McBeth v. Allstate Canada, 2022 CanLII 65584

Citation: McBeth v. Allstate Canada, 2022 ONLAT 20-007407/AABS

Licence Appeal Tribunal File Number: 20-007407/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:

Cody McBeth

Applicant

and

Allstate Canada

Respondent

DECISION [AND ORDER]

VICE-CHAIR: Sandeep Johal

APPEARANCES:

For the Applicant: Vameesha P. Patel, Counsel

For the Respondent: Kevin Mitchell, Counsel

HEARD: By Way of Written Submissions

REASONS FOR DECISION [AND/OR ORDER]

BAACKGROUND

1The applicant was injured in an automobile accident on November 24, 2018 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (''Schedule'').

2There is no dispute between the parties that the applicant meets the disability test and that he is entitled to an income replacement benefit (“IRB”). The parties disagree over whether the applicant had available to him, and whether he could have received Long Term Disability (“LTD”) benefits from his collateral benefits insurer through his employment.

3The applicant takes the position that he applied for LTD benefits which were refused and therefore the respondent is not entitled to deduct any potential LTD benefits from his IRB.

4The respondent takes the position that the applicant’s claim for an LTD was denied on a technical and procedural ground as a result of not applying for the benefit on time and therefore he should be deemed not to have applied for the benefit at all. According to the respondent, the LTD should be subject to a deduction from the IRB paid in accordance with the Schedule.

5The applicant disagreed with that decision and submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“Tribunal”).

ISSUES TO BE DECIDED

6The following is the issue to be decided:

i. Is the respondent entitled to deduct for collateral long-term disability benefits available to the applicant from his IRB?

RESULT

7For the following reasons, I find that the respondent is entitled to deduct LTD benefits from the IRBs paid to the applicant.

ANALYSIS

8The applicant had available to him LTD benefits after an elimination period or waiting period of 4 months to make a claim. The LTD insurer pays 66.67% of the applicant’s monthly basic earnings. The LTD claim booklet states that in order to receive benefits, a claim must be made no later than 90 days after the end of the elimination period.² Accordingly, the last day for the applicant to apply for the LTD benefits would have been on or around June 24, 2019.

9All other income replacement assistance is deductible from IRBs. “Other income replacement assistance” is defined in the Schedule to include the amount of any gross weekly payment for loss of income that may be available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan but is not being received by the person and for which the person has not made an application.³

10The applicant submits he had LTD benefits available to him through his employer and further acknowledges that the respondent sent an email on April 12, 2019 to inform him that he is entitled to an LTD benefit and to seek an update on his status of the application for LTD benefits. According to the applicant, there was no prior correspondence from the respondent to explain to the applicant that he was required to apply for an LTD benefit.

11After this, the applicant submits he attempted to retrieve the LTD claim form through his LTD provider’s website but there were issues with the website, and he was only able to access the claim form on May 2, 2019. The applicant further submits that he had difficulty obtaining the necessary funds to pay for the portion of the LTD claim documents that his doctor needed to complete and as a result he was not able to do so until June 7, 2019.

12According to the applicant, he could not afford a car or gas and had difficulty travelling to his doctor’s office to pick up the completed form for the LTD benefits and as a result, he was unable to attend at his doctor’s office until September 5, 2019. The applicant further submits the respondent did not provide him with a deadline by which to submit the LTD claim to his LTD provider. Upon receipt of the LTD application from his doctor he did not have money to send the documents by express mail or courier until September 25, 2019.

13On November 7, 2019 the applicant’s LTD insurer responded to inform the applicant that his claim was not approved as he was late in filing this claim which should have been received by June 22, 2019 and the LTD insurer did not receive it until September 25, 2019.⁴ As a result, the applicant’s LTD claim was denied.

14The applicant relies upon the cases of Smith,⁵ Vanderkop,⁶ Ng,⁷ and P.B.⁸ in support of his position that the respondent did not provide information in a timely manner regarding the application process for the LTD benefits (Smith) and the obligation of the respondent to pay IRBs is not affected by the denial of benefits by the LTD insurer, (Vanderkop, Ng and P.B.) The applicant further submits that the LTD entitlement should not be treated as being available and therefore the respondent’s obligation to pay IRBs should not be reduced as his LTD insurer denied the claim and therefore, he is not receiving those benefits and they are not available to him.

15The respondent takes the position that Smith does not create an obligation upon the insurer to provide information or to assist the applicant on an application for collateral benefits. Further, the cases that rely on the Vanderkop decision are similar in facts to Vanderkop in that they deal with a lump sum settlement of the LTD which was found not to be deductible from the IRB and those are not the facts in the present case.

16The respondent further submits that the applicant should be considered to have not applied for the LTD collateral benefit as he missed the time period to do so. In support of its position, the respondent relies upon the Financial Services Commission of Ontario (FSCO) case of Li Pan,⁹ which was decided in 2018 and deals with the current version of the Schedule. Li Pan dealt with a situation where the applicant did not apply for a Canada Pension Plan disability benefit. (“CPP”). It is the respondent’s position that CPP disability benefits are similar to the LTD benefit in the present case as they are both considered benefits paid on account of a disability and includes payments for the loss of income, which is routinely deducted from IRBs.

17In Li Pan, the arbitrator found that the CPP disability was to be deducted from the IRBs despite the fact that it was not being received by the applicant in that case. The arbitrator gave effect to the collateral benefit deduction sections of the Schedule and found that the applicant had denied the insurer the ability to an offset as contemplated and permitted by the Schedule and relied upon a more recent Court of Appeal decision in Wilken.¹⁰ In that case it was held that the plaintiff’s decision to forgo WSIB benefits would deny the insurer a deduction of any payment or benefit for which the insured is “eligible” under the Workers’ Compensation Act or similar law.¹¹ In Wilken it was held that by elevating the insurer’s relevant coverage to a “first payor” status was not intended by the legislature. In the present case, the respondent submits, the applicant did the same by not applying for the LTB within the time period prescribed for doing so. The applicant knew or ought to have known the parameters of the process by which to make a valid claim to SunLife. Li Pan also found that the insurer was not obligated to notify the applicant in that case to apply for the collateral benefit.

18I agree with the respondent and the line of cases it relies upon. Although I am not bound by FSCO case law, I find the analysis in Li Pan to be persuasive. In my view, there is an obligation on the applicant to apply for and exhaust collateral benefits before resorting to the accident benefit insurer, and the accident benefits insurer is payor of last resort,¹² in this case, the respondent.

19The respondent concedes that the applicant cannot be forced to appeal a denial of the LTB, however the applicant has an obligation, where collateral benefits are available, to apply for those benefits within the parameters of the collateral benefits policy. I agree with the finding in Li Pan that the obligation is not on the respondent insurer to advise the applicant of the collateral benefit policy obligations and timelines to apply for the benefit, especially when the applicant is represented by counsel. The applicant must be diligent in pursuing a claim under a collateral benefits LTD policy. If the applicant fails to apply for collateral benefits, or if the applicant misses the limitation period within which to apply for the collateral benefit, in my view, that is akin to failing to apply for the benefit at all as required by the Schedule and the respondent insurer is entitled to deduct the LTD as if the applicant is receiving the benefit.

20I find the Li Pan persuasive and Wilken binding in that the applicant’s failure to apply for the LTD collateral benefits within the limitation period as required by that LTD policy is similar to the situation in Wilken. In Wilken, the plaintiff was considered to have foregone his WSIB benefit, and this effectively denied the insurer its contemplated and permitted offset. As a result, I find that the respondent is entitled to a deduction of the LTD benefits which the applicant otherwise may be entitled, and a deduction or a deemed offset should be applied in relation to the amount of LTD benefits the applicant could have received had he exercised his entitlement to them in accordance with the collateral benefits policy.¹³

ORDER

21The respondent is entitled to a deduction of LTB benefits that are available to the applicant from the IRBs being received in accordance with the Schedule.

Footnotes

1. 1O. Reg. 34/10.
2. 2Respondent Document Brief at Tab 2 pg. 13, LTD Benefits Booklet at pg. 47.
3. 3S. 4(1) and 4(1)(b) of the Schedule.
4. 4Applicant written submissions at Tab 7.
5. 5Smith v. Co-operators General Insurance Co., 2002 SCC 30
6. 6Vanderkop v. Personal Insurance Company of Canada, 2009 ONCA 511
7. 7Ng v. Cole et al, 2013 ONSC 6588
8. 8P.B. v. The Co-Operators Insurance Company, 2020 CanLII 72511 (ON LAT)
9. 9Hua Li Pan v Allstate insurance Company of Canada, FSCO A16-003705
10. 10Wilken v SunLife, 2017 ONCA 975.
11. 11Wilken at para. 2.
12. 12Li Pan, at pg. 15.
13. 13Wilken, at paras 3-6.