Harris v. Motor Vehicle Accident Claims Fund (MVACF), 2021 CanLII 127464

Licence Appeal Tribunal

Citation: Harris v. Motor Vehicle Accident Claims Fund (MVACF), 2021 ONLAT 19-000953/AABS - P

Licence Appeal Tribunal File Number: 19-000953/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:

[N. H.]s

Applicant

and

Motor Vehicle Accident Claims Fund (MVACF)

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Deborah Neilson

APPEARANCES:

For the Applicant:

Nicole Harris, Applicant

Jwan Desai, Counsel

Peter Cimino, Counsel

For the Respondent:

Todd M. Wasserman, Counsel

Heard by Videoconference:

July 12 and September 17, 2021

BACKGROUND

1This proceeding concerns a dispute between an insured person (the applicant) and the Motor Vehicle Accident Claim Fund (the respondent) about automobile insurance benefits under the Statutory Accident Benefits Schedule – Accidents after December 31, 1993 and before November 1, 1996 (the “Schedule”) arising out of a motor vehicle accident on March 29, 1994.The applicant is claiming entitlement to attendant care benefits, housekeeping benefits, income replacement benefits and a loss of earning capacity benefit offer from the respondent. The respondent has denied the applicant is entitled to the benefits claimed.

2The parties could not resolve the issues and a 15 day hearing was scheduled to commence before the Tribunal ¹ on July 12, 2021. After hearing submissions from the parties, I adjourned the hearing. One of the issues raised by the applicant is that she is not barred from claiming a loss of earning capacity benefit despite not having applied for mediation, arbitration, to the court or to the Tribunal on the issue prior to March 1, 2006. Accordingly, a preliminary issue hearing was scheduled to be heard by me pending the commencement of the substantive issue hearing, which was adjourned to April 4 to 26, 2022.

3Having reviewed and heard the submissions of the parties, I find on the preliminary issue that if the applicant is entitled to income replacement benefits, a loss of earning capacity offer to the applicant is not authorised under Part VI of the Schedule.

PRELIMINARY ISSUE

4The preliminary issue is as follows:

1. If the applicant is entitled to income replacement benefits as of March 29, 1996, is the respondent required to make a loss of earning capacity offer in light of s.20.1 of the Schedule.

a) Can the applicant commence a mediation, arbitration, or court matter to start the process set out in s. 20.1 if there was no denial?

b) If not, was there a denial?

ANALYSIS

5The accident occurred on March 29, 1994. Prior to March 2006, insurers were required to make a loss of earning capacity benefit (“LECB”) offer to insured people who were involved in accidents between December 31, 1993 and November 1, 1996, and who were entitled to income replacement benefits (“IRBs”) more than two years after the onset of the disability. People who were involved in accidents during that period of time were limited in the tort claims they could make. They could claim for pain and suffering but were barred form claiming pecuniary loss or loss of income.² LECBs were intended to compensate for the loss of competitive advantage or earning differential claim that would have formerly been brought under the tort system. The LECB is payable for life. However, the Schedule was amended with the addition of s.20.1 so that an insurer was not required to make an LECB offer unless the following conditions were met as of March 1, 2006:

a. the insurer has refused to pay IRBs or other weekly benefits;

b. the insurer has not made an LECB offer and there is no agreement under section 24 or 25; and

c. one of the following has been commenced:

i. an arbitration proceeding at FSCO;

ii. a private arbitration proceeding under the Arbitration Act, 1991, or

iii. a court proceeding.

6The amendment, however, did not eliminate LECBs for all persons who were involved in an accident after December 31, 1993 and before November 1, 1996. The amendments preserved the rights of an insured person who, prior to March 1, 2006, was receiving LECBs, had received an LECB offer, entered into an agreement with the insurer under s.25³ or had commenced a formal arbitration or court proceeding over his or her entitlement to one of the prerequisite benefits.⁴

7The respondent submits that the issue of whether an LECB benefit is payable cannot be determined unless the applicant first establishes entitlement to IRBs. I find that the requirement for the applicant to prove entitlement to IRBs in order to be entitled to an LECB offer is set out in s.21(1) of the Schedule. Under s.20.1 of the Schedule, s.21 applies only if certain conditions took place before March 1, 2006. This means that, unless the applicant is able to first establish that s.21 to 25 apply to her, she will not be able to claim entitlement to an LECB offer. I find, therefore, that I need not determine whether the applicant is entitled to an IRB before determining whether or not s.21 to 25 apply to her.

A. Proper Denial

8The applicant submits that s.20.1 of the Schedule does not apply to her because the respondent never denied her benefits. She submitted an application for accident benefits to the respondent on October 12, 1994. On or about November 22, 1994, the respondent paid the applicant an income replacement benefit in the amount of $185.00 per week from April 5, 1994 to July 1, 1994. No further benefits were paid, and the applicant submits no denial of IRBs was made.

9The applicant submits that a proper termination of IRBs is required to trigger s.20.1. Section 71 of the Schedule required an insurer to inform the person in writing of the procedure for resolving disputes that are described in subsection 280(1) of the Insurance Act (as it then read) if an insurer reduced or refused to pay a benefit that a person had applied for. The applicant submits that there was no arbitration proceeding or court proceeding commenced regarding IRBs because she did not receive a proper written termination of IRBs from the respondent outlining her rights to dispute. This means that she could never be in a position to apply for arbitration or issue a claim against the respondent.

10The applicant’s submission is persuasive, especially in light of the Supreme Court of Canada’s determination in Smith v. Co-operators⁵ that a proper refusal that complies with s.71 is required to start a limitation period. If the applicant’s entitlement to IRB was never refused, she would never meet one of the conditions under s.20.1, which appears to be an absurd result. However, Smith v. Co-operators dealt with when a limitation period starts. There was nothing preventing the applicant from pursuing mediation and litigation against the respondent for IRBs prior to March 1, 2006 when the respondent failed to pay any further IRBs beyond July 1,1994. A written refusal is not a pre-requisite for an insured person to start the litigation process when a benefit is supposed to be paid and it is not. A person’s right to apply for mediation crystalized when the insurer failed to pay benefits owed.⁶ I find that to accept the applicant’s submission would result in a barrier to an LECB offer for those insured persons whose weekly benefits stopped without a proper denial, even though a court action or arbitration was initiated prior to March 1, 2006.

11A failure to continue paying IRBs absent a written denial may constitute a refusal under s.20.1(a) of the Schedule. However, whether or not it does is of no assistance to the applicant. I find that by using the word “and” at the end of s.20.1(b), the Legislature intended all three conditions in s.20.1(a) to (c) to be present for ss.21 to 25 of the Schedule to apply to an insured person. In other words, the fact that the applicant did not commence the litigation process by applying for mediation prior to March 1, 2006 means that ss.21 to 25 of the Schedule do not apply to the applicant.

12The applicant’s submission that s.20.1 could never apply to her because there was never a refusal under s.71 of the Schedule does not assist her either. If I accept the applicant’s submission that s.20.1 of the Schedule does not apply to her, then she would never be eligible for, or entitled to, an LECB offer. As determined by the Director’s Delegate in Francis,⁷ for s.20 to apply to the applicant, the payment of LECBs must be authorised by Part VI of the Schedule. Sections 21 to 25 authorise an LECB offer in certain circumstances. Those sections only apply if the applicant meets the conditions set out in s.20.1 of the Schedule. If s.20.1 does not apply to the applicant because IRBs were never refused, that does not mean that ss.21 to 25 operate as if s.20.1 does not exist. It means that without the operation of s.20.1, the applicant cannot access ss.21 to 25 of the Schedule.

B. Vested Rights

13The applicant submits that she had vested rights once the IRBs were paid to her. She submits that s.20.1 of the Schedule is not to be read as prejudicially affecting accrued rights, or an existing status, unless the language in which it is expressed requires such a construction. She relies on the Supreme Court of Canada decision of Dikranian v. Quebec (Attorney General),⁸ which determined that vested rights result from the crystallization of a party’s rights and obligations and the possibility of enforcing them in the future.

14There are two criteria for recognizing vested rights:⁹

a. The individual’s legal situation must be tangible and concrete rather than general and abstract. The mere possibility of availing oneself of a specific statute is not a basis for arguing that a vested right exists, and the right must be vested in a specific individual.

b. The legal situation must have been sufficiently constituted at the time of the new statute’s commencement. Rights and obligations resulting from a contract are usually created at the same time as the contract itself.

15The repeal of an act or of regulations made under its authority shall not affect rights acquired and the acquired rights may be exercised notwithstanding such repeal.¹⁰

16The respondent submits that there were no vested rights and relies on the Divisional Court in Francis v. Dominion of Canada,¹¹ which fully disposed of an applicant’s right to pursue a LECB if the rights to the benefit had not crystalized or were not in dispute by February 28, 2006. Francis v. Dominion concluded that section 20.1 removed the right to a LECB to those who have not met the conditions prior to March 1, 2006.

17The applicant submits that Francis v. Dominion is distinguishable because in that case the applicant did not have any rights as of March 1, 2006. He was not entitled to any weekly benefits because he was 14 years old when s.20.1 of the Schedule came into force and he could not qualify for any weekly benefit until he reached age 16. Therefore, he had no vested rights, unlike the applicant.

18I am unable to accept that Francis v. Dominion is distinguishable. The Director’s Delegate in Francis determined that s.20.1 of the Schedule did not interfere with vested rights. The Divisional Court agreed and determined that even if Mr. Francis’ rights had vested prior to the March 1, 2006 cut-off date, the presumption that the amendment would not have a retrospective effect was rebutted.

19To rebut the presumption against interference with vested rights and the presumption against retroactive legislation, all that is required is some sufficient indication that the legislation is meant to apply, not only to ongoing and future facts, but also to facts that are past.¹² Both the Director’s Delegate in Francis and the Divisional Court in Francis v. Dominion found that intention was clear in s.20.1 of the Schedule.

20I am bound by the Divisional Court decision in Francis v. Dominion. However, even if I were not, I agree that legislator’s intention to eradicate the right to an LECB offer unless certain actions took place in the 10 to 12 years from when the accident took place to March 1, 2006 is clear from the wording in s.20.1 and from the preservation of rights in s.27.1 of the Schedule for those who, on February 28, 2006, were receiving LECBs, had received an LECB offer, or had an agreement with the insurer to receive an LECB offer.

21The respondent submits that the onus is on the applicant to prove that there was an improper termination of IRBs. It also submits that even if she is able to prove that there was no proper denial, she must still prove she is entitled to an IRBs. I agree. This also means that, although the applicant’s entitlement to LECBs may have been eradicated, her right to claim IRBs was not. However, regardless of whether the applicant is able to prove entitlement to IRBs, the applicant did not commence a mediation, arbitration or action prior to March 1, 2006 and, therefore, is not entitled to pursue an LECB offer or LECBs.

CONCLUSION

22Regardless of whether the applicant is entitled to IRBs as of March 29, 1996, I find that in light of s.20.1 of the Schedule, ss.21 to 25 of the Schedule authorising an LECB offer do not apply to the applicant.

23As the applicant failed to commence mediation, arbitration or a court proceeding prior to March 1, 2006, she would not be entitled to an LECB offer if she is able to establish entitlement to IRBs beyond March 29, 1996.

Footnotes

1. 1Tribunals Ontario, the Licence Appeal Tribunal-Automobile Accident Benefits Service (“Tribunal”)
2. 2Section 267.1(1) Insurance Act RSO 1990, c I.8
3. 3Section 27.1 of the Schedule
4. 4Section 20.1 of the Schedule
5. 5Smith v. Co-operators General Insurance Company, 2002 SCC 30 (“Smith v. Co-operators”)
6. 6See s.280(1) of the Insurance Act, RSO 1990, c I.8 in force prior to 2010. The only barrier to commencing a mediation under the Schedule was s.71.1 - if the insured person failed to provide the insurer with notice of the intent to apply for benefits or failure to attend insurer’s examination or designated assessment centre assessment.
7. 7Francis and Dominion of Canada General Insurance Company (FSCO P15-00013, August 31, 2015) (“Francis”)
8. 8Dikranian v. Quebec (Attorney General), 2005 SCC 73 para.30
9. 9Dikranian v. Quebec (Attorney General) para.37 to 40
10. 10Dikranian v. Quebec (Attorney General) at para. 34
11. 11Francis v. Dominion General Insurance Company, 2016 ONSC 6566 (“Francis v. Dominion”),
12. 12Dikranian v. Quebec (Attorney General) at para. 33 and Francis (Div. Ct) para. 15.