Licence Appeal Tribunal File Number: 20-010657/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:
Alexander Katsaros
Applicant
and
TD Insurance Meloche Monnex
Respondent
PRELIMINARY ISSUE DECISION AND ORDER
ADJUDICATOR:
Theresa McGee, Vice-Chair
APPEARANCES:
For the Applicant:
Ray DiGregorio, Counsel
For the Respondent:
Gina Nardella, Counsel
HEARD:
By way of written submissions
BACKGROUND
1The applicant, Alexander Katsaros, was involved in an automobile accident on October 21, 2016, and sought benefits from the respondent, TD Insurance Meloche Monnex, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 20101 (the “Schedule”).
2When the respondent denied the applicant’s income replacement benefit claim, the applicant applied to the Licence Appeal Tribunal (“Tribunal”) for dispute resolution. The respondent raises two related preliminary issues that, if established, would dispose of the entire application. This hearing is to determine those preliminary issues.
PRELIMINARY ISSUES
3The issues to be decided are:
a. Did the applicant fail to apply for income replacement benefits within the timeframe set out in the Schedule?
b. If yes, is the applicant statute-barred from any entitlement to income replacement benefits as a result?
RESULT
4The application shall proceed to a hearing on the merits.
FACTUAL BACKGROUND
5The applicant’s claim for an income replacement benefit has an uncommon procedural history, but the relevant facts are undisputed.
6On November 1, 2016, the applicant filed an Application for Accident Benefits (OCF-1) stating that he was working at the time of the accident and that he returned to work after a five-day interruption.
7On December 1, 2016, the respondent sent a letter to the applicant informing him that he was ineligible for an income replacement benefit because he had returned to work within seven days of the accident. The respondent requested a disability certificate (OCF-3) to determine the applicant’s eligibility for further benefits.
8On February 13, 2017, the applicant submitted a disability certificate (OCF-3) stating that he did not suffer a substantial inability to perform the essential tasks of his employment, but that he did suffer a complete inability to carry on a normal life.
9On February 14, 2017, the respondent sent an explanation of benefits to the applicant stating he may be eligible for a non-earner benefit, but not an income replacement benefit because he had returned to work.
10On March 20, 2017, the respondent sent the applicant an explanation of benefits stating that he was required to attend a series of insurer’s examinations to determine whether he met the test for entitlement to a non-earner benefit.
11In April and May 2017, the applicant underwent the insurer’s examinations and the respondent’s assessors determined he did not meet the test for entitlement to a non-earner benefit.
12On May 18, 2017, the applicant submitted a second disability certificate (OCF-3) stating that he did not suffer a substantial inability to perform the essential tasks of his employment, but that he did suffer a complete inability to carry on a normal life.
13On May 25, 2017, the respondent denied the applicant’s claim for a non-earner benefit.
14Almost a year later, on April 6, 2018, the applicant stopped working and began receiving short-term disability benefits from his employer.
15On August 3, 2018, the applicant’s short-term disability benefits ceased, and he began receiving long-term disability benefits from his employer.
16Almost two years later, on July 28, 2020, the applicant submitted a third disability certificate (OCF-3), this time indicating that he had last worked on April 5, 2018 and that within 104 weeks of the accident, he suffered a substantial inability to carry out the essential tasks of his pre-accident employment.
17On July 31, 2020, the applicant wrote to the respondent to advise that he stopped working in April 2018. He enclosed various progress reports setting out the circumstances of his work stoppage.
18On August 2, 2020, the applicant stopped receiving collateral disability benefits entirely through his employer.
19On August 13, 2020, the respondent sent an explanation of benefits to the applicant advising that he was not eligible for an income replacement benefit because he returned to work on October 26, 2016.
20On September 5, 2020, the applicant filed an application with the Tribunal, with the sole substantive issue being his entitlement to an income replacement benefit from August 3, 2018 to date an ongoing (he claims pre- and post-104 week entitlement).
POSITIONS OF THE PARTIES
21The respondent submits that the applicant failed to properly apply for an income replacement benefit because he did not submit a disability certificate establishing that he suffered a substantial inability to carry on a normal life within 104 weeks of the accident, a procedural step it submits is required under s. 5(1) of the Schedule. The respondent submits that the applicant is improperly trying to retroactively establish entitlement to the benefit. The respondent submits that the application to the Tribunal was filed more than three years after it initially denied him an income replacement benefit on December 1, 2017, well outside the two-year limitation period. The respondent submits there are no grounds for the limitation period to be extended.
22The applicant submits he did not immediately revive his claim for an income replacement benefit when he stopped working in April 2018 because he was receiving collateral disability benefits and he would have been entitled to an income replacement benefit quantum of zero. The applicant submits that all he is required to show under s. 5(1) of the Schedule is that at some point during the first 104 weeks after the accident, he suffered a substantial inability to perform the essential tasks of his employment. He submits he is not required to establish entitlement during that timeframe. He further submits that the respondent was alerted to the fact that he was no longer working during the 104-week period as early as September 14, 2018, when it received a psychological treatment progress report referencing his work stoppage.
23The applicant does not dispute that entitlement to a pre-104 week income replacement benefit is a precondition to a claim for post-104 week benefits.
ANALYSIS
The applicant did not offend s. 36 of the Schedule
24Section 36(2) of the Schedule requires a person seeking an income replacement benefit (or other specified benefit) to submit a “completed disability certificate” with their application for accident benefits. Section 36(3) holds that a person is not entitled to an income replacement benefit for any period before a completed disability certificate is submitted.
25Section 67 of the Schedule provides that a disability certificate is “duly completed” if every field in the form not identified as an optional field is filled in and any optional field is completed in the manner and format specified by the form.
26The respondent submits that the applicant’s failure to submit a disability certificate that was positive for income replacement benefits within 104 weeks of the accident is fatal to his application. The applicant submits that he submitted two completed disability certificates within 104 weeks of the accident, one in February and one in May of 2017. He submits he has satisfied the requirements of s. 36. In any event, the applicant submits, there is no requirement in the Schedule for an insured person to establish entitlement to an income replacement benefit within 104 weeks of the accident.
27Section 67 of the Schedule is worded in a straightforward manner: a disability certificate need not be positive for a given disability threshold for the form to be “completed.” This plain reading of the provision has been adopted in prior decisions of this Tribunal. In 17-000388 v The Co-Operators [17-000388],2 the Tribunal held that it would be overly restrictive to interpret the term “completed disability certificate” to mean a “positive certificate.” In B.M. v Travelers Insurance Company of Canada,3 the Tribunal decided that a completed disability certificate need not confirm an applicant’s entitlement to an income replacement benefit to be “complete” for the purposes of s. 67 of the Schedule.
28Although the Tribunal’s interpretation of the meaning of “completed disability certificate” in 17-000388 remains undisturbed, that decision was reconsidered by the Executive Chair on a separate point that is relevant to the analysis of the present preliminary issue. At first instance, the Tribunal in 17-000388 had held that a disability certificate produced beyond 104 weeks post-accident could not be used to establish entitlement to a pre-104 week income replacement benefit. The first instance adjudicator determined that to allow insured persons to establish entitlement outside the 104-week period would undermine the statutory principle of finality, a principle embraced by the Court of Appeal in Wadhwani v. State Farm Mutual Automobile Insurance Company [Wadhwani].4 The Executive Chair determined that the first instance adjudicator had misread Wadhwani, adding that the Court of Appeal simply held that substantive entitlement to pre-104 income replacement is a prerequisite for entitlement to the benefit after 104 weeks. The Executive Chair held:
Thus, I agree with D.W. that the Tribunal erred in refusing to accept any evidence generated in the post-104 week period. The central inquiry in this matter is whether he satisfied the test in s. 5(1)1 of the Schedule – that is, whether he was employed at the time of the accident and, “as a result of and within 104 weeks after the accident, suffer[ed] a substantial inability to perform the essential tasks of that employment.” In the ordinary course, one’s evidence proving this sort of claim will be generated within the initial 104-week period. But there may also be evidence generated later. It is all relevant. The only temporal restriction on the Tribunal’s analysis is that it must look determine whether, “within 104 weeks after the accident,” the applicant suffered a substantial inability to perform the essential tasks of that employment. Conceivably, evidence generated after the 104-week mark may inform that inquiry.5
29In summary, while s. 36 of the Schedule is clear on the requirement to submit a “completed disability certificate” and in excluding entitlement to an income replacement benefit before this step is taken, the provision does not clearly require that a “positive” disability certificate be submitted before the benefit can be claimed. Similarly, although s. 5(1) of the Schedule clearly provides that to qualify for an income replacement benefit, a person must have suffered a substantial inability to perform the essential tasks of their pre-accident employment, that section does not unequivocally state that an insured person must prove that they have met this test within the prescribed period.
30I am not persuaded by the applicant’s rationale for failing to actively pursue an income replacement benefit sooner than August 2020. His actions appear to disclose an acknowledgment that filing an updated disability certificate (OCF-3) was necessary to alert the respondent to the existence of his income replacement benefit claim. His explanation as to why it took him over two years from the date of his work stoppage to take this step does not accord with the facts set forth in his submissions. He submits that he did not revive his claim because he was receiving collateral benefits and the quantum of his entitlement would have been zero. He submits that correspondence from the respondent made it clear that any entitlement to an income replacement benefit would have been subject to a deduction for any collateral benefits he received. But the applicant’s own submission is that his collateral benefits were reduced to roughly 70% of his pre-accident income in August 2018 when those benefits were converted from short- to long-term disability payments. In fact, the applicant claims an income replacement benefit of $400.00 per week from August 3, 2018 and ongoing. And yet it was not until two years later that he filed an updated disability certificate (OCF-3) indicating for the first time that he met the disability test for the benefit.
31Setting aside the lack of a cogent rationale for delaying the filing of an updated disability certificate (OCF-3), I find that if the applicant is able to establish that he suffered the requisite disability within 104 weeks of the accident, he may be entitled to the benefit. And his eligibility for a pre-104 week income replacement benefit would be capable of grounding a post-104 week benefit, provided he can prove the heightened disability threshold set out in the Schedule.
32I appreciate that the absence of a clear deadline to apply for an income replacement benefit deprives an insurer of a measure of finality. However, the length of time it takes an applicant to initiate a claim for an income replacement benefit will ultimately bear upon his ability to meet his evidentiary onus. The hurdle for an insured person seeking to “retroactively” claim an income replacement benefit lies not in the steps taken to claim the benefit within the first 104 weeks after the accident, but in establishing the relevant disability within that same period. Any disadvantage suffered by the respondent in being able to obtain timely medical assessments of the applicant’s impairments is better addressed as a matter of weight in a full evidentiary context. It would be improper for me to bar the applicant’s claim at the preliminary issue hearing stage without clear statutory grounds for doing so.
The applicant is not barred by the limitation period in s. 56 of the Schedule
33Section 56 of the Schedule requires that an applicant dispute the denial of a benefit by commencing an application with the Tribunal no later than two years after the date of the refusal to pay an amount claimed. The respondent claims that it denied an income replacement benefit on December 1, 2016, and that the applicant applied to the Tribunal over three and a half years later, well outside the limitation period.
34The applicant submits that the respondent issued the relevant denial on August 13, 2020, and that he applied to the Tribunal less than a month later. The applicant further submits that none of the respondent’s purported denials were valid based on the Divisional Court’s recent ruling in Varriano v. Allstate [Varriano].6 In Varriano, the court held that insurers must, under s. 37(4) of the Schedule, provide medical reasons for denying an income replacement benefit. Simply stating that an insured is ineligible for the benefit owing to a return to work does not satisfy the notice requirement, because it prevents the insured person from understanding whether their impairment is at issue. Ultimately, the absence of medical reasons undermines the insured’s ability to make an informed decision about whether to dispute the denial.
35The respondent takes the position that Varriano is distinguishable from the present case because the applicant never properly applied for the benefit and never received it.
36I am unpersuaded by the respondent’s submissions on this point. I see nothing in the court’s reasoning in Varriano that would restrict its application to discontinuation of a benefit. In fact, the court expressly identifies the phrase “medical and any other reasons” as it appears in s. 36(4)(b) as among the “myriad situations” where an insurer must provide “full and frank information” about an insured’s impairment when refusing or limiting coverage: see Varriano at para. 18.
37Section 56 of the Schedule provides that a limitation period commences with a “refusal to pay an amount claimed.” As I held in Pena v. Allstate Insurance Company of Canada, “It is impossible to refuse to pay nothing when nothing is claimed.” 7 Grounding the effective date of denial in the respondent’s December 1, 2016 explanation of benefits suffers from the fact that at that time, the applicant would have been eligible for zero income replacement. In other words, there was no “amount claimed.” Conversely, though, the applicant may have become eligible to a quantum of income replacement as early as August 2018, yet he hesitated in filing an updated disability certificate (OCF-3) for two years, effectively preventing the respondent from issuing a denial of an “amount claimed.”
38Regardless of whether the effective date of denial was December 1, 2016, after the filing of the first “completed” disability certificate (OCF-3) or August 13, 2020 after the filing of the third disability certificate (OCF-3) (and the first occasion upon which an “amount” was “claimed”), neither refusal to pay the benefit satisfied the notice requirements articulated in Varriano. Therefore, neither notice triggers the running of the limitation period, and the applicant cannot be barred from proceeding before the Tribunal on the basis of s. 56 of the Schedule.
39Taken together, sections 5(1), 36, 67 and 56 of the Schedule shepherd the applicant through this preliminary stage of proceedings. I cannot find, as the respondent requests, that the applicant failed to apply for an income replacement benefit within the timeline established under the Schedule because the Schedule appears to impose no such timeline. So long as a “completed” disability certificate is filed in accordance with s. 36, regardless of whether that disability certificate positively indicates a substantial inability to perform the essential tasks of pre-accident employment, the window is left open to a future income replacement benefit claim.
40The true test of entitlement with retroactive or latent income replacement benefit claims is whether an applicant can effectively marshal evidence to establish that he met the test for disability during the initial 104-week period after the accident. A proper determination of this question can only be made after a hearing on a full evidentiary record. It will be for the hearing adjudicator to consider the impact of the delay on the respondent’s ability to obtain timely medical evidence in its defence.
CONCLUSION AND ORDER
41The applicant is not barred from proceeding with his claim for an income replacement benefit. This matter shall proceed to a hearing of the merits of the substantive issue.
42The Tribunal will contact the parties to schedule a date for a case conference to determine arrangements for the substantive issue hearing.
Released: May 16, 2022
Theresa McGee
Vice-Chair
Footnotes
- O. Reg. 34/10.
- 2017 CanLII 148390 (ON LAT) at para. 28.
- 2019 CanLII 101813 (ON LAT) at para. 27.
- 2013 ONCA 662.
- D.W. v. The Co-operators, 2018 CanLII 8092 (ON LAT) at para. 18.
- 2021 ONSC 8242.
- 2021 CanLII 117443 (ON LAT) at para. 18.