Kesavan v. TD General Insurance Company
Licence Appeal Tribunal File Number: 23-001710/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:
Dusuyanthi Kesavan
Applicant
and
TD General Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Tavlin Kaur
APPEARANCES:
For the Applicant:
Farid Mahdi, Counsel
For the Respondent:
Melissa Parravano, Counsel
Held by teleconference:
October 12, 2023
OVERVIEW
1Dusuyanthi Kesavan, the applicant, was involved in an automobile accident on November 16, 2016, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, TD General Insurance Company (“TD”), and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE IN DISPUTE
2The preliminary issue to be decided is whether the applicant is barred from proceeding to a hearing for the substantive issues in dispute because the applicant failed to dispute the denials within two-year limitation period.
RESULT
3The applicant may proceed with her application.
ANALYSIS
Background
4The applicant was involved in an accident on November 16, 2016. She retained three separate law firms to assist her in her matter. The first law firm was retained in 2016. She then retained another lawyer in 2017. Her current counsel assumed carriage of her file in June 2022. The applicant filed her application with the Tribunal on February 13, 2023. On October 12, 2023, the applicant was informed that she was deemed catastrophically impaired by the respondent’s insurer examination (“IE”) assessors.
Parties’ positions
5The respondent submits that the application should be dismissed because more than two years have passed since the respondent’s denial of each treatment plan in dispute.
6The applicant submits that she was not aware of the denials until her counsel discovered them. She submits she has acted reasonably and promptly thereafter. She should be able to proceed to the substantive issue hearing.
The Law
7Section 56 of the Schedule provides that an application to dispute a denial of a benefit shall be commenced within two years of the insurer’s refusal to pay.
8In order for the provision under section 56 to be triggered, I must determine whether the respondent’s notice of denial was proper in accordance with the principles set out in Smith v. Co-operators General Insurance Co, 2002 SCC 30 (“Smith”) at paragraph 14. According to Smith, the refusal to pay the benefit must contain straightforward and clear language, it must be directed towards an unsophisticated person, it must outline the dispute resolution process and the relevant time limits that govern the process, and it must provide valid or other reasons for the denial.
9Defining with precision an unsophisticated person is a challenging task; however, the Court’s direction in Smith clearly recognizes that greater accessibility of an insured person to the informational content of the denial notice is of paramount importance and must necessarily account for the variety of persons and backgrounds who may make claims for accident benefits. Accordingly, Smith requires a denial notice to be as specific and accessible as possible to ensure that there is no ambiguity in what a notice means when read by an unsophisticated person.
10Further, the notice must provide a valid medical and any other reason for the denial. I note that the Divisional Court in Hedley v. Aviva Insurance Company of Canada (“Hedley”), 2019 ONSC 5318 considered the reconsideration decision of B.H. v. Aviva Insurance Company, which in turn applied T.F. v. Peel Mutual Insurance Company, 2018 CanLII 39373 (ON LAT) (“T.F.”). The Court found no basis to intervene as the decision was within the reasonable range of outcomes.
11The principles were set out by the Tribunal in T.F. in which Executive Chair Lamoureux stated, at para. 19:
[…] 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.
12This means the notice of denial at the very least should explain what the insured person’s medical conditions are and why those conditions do not justify entitlement to the benefit claimed. By providing this information, the insured person will have a better understanding of the insurer’s determination. It is then that the consumer protection mandate of the Schedule is achieved.
13Moreover, I note that the Court in Hedley found that boilerplate medical reasons for denials of treatment plans submitted under the Schedule constitute as no reasons at all. Reasons must be meaningful in order to permit the insured person to decide whether or not to challenge the insurer’s determination.
14If an insurer’s notice of denial to an insured person does not satisfy these requirements, the denial may be determined to be invalid and fail to trigger the two-year limitation period.
15However, if the notice of denial does satisfy these requirements, then the onus is on the applicant to establish reasonable grounds for an extension under Section 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”). Section 7 allows the Tribunal to extend a limitation period for filing an appeal to it. In considering whether to exercise its discretion to extend the limitation period, the Tribunal must consider the following four factors to determine if the justice of the case requires the extension (See: Manuel v. Ontario (Registrar, Motor Vehicle Dealers Act), 2012 ONSC 1492 (Div. Ct.)):
a. A bona fide intention to appeal within the limitation period;
b. The length of delay;
c. Prejudice to the other party; and
d. Merits of the appeal.
16No one factor is determinative in this analysis.
Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, Ontario Regulation 73/20 (“O. Reg 73/20”)
17On March 20, 2020, Ontario enacted O. Reg. 73/20. This regulation suspended limitation periods retroactively from March 16, 2020 and was repealed on September 14, 2020. This legislation was in force for 183 days. This was affirmed in McAuley v Canada Post Corporation, 2021 ONSC 4528, where the Ontario Superior Court of Justice found that O. Reg. 73/20 extended all running limitation periods by 183 days.
18The limitation period for the OCF-18 in the amount of $2,193.15 for physiotherapy services denied on January 22, 2019 for this application can therefore be extended by 183 days.
Are the denials compliant?
OCF-18 in the amount of $3,389.90 for physiotherapy services denied on November 10, 2017
19The denial letter dated November 10, 2017 does not comply with the requirements under section 38(8) as it failed to provide adequate medical reasons to deny the disputed OCF-18. While the notice notes the type of examination and refers to the treatment plans, it fails to refer to the applicant’s medical conditions. However, the respondent cured this in the subsequent denial letter dated January 10, 2018. The respondent included detailed reasons for the denial. There are references to the applicant’s medical conditions. I find this denial is compliant.
OCF-18 in the amount of $4,588.30 for psychological services denied on November 10, 2017
20The denial letter dated November 10, 2017 does not comply with the requirements under section 38(8) as it failed to provide adequate medical reasons to deny the disputed OCF-18. While the notice notes the type of examination and refers to the treatment plans, it fails to refer to the applicant’s medical conditions. However, the respondent cured this in the subsequent denial letter dated January 10, 2018. The respondent included detailed reasons for the denial. There are references to the applicant’s medical conditions. I find this denial is compliant.
OCF-18 in the amount of $4,035.16 for therapy, motor and living skills denied on January 26, 2018
21The denial letter dated January 26, 2018 does not comply with the requirements under section 38(8) as it failed to provide adequate medical reasons to deny the disputed OCF-18. While the notice notes the type of examination and refers to the treatment plan, it fails to refer to the applicant’s medical conditions. The respondent did not cure this in the subsequent denial letter dated August 29, 2018. The reason provided is that:
Upon review of the available file material and completion of the in-person examination on August 15, 2018, Ms. Dawn Li concludes, "Based on the rationale provided above and more importantly the several inconsistencies noted during the current assessment completed by this therapist on August 15, 2018, this therapist is unable to objectively support the proposed OCF18 for 14 occupational therapy sessions, prepared by Dr. Haralabos Grigoropoulos, Chiropractor, and dated January 16, 2018 at the present time."
22This is unclear and vague. The rationale that the respondent refers to is not mentioned in the letter. The denial letter does not explain why the treatment plan is not reasonable or necessary. In my view, the denial letter did not meet the basic requirements outlined in Smith and therefore the two-year limitation period was not triggered. As such, the applicant may proceed with this treatment plan.
OCF-18 in the amount of $3,051.55 for chiropractic services denied on January 24, 2018
23In my view, the denial letter dated January 24, 2018 is valid. Reasons for the denial are provided. The respondent has identified the applicant’s medical conditions. The denial letter notes that the applicant has a fractured right rib and uncomplicated soft tissue injuries. The applicant was provided with information regarding her right to appeal the decision. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. I find that this was a clear and unequivocal denial.
OCF-18 in the amount of $4,588.38 for psychological services denied on February 28, 2018
24The denial letter dated February 28, 2018 does not comply with the requirements under section 38(8) as it failed to provide adequate medical reasons to deny the disputed OCF-18. While the notice notes the type of examination and refers to the treatment plans, it fails to refer to the applicant’s medical conditions.
25The respondent did not cure this in the subsequent denial letter dated March 26, 2018. In my view, the denial letter did not meet the basic requirements outlined in Smith and therefore the two-year limitation period was not triggered. As such, the applicant may proceed with this treatment plan.
OCF-18 in the amount of $2,193.15 for physiotherapy services denied on January 22, 2019
26In my view, the denial letter dated January 22, 2019 is valid. Reasons for the denial are provided. The respondent has identified the applicant’s medical conditions. The denial letter notes that the applicant has a fractured right rib and uncomplicated soft tissue injuries. The applicant was provided with information regarding her right to appeal the decision. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. I find that this was a clear and unequivocal denial.
27The next stage of this analysis will address whether the limitation period should be extended for the treatment plans where the denial letters were compliant.
Section 7 of the LAT Act
Bona fide intention
28The applicant submits that once she discovered the denials, she appealed promptly in February 2023 and within a month of discovery. She states that she did not have the benefit of possessing the previous lawyers’ files or the adjuster’s log notes to discern if past attempts were made to dispute the denials by previous counsel.
29The respondent submits that the applicant has not provided a bona fide intention to appeal within the appeal period. The applicant and her counsel were provided clear and timely denials for the issues in dispute.
30I am not persuaded that there is a bona fide intention to appeal the denials. I have reviewed the denials and they were sent directly to the applicant. I am not persuaded that the applicant only discovered the denials in February 2023. Moreover, the applicant has not provided an affidavit to substantiate her position. Submissions are not evidence.
Length of delay
31The applicant submits she personally did not contribute to the delay. The delay arose solely as a result of potentially negligent legal representatives. Furthermore, the respondent contributed to the delay by not providing the complete accident benefits file.
32The respondent submits that the applicant has not provided a reasonable explanation for the delay in bringing the subject application. This is not a case where the applicant’s application is outside of the limitation period by a few days, weeks or even months. Rather, the application was filed on February 13, 2023 which ranges from one and a half years to more than three years after the expiration of the two-year limitation, including the COVID extension, for the issues in dispute. The respondent submits that there is no explanation to warrant the extent of the delay.
33In light of the fact that there is limited information as to what transpired in relation to this file, it is difficult to ascertain the reason for the delay. However, I am bound by Cervo v. Raimondo (‘Cervo’), 2006 CanLII 37119 (ONCA). In Cervo, the Court of Appeal found that mere reliance on the solicitor was not a reasonable explanation. On the facts before me, the applicant gave her lawyer the authority to act on her behalf in relation to the accident. It is assumed her former counsel would know about the processes set out in the Schedule. That is what her former counsel was hired to assist the applicant with. In any event, there is a lengthy delay. However, without the adjuster’s log notes, it is difficult to determine what caused this delay.
Prejudice to the respondent
34The applicant submits that the prejudice to her should the application be dismissed gravely exceeds the prejudice to the respondent. All of the treatment plans have been incurred. Dismissal of the application at this preliminary stage exposes her personally to the outstanding account and potential legal action by the clinic against her.
35The respondent submits that it would suffer immense prejudice if the Tribunal were to extend the limitation period for the issues in dispute in this case. Insurers are entitled to finality. The delay in filing this application is so extreme that it deprives the insurer of this finality. It would open the floodgates from a public policy perspective to continue to litigate claims that are years outside of the limitation period.
36Based on the limited information before the Tribunal, it appears that the respondent was actively involved in the adjusting of the file. Therefore, I find that the respondent was not prejudiced because they conducted IEs that allowed them to assess the applicant.
Merits of the appeal
37The applicant submits there is a reasonable prospect of success on the merits. The proposed treatment was aimed to mitigate and alleviate her injuries from a physical and psychological perspective.
38The respondent submits that there is no merit to this appeal. The denials provided were clear and unequivocal which commenced the limitation period to run on each issue in dispute. The filing of this application far surpasses the limitation date of each issue. To allow an extension of the limitation period would be a violation of the rules of natural justice and procedural fairness.
39I have reviewed the medical evidence and find that there is some merit to the appeal. The respondent’s own assessors note that the applicant’s mental and behavioural impairments meet the threshold for catastrophic impairment under Criterion 8 as defined by the Schedule. In light of the circumstances, to deny the applicant an opportunity to proceed with her application would be prejudicial. As such, I find that there is merit to the applicant’s appeal and that the parties should be afforded the opportunity to present their respective positions before the Tribunal.
Weighing the factors
40In weighing the factors to determine if the justice of the case warrants an extension of time under section 7 in favour of the applicant, I find that there is some merit to the appeal and that the respondent did not suffer prejudice due to the lengthy delay because it conducted assessments. As such, I find that the applicant has met her onus in demonstrating that the limitation period for commencing her application should be extended. As such, I am exercising my discretion under section 7 of the LAT Act to extend the limitation period and allow her to proceed with her application before the Tribunal.
ORDER
41For the reasons noted above, the applicant may proceed with her application before the Tribunal.
42It is ordered that the following treatment plans will proceed to the substantive issue hearing because the denial letters were invalid:
a) OCF-18 in the amount of $4,035.16 for therapy, motor and living skills; and
b) OCF-18 in the amount of $4,588.38 for psychological services.
43It is ordered that the following treatment plans will proceed to the substantive issue hearing because the applicant established that there are reasonable grounds which warrant an extension under section 7 of the LAT Act:
a) OCF-18 in the amount of $4,588.30 for psychological services;
c) OCF-18 in the amount of $3,389.90 for physiotherapy services;
b) OCF-18 in the amount of $2,193.15 for physiotherapy services; and
c) OCF-18 in the amount of $3,051.55 for chiropractic services
44Except for the provisions contained is this order, all previous orders made by the Tribunal remain in full force and effect.
Released: December 19, 2023
___________________________
Tavlin Kaur
Adjudicator