Ritchie v. Aviva Insurance Canada, 2022 CanLII 117079

Citation: Ritchie v. Aviva Insurance Canada, 2022 ONLAT 21-007812/AABS – PI

Licence Appeal Tribunal File Number: 21-007812/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:

Melissa Ritchie

Applicant

and

Aviva Insurance Canada

Respondent

PRELIMINARY ISSUE DECISION [AND ORDER]

ADJUDICATOR:

Tavlin Kaur

APPEARANCES:

For the Applicant:

Melissa Ritchie, Applicant

Jeffery Crannie, Counsel

For the Respondent:

Jason Brumwell, Litigation Specialist

Marcin Panasewicz, Counsel

HEARD:

By Way of Written Submissions.

OVERVIEW

1This proceeding concerns a dispute between an insured person (the ‘applicant’) and an insurer (the ‘respondent’) about automobile insurance benefits under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the ‘Schedule’) arising out of a motor vehicle accident on February 13, 2014.

ISSUES IN DISPUTE

2The respondent raised a preliminary issue for this matter, which is:

1. Is the applicant barred from proceeding with her claim for home modification benefits as she failed to submit to an insurer’s examination under section 44 of the Schedule?

BACKGROUND

3The applicant was involved in an accident on February 13, 2014. On May 19, 2021, the applicant submitted a treatment and assessment plan (‘OCF-18’) in the amount of $33,755.26 for home modifications. The respondent sent a denial letter to the applicant on June 4, 2021. The respondent subsequently sent a notice of examination on June 21, 2021, requesting that the applicant submit to an insurer examination (‘IE’) that was scheduled to take place on June 28, 2021.

4The applicant filed her application with the Tribunal on June 24, 2021. The applicant did not attend the June 28, 2021 IE. The respondent sent a second notice of examination on July 14, 2021 to the applicant, requesting her to attend an IE scheduled for July 29, 2021.

5On July 15, 2021, the counsel for the applicant sent the following email:

This will advise that my client will not be attending the Insurer Examination. The Explanation of Benefits sent June 4 did not request an IE, so it is clear that Aviva did not require any additional information to make its decision to deny your insured her benefits. It was not until after the LAT application was filed before the Notice was provided. Given that the insurer had clearly stated its denial prior to the LAT application being filed, it appears clear that this examination has been requested for the purpose of litigation and is therefore an improper abuse of process.

6On July 20, 2021, the respondent sent the applicant’s counsel an email which informed him that the fax was sent on June 21, 2021. The respondent also attached a fax confirmation. The respondent informed the applicant’s counsel that the IE would remain as scheduled. On the same day, the applicant’s counsel informed the respondent that the fax number on the fax confirmation was incorrect.

7On August 11, 2021, the respondent sent the applicant’s counsel a third notice of examination. The third IE was scheduled to take place on September 9, 2021. The respondent was informed by the applicant’s counsel on August 11, 2021 that his client would not be attending the IE.

PARTIES’ POSITIONS

8The respondent submitted that the applicant has not attended any of the IEs in relation to the OCF-18. She did not meet her obligations under section 44 of the Schedule to attend the scheduled IEs and, as a result, is barred from proceeding under section 55 of the Schedule. The respondent submits that the Tribunal should dismiss her application, and, in the alternative, the respondent should be allowed to conduct the subject IE in advance of the hearing on the substantive issue in dispute.

9The respondent submits that it notified the applicant of these examinations appropriately. Moreover, the IEs are reasonably necessary to determine her entitlement to the disputed OCF-18. The respondent conceded that the first notice of examination dated June 21, 2021 was not delivered to the applicant’s counsel. However, the two subsequent notices issued on July 14, 2021 and August 2021 were proper notices. These were received by the applicant’s counsel and triggered the applicant’s obligation to attend the IE.

10The applicant submitted that she is not barred by section 55(1)2 because by the time she applied to the Tribunal, she had not been provided with a notice in accordance with the Schedule that the respondent required an examination under section 44. There is no evidence that the applicant received the notice purportedly mailed on June 21, 2021, prior to applying to the Tribunal on June 24, 2021. In fact, she did not receive the notice prior to applying to the Tribunal.

11Moreover, section 55 of the Schedule states that, “an insured person shall not apply to the [LAT].” The section only bars applying to the Tribunal. The applicant submitted that the section does not bar continuing with an application that was commenced prior to being provided with notice in accordance with the Schedule that an IE was required.

12The applicant also asserted that the June 21, 2021 notice was not sufficient. For an insurer to rely on section 55(1)2, it must have provided the applicant with sufficient notice. The applicant submitted that the medical reasons provided in the June 21, 2021 notice are insufficient.

13The applicant also submits that as the insurer’s right to require an IE under section 44 is limited to those examinations that are “reasonably necessary.” The subject IE is not reasonably necessary. The timing of the insurer’s request for an IE is one of the guiding criteria in assessing the reasonableness of a proposed IE. The applicant further submitted that the requested IE is not reasonably necessary because the benefit to be addressed by the IE had already been unequivocally denied by the respondent.

14The applicant is relying on Victor Kozin v. Certas Home and Auto Insurance Company, 2013 ONFSCDRS 150 and C B. L. v Economical Insurance Company, 2019 CanLII 94125 (ON LAT) in support of her case.

15The respondent submitted that the interpretation of section 55 suggested by the applicant would lead to absurd results in claims adjustment and litigation. The applicant’s proposed interpretation opens the door to insured persons avoiding unwanted IEs by simply filing LAT applications before an insurer can coordinate and schedule an IE.

LAW

16Section 44(1) of the Schedule provides that, for the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit for which an application is made, but no more often than is reasonably necessary, an insurer may require an insured person to be examined by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation.

17The requirements for a notice of examination set out in s. 44(5) of the Schedule are:

If the insurer requires an examination under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,

(a) the medical and any other reasons for the examination;

(b) whether the attendance of the insured person is required at the examination;

(c) the name of the person or persons who will conduct the examination, any regulated health profession to which they belong and their titles and designations indicating their specialization, if any, in their professions; and

(d) if the attendance of the insured person is required at the examination, the day, time and location of the examination and, if the examination will require more than one day, the same information for the subsequent days.

18Section 44(9)2. sets out the rules for an in-person IE:

The following rules apply in respect of the examination:

2. If the attendance of the insured person is required,

i. the insurer shall make reasonable efforts to schedule the examination for a day, time and location that are convenient for the insured person,

ii. the insured person and the insurer shall, not later than five business days before the day scheduled for the examination, provide to the person or persons conducting the examination such information and documents as are relevant or necessary for the review of the insured person’s medical condition, and

iii. the insured person shall attend the examination and submit to all reasonable physical, psychological, mental and functional examinations requested by the person or persons conducting the examination.

19Section 55(1)2 of the Schedule provides that an insured person shall not apply to the Tribunal if the insurer has provided the insured person with notice that it requires an examination under s. 44, but the insured person has not complied.

20Taking all of the above provisions, the Schedule is clear that the applicant has a duty to participate in each in-person IE that is reasonably necessary and for which there is a Schedule-compliant notice. If the applicant fails to comply, there must be a reasonable explanation provided for the non-compliance. To be clear, the respondent must first prove that a Notice of Examination complies with s. 44(5) of the Schedule in order for it to rely on it as a basis to seek a statute bar under s. 55.

ANALYSIS

Is the respondent precluded from raising s. 55?

21In my view, answering this question depends on answering two other questions; first: does the notice of examination need to be included with the denial letter and second: is the respondent precluded from requesting IEs after the applicant has applied to the LAT for dispute resolution? I discuss those questions below.

i. Does a Notice of Examination need to be included with the denial letter?

22Based on what I recited in paragraphs 5 and 10 above, it appears that the applicant’s position is that the notice of examination must be issued with the denial letter.

23The respondent submitted that section 38(10) of the Schedule allows, but does not require, an insurer to issue a Notice of Examination along with its denial of a medical benefit. Section 38(8) does require that an insurer advise an insured person of its position in respect of payment of a benefit within 10 business days.

24Pursuant to section 38(10) of the Schedule, if the insurer has not agreed to pay for all goods, services, assessments and examinations described in the treatment and assessment plan or believes that the Minor Injury Guideline applies to the insured person’s impairment, the notice under subsection (8) may notify the insured person that the insurer requires the insured person to undergo an examination under section 44. [my emphasis added].

25It 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. The fact that the legislature has included the word ‘may’ in section 38(10) of the Schedule leads me to believe that the respondent is not required to issue a notice of examination along with its denial of the medical benefit. In my opinion, the wording in section 38(10) of the Schedule does not give rise to any ambiguity. Moreover, if the legislature intended that the insurer provide the notice of examination along with the denial letter, the wording in section 38(10) would have reflected that, for example: “and where the insurer requires the insured person undergo an examination under section 44, the notice under subsection (8) shall be accompanied by the notice under section 44.”

26Therefore, I find that the notice of examination does not need to be included with the denial letter.

ii. Is the respondent precluded from requesting an IE after the filing of the LAT application?

27I note that the Schedule does not say that the respondent is precluded from requesting an IE after the filing of the application with the Tribunal. Nor has the applicant directed me to such a section. The applicant is relying on paragraphs 25 to 26 in C B. L. v Economical Insurance Company., 2019 CanLII 94125 (ON LAT) in support of her case. However, the applicant fails to address the comments in paragraphs 27 and 28. The Tribunal found that:

Despite the fact that the IE request by the respondent was given after the Tribunal proceeding was commenced does not automatically preclude an IE assessment. The particular facts of the case must be considered, and the IE request should not solely be to bolster the respondent’s position in preparation for a hearing. In the present case, the catastrophic IE request is the first one the applicant would be required to attend, and the respondent has a duty to continuously adjust the applicant’s file. The adjustment process does not stop just because the applicant filed an appeal Application with the Tribunal.

28I agree with the reasoning in C.B.L. The particular facts of the case must be considered. In this case, the respondent served the notice before the filing of the application with the Tribunal. Although it was sent to the wrong fax number, the intention was there. Human error is inevitable. The respondent mitigated this issue by sending two other notices.

29The IE would have been the first one that the applicant would be required to attend in relation to this treatment plan. Even though the denial letter dated June 4, 2021 did not indicate that the respondent intended to conduct an IE, the respondent has a duty to adjust the applicant’s file on a continuous basis. Precluding the respondent from doing so would be prejudicial and inconsistent with the principles of procedural fairness and natural justice.

30With respect to Kozin, I am not persuaded by the applicant’s argument as Kozin addresses an old version of section 55. It is not applicable to the case before me and nor is this decision of the Financial Services Commission binding on me.

31For the reasons noted above, I find that the respondent is not precluded from requesting an IE after the filing of the LAT application.

32Further, given my findings on the two questions, I find that the respondent is not precluded from raising section 55. I now turn to the substance of the section 55 issue itself.

Is the Notice of examination dated June 24, 2021 deficient?

33I am not satisfied that the notice of examination dated June 24, 2021 complied with the requirements under section 44(5) of the Schedule. The applicant is of the view that the first notice is deficient because the medical reasons are insufficient. The stated medical reason in the June 24, 2021 notice was as follows:

There appears to have been late reporting of the accident and/or commencement of medical care. The submission for proposed devices does not appear to relate to the diagnosis. At more than 7 years post mva, there is no medical evidence that these assistive devices are reasonable or necessary.

34The applicant is relying on M.B. v. Aviva Insurance Company, 2017 CanLII 87160 (ON LAT). In this case, Executive Chair Lamoureux addressed the purpose of reasons:

In my view, an insurer satisfies its obligation to provide its “[medical] and any other reasons,” whether under s. 44(5)(a) or elsewhere, by explaining its decision with reference to the insured’s medical condition and any other applicable rationale. That explanation will turn on the unique facts at hand. Therefore, it would be unwise to attempt to outline a comprehensive approach to doing so. Nevertheless, an insurer’s “medical and any other reasons” should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal.

35The Executive Chair also highlighted that an insured’s claim cannot be barred if the respondent failed to provide proper notice as per s. 44(5) of the Schedule. In addition, the notice requirements set out in s. 44(5) should be strictly construed and the insurer's notice should be closely examined to ensure it complies. If the respondent’s notice does not comply with s. 44(5), an insurer cannot rely on the severe remedy available in s. 55 of the Schedule to bar an insured’s application.

36The reasons do not mention the applicant’s conditions, which forms the basis for the insurer’s decision. Nor does it identify the information about the insured’s condition that the respondent requires but does not have. The benefit in dispute is not mentioned. I find that the reasons are vague. As such, I find that the Notice of Examination dated June 24, 2021 was not compliant with section 44(5) of the Schedule.

Are the second and third notices deficient?

37The notices of examinations dated July 14, 2021 and August 11, 2021 are identical. The only difference is the dates. The notices both mention the applicant’s conditions, which forms the basis of the decision. Both notices mention the benefit in dispute. I find that these notices provide more fulsome explanations. I am satisfied that these notices of examinations dated July 14, 2021 and August 11, 2021 comply with section 44(5) of the Schedule.

38I also find that the second and third notices complied with s. 44(5) as they were clear and sufficient enough to allow an unsophisticated person to make an informed decision to attend the insurer examination or dispute it.

Did the applicant fail to comply with section 44 in relation to the second and third notices?

39The parties do not dispute that the applicant did not attend the IEs scheduled according to the second and third notices. Having found those notices compliant with the Schedule, I find that the applicant failed to comply with section 44.

Does s. 55(1)2 apply to the applicant?

40Section 55(1)2 of the Schedule permits the Tribunal to allow an insured to apply for dispute resolution despite being non-compliant with s. 44. Section 55(3) of the Schedule provides that the Tribunal may impose terms and conditions on any permission granted.

41As noted in the emails dated July 15, 2021, July 19, 2021 and August 11, 2021, the applicant’s counsel informed the respondent that the applicant would not be attending the rescheduled IEs.

42I decline to exercise my discretion under these sections because the applicant has not put forward a reasonable explanation for her non-attendance at the IEs. I find this to be unreasonable. Just as much as the insurer has a duty of good faith to adjust the claim and provide the applicant with medical and any other reasons why the IE is required, I find that the applicant has a duty to cooperate with the respondent where the IE notice is compliant. Refusing to attend the rescheduled IEs frustrated the respondent’s ability to assess the applicant.

ORDER

43The applicant is barred from proceeding with her application because she failed to attend the respondent’s s.44 insurer examination The application is dismissed.