Citation: Haines v. Aviva Insurance Company of Canada, 2021 ONLAT 20-003388/AABS – PI

Released Date: 06/17/2021

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:

Joel Haines

Applicant

and

Aviva Insurance Company of Canada

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Jesse A. Boyce, Vice-Chair

APPEARANCES:

For the Applicant:

Salvatore Shaw, Counsel

For the Respondent:

Sophia Chaudri, Counsel

HEARD:

By way of written submissions

OVERVIEW

1The applicant was involved in an automobile accident on February 4, 2016 and sought benefits from the respondent, Aviva, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010¹ (the ''Schedule''). The applicant applied for and received attendant care benefits (“ACBs”) from Aviva from March 31, 2016 to November 13, 2016. Aviva terminated the ACBs via letter dated November 6, 2016 on the basis of a s. 44 report that determined they were not reasonable and necessary.

2The applicant submits that his condition deteriorated in the years that followed. In September 2018, the applicant underwent various assessments to determine whether he was catastrophically impaired (“CAT”) as a result of the accident. An application for CAT was prepared and submitted to Aviva on December 3, 2018.

3On January 7, 2020, and following a series of assessments of its own, Aviva accepted the applicant as CAT. The applicant then submitted an Assessment of Attendant Care Needs (“Form-1”) dated February 13, 2020 seeking post-104-week ACBs. On March 10, 2020, Aviva advised the applicant that it would not pay ACBs, relying on its denial letter from November 8, 2016 that terminated the benefit. The applicant disagreed and applied to the Tribunal for resolution of the dispute.

PRELIMINARY ISSUE IN DISPUTE

4The following preliminary issue was identified as being in dispute:

a. Is the applicant permitted to proceed with the application for ACBs in the amount of $1,721.85 per month from February 13, 2020 to date and ongoing or is the application for ACBs statute-barred?

RESULT

5The applicant may proceed with his application for ACBs.

ANALYSIS

Section 56 and Tomec

6Section 56 of the Schedule provides that an application under subsection 280(2) of the Insurance Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed. The parties agree that the applicant did not dispute Aviva’s November 6, 2016 denial of pre-104-week ACBs within two years.

7However, complicating the matter is the Court of Appeal’s direction on the rule of discoverability in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882. Tomec concerned claims for ACBs and housekeeping benefits 104 weeks post-accident that were pre-emptively denied by the insurer prior to the applicant being eligible to claim them on the basis of not being CAT. The applicant’s condition worsened over time to the point where she became CAT and was entitled to the enhanced tier of benefits after the expiry of the two-year limitation period under s. 281.1(1) of the Insurance Act. The primary issue in Tomec was whether the two-year limitation period in s. 281.1(1) of the Insurance Act and s. 51(1) of the Schedule are subject to discoverability.

8The Court determined that “the analysis is not focused on whether a limitation period is tied to a fixed event [ . . . ]. Rather, the question is whether the limitation period is related to the cause of action or the plaintiff’s knowledge.” The Court rejected the insurer’s argument that a refusal to pay a benefit is a specific event that is not tied to a cause of action, finding that the applicable limitation period “is tied to the accrual of the cause of action.” The Court reasoned that “[T]he refusal to pay a benefit and the ability to make a claim are inextricably intertwined in the cause of action. The refusal cannot be stripped out of the cause of action and treated as if it is independent of it.” Accordingly, Tomec stands for the principle that the rule of discoverability applies to the two-year limitation period under s. 281.1(1) of the Insurance Act governing accident benefit claims

9As I understand it, in raising this preliminary issue, Aviva asserts that Tomec is distinguishable because ACBs were paid to the applicant and then denied on the basis of a s. 44 report that determined they were not reasonable and necessary. Aviva submits that the facts here are different because it did not deny the ACBs on the basis that the applicant was not CAT, but because he was not substantively entitled to them. In this vein, Aviva submits that the ACBs were not “pre-emptively” denied or were only “discovered” later, as in Tomec, meaning discoverability does not apply and the only recourse for the applicant was to appeal its denial within the two-year limitation period.

10Further, Aviva asserts that the applicant “ought to have known” of his potential claim when he submitted his first Form-1 on March 31, 2016. Finally, Aviva submits that, unlike the applicant in Tomec, the applicant’s condition here has not worsened over time, as his post-104-week ACB claim is for less attendant care per month than his pre-104-week ACB claim, so it cannot be said that his claim was only discovered following CAT, where his condition has seemingly improved.

11In response, the applicant submits that Tomec and the rule of discoverability are binding on the facts and cannot be distinguished. Further, the applicant submits that Aviva is attempting to pre-emptively deny post-104-week ACBs that are only available to insureds after receiving a CAT designation. For support, he relies on Tomec and the Tribunal cases R.D. v. Pafco Insurance Company², Applicant v. TD Home and Auto Insurance Company³, Applicant v. Co-Operators General Insurance Company⁴ and B.E.T. v. Wawanesa Mutual Insurance Company⁵ which all wrestled with discoverability on similar facts.

The applicant is not statute-barred

12I agree with the applicant and find that he is not statute-barred from proceeding with his claim for post-104-week ACBs because he was not eligible for this benefit until he was declared CAT. I follow the Court of Appeal’s binding decision in Tomec and the Tribunal cases that followed and find that the rule of discoverability applies to the applicant’s claim and he should be allowed to proceed.

13The Schedule provides that only individuals who have been deemed CAT are eligible for ACBs beyond the 104-week mark. Like in Tomec, without a CAT designation, the applicant would not have been entitled to post-104-week ACBs. Aviva’s denial of November 6, 2016 pre-dated the applicant’s CAT designation, as it was in relation to pre-104-week ACBs. Aviva is now attempting to rely on this five-year-old denial of pre-104-week ACBs to avoid paying post-104-week ACBs to the applicant after his condition has deteriorated to the point that it accepted him as CAT. This is precisely what the Court rejected in Tomec in finding that the rule of discoverability applied.

14The Court found that an applicant first had to be eligible for the benefit in question in order for the denial to be of any effect. Like the applicant in Tomec, the applicant here only became eligible for post-104-week ACBs on January 7, 2020 when Aviva accepted him as CAT, which is the pre-requisite for eligibility for the benefit. Without the CAT designation, I agree that the limitation period could not run because the applicant was not even eligible for post-104-week ACBs.

15Indeed, the applicant was not eligible for post-104-week ACBs at any point in time before January 7, 2020, and not before his post-CAT Form-1 was submitted to Aviva on February 13, 2020. The applicant could not even apply until this point. Aviva’s refusal to pay post-104-week ACBs on the basis of its denial of pre-104-week ACBs at which time the applicant was not CAT is inconsistent with Tomec and the Tribunal’s case law that has followed it. As the Court stated in Tomec: “the refusal to pay a benefit and the ability to make a claim are inextricably intertwined in the cause of action.” It follows that where the applicant was unable to make his claim at the time of Aviva’s denial, that this denial and the applicant’s ability to make the claim were not “inextricably intertwined.” Aviva’s November 2016 denial was over three years before the applicant was deemed CAT and eligible to apply for post-104-week ACBs.

16In this vein, I agree with the applicant that there are several Tribunal cases that are on point with this approach that I find assistive: R.D. v. Pafco (finding that the applicant could not even dispute the denial of housekeeping benefits because he had not been deemed CAT until three years later); Applicant v. TD (applying Tomec to find that ACBs could not be denied prior to eligibility where the claim was only discovered a decade later once deemed CAT); Applicant v. Co-Operators (finding that it was absurd to allow the insurer to rely on a denial of ACBs and housekeeping benefits from three years before the CAT determination); and B.E.T. v. Wawanesa (finding that it would be absurd to require an applicant to bring a pre-emptive application for denied non-earner benefits in order to insulate herself against a future bar where her condition deteriorated to the point she was later deemed CAT). I note that in B.E.T., like Aviva here, Wawanesa initially attempted to statute-bar the applicant’s claim for ACBs under s. 56. Prior to the hearing, Wawanesa conceded that the applicant, having been deemed CAT, was not statute-barred from claiming post-104-week ACBs.

17I would not give effect to Aviva’s argument that because its November 6, 2016 denial of pre-104-week ACBs was not a “pre-emptive” denial of ACBs, but rather a substantive one, and therefore that the limitation period applies to the applicant’s post-104-week ACB claim. This rationale would have required the applicant to appeal the denial of pre-104 ACBs in order to insulate himself against a potential future denial of post-104 ACBs that he was not yet eligible to claim by virtue of not being CAT. This is the absurdity that Tomec addresses. I find it clear that Aviva is attempting to use a 2016 denial of pre-104-week ACBs to deny a 2020 claim for post-104 ACBs that did not arise until the applicant was deemed CAT. Contrary to Aviva’s submissions, this denial clearly pre-dates the applicant’s eligibility, so its acceptance of the applicant’s CAT impairment is consequential to the denial because the applicant was not eligible for the benefit he is now claiming.

18Finally, Aviva asserts that unlike the applicant in Tomec, the applicant’s condition here has not worsened over time, even though it accepted him as CAT. Aviva contrasts the applicant’s 2016 claim for ACBs at the rate of $1,948.60 with his 2020 claim for ACBs at the rate of $1,721.85, submitting that this is evidence that the applicant’s condition “improved” so it cannot be said that he “discovered” his claim when he was actually doing better than he was at the time of the 2016 denial and, therefore, discoverability does not apply. Putting aside the negligible difference in the ACB rates and the many variables that could affect the quantum of a Form-1, I find it difficult to reconcile Aviva’s somewhat obtuse position that the applicant actually improved following its 2016 denial with the fact that it accepted him as CAT in January 2020. To argue that discoverability somehow does not apply on these facts is disingenuous and no authority was provided to support this position.

19For these reasons, I find it clear that Aviva is attempting to use the 2016 denial of pre-104-week ACBs to prevent the applicant from claiming the post-104-week ACBs that he did not apply for in 2016 and was not even eligible to claim until he was deemed CAT in January 2020. I follow the binding direction provided by the Court of Appeal in Tomec that the rule of discoverability applies. Aviva’s 2016 refusal to pay a benefit and the applicant’s ability to make his current claim were not inextricably intertwined, as he was not yet eligible. The applicant is not statute-barred under s. 56 and may proceed with his claim for ACBs.

Section 7

20For completeness, both parties provided submissions on the applicability of s. 7 of the Licence Appeal Tribunal Act, which provides the Tribunal with discretion to extend a limitation period if it is satisfied that there are reasonable grounds for granting such relief, based on four factors: a bona fide intention to appeal; the overall delay; prejudice to the parties; and, the merits of the claim. While the parties highlighted the conflicting interpretations of s. 7 in the Tribunal’s jurisprudence, the Divisional Court recently confirmed that the Tribunal has discretion to extend the limitation period under s. 7 in Fratarcangeli v. North Blenheim Mutual Insurance Company, 2021 ONSC 3997.

21If I had not followed the binding authority of Tomec to find the rule of discoverability applies, I would have exercised the discretion afforded by s. 7 to extend the limitation period. First, it was impossible for the applicant to have a bona fide intention to appeal the denial of a benefit he was not eligible for. However, I accept that the applicant intended to appeal by pursuing his CAT determination within the limitation period. Second, the CAT determination process took over 13 months and the applicant applied for ACBs within five weeks of Aviva’s acceptance of CAT. The applicant then applied to the Tribunal within one month of Aviva’s denial. The delay is not four years, as Aviva submits. Third, there is limited prejudice to Aviva where it has conducted a slate of recent CAT assessments that would provide evidence of the applicant’s attendant care needs and, in any case, the Form-1 contemplates ACBs from February 13, 2020 and ongoing and not retroactively, so it cannot be said that there are evidentiary concerns. Finally, it is obvious that the applicant’s claim has merit based on his CAT designation and the 2020 Form-1 recommending $1,721.85 in attendant care. On balance, I find the factors weigh in favour of the applicant.

ORDER

22The applicant may proceed with his claim for ACBs, as he is not statute-barred by s. 56 of the Schedule. The parties shall contact the Tribunal to arrange a case conference to determine how to proceed.

Footnotes

1. 1O. Reg. 34/10, as amended.
2. 22020 CanLII 34421 (ON LAT).
3. 32020 CanLII 30438 (ON LAT Reconsideration).
4. 42020 CanLII 30387 (ON LAT).
5. 52020 CanLII 87991 (ON LAT).