Citation: Thompson v. Aviva Insurance Company, 2022 ONLAT 20-005734/AABS

Licence Appeal Tribunal File Number: 20-005734/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:

Patricia Thompson

Applicant

and

Aviva Insurance Company

Respondent

AMENDED PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Brian Norris

APPEARANCES:

For the Applicant:

Patricia Thompson, Applicant

Shannon Kelly, Counsel

Gus Triantafillopoulos, Counsel

For the Respondent:

Jennifer Walters, Adjuster

Maggie Morgan, Counsel

J.- C. Rioux, Counsel

Court Reporter:

Shane Brenton

HEARD: By videoconference followed by written submissions

OVERVIEW

1Mr. Carter, the fiancé and now, husband, of Patricia Thompson, (“the Applicant”), was involved in an automobile accident on October 9, 2015, and suffered catastrophic injuries as a result. The Applicant claims that she developed psychological injuries while caring for Mr. Carter during his rehabilitation from his accident and claimed entitlement to certain benefits from Aviva Insurance Company, (“the Respondent”), pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010, which were denied. The Applicant submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for a resolution of the dispute.

2In response to the application, the Respondent raised a preliminary issue that the Applicant is barred from proceeding with her claim for IRBs because she failed to submit an application for the benefit within the times prescribed by the Schedule.

3The substantive issues are not before me.

ISSUES

4The preliminary issue in dispute is:

1. Is the Applicant barred from proceeding with her claim for IRBs because she failed to submit an application for the benefit within the times prescribed by the Schedule?

5For reference, the substantive issues in dispute are:

1. Is the applicant entitled to an income replacement benefit of $317.10 per week from April 25, 2019 date and ongoing?

2. Is the applicant entitled to $3,780.00 ($7980.00 less $4,200.00 approved) for psychological services recommended by FunctionAbility Rehabilitation Services in a treatment plan (OCF-18) submitted on April 17, 2019 and denied on August 7, 2019?

3. Is the applicant entitled to $6,899.75 for psychological services recommended by FunctionAbility Rehabilitation Services in a treatment plan (OCF-18) submitted on September 18, 2019 and which was reportedly approved?

4. Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments to the applicant?

5. Is the applicant entitled to interest on any overdue payment of benefits?

RESULT

6I find that the Applicant is statutorily entitled to IRBs at the rate of $317.10 per week, for the period from May 31, 2019 to January 20, 2020, plus interest pursuant to section 51 of the Schedule. The Applicant is otherwise precluded from claiming entitlement to IRBs.

BACKGROUND

7The Applicant claims entitlement to benefits pursuant to her status as an insured person, which is also outlined in section 3(1). Relevant to this dispute, section 3(1) states that insured person means as follows;

a) the named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of the named insured and a dependant of the named insured or of his or her spouse,

b) if the named insured, specified driver, spouse or dependant is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant,

8Section 3(1) considers the Applicant to be an insured person because, although she was not physically involved in the accident, she suffered psychological injuries as a result of an accident involving her, at that time, common-law spouse, and now spouse, Mr. Carter.

9The Applicant was on parental leave at the time of Mr. Carter’s accident. She returned to work at the conclusion of her parental leave, in February of 2016. She worked from February 2016 to April 19, 2019, which included a change in employers. The Applicant contends that she stopped employment in 2019 when she had a psychological breakdown related to caring for Mr. Carter during his recovery from catastrophic injuries. The Applicant applied for accident benefits on May 7, 2019, and submitted an OCF-3 dated May 31, 2019 to apply for IRBs. The application for IRBs went without a response, until January 20, 2020, when the Respondent wrote to the Applicant and advised that it would pay IRBs for the period from April 29, 2019, to-date and ongoing, including back payment and interest. Cheques were issued to the Applicant but went to the wrong address and were never cashed.

10The Applicant followed up with the Respondent about a month after the Respondent’s correspondence, on February 20, 2020, and advised that the Applicant never received payment for IRBs. The February 20, 2020 email went without a response, prompting the Applicant to initiate her application with the Tribunal on April 30, 2020.

11The Respondent wrote to the Applicant on November 20, 2020 and advised her that it took the position that she was not entitled to IRBs because her application for IRBs was made more than 104 weeks following the accident. It also noted that the IRB payments to-date were made in error because she did not qualify for IRBs. The letter further noted the Respondent’s entitlement to a repayment, but no repayment was requested because the cheques were not cashed, so no payment was ever made.

12The Respondent argues that the Applicant should be barred from proceeding with her claim for IRBs because she was working during the 104 weeks immediately following Mr. Carter’s accident and failed to apply for IRBs within 104 weeks from the date of Mr. Carter’s accident.

ANALYSIS

13Upon consideration of the submissions and evidence, I have determined that the Applicant’s entitlement to IRBs falls into two separate periods. First, her entitlement to benefits for the time from when she initiated her claim, on May 31, 2019, until January 20, 2020, when the Respondent replied to her claim. I consider this to be the period of statutory entitlement. I consider the period after January 20, 2020 to be the period subject to section 5(1)(1) of the Schedule.

14While the primary issue before me is whether the Applicant is barred from proceeding with her claim for IRBs, the parties also made submissions on her entitlement to IRBs during the period of statutory entitlement. As I will outline below, I am unable to address the preliminary issue without also addressing the Applicant’s entitlement during the period of statutory entitlement.

15For the following reasons, I find that the Applicant is precluded from proceeding with her claim for IRBs for the period subject to section 5(1)(1) because her application was made more than 104 weeks following the accident. However, the Applicant is entitled to IRBs for the period of statutory entitlement, as explained below. I will address the issues chronologically, starting with the period of statutory entitlement first.

The Period Statutory Entitlement

16The procedural provisions in section 36 of the Schedule trump the entitlement requirements provided by section 5(1)(1). Section 36 guides the process for claiming IRBs. Relevant to this dispute, section 36(2) states that the Applicant must submit a disability certificate with her Application for benefits, as she did on May 31, 2019. Upon receipt of the Application for benefits, the Respondent is obligated to reply to it in accordance with the time provisions outlined in section 36(4) of the Schedule.

17The Respondent failed to comply with the time provisions outlined in section 36(4) of the Schedule. That section notes that, within 10 business days after receiving an application and completed disability certificate, the Respondent shall pay the benefit, give notice of the medical and any other reasons why it will not pay the benefit – including any request for an examination pursuant to section 44 of the Schedule, or request additional information pursuant to section 33(1) or 33(2) of the Schedule. In this case, the Respondent failed to issue any response until January 20, 2020, when it advised that it will pay the benefit as claimed.

18Section 36(6) of the Schedule outlines the consequences insurers face when they fail to comply with the time provisions in section 36(4). Section 36(6) reads as follows:

(6) If the insurer fails to comply with subsection (4) or (5) within the applicable time limit, the insurer shall pay the specified benefit for the period starting on the day the insurer received the application and completed disability certificate and ending, if the insurer subsequently gives a notice described in subsection (4) (b), on the day the insurer gives the notice.

19The Respondent failed to comply with the time provisions in section 36(6) of the Schedule and is subject to the consequences outlined therein. It is undisputed that the Applicant completed her application for IRBs when she submitted her application for benefits as well as her completed disability certificate. Further, it is undisputed that the Respondent’s first response to the application for IRBs was made on January 20, 2020. Thus, the Respondent is subject to the consequences in section 36(6) of the Schedule for the period of statutory entitlement whereby it failed to reply to the application for IRBs.

20The IRB entitlement provisions in section 5(1)(1) of the Schedule do not apply during the period of statutory entitlement because the Schedule does not require it. A plain reading of section 36(6) causes me to conclude that there is no reference to any entitlement provisions, let alone those outlined in section 5(1)(1). Section 36(6) of the Schedule provides that the Respondent must reply to the application for IRBs within 10 business days following when the Applicant submitted a completed application. If section 36(6) of the Schedule required the Applicant to meet the disability test for IRBs, it would include reference to the test.

21While the Applicant is statutorily entitled to IRBs for the period from May 31, 2019 to January 20, 2020, the Respondent’s compliance with section 36(4) causes her entitlement to IRBs to be subject to the eligibility test provided by section 5(1)(1), for the period from January 20, 2020 to-date.

The Period Subject to Section 5(1)(1) of the Schedule

22My analysis on this period requires me to interpret and apply certain sections of the Schedule. Such statutory interpretation requires me to review the Schedule in its entire context and in the ordinary sense, harmoniously with the Schedule, the object of the Schedule, and the intention of the legislature, which ought not produce an absurd consequence that may be illogical or incompatible with the object of the legislation.

23Relevant to the preliminary issue, section 5(1)(1)i of the Schedule sets out that IRBs are contingent on an insured person suffering a substantial inability to complete their essential tasks of employment within 104 weeks of the accident. Section 32(1) of the Schedule provides that a person who intends to apply for accident benefits shall notify the Respondent of their intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day.

24Read together, sections 5(1)(1) and 32(1) imply that the Applicant must make her claim for IRBs within 105 weeks of the accident. Given that the impairment must arise within 104 weeks of the accident and that the notification of an intent to apply for IRBs must be made within a week, or as soon as practicable after that day, I conclude that the Applicant must apply for IRBs within 105 weeks of the accident, or as soon as practicable after that day.

25Section 32 of the Schedule is unsupportive with respect to the Applicant’s claim for IRBs because her impairment arose after 104 weeks following the accident. Section 32(1) stipulates that the Applicant give the Respondent notice of her intention to claim benefits within seven days after the circumstances that give rise to the entitlement to the benefit, or as soon as practicable after that day. The term “as soon as practicable after that day” is not defined in the Schedule. However, I trust that it requires a reasonable delay between the 104-week mark and the date the application is submitted, together with a reasonable excuse. Here, the Applicant provides neither. She submits that her impairment arose after 104 weeks following the accident, which would disqualify her from the eligibility provisions in section 5(1)(1) of the Schedule. Alternatively, the Applicant’s impairment arose within 104 weeks of the accident, yet she never gave the Respondent notification of an intent to apply for benefits until May 2019, more than three and a half years following the subject accident. In either event, the Applicant would not meet the eligibility requirement for IRBs, as outlined in section 5(1)(1).

26The Tribunal has previously barred claims for IRBs where an impairment arose after 104 weeks following the accident¹. However, the Tribunal has not considered whether the same provisions apply in a situation like the Applicant’s, whereby she sustained psychological injuries subsequent to the subject accident.

27The term “accident” is defined in section 3(1) of the Schedule as meaning an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or medical or dental device.

28As noted previously, the Applicant claims entitlement to benefits pursuant to her status as an insured person, which is also outlined in section 3(1).

29Notably, section 3(1) of the Schedule recognizes that insured persons like the Applicant were not directly involved in the accident but ought to receive some coverage for the psychological or mental injuries that they sustain as a result of an accident involving their family member. This is notable because, if the situation is contemplated when outlining where coverage lies, it would naturally be present when the legislators drafted the IRB eligibility provisions. Thus, if the eligibility provisions in section 5(1)(1), as they apply to the Applicant, were meant to read 104 weeks after the circumstances that gave rise to the substantial inability to complete the essential tasks of employment, it would say so. Instead, it specifically anchors entitlement to those whose impairment arises within 104 weeks of the subject accident.

30I find that the Schedule intended to limit IRB claims, including those made by family members who develop psychological injuries like the Applicant, to insured persons whose entitlement arises within 104 weeks of the subject accident and not 104 weeks within the onset of impairment. The Schedule extends and limits coverage, depending on the circumstances. Section 5(1)(1) provides the eligibility criteria for IRBs, whereby an impairment must arise within 104 weeks of the accident. Section 3(1) of the Schedule provides a specific definition of “accident”, which I conclude is the incident involving Mr. Carter. I would have to redefine the term “accident” if I were to accept the Applicant’s interpretation of the Schedule and extend IRB coverage to her. That is because the term “accident”, as defined by the schedule, requires that the use or operation of a vehicle that directly cause an impairment. Here, the Applicant’s impairment arose out of her relationship to and care for the injured person, not the direct use or operation of a vehicle. Alternatively, I would have to redefine the term “accident” to refer the instance when the Applicant suffered a psychological breakdown and became unable to complete the essential tasks of her employment, instead of the incident involving the vehicle. I reject this interpretation and thus choose not to redefine accident as suggested.

31The Respondent’s actions while adjusting Mr. Carter’s claim are immaterial to this hearing. The Applicant submits that the Respondent received reports which confirmed that Mr. Carter sustained a catastrophic impairment as a result of the accident, but failed to provide the reports to Mr. Carter (and the Applicant) for more than seven months. However, this issue between Mr. Carter and the Respondent has no influence on my determination of whether the Applicant’s impairment arose as a result of and within 104 weeks of the subject accident.

32The repayment provisions in section 52 of the Schedule promote the timely adjusting of benefits by permitting the Respondent to correct errors committed out of haste, or otherwise. Thus, the Respondent is within its rights to revoke its January 20, 2020 agreement to fund the Applicant’s IRBs. Amongst other things, sections 52(2) and 52(3) provides that an Applicant is liable to repay to the Respondent any benefit that is paid as a result of an error on the part of the insurer. To claim repayment, the Respondent must, within one year of the error, provide the Applicant with notice of the amount that she is required to repay. The Respondent provided clear notice of the repayment request to the Applicant on November 20, 2020. Thus, it was within it’s right to claim repayment dating back to January 20, 2020, when the period of statutory entitlement ended, as it is within one year of the repayment request. Considering that no payments were ever deposited, no actual repayment is required of the Applicant.

33Section 52 of the Schedule has no impact on the Applicant’s entitlement to IRBs prior to January 20, 2020. As noted previously, the mandatory time provisions and consequences for noncompliance outlined in section 36 of the Schedule are compulsory and not subject to the entitlement provisions in section 5(1)(1) of the Schedule. As the Applicant is entitled to IRBs during the period of statutory entitlement, it follows that the Respondent is barred from seeking a repayment of IRBs paid prior to January 20, 2020.

34In sum, the Respondent is correct in determining that the Applicant is precluded from claiming entitlement to IRBs. The Applicant’s impairment arose more than 104 weeks following the accident and her application for IRBs was made more than 105 weeks following the accident. However, the Respondent’s failure to comply with the time provisions in section 36 of the Schedule provide that the Applicant is entitled to IRBs as claimed for the period from the date of her Application to the date the Respondent complied with section 36 of the Schedule.

INTEREST

35Interest is payable on the overdue payment of benefits. As the Respondent failed to pay IRBs to the Applicant during the period of statutory entitlement, it follows that she is entitled to interest on those payments, pursuant to section 51 of the Schedule.

36As no payments were ever remitted to the Applicant, she is not required to repay any benefits. It follows that no interest would be payable to the Respondent as no benefits are to be repaid.

CONCLUSION AND ORDER

37The Applicant is entitled to IRBs are the rate of $317.10 per week for the period from May 31, 2019 to January 20, 2020, plus interest pursuant to section 51 of the Schedule.

38The Applicant is precluded from claiming entitlement to any other IRBs because her impairment arose more than 104 weeks after the subject accident and she failed to submit an application for the benefit within the times prescribed by the Schedule.

39A hearing on the remaining substantive issues in dispute will proceed as outlined in the Case Conference Report and Order dated October 21, 2020.

Footnotes

1. 1See JV v TD Insurance Meloche Monnex, 2019 CanLII 110091 (ON LAT) and C.G. v Pembridge Insurance Company, 2020 CanLII 51276 (ON LAT)