent made no payment. Instead, it sought an accounting report to determine the amount payable to the applicant, who was self-employed at the time of the accident.

9By May 12, 2017, the applicant had yet to receive payment for IRBs and wrote to the respondent. He demanded immediate payment of IRBs and advised the respondent that a property of his was under a notice of sale from the mortgagee and that he and his family were being threatened with eviction from a different property for non-payment of rent.

10The accounting report was completed and delivered to the respondent on June 19, 2017. The respondent paid IRBs the applicant, plus interest, via lump sum payment on July 28, 2017 for the period from February 10, 2015 to November 22, 2016, based on the June 19, 2017 report.

11On May 29, 2019, the applicant filed his application to dispute his ongoing entitlement to IRBs.

12At issue is whether the applicant has filed his application to dispute his ongoing entitlement to IRBs within the requisite two-year limitation period. If not, I must consider whether the deadline to file and application should be extended pursuant to section 7 of the Licence Appeal Tribunal Act, 1999 (the “LAT Act”).

THE LIMITATION PERIOD - Positions

13The applicant’s position is that he filed his application within the two-year limitation period. He submits that the calculation of the limitation period starts on July 28, 2017 because that letter included reference to the two-year limitation period and made no mention of the November 8, 2016 letter which initially stopped the benefit. He submits that he had no reason to believe that the calculation of his limitation period started at any other time than July 28, 2017.

14The respondent submits that the limitation clock started on November 28, 2016 when it denied the applicant entitlement to IRBs. It maintains the denial is clear and unequivocal, with medical reasons, and referred to the two-year limitation period. It further submits that the July 28, 2017 letter does not reset the limitation clock.

THE LIMITATION PERIOD – When does it start?

15I find that the November 8, 2016 letter started the limitation clock because the letter satisfies the requirements of a proper denial of benefits.¹ In the letter, the respondent provided a clear denial of the benefit when it advised the applicant that it will not consider any IRBs past November 22, 2016. It provided a medical reason in when it enclosed three IE reports and advised that the IE assessors determined he did not suffer a substantial inability to perform the essential tasks of his employment or self-employment as an auctioneer. Lastly, the letter referred the applicant to the dispute resolution process and warned of the two-year deadline to dispute the decision.

The July 28, 2017 letter

16I find that the July 28, 2017 letter has no impact on the applicant’s deadline to dispute the respondent’s November 8, 2016 decision because the letter is not a denial of benefits. The purpose of the July 28, 2017 letter was to provide the applicant with a copy of the accounting report and confirm the amount payable for IRBs for the period from February 10, 2015 to November 22, 2016. Further, reference in the letter to the two-year limitation period notes that it must occur “within two years of the date of reduction or denial.” The applicant’s benefits were reduced or denied on November 8, 2016 – the July 28, 2017 letter neither reduced nor denied any benefits.

17I find that the cases submitted by the applicant are distinguishable from his. In Shin and Co-operators General Insurance Company², the arbitrator rejected a piecemeal approach to a denial of benefits. This is not the case here. The November 8, 2016 letter included all the requisite information to convey a proper denial of benefits and is not reliant on the July 28, 2017 letter. ZB and PAFCO³ involved a situation where the insurer denied a benefit in one letter but later changed its decision in a following letter without clear reference to the initial decision. Here, there is no change in decision in the July 28, 2017 letter. It states the amount to be paid, confirms the stoppage date outlined in the November 8, 2016 letter, includes the accounting report, and refers to the dispute resolution process and the two-year deadline starting on the date of reduction or denial. Lastly, I disagree with the applicant’s application of N.V. and Allstate Insurance Company of Canada⁴(“NV”). In that matter, the applicant had returned to work and had his IRBs terminated as a result. Later, his disability status changed, and he stopped working, prompting the insurer to request further information on the disability. Eventually, the respondent issued a second denial when no further information was provided. The applicant suggests that the first denial in NV was upheld because the second denial referred to it. I disagree. To me, the first denial was upheld because that is when the insurer reduced or denied the benefit which started the limitation clock and because the second letter confirmed the initial decision.

THE LICENCE APPEAL TRIBUNAL ACT

18The parties disagree on whether section 7 of the LAT Act can be applied. At present time, there is no decision on the application of section 7 of the LAT Act which is binding on the Tribunal. Although the parties disagree on the application of the LAT Act, they nevertheless made submissions on the four Manuel factors to consider when contemplating an extension of the deadline to file⁵. I have reviewed the submissions on the extension of the LAT Act and, in the event that the deadline can be extended by the LAT Act, I choose not to exercise my discretion to extend the deadline to file for the reasons that follow.

Existence of a Bona Fide Intention to Appeal

19I find no evidence showing the applicant had any intention to appeal within the appeal period. Although the applicant notes that he truly believed the appeal period ended on July 28, 2019, it is the incorrect date. Instead, the appeal period ended on November 22, 2018, at the latest, and the applicant filed his appeal on May 21, 2019. There is no evidence or suggestion that the applicant intended to file his appeal prior to the expiration of the deadline.

Length of Delay

20To me, a six-month delay is significant. It is one-quarter of the two-year limitation period and, as the respondent notes, is more than four years following the accident.

Prejudice to the Other Party

21The applicant submits the balance of prejudice favours him and that the respondent presents no evidence of prejudice if the limitation deadline is extended. The respondent submits it is prejudiced in three ways; first, it could have responded differently to the litigation such as by seeking additional reports, addendums, or surveillance. Second, the delay could impact evidence accuracy and witness availability. Third, it would have to pay interest on unpaid benefits if they are found payable.

22The principles in Elkhouli v. Senathirajah et al provide that the analysis of prejudice to the other party requires an assessment of the prejudice suffered by the responding party, Aviva in this situation, if the limitation period is extended - not to the party asking for the extension⁶. I see little, if any, prejudice to the respondent if the limitation period is extended to permit the application. I agree with the applicant in that the respondent provides no actual evidence of prejudice with respect to its reasons I outlined above. I also agree with the respondent that the interest measures provided by section 51 of the Schedule are, in part, punitive and that by permitting an application more than two years following a denial could subject it to unintended interest costs. However, I note that the potential for additional interest is purely speculative and dependent on the outcome of a hearing on the substantive issues.

The Merits of the Appeal

23The applicant submits his appeal has merit in that he was removed from the Minor Injury Guideline (“the MIG”) at the time IRBs were stopped in November 2016, closed his business in 2017, sold multiple properties, is being assessed for catastrophic impairment and was approved for the Ontario Disability Support Program as of July 1, 2018. The respondent submits that, aside from the removal from the MIG, these incidents have not been causally linked to the accident and are not relevant.

24I find that the applicant’s claim may have some merit but the potential for merit alone is not enough to extend the limitation period pursuant to section 7 of the LAT Act. I believe that the applicant experiences a certain level of disability, though the records provided to me fail to show that it is as a result of the February 2, 2015 accident and not the natural progression of the chronic pain he experienced prior to the accident. At the time of the accident, the applicant was receiving an ongoing disability benefit from the Workplace Safety Insurance Board due to a prior workplace injury. He was able to return to self-employment shortly after the accident. I acknowledge that the applicant was removed from the MIG as a result of an adjustment disorder with mild anxiety. However, the same examiner found that the applicant had no psychological barriers to working.

25Collectively, I find that the four factors weigh in favour of the respondent. The potential merit of the applicant’s claim fails to outweigh the other factors. There is no evidence of any intention to appeal within the appeal period and the six-month delay is significant.

CONCLUSION

26The respondent provided a proper denial of benefits effective November 22, 2016 and the applicant failed to dispute the denial within two-years of the decision. The letter dated July 28, 2017 does nothing to alter the denial of IRBs. As a result, the applicant is barred from proceeding with his claim for IRBs as a result of the expiration of the limitation period.

27The parties must contact the Tribunal to schedule a case conference to address the remaining substantive issues in dispute.

Footnotes

1. 1This analysis is based on the principles established in Turner v. State Farm Mutual Automobile Insurance Company, 2005 CanLII 2551 (C.A.) and Smith v. Co-operators General Insurance Co., 2002 SCC 30
2. 22009 FSCO A06-000232
3. 32019 CanLII 94047 (ON LAT)
4. 42020 CanLII 376 (ON LAT)
5. 5Manuel v. Registrar, Motor Vehicles Dealers Act, 2002, 2012 ONSC 1492
6. 62014 ONSC 6140