Nichols v. Gore Mutual Insurance Company, 2022 CanLII 109495

Citation: Nichols v. Gore Mutual Insurance Company, 2022 ONLAT 21-008322/AABS

Licence Appeal Tribunal File Number: 21-008322/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:

Heather Nichols

Applicant

and

Gore Mutual Insurance Company

Respondent

DECISION [AND ORDER]

ADJUDICATOR:

Tavlin Kaur

APPEARANCES:

For the Applicant:

Heather Nichols, Applicant

Andrew Franzke, Counsel

For the Respondent:

Ted Watson, Accident Benefits Adjuster

Rosalind Eastmond, Counsel

Heard in writing

OVERVIEW

1Heather Nichols (“the applicant”) claimed involvement in an accident on May 17 2018 and sought benefits from the respondent pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the “Schedule”).

2Gore Mutual Insurance Company (“the respondent”) took the position that the applicant failed to apply for accident benefits within the time prescribed by the Schedule. As a result, it refused to accept the applicant’s claim for benefits. The applicant disagreed and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of this dispute.

ISSUE

3Is the applicant barred from proceeding with the claim for benefits, as she failed to submit the application for benefits (OCF-1) within the time prescribed in the regulation?

RESULT

4Pursuant to section 55(1)1 of the Schedule, the applicant is barred from proceeding with her claim for accident benefits as she failed to comply with the timelines prescribed by section 32 of the Schedule.

BACKGROUND

5On May 17, 2018, the applicant was seated in her vehicle which had stopped on the roadway due to the loss of fuel. The applicant was involved in an accident when a third party rear-ended her vehicle.

6The respondent received notification of the accident on May 24, 2018 and contacted the applicant via telephone. On May 25, 2018, the respondent sent the applicant the initial accident benefits letter informing her that she was entitled to benefits provided under the policy. The letter informed the applicant that in order to apply for benefits, she must complete the Application for Benefits (‘OCF-1’) and return it to the respondent within 30 days. In the letter, the applicant was informed that failure to return the application forms within 30 days of receiving them would result in the rejection of the claim for accident benefits.

7On June 15, 2018, the respondent notified the applicant that the application for accident benefits was not received. The applicant was informed that if the application was not received by July 18, 2018, the file would be closed.

8The respondent did not receive the application. On September 11, 2018, the respondent wrote to the applicant to inform her that the file would be closed on September 28, 2018.

9On July 23, 2019, the applicant’s counsel reached out to the respondent. She provided some invoices and also requested information pertaining to the income replacement benefit. There were subsequent requests for information from the respondent. The applicant’s counsel was informed on many occasions that the applicant did not submit an application for accident benefits and that the file was closed in 2018. On December 2, 2021, the respondent informed the applicant’s counsel that they did not have the OCF-1. The email from the respondent stated, “I have noted that previously numerous times.”

10On September 15, 2022, the parties attended a case conference. The respondent received an OCF-1 after the case conference.

ANALYSIS

11Pursuant to section 32(1) of the Schedule, a person who intends to apply for statutory accident benefits, shall notify the insurer of their intention no later than the seventh day after the circumstances that give rise to the entitlement to the benefit, or as soon as practicable after. The accident occurred on May 17, 2018, and the insurer was notified on May 24, 2018. I find that the applicant notified the respondent within seven days after the accident, in compliance with s. 32(1).

Was the OCF-1 provided to the applicant?

12In an accident benefits package, the insurer is required to give the applicant the following, pursuant to section 32(2) of the Schedule:

(a) the appropriate application forms;

(b) a written explanation of the benefits available;

(c) information to assist the person in applying for benefits; and

(d) information on the election relating to income replacement, non-earner and caregiver benefits, if applicable.

13The applicant submitted that there is no evidence that the OCF-1 was included with the respondent’s letter. The applicant submitted that the respondent’s failures to adduce sufficient evidence to ground a finding that the OCF-1 was actually sent to the applicant should lead the Tribunal to determine that the respondent failed to comply with section 32(2)(a).

14The respondent stated that “the accident benefits package was manually placed in the envelope, which was sent to the applicant, along with the letter which specifically set out in clear and unambiguous language the requirement to complete the form, return to the respondent within the specified time frame and the consequences for not returning the forms.” The respondent submitted that the applicant is deemed to have received the mail on the fifth business day after the document was mailed. The respondent directed the Tribunal to Tab 15 of the applicant’s submissions. The respondent stated “Significantly, at TAB 15 of the Applicant’s Submissions, the Applicant attached a completed OCF-1 form, albeit four years, four months later, one of the enclosures, the inclusion of which the Applicant queried."

15Upon reviewing the OCF-1 form, I find that this OCF-1 in Tab 15 cannot be the one that was provided in the initial accident benefits package back in 2018 because the OCF-1 in Tab 15 contains prepopulated info that didn’t come into existence until 2019. The OCF-1 form contains the applicant’s counsel’s information. It should be noted that the applicant retained Ms. Masgras in 2019, not 2018 when the form was sent to her. This raises the question why Ms. Masgras’ name is in the OCF-1 that was presumably sent to the applicant when she was not even retained at the time. Moreover, the date has been typed into the OCF-1 in Tab 15 as September 15, 2022.

16The respondent submitted into evidence the correspondence that was sent to the applicant. The letter dated May 25, 2018 provided information to the applicant regarding the application and the consequence of failing to comply. The letter also notes documents that have been enclosed such as those relating to sections 32, 33, 36, 37, 44 of the Schedule and the accident benefits package. The text of those sections of the Schedule were included with the letter in the evidence brief. However, the accident benefits package which would presumably include the OCF-1 is not in the evidence brief that was filed. This raises the question why this was not included and whether it was sent to the applicant. Based on the evidence before me, I am not persuaded that the OCF-1 was included with the letter dated May 25, 2018.

17However, I note that the respondent was proactive and sent multiple letters to the applicant regarding her failure to submit the OCF-1. The information in the letters is unequivocal. The applicant did not provide any evidence that shows that she reached out to the respondent to inquire about the allegedly missing OCF-1. The adjuster’s log notes make no mention of any attempts on the applicant’s part to reach out regarding the application. If a document was missing, the applicant should have reached out to the respondent. Just as much as the insurer has a duty of good faith to adjust the claim and provide information to assist the applicant to make her claim, I find that the applicant had a duty to mitigate this issue. The May 25, 2018 letter sent to the applicant expressly refers to an OCF-1, which plays a crucial part of the benefits application process. It was open to the applicant to notify the respondent that one or more forms were missing, particularly if the respondent might be unaware of that deficiency.

18I find that the Schedule provides no consequence for the failure to comply with section 32(2). The applicant submitted that “the Tribunal should make it clear that insurers are precluded from relying on Section 55 of the SABS when they are in non-compliance with Section 32(2).” The applicant argued that this would be consistent with the purpose of the Schedule as remedial and consumer protection legislation.

19The applicant is relying on M.O. v. Jevco Insurance Company, 2020 CanLII 63561 (ON LAT) (‘M.O.’), where the Tribunal found that the respondent’s failure to reach out to the applicant or to provide him with application forms for his potential accident benefit claims was a failure under s. 32 that prevents it from relying on the limitation period. In M.O., Vice-Chair Boyce found that the applicant provided a reasonable explanation for the delay and allowed him to proceed with the appeal. I find that M.O. is distinguishable because the respondent in the case before me did reach out to the applicant on multiple occasions.

20With respect to the applicant’s request, it is a basic principle of statutory interpretation that every word that is found in a statute has been included there for a reason and is intended to have a purpose. There must be a reason as to why the Legislature did not provide a consequence for the failure to comply with section 32(2). I am required to respect the Legislature’s clear intention even though it may result in unfairness to the applicant.

Was the OCF-1 submitted within the timeframes prescribed in the Schedule?

21The respondent submitted that the applicant is precluded from accessing the dispute resolution process in accordance with section 55 of the Schedule because she failed to submit her OCF-1 within the time prescribed by the Schedule.

22The applicant submitted that the respondent’s breach of section 32(2) continued up and until the service of its case conference brief, which disclosed that the OCF-1 had not been submitted. The applicant submitted that an OCF-1 fourteen days later, after the case conference, in compliance with the Schedule.

23I find that the OCF-1 was not submitted within the prescribed timeframe. The adjuster spoke with the applicant on the phone regarding the accident. The adjuster’s log notes state “Ted explained AB claims process and AB package. Diary set for rec’t of AB package. Diary set for 60 day diary review.”

24On May 25, 2018, the respondent sent the applicant the initial accident benefits letter informing her that she was entitled to benefits provided under the policy. The letter informed the applicant that in order to apply for benefits, she must complete the OCF-1 and return it to the respondent within 30 days. In the letter, the applicant was informed that failure to return the application forms within 30 days of receiving them would result in the rejection of the claim for accident benefits.

25On June 15, 2018, the respondent notified the applicant that the application for accident benefits was not received. The applicant was informed that if the application was not received by July 18, 2018, the file would be closed. The respondent did not receive the application. On September 11, 2018, the respondent wrote to the applicant to inform her that the file would be closed on September 28, 2018.

26On February 22, 2021, the respondent informed the applicant’s counsel that the claim was closed. On December 2, 2021, the respondent informed the applicant’s counsel that they did not have the OCF-1. On September 15, 2022, the parties attended a case conference. The respondent received an OCF-1 (the one in Tab 15) after the case conference, which is dated September 15, 2022.

27Based on the evidence before me, I find that the OCF-1 was not submitted within the prescribed timelines under the Schedule. Contrary to the applicant’s assertion that the respondent did not assist her, I find that the respondent provided adequate information to assist the applicant in applying for accident benefits. The respondent notified the applicant on multiple occasions that the application had not been submitted. The letters are quite clear. Moreover, the correspondence sent from the respondent to the applicant’s counsel’s firm is not vague or ambiguous. From my review of the correspondence, it is quite explicit that the respondent did not receive the OCF-1 within the prescribed timelines. As such, I am not persuaded by the applicant’s position.

Reasonable Explanation

28Pursuant to section 34 of the Schedule, an applicant may not be disentitled for failing to comply with section 32 if she provides a reasonable explanation for the delay. The interpretation of “reasonable explanation” is guided by Horvath and Allstate Insurance Company of Canada², more recently reiterated in K.H. vs Northbridge.³ The guiding principles are:

1. An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.

2. The onus is on the insured person to establish a “reasonable explanation.”

3. Ignorance of the law alone is not a “reasonable explanation.”

4. The test of “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.

5. The lack of prejudice to the insurer does not make an explanation automatically reasonable.

6. An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.

29The applicant submitted that the respondent’s failure to carry out its duties pursuant to section 32(2), as well as its vague and evasive communications more generally, when considered in conjunction with the applicant’s injuries and substantial post-accident deterioration in her life circumstances, constitute a reasonable explanation for her failure to comply with Section 32(1).

30The respondent submitted that the applicant has not discharged her onus of establishing a reasonable explanation. The applicant did not submit an explanation for her delay in submitting the OCF-1. Moreover, ignorance of the law is not a reasonable explanation in this case, as there is no evidence to suggest that the applicant’s background, education, experience to other personal characteristics suggest that she was genuinely ignorant of the process of filing an accident benefit claim in the timelines required by the SABS.

31Moreover, it would suffer significant prejudice if the applicant would be allowed to pursue the dispute and claim. The significant delay of four years and 4 months prevented the respondent from obtaining contemporaneous medical examinations and records. The respondent submits that the prejudice to the respondent far outweighs the hardship faced by the applicant.

32Even if I were to accept the argument that the applicant’s medical conditions and life circumstances impacted her ability to understand and apply for accident benefits, it still does not explain why there was a delay in submitting it when counsel for the applicant first became aware of the fact that the OCF-1 was not submitted. On February 22, 2021, the respondent informed the applicant’s counsel’s office that the file had been closed due to non-activity and that zero benefits had been paid to date.

33Following the applicant’s request for dispute resolution by this Tribunal, the applicant was served with the respondent’s response, which is dated July 23, 2021. The response includes a note under the preliminary issue section that the applicant did not submit an application for accident benefits within two years and should be precluded from applying to the Tribunal. On December 3, 2021, the applicant’s counsel’s office asked if the respondent had a copy of the OCF-1. The respondent replied that it did not have a copy and that this has been noted “previously numerous times”.

34Contrary to the applicant’s submissions, I find that it is quite clear from the correspondences that the respondent did not receive the OCF-1. The response outlines the sections and the issues in a very clear manner. It raises the question why the applicant’s counsel did not submit the OCF-1 on behalf of the applicant once the response was received. The applicant submitted an OCF-1 after the case conference, which took place on September 15, 2022. There is a delay from July 23, 2021 to September 15, 2022. The applicant did not provide a reasonable explanation for this delay. In my view, this delay is unreasonable. I agree with the respondent’s submissions that to allow the applicant to pursue her claim would be prejudicial to the respondent.

35Pursuant to section 55(1)2 of the Schedule, the applicant shall not apply to the Tribunal as a result of her failure to adhere to the timelines provided by the Schedule. Considering my analysis above, I find no compelling reason to invoke section 55(2) of the Schedule and use my discretion and permit the applicant to continue her application to this Tribunal. I am fully cognizant of the ramifications to the applicant’s claims for accident benefits and do not make this decision lightly.

CONCLUSION AND ORDER

36The applicant failed to submit her application for accident benefits in accordance with the timelines outlined in the Schedule. She has not provided a reasonable excuse for her delayed submission of her application.

37Pursuant to section 55(1)1 of the Schedule, the applicant shall not apply to the Tribunal because she failed to submit her application within the times prescribed by section 32(5) of the Schedule.

38The Application is dismissed.

Footnotes

1. 1O. Reg. 34/10
2. 2FSCO A02-000482, June 9, 2003
3. 32019 CanLII 101613 (ON LAT)