Alakoozi v. ACE INA Insurance, 2021 CanLII 18906

Licence Appeal Tribunal

Citation: Alakoozi v. ACE INA Insurance, 2021 ONLAT 20-000516/AABS

Released Date: 02/10/2021

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:

Ghulam Alakoozi

Applicant

and

ACE INA Insurance

Respondent

PRELIMINARY DECISION

ADJUDICATOR:

Monica Chakravarti

APPEARANCES:

For the Applicant:

Mitchell Kent, Paralegal

For the Respondent:

Jason Frost, Counsel

Megan Cui, Counsel

HEARD:

By way of written submissions

OVERVIEW

1The applicant was involved in a motor vehicle accident on December 15, 2016 and sought benefits from the respondent pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010¹ (“Schedule”). The respondent denied these benefits and the applicant then filed an application with the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) to resolve the dispute.

2On June 16, 2020, the parties attended at a case conference, during which the respondent raised a preliminary issue, namely whether the applicant is statute barred from proceeding with his claim for an IRB pursuant to section 56 of the Schedule. Section 56 of the Schedule states in part that the applicant must bring his application to the Tribunal within two years of the insurer’s refusal to pay the amount claimed. This is colloquially known as the “limitation period” and will be referred to as such.

3According to the Tribunal’s Order following the case conference (the “Order”), the substantive issues in dispute to be determined following this preliminary issue hearing are: a) whether the applicant’s injuries were minor as defined in the Schedule; b) is the applicant entitled to an income replacement benefit (IRB); c) what is the quantum of the income replacement benefit in dispute; d) whether the applicant is entitled to two medical and assessment benefits; and e) interest.

4This decision is about the preliminary issue. The substantive issue of IRB depends on the decision in this preliminary hearing.

ISSUES TO BE DECIDED

5At the outset, the parties differ on the preliminary issues in dispute. The respondent submits that the issue in dispute is, per the Order, did the applicant fail to dispute the denial of IRB within the two-year limitation period. The applicant, however, submits that there are two issues in dispute with respect to IRB, the first being entitlement and the second being quantum.

6This preliminary issue is being heard prior to the substantive issues in dispute. This preliminary issue will determine if the substantive issues dealing with IRB proceed to a hearing. The substantive issues, which the parties agreed to at the case conference, involve the applicant’s entitlement to IRB and the quantum of IRB.

7For the reasons detailed below, the issues to be decided in this preliminary hearing are:

a. Pursuant to s. 56 of the Schedule, is the applicant barred from proceeding with his claim for entitlement to income replacement benefit?

b. Pursuant to s. 56 of the Schedule, is the applicant barred from proceeding with his claim for the quantum of income replacement benefit?

RESULT

8Based on the reasons below and pursuant to Section 56 of the Schedule, the applicant is statute barred from proceeding with his claim for IRBs from July 11, 2017 onwards as he failed to commence his application within the two years after a valid denial from the respondent.

9Pursuant to Section 56 of the Schedule, the applicant can proceed with his claim for the weekly quantum of the IRBs prior to July 11, 2017 as the application was commenced within two years following a valid denial.

ANALYSIS

There are two issues in dispute:

10The Order of the Tribunal confirms that there are two substantive issues in dispute with respect to IRBs. The first is entitlement to IRB and the second is quantum of IRBs. The issues in dispute were agreed to by the parties.

11The evidence shows the following:

a. On July 11, 2017, the respondent through an adjusting firm provided a letter to the applicant that stated, in part, the following:

“Based on the result of the above noted examination [Insurer Examinations] this letter provides notice that insurance company has determined that you are not entitled to an income replacement benefit.”

“Please be advised that the income replacement benefit will be terminated as of July 11, 2017 in accordance with Section 37 and Section 54 of the Statutory Accident Benefits Schedule.”

b. On March 16, 2018 the respondent, again through the adjusting firm, provided a letter to the applicant that stated, in part, the following:

“We have now been provided with a report from MDD Forensic Accountants with regard to your IRB entitlement.”

“Based on the information you have provided to them, your weekly IRB amount up to the stoppage date of July 11, 2017 is NIL.”

“If you disagree with the above determination, you have the right to dispute it according to the procedure described in the attached Your Right to Dispute. Please note that you have two years from the date of this letter to commence the dispute process.”

c. Both parties agree that the application to the LAT for dispute resolution was filed on January 20, 2020.

12The respondent submits that the denial of the IRBs was July 11, 2017 and the there is no retriggering of the denial of IRBs by the calculation of the IRBs for the period prior to the stoppage date.

13The applicant submits that there were two denials. The first on July 11, 2017 was for the initial entitlement to IRBs. The second denial was on March 16, 2018 for the quantum of the initial IRBs.

14The respondent in reply states that there is no such thing as a limitation period from the IRB quantum calculation and that it would be an absurd outcome for the applicant to be allowed to dispute quantum but not entitlement as, without entitlement, quantum would be a moot issue.

15The letter of July 11, 2017 was a denial for the ongoing entitlement to IRBs. It was not, as submitted by the applicant, for the initial entitlement. It was, as submitted by the respondent, the stoppage of IRB. Put another way, the applicant was told that he was no longer eligible for IRBs as of July 11, 2017.

16As for the letter of March 16, 2018, the respondent is correct that this was not a retriggering of the denial of the IRBs from the stoppage date of July 11, 2017. As noted, on a plain reading of the letter of March 16, 2018 and I agree with the respondent’s submission, the applicant was told that the respondent has determined that his “weekly quantum” of IRBs up until the stoppage date is “NIL.”²

17The respondent also advised the applicant in the letter of March 16, 2018 that if he disagrees with the calculation of the weekly quantum of the IRB that he can dispute this. I find this is in keeping with the respondent’s obligation of Section 54 of the Schedule [written notice that a person can dispute a reduction in the amount of a benefit] and an acknowledgement by the respondent that quantum can be disputed.

18The evidence filed leads to the conclusion that the respondent was not disagreeing about the applicant’s entitlement to IRBs from the time of the claim until July 11, 2017. The respondent, however, determined that the quantum of the weekly amount of IRB from the time of the claim until the stoppage is $0.00. The applicant obviously does not agree. An applicant can dispute the weekly quantum of IRBs under the Schedule. Further, the respondent advised the applicant of his ability to dispute the weekly quantum in the letter of March 16, 2018.

19Based on the above, there are two denials of IRB. The first denial is the denial of ongoing IRB entitlement as of July 11, 2017. To be clear, the applicant was denied IRBs as of July 11, 2017.

20The second denial was on March 16, 2018 wherein there is no denial of entitlement to IRB prior to July 11, 2017 but rather a determination of the weekly quantum of the IRB for the period of time prior to July 11, 2017.

21The issues in dispute according to the Tribunal’s Order are entitlement to IRB and quantum of the IRBs. In terms of this preliminary hearing, the issues are narrowed to determine if the applicant is statute barred from proceeding with application disputing the quantum of IRBs prior to July 11, 2017.

22With respect to the issue of quantum including and following July 11, 2017, I agree with the respondent that if there is no entitlement to IRB or if the applicant is statute barred then the issue of quantum of the IRB from July 11, 2017 onwards is moot.

23Therefore, the second issue for this preliminary hearing involves a determination if the applicant is statute barred from proceeding with his claim for IRBs from July 11, 2017 onwards (an end date determined by the parties or by the hearing adjudicator).

The applicant is not statute barred from proceeding with his dispute of the weekly quantum of benefits prior to July 11, 2017:

24The March 16, 2018 letter advised the applicant of the weekly quantum of IRB up until the stoppage of July 11, 2017. The application was filed on January 20, 2020. As the application was filed prior to the expiry of the limitation period, the applicant is not barred from proceeding with his application on the issue of weekly quantum of IRBs prior to July 11, 2017.

The applicant is statute barred from proceeding with his dispute for IRBs from July 11, 2017 onwards:

a) The Denial

25Under section 56 of the Schedule, an applicant has two years from the date the insurer refuses to pay an amount claimed to commence an application with respect to the denial of the benefits that are refused. The applicant agrees that notice of denial for the IRBs for the period of July 2017 onwards was on July 11, 2017 (“Notice of Denial”).³

26To determine whether a denial is proper it must be in accordance with the principles outlined in Smith v Cooperators General Insurance Company⁴. The applicant does not make any submissions regarding the notice being anything other than proper.⁵ The respondent submits that the notice of denial complied with the Schedule, the law in Smith, and the jurisprudence thereafter. I agree and therefore the Notice of Denial is proper and in accordance with the jurisprudence.

27The Court of Appeal in Sietzema v. Economical Mutual Insurance Company, confirmed that the limitation period is triggered once proper notice of denial is provided regardless of the correctness of the insurer’s reasons for denial.⁶

28In this case, there is no dispute that the Notice of Denial was on July 11, 2017 and the Application was on January 20, 2020, outside of the two-year limitation period provided for in the Schedule.

b) Section 56 of the Schedule, Section 7 of the LAT Act and Potential Outcomes

29The applicant seeks relief from the expiry of the limitation period found in section 56 of the Schedule and submits that under section 7 of the Licence Appeal Tribunal Act, 1999 (the “LAT Act”) the Tribunal has discretion to extend the limitation and seeks that the Tribunal exercise this discretion.

30Section 7 of the LAT Act states:

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.

31The jurisprudence is conflicting on the issue of whether the Tribunal has the discretion to extend the limitation period found in the Schedule pursuant to section 7 of the LAT Act and the Divisional Court decisions that could assist in determination of this issue are still pending.

32The respondent submits that the Tribunal does not have jurisdiction to extend the limitation period as the limitation period is to be applied strictly according to the Court of Appeal in Sietzema and in the Court of Appeal’s earlier decision of Turner v. State Farm Mutual Automobile Insurance Company⁷. The respondent submits that the Tribunal recognized that it does not have discretionary authority under s.7 of the LAT Act in its reconsideration decision of S.S. v. Certas Home and Auto Insurance Company⁸. Further, in the alternative, even if the Tribunal exercises its discretion (which the respondent submits that the Tribunal does not have), the respondent submits that the applicant has provided no evidentiary basis to warrant an extension of the limitation period.

33The applicant submits that I adopt the reasoning in S.W. v Aviva General Insurance Company⁹ wherein the adjudicator held that the reasoning in the S.S. decision was an outlier and quiet narrow. The applicant submits that S.S. is not the applicable case to follow.

34In my view, assuming that the tribunal has jurisdiction to extend the limitation period, it is unlikely to exercise that jurisdiction if the applicant has provided insufficient grounds to satisfy the tribunal.

35To extend the limitation period, the applicant relies on the Divisional Court decision of Manuel v. Registrar, Motor Vehicle Dealers Act, 2002¹⁰. The Divisional Court in Manuel ruled that the overriding consideration on a request for an extension of time is whether the justice of the case requires that the extension be granted. The four factors to consider in making this determination are:

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.

36The applicant notes that, in A.F. v. North Blenheim,¹¹ the Tribunal held that all four factors above do not need to be met but that the four factors above are to assist the adjudicator.

37The applicant did not demonstrate a bona fide intention to appeal. He has provided no evidence or explanation as to why he took no steps following the Notice of Denial of the IRBs. The applicant offers that he was thinking about it; however, I note that he took over two years and six months to think about the Notice of Denial with the benefit of having a legal representative for those two years and six months. Further, the length of delay of six months was not explained and I find it is not an insignificant amount of time. The prejudice to a party is that they are unable to rely upon the Schedule or the limitation period. I agree with the respondent that the mere fact that they must respond to this application where there is no excuse or reason from the applicant for the delay in filing an Application following the Notice of Denial is in and of itself prejudicial. The applicant suggests that somehow the minor injury issue and the IRBs are tied, making this appeal meritorious; however, the applicant does not provide a cogent argument as to how or why.

38The applicant failed to provide reasonable grounds to extend the limitation period, assuming that it can be done. In this context it is inconsequential if the Tribunal has discretion to extend the limitation period as the result is the applicant does not satisfy the Tribunal to allow him to move forward with his application for IRBs (for July 11, 2017 onwards).

39If the limitation period is strictly applied, the applicant filed his application more than 2 years following the Notice of Denial and he is therefore barred from proceeding with this (July 11, 2017 onwards) claim for IRBs.

40Therefore, regardless of the discretion of the Tribunal the applicant is statute barred from proceeding with his claim for IRBs from July 11, 2017.

ORDER

41Pursuant to section 56 of the Schedule, the applicant is statute barred from proceeding with his claim for IRBs from July 11, 2017 onwards as he failed to commence his application within the two years after a valid denial from the respondent. If the Tribunal does have jurisdiction to extend the limitation period pursuant to section 7 of the LAT Act, the applicant did not meet his onus to show that such relief is warranted.

42The applicant can proceed with his claim for the weekly quantum of the IRBs prior to July 11, 2017 as his application was filed prior to the expiry of the two-year limitation period contemplated in section 56 of the Schedule.

Footnotes

1. 1O.Reg. 34/10
2. 2Respondent’s submissions paragraph 10 and 11.
3. 3Applicant’s submissions paragraph 18 and 24.
4. 4Smith v Cooperators General Insurance Company, 2002 SCC 30.
5. 5Applicant’s submissions paragraph 18 and 24.
6. 6Sietzema v Economical Mutual Insurance Company, 2014 ONCA 111
7. 7Turner v. State Farm Mutual Automobile Insurance Company, 2005 CanLII 2551 (ONCA)
8. 8S.S. v. Certas Home and Auto Insurance, (ON LAT Reconsideration) File No.: 18-001196, September 5, 2019.
9. 9S.W. v Aviva General Insurance Company [2020] CanLII 63569 (ON LAT)
10. 10Manuel v Registrar, Motor Vehicle Dealers Act, 2002, [2012] ONSC 1492
11. 11A.F. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT)