Laszlo v. Economical Mutual Insurance Company, 2021 CanLII 30363

Licence Appeal Tribunal

Citation: Laszlo v. Economical Mutual Insurance Company, 2021 ONLAT 20-001644/AABS Release date: 03/31/2021

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:

Jennifer Laszlo Applicant

and

Economical Mutual Insurance Company Respondent

PRELIMINARY DECISION

ADJUDICATOR: Monica Chakravarti

APPEARANCES:

For the Applicant: Miguel Maruszki, Paralegal For the Respondent: Ashleigh Leon, Counsel

HEARD: By way of written submissions

OVERVIEW

1The applicant was involved in a motor vehicle accident on March 18, 2017 and sought income replacement benefits (IRBs) from the respondent pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010¹ (“Schedule”).

2The respondent denied the IRBs and the applicant then filed an appeal with the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for a determination that the applicant is entitled to IRBs, interest on any overdue payment of IRBs and an award under Regulation 664 because the respondent unreasonably withheld or delayed payments to the applicant.

3On July 2, 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 her claim for an IRB pursuant to section 56 of the Schedule. Section 56 of the Schedule states, in part, that the applicant must bring her application to the Tribunal within two years of the insurer’s refusal to pay the amount claimed. This is also known as the “limitation period” and will be referred to as such.

4If I find that the applicant is statute barred from proceeding with her claim for IRBs, then the appeal is dismissed in its entirety because the remaining issues in dispute are derivative and tied to the applicant’s entitlement to the IRBs.

ISSUE TO BE DECIDIED

5The issue to be decided in this hearing is

a) Is the applicant barred from proceeding with her claim for income replacement benefits because the applicant did not dispute the denial within the 2 year limitation period in s.56 of the Schedule?

RESULT

6Pursuant to section 56 of the Schedule, the applicant is statute barred from proceeding with her claim for IRBs as she failed to commence her application within the two years after a valid denial from the respondent.

ANALYSIS

Deemed Date of Delivery

7Section 64 of the Schedule states

64. (1) Except as otherwise permitted by this Regulation, all notices required or permitted under this Regulation, other than a notice under subsection 32 (1) or (6), must be in writing. O. Reg. 34/10, s. 64 (1).

(2) Any document, including a notice in writing, required or permitted under this Regulation to be given to a person may be delivered, (a) by faxing the document to the person or to the solicitor or authorized representative, if any, of the person in accordance with subsection (19);

(20) A document delivered in accordance with clause (2) (a), (b), (c) or (e) after 5 p.m. local time of the recipient shall be deemed to be delivered on the next business day. O. Reg. 34/10, s. 64 (20).

8The respondent submits that the applicant was advised of the notice of denial of IRBs in the letter dated November 30, 2017, faxed to the applicant’s legal representative and mailed to the applicant. The fax cover page confirms that this letter was sent at 5:29 p.m. on November 30, 2017 and pursuant to section 64(20), this denial letter is therefore deemed delivered on the next business day, December 1, 2017. Therefore, I find that the notice of denial of the IRBs was delivered on December 1, 2017.

9In the balance of this decision when referring to the denial of December 1, 2017 it means the letter of November 30, 2017 and deemed delivered December 1, 2017.

Was the December 1, 2017 Notice of Denial Improper?

10Pursuant to section 56 of the Schedule the applicant has two years from the date of denial to apply to the Tribunal to dispute the denial. The denial must be in compliance with the Schedule.

11The respondent submits that the notice of denial it delivered on December 1, 2017 was clear and unequivocal. This notice of denial informed the applicant that based on the opinions of the section 44 (I.E.) assessors that she was no longer entitled to an IRB and her IRBs would cease as of December 7, 2017. This letter also enclosed the section 44 assessment reports.

12There is no dispute between the parties that this notice letter that accompanied the section 44 reports was clear and unequivocal. However, the applicant submits that the notice of denial of December 1, 2017 was not proper because the respondent did not comply with the Schedule, in that the respondent provided the section 44 assessments outside of the timelines prescribed in the Schedule. Specifically, the applicant submits that the respondent was in non-compliance with section 37(5) and (6) as follows:

a. Pursuant to section 37(5), the respondent did not provide the section 44 assessment reports within ten business day of receiving same; and

b. Pursuant to section 37(6) the respondent did not provide notice of its determination of the refusal to pay IRBs (as of December 7, 2017) within ten days of receipt of the section 44 reports.

13The applicant relies on the Superior Court decision of Roger v. The Personal Insurance Company of Canada² (“Roger”) for its position that this notice was improper. The applicant submits that Roger, relying upon the Supreme Court of Canada’s decision of Smith v Co-Operators General Insurance Company, stood for the general proposition that, where an insurer does not comply with the clear and unequivocal procedural requirements set out in section 37 of the Schedule, in regards to preconditions which, if ignored, placed the insured at a disadvantage, the insurer cannot rely on its purported termination of benefits as triggering the commencement of the limitation period.³ The applicant submits that as in Roger there was no proper termination of the IRB due to the respondent’s non-compliance with section 37(5) and 37(6) of the Schedule, and therefore it follows that the limitation period was not triggered by the notice of denial of December 1, 2017.

14Further, the applicant points to the F.S.C.O decision of Nadarajah v RBC General Insurance Co. of Canada⁴ (“Nadarajah”) and submits that the adjudicator held that the limitation period only begins to run when the insurer has properly terminated benefits which includes complying with section 37(5). In Nadarajah the insurer could not rely on a limitation period because it did not comply with the Schedule.

15The applicant submits the section 44 reports and the notice of denial was provided on the 12th business day after the respondent received the section 44 assessments. The respondent concedes that it provided the section 44 assessment reports on the 12th business day after receiving same. The respondent also does not dispute that proper notice requires compliance with section 37(5) and 37(6) of the Schedule.

16However, the respondent submits that in Roger the court held that the failure of an insurer to meet the timeline in section 37(6) (i.e. to provide the section 44 assessment reports to the applicant within 10 business days) is a minor error and standing alone it cannot support a finding in favour of the Plaintiff with respect to the limitation issue.

17The respondent further submits that the Nadarajah decision pre-dates the Court’s decision in Roger and cannot be followed by the Tribunal and nor is it binding on the Tribunal. Secondly, the respondent submits that the final holding in Nadarajah, that the limitation period was not triggered because of non-compliance with section 37(5), is distinguishable because the non-compliance in that case was the failure by the insurer to provide a copy of the insurer examination (I.E.) report to the applicant’s medical practitioner (in that it was never provided to the applicant’s medical practitioner). The respondent notes that in the matter at hand the section 44 reports were provided to the applicant on the 12th business day and that this delay of 2 business days did not prejudice the applicant’s ability to challenge the denial of her IRBs.

18I agree with the respondent that the decision in Roger held that the delay to provide the I.E reports to the insured within the timelines under the Schedule was a minor error that had no impact on the insured’s ability to pursue her rights.⁵ I also agree that in the matter at hand, the late delivery of the section 44 reports, did not prejudice this applicant and it was a minor error and not part of ongoing errors by the respondent.

19In Roger the plaintiff/insured was seeking a ruling that her action was not statute barred as a result of the limitation period. The plaintiff argued that the defendant/insurer was non-compliant with the Schedule in five ways.⁶ The plaintiff argued that two of the ways the defendant (insurer) was non-compliant was: 1) the insurer examination (I.E.) doctor was to provide a copy of his report within ten business days, following the examination, to the Defendant and the doctor provided the report to the Defendant on the sixteenth business day; and 2) the I.E. report was to be provided to the insured person within five business days after receipt by the Defendant and it was provided on the ninth business day.

20The Plaintiff in Roger conceded that the above two ways of non-compliance were minor procedural irregularities involving the insurer not meeting the timelines set out in the Schedule.⁷ The Court in Roger held that the above two instances of non-compliance when “considered on their own, they fall into the category of errors which should not result in a final determination of rights in favour of the insured.”⁸ The Court in Roger, quoting paragraphs 35-36 of Gray v. Pilot Insurance Co., which held that:

Timelines are important for the purpose to ensure that claims are dealt with expeditiously. Errors, however, will inevitably occur. Whether they amount to mere procedural irregularities which should be relieved against, or matters of substance, must depend on the circumstances of each case.

21As pointed out by the respondent, at paragraph 21 in Roger, the Court held

The delay of six days over the regulatory timeline for Dr. Judge [I.E. doctor] to deliver his report to the Defendant, and the delay of four days over the regulatory timeline for the Defendant to deliver Dr. Judge's report to the Plaintiff, are minor errors. There is no evidence that either error had any impact on the Plaintiff or on her ability to pursue her rights. Standing alone, these examples of non-compliance cannot support a finding in favour of the Plaintiff in regard to the limitation issue.

22In the matter at hand there is no evidence that the delay of two days of delivery of the section 44 assessments had any bearing on the applicant’s ability to file her appeal at the Tribunal.

23It is not disputed that the respondent clearly and unequivocally provided notice of the denial on December 1, 2017. As per the reasons in Roger, the delay of two business days to provide the section 44 assessments to the applicant and the delay of two business days to provide the applicant with its determination following the respondent’s receipt of the report, were minor errors. There is no evidence that there were ongoing errors or non-compliance by the respondent and there is no evidence that the delay of two days in delivery of the section 44 assessments was prejudicial to the applicant. Therefore, I find that the limitation period was triggered by the notice of denial of December 1, 2017.

Was the limitation period triggered by the letter of February 18, 2018?

24As I have found that the notice of denial is December 1, 2017 and the limitation period is triggered by this notice, there is no need to consider if a subsequent letter of February 18, 2018 also triggered the already existing limitation period.

25However, by way of background, I note that on February 20, 2018 the respondent sent a letter enclosing further section 44 addendum reports, that were done following the receipt of additional medical information from the applicant. The respondent in the letter of February 18, 2018 states that the decision to terminate the IRBs as of December 7, 2017 remains.

Can the limitation period be extended?

26There is no dispute that the applicant filed her appeal with the Tribunal on February 18, 2020. The parties also agree that the limitation period is two years from the notice of the denial. Based on the findings above the limitation period would be December 1, 2019. The respondent submits that the denial is “effective” as of December 7, 2017 which even if I take to mean as the date of denial (as that is the date IRBs are no longer payable) this would still place the applicant’s appeal well outside the limitation period.

27The 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, S.O. 1999 c 12 Sch G (the “LAT Act”) the Tribunal has discretion to extend the limitation and seeks that the Tribunal exercise this discretion.

28Section 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.

29The jurisprudence is conflicting on the issue of whether the Tribunal has the discretion to extend the limitation period found in s. 56 of the Schedule pursuant to section 7 of the LAT Act. The Court decisions that could assist in determination of this issue are still pending.

30The 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 Company⁹. 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.

31The applicant submits that Tribunal has discretion to extend the statutory limitation period under section 7 of the LAT Act and this power to extend the limitation has been upheld through recent case law, including in Bouianov v. Travelers Insurance.¹⁰

32In 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.

33With respect to the ground to extend the limitation period, the applicant relies on the Divisional Court decision of Manuel v. Registrar, Motor Vehicle Dealers Act, 2002¹¹. 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;
4. The merits of the appeal.

34The applicant submits all four factors above do not need to be met but that the four factors above are to assist. I find that the use of the above factors in Manuel and the submission of the applicant that all four factors above do not need to be met is in keeping with the decision of A.F. v. North Blenheim.¹² The applicant submits that in this case that the weight should be given to the first three factors.

35The applicant did not demonstrate a bona fide intention to appeal. She has provided no evidence or explanation as to why she took no steps following the notice of denial of the IRBs. The applicant offers that she was under the misapprehension that the letter of February 20, 2018 was the denial of the IRB and that because of this she filed her application two days shy of the limitation period for the February 20, 2018 denial letter. The applicant has offered no evidence on this point but has provided only submissions.

36The respondent submits that there was no bona fide intention to appeal because first, there was no confusion of the stoppage of IRBs effective December 7, 2017 and that this was told to both the applicant and her legal representative in the letter dated November 30, 2017. Despite this letter and the clear language therein, the applicant did nothing. The stoppage of IRBs was reiterated to the applicant and her representative in the letter of February 20, 2018. Despite this the applicant did nothing for 2 days shy of two years. Further, the respondent submits that the fact that the applicant returned to work shows that the applicant had no intention of appealing the denial of IRBs and presumably did not appeal the decision because there was no basis to do so.

37I find that the applicant has not met her onus to show that she had a bona fide intention to appeal the denial of the IRBs because there is no actual evidence of her intentions. There is no correspondence from her to the respondent indicating that the notice was improper and her demanding the IRBs. She provided no evidence to indicate why, despite the letter of February 20, 2018 stating that the IRBs remain discontinued as of December 7, 2017, she still did nothing despite having the benefit of legal representation. The filing of the appeal two days shy of a perceived limitation period does not show a bona fide intention but rather corroborates the non-urgent nature of the applicant’s intention to appeal.

38Despite the applicant providing submissions and turning her mind to the fact that the Tribunal could make a finding that the denial was on December 1, 2017) the applicant provides no explanation for the delay of over two months other than to say that it is not unreasonable and is consistent with the reasonable and bona fide belief that the denial was on February 18, 2018. Again, the applicant provides no evidence to show why her belief was reasonable that the limitation period was triggered on February 18, 2018 and what steps she took following the denial letter of December 1, 2017 despite having the benefit of legal advice and representation. I find that the delay of over two months is not an insignificant amount of time.

39The applicant submits that the proportionality of prejudice to both parties is a major consideration. The applicant submits that the dislocation and hardship to the applicant outweighs the potential prejudice to the respondent.

40In keeping with the factors of Manuel the prejudice to the other party is a factor that is to be considered and the applicant has the onus to show the prejudice to the other party is tempered. To that end the applicant submits that the prejudice to the respondent is minimal. The applicant provides no further submissions nor any further explanation, jurisprudence or anything to assist in this submission. The respondent submits, that they were unable to assess the ongoing entitlement because they were never advised that the merits of the denial would be in question until some 2 years and 2 months after the fact. Further the respondent was unable to conduct assessments following the 104-week mark (March 18, 2019), when the basis for entitlement to IRBs changes.

41I find that the prejudice to the respondent is not insignificant. In my view, the respondent was led to believe that there was no dispute with respect to the denial of IRBs and this prevented the respondent from making any enquiries regarding any return to work attempts by the applicant post-accident (discussed in detail below) and prevented the respondent from doing timely assessments regarding the post-104 week entitlement to IRBs as the appeal was filed almost one year following the post-104 week mark.

42The applicant submits that her claim has merit because the applicant has serious and permanent injuries as a result of the accident. She submits that she has been unable to work from the date of the accident until June 21, 2018; from June 21, 2018 until April 21, 2019 she was able to work; and since April 21, 2019 she has been unable to work and continues to be unable to work as a result of accident related injuries. The respondent submits that it was in the submissions of the applicant that the respondent was informed of any return to work and if in fact the applicant returned to work this fact is in and of itself evidence that the claim for IRBs lacks merit. Further, the applicant has submitted no evidence that she may be entitled to post 104-week IRBs as a result of the accident.

43The applicant herself submits that the above three factors, carry more weight than the merits of her appeal. I agree that the evidence has not shown that her claim is meritorious to the extent that the limitation period should be disregarded. There is no evidence that speaks to her injuries and impairments from April 21, 2019 ongoing or her continued inability to work as a result of those injuries. There is no information regarding her return to work, other than the submission that she did eventually return to work from June 21, 2018 and continued working until April 21, 2019. There is no information provided in this regard and the respondent in their submissions affirm that they have no information regarding a return to work. I make no findings on whether the chronic back pain noted in the two notes provided and the disc bulge noted are accident related as there simply is not enough information nor is it the purpose of this hearing. Thus, based on the evidence filed the applicant has not shown that her claim is meritorious enough for the Tribunal to consider extending the limitation period.

44In determining if the justice of the case warrants an extension of the limitation period all four factors in Manuel do not need to be satisfied, however an analysis and balancing all the factors as discussed above is required. I find that the applicant has not persuaded me on a balance of probabilities that she had a bona fide intention to appeal within the appeal period and she has not explained the length of the delay. I find there is some prejudice to the respondent, and I have not been satisfied that her appeal may have merit. As a result, I find that the justice of the case does not warrant an extension of the limitation period.

45It is also not necessary for me to determine if the Tribunal has discretion to extend the limitation period because the consequence of exercising this discretion would be that the applicant did not meet her onus to show that the extension is warranted and therefore is barred from proceeding with her claim for IRBs. This is the same conclusion that would follow if the Tribunal has no discretion to extend the limitation period as the application was filed more than 2 years following the Notice of Denial and the applicant is consequently barred from proceeding with her claim for IRBs.

CONCLUSION and ORDER

46Pursuant to section 56 of the Schedule, the applicant is statute barred from proceeding with her claim for IRBs as she failed to commence her 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 her onus to show that such relief is warranted.

Footnotes

1. 1O.Reg. 34/10, as amended.
2. 22014 ONSC 1964, (“Roger”)
3. 3Ibid, para. 37
4. 42013 CarswellOnt 18486 [2013] O.F.S.C.D. No. 239
5. 5Roger, para. 21
6. 6Ibid. para 12
7. 7Ibid. para. 19
8. 8Ibid.
9. 9S.S. v. Certas Home and Auto Insurance, 2018 CanLII 141018 (ON LAT) (Reconsideration).
10. 10Petr Bouianov v. Travelers Insurance, 2020 CanLII 34496 (ON LAT), at para 32
11. 11Manuel v Registrar, Motor Vehicle Dealers Act, 2002, 2012 ONSC 1492
12. 12A.F. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546 (ON LAT)