R.C. v. The Co-operators General Insurance Company, 2020 CanLII 98748

Citation: R.C. vs. The Co-operators General Insurance Company, 2020 ONLAT 19-012539/AABS

Released Date: 12/03/2020

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:

R.C.

Applicant

and

The Co-Operators General Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Jesse A. Boyce, Vice-Chair

APPEARANCES:

For the Applicant:

Andrew Franzke, Counsel

For the Respondent:

Bruce Keay, Counsel

HEARD:

Via written submissions

OVERVIEW

1The applicant alleges he was injured in an accident on April 3, 2013 when he was struck by a vehicle while riding his bike. He alleges that he sustained injuries to his back and a dislocated shoulder as well as psychological impairments as a result of the accident.

2Thirteen days later, the applicant was incarcerated. Over the next four years, the applicant was in and out of provincial institutions, a pattern that has been consistent throughout his adult life. Notably, the applicant has and continues to struggle with drug addiction and mental illness.¹

3The applicant was released from prison on November 3, 2017. However, it was not until August 21, 2019, that the applicant sought benefits from the respondent, Co-Operators, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010² (''Schedule''). On receipt of his application, Co-Operators requested more information to speak to the six-and-a-half-year delay in notifying it about the accident and his alleged impairments.

4Following an Examination Under Oath (“EUO”), Co-Operators denied the applicant’s claim on the basis that he had failed to notify his insurer of the accident under s. 32 and failed to apply for accident benefits within the time limits prescribed by the Schedule. Further, Co-Operators took the position that the applicant had not provided a reasonable explanation for the delay under s. 34.

5The applicant disagreed, submitting that his period of incarceration, homelessness and mental illness prevented him from pursuing his claim, and that his explanation under s. 34 is a reasonable one. He submitted an application to the Tribunal for resolution of the dispute. Co-Operators then raised the preliminary issue giving rise to this hearing.

ISSUES IN DISPUTE

6The following issue is in dispute:

i. Is the applicant statute-barred from filing this application with the Tribunal because he failed to apply to the respondent for the benefits in dispute until 2019 and the date of loss was 2013, therefore failing to comply with s. 32, s. 33 and s. 34 of the Schedule?

RESULT

7The applicant is not statute-barred from proceeding with his application as he has provided a reasonable explanation for delay under s. 34.

ANALYSIS

Sections 32 and 34; Horvath

8Section 32(1) of the Schedule requires an insured person to inform an insurer of an accident within seven days, at which point the insurer will provide the insured with the application forms for accident benefits. Section 32(5) then requires an insured person to complete and deliver these forms back to the insurer within 30 days. The parties agree that neither of these timelines were met by the applicant. Instead, the applicant raises the exception in s. 34, which allows an insured person to proceed with a late application for benefits if the person has a “reasonable explanation” for the delay.

9While not binding on this Tribunal, the parties agree that the Financial Services Commission of Ontario case Horvath and Allstate Insurance Company of Canada, (FSCO A02-000482) is instructive in this matter, as it identified the following principles concerning the interpretation of a “reasonable explanation” for delay under s. 34:

i. An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.

ii. The onus is on the insured person to establish a “reasonable explanation.”

iii. Ignorance of the law alone is not a “reasonable explanation.”

iv. The test for a “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.

v. The lack of prejudice to the insurer does not make an explanation automatically reasonable.

vi. An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.

Positions of the Parties

10In raising this preliminary issue, Co-Operators raises several causation concerns that it submits should bar the application under s. 55. It points to the applicant’s self-reporting of several other accidents both pre- and post-2013 and a history of a pre-existing back injury and mental health issues. Further, Co-Operators submits that there were many periods of time between the accident and his release in 2017 where the applicant was out of custody and could have notified it of the accident, as well as the near two-year period post-incarceration where he did not submit his application until 2019. Co-Operators submits that the applicant has not demonstrated that he attempted to contact it regarding his claim, that he attempted to seek representation or that he was unable to do either while incarcerated. Causation issues aside, Co-Operators argues that allowing the application to proceed would be prejudicial to it, as it is well-past the application periods prescribed by the Schedule, because the applicant’s explanation is not a reasonable one where the delay was entirely his fault and, ultimately, because it would be robbed of the opportunity to conduct timely, contemporaneous medical examinations to rebut the applicant’s injury claims.

11In response, the applicant submits that he was unable to apply for accident benefits in the thirteen days post-accident because he was suffering from mental illness, living in a homeless shelter, had relapsed back into smoking crack, was dealing with his accident-related pain, was purportedly contemplating suicide and is an individual of very limited means and education. With respect to his period of incarceration from 2013 to 2017, the applicant points to his responses from the EUO, arguing that when he was not subject to solitary confinement, he made efforts to notify the insurer, to seek counsel to represent him and to have his social worker assist him with his claim, efforts that were either rebuffed or were impractical given the resources available to inmates.

12In the periods between 2013 and 2017 when he was not in custody, the applicant submits that he was focusing on surviving, as he was living primarily on the streets and struggling with mobility, addiction and mental health issues. Finally, he submits that the post-incarceration delay between November 2017 and August 2019 was reasonable where he was attempting to secure representation and was dealing with his physical and psychological impairments. The applicant submits Co-Operators faces no prejudice as there are ample medical records from his periods of incarceration to speak to his accident-related impairments which, he contends, will render him wheelchair-bound for the rest of his life.

The applicant has provided a reasonable explanation for the delay

13I find the applicant has met his onus to present a reasonable explanation under s. 34 of the Schedule to account for the six-and-a-half-year delay between the alleged accident on April 3, 2013 and the submission of his application for accident benefits to Co-Operators on August 21, 2019.

14On the facts, I accept that the applicant’s life both pre- and post-April 3, 2013 has been difficult and rather chaotic. For instance, there is little dispute that he suffers from physical and psychological issues that have plagued him for some time. There is also no dispute that he suffers from addiction and does not have a stable residence or support system. Indeed, he has been in and out of provincial institutions for most of his adult life dating back to 2001. While I agree with Co-Operators that the applicant’s responses from the EUO reveal that he is a truly poor historian and the delay is significant, I find the volume of records from provincial institutions, the medical evidence provided and the facts presented provide enough evidence that the applicant’s explanation is credible, or at least worthy of belief, in order to proceed to an analysis of whether it is reasonable under s. 34.

15Accordingly, I accept that the applicant’s transient circumstances—no fixed address, no support system, an addiction supported by theft, significant mental illness, periods of incarceration followed by periods of homelessness, his alleged physical injuries from the accident—would have resulted in a genuine inability to pursue a benefits claim in the days, months and, seemingly, years following the accident of April 3, 2013.

16Indeed, the applicant asserts that at the time of the accident and in the thirteen days prior to his incarceration, he was unable to apply for accident benefits because he was suffering from mental illness, living in a homeless shelter, had relapsed back into smoking crack, was dealing with his accident-related pain, was purportedly contemplating suicide and, more generally, is an individual of very limited means and education. While Horvath provides that ignorance of the law is not an explanation it does provide that a “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard. Here, I find it difficult to believe that a reasonable person would be able to objectively find that the applicant, given his personal characteristics, would have known that he was entitled to benefits from Co-Operators after being hit on his bike, would somehow have been capable of notifying Co-Operators of the accident or would have been able, on his own, to receive and complete the necessary paperwork to advance his claim, all while struggling with mental illness, addiction, alleged physical pain and with seemingly nowhere to go.

17Further, I also accept that the applicant would have had limited resources and avenues to notify Co-Operators of the accident and to apply for benefits while he was incarcerated between 2013 and 2017 or during any of the periods where he was briefly out of custody. Frankly, inmates at provincial institutions simply do not have access to the same resources or the same ability to communicate with those resources that an insured normally would post-accident. Where there are resources available, I accept that those resources (a social worker, a psychologist, etc.) are dedicated to the rehabilitation and education of the criminal offenders and not to assist with their applications for accident benefits. The volume of medical notes and records in evidence from the institutions suggest that the applicant was often subject to segregation, which would have further reduced, if not eliminated, his ability to cull resources to notify Co-Operators of the accident. While the applicant’s explanations at the EUO lacked the type of specificity Co-Operators demands, I accept that it would have been incredibly difficult, if not impossible, for the applicant to successfully secure representation for an accident benefits claim while he was incarcerated.

18With respect to the periods in between incarceration and the delay between his release in November 2017 and his application in August 2019, I accept that the applicant, given his personal circumstances, would have simply and quite reasonably been focused on his survival, as he was seemingly living on the streets. The fact that the applicant continued to end up back in jail between 2013 and 2017 after being released speaks to the lack of structure in his life, the chaos that formed his day to day existence and the grip that his addiction and mental health issues have upon him. I accept that the need to ensure basic survival is a reasonable explanation for not notifying Co-Operators of the accident, even where the applicant’s alleged impairments from the accident allegedly continued to result in functional deterioration.

19In the nearly two years that followed his release, I accept that the applicant would have faced considerable difficulty trying to secure representation and navigate a complex system as a repeat offender with a crack addiction, mental health issues, an apparent inability to walk and with no fixed address. It is unfortunately unsurprising that his efforts were rebuffed and that it took some time, and a bit of luck through his shelter, to secure his current representation. In this vein, Horvath requires a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit. Here, while a lack of prejudice does not make an explanation automatically reasonable, I find limited evidence that Co-Operators will be prejudiced by allowing the applicant to proceed past the preliminary issue stage as there is quite a bit of medical evidence available and it will ultimately be the applicant’s burden to prove causation and entitlement after a lengthy delay.

20In any event, I find that the hardship to the applicant if he is prevented from proceeding to a substantive hearing would be far greater than any prejudice faced by the delay in receiving notice on Co-Operators’ end. If the applicant is indeed wheelchair bound as a result of the April 3, 2013 accident, then not receiving benefits or assistance would only increase this hardship and would run counter to the consumer-protection nature of the Schedule. On balance, I find it would be equitable to relieve against the consequences of the applicant’s failure to comply with s. 32 because he has provided several reasonable explanations for the delay.

21For clarity, this is not to say that I find merit in the applicant’s substantive claim, as that issue is not before me here. Indeed, Co-Operators has raised several valid causation and reporting issues that the applicant will be forced to rebut in order to demonstrate substantive entitlement. Rather, on the guidance provided by Horvath, I only find that the applicant has provided a reasonable explanation for his delay in notifying Co-Operators of the accident under s. 34 that will not bar him at this preliminary stage. I find the applicant may proceed with his application.

ORDER

22The applicant has provided a reasonable explanation for delay under s. 34 and may proceed with his application. The parties are directed to contact the Tribunal on receipt of this preliminary issue decision in order to schedule a case conference to determine how to proceed.

Footnotes

1. 1Identified in medical documents as chronic schizophrenia, severe drug addiction, depression, anxiety, personality disorder, and bipolar disorder.
2. 2O. Reg. 34/10, as amended.