Citation: Han v. Wawanesa Mutual Insurance Company, 2023 ONLAT 21-014475 AABS – P.I.

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:

Jeung Han

Applicant

and

Wawanesa Mutual Insurance Compay

Respondent

AMENDED PRELIMINARY ISSUSE DECISION AND ORDER

VICE-CHAIR:

D. Gregory Flude

APPEARANCES:

For the Applicant:

Shenthuran Subramaniam and Angel Leung, Counsel

For the Respondent:

Erica Lewin, Counsel

HEARD:

By way of Written Submissions

REASONS FOR DECISION AND ORDER

OVERVIEW

1The applicant, Jeung Han, was involved in a motor vehicle accident on August 8, 2016. She applied to the Licence Appeal Tribunal (“Tribunal”) on November 24, 2021 to determine her entitlement to benefits under the Statutory Accident Benefits Schedule – Effective September 1, 2010 O. Reg 34/10 (the “Schedule”).

2The respondent, Wawanesa Mutual Insurance Company (“Wawanesa”), has brought a preliminary issue motion for a determination that the applicant brought her claim outside the statutory limitation period. This matter addresses various time limits in the Schedule and whether they are to be addressed serially or as stand-alone individual limits.

3The appellant submitted a treatment and assessment plan (OCF-18) for a physiatry assessment on December 4, 2019. Wawanesa responded with a denial letter on December 16, 2019, and the applicant applied to the Tribunal on November 24, 2021, that is, more than five years post-accident but within two years from the date of denial. She has not had the assessment, such that, in the words of the Schedule, it has not been incurred. The facts highlight tension between various provisions of the Schedule and the interpretation of those provisions in the case law. An insurer is liable to pay for all reasonable and necessary expenses incurred for medical treatment.

4Case law from the Tribunal and the courts holds that an insured person does not have to pre-pay for treatment, that is, incur it, before proceeding to the Tribunal. The Tribunal determines entitlement, and where the treatment has not been provided, the insured person may proceed to get it. Section 56 sets a two-year limitation period from the date of denial to appeal to the Tribunal. The tension arises out of the wording of s. 20 of the Schedule.

5The applicable provisions of s. 20 of the Schedule provide that “no medical … benefit is payable for expenses incurred … more the 260 weeks after the accident.” Since the applicant has not yet had the physiatry assessment she seeks, if the Tribunal were to find that it is reasonable and necessary, the expense for that assessment would be incurred more than 260 weeks after the accident. Indeed, it will be well into 2023 before the issue is resolved. The expense will be incurred approximately 364 weeks post accident.

The PRELIMINARY ISSUE in dispute

6The preliminary issue in dispute was agreed to as follows:

1. Is the applicant barred from proceeding with her claim for physiatry service benefits as the expense was incurred more than 260 weeks after the accident?

RESULT

7I am not persuaded by Wawanesa’s position. It has been determined by the courts that to require an insured person to pay for treatment as a precursor to commencing an application to the Tribunal would disadvantage the impecunious. If the OCF-18 is found to be reasonable and necessary, the issue is not when Wawanesa will have to honour its obligations to fund treatment under the Schedule at some point in the future, but when should it have honoured its obligations in the past. Such an interpretation is in keeping with the intent of the Schedule to ensure treatment is made available to those in need, regardless of ability to pay and delaying payment does not allow to Wawanesa to escape its obligations, even if the denial is in good faith.

8The applicant had five-years from the date of an accident to seek treatment. That treatment was denied, so she had two years to appeal to this Tribunal. Her right to payment for that treatment did not expire with the lapse of 260 weeks.

ANALYSIS

9As I understand the submissions of Wawanesa, in addition to the points made above about the absolute bar that s. 20 represents to the applicant’s appeal, it submits that to find Wawanesa liable I must first find that its denial triggers a “deemed incurred” finding under the provisions of s.3(8). In other words, if Wawanesa “unreasonably withheld or delayed payment of a benefit,” I can deem that the applicant incurred it and circumvent the s. 20 limitation. Wawanesa devoted numerous paragraphs in its submissions to the applicant’s medical records and the lack of evidence that she had suffered anything other than minor injuries in the accident. I note that Wawanesa responded to the treatment plan in 10 business days, and I have been directed to nothing that would suggest Wawanesa was unreasonable in the position it took. There is no support for a deemed incurred finding.

10I am not sure from paragraph 5.c. of the applicant’s submissions whether she agrees with Wawanesa’s position on deemed incurred or if she has included the word “not” in error. If I read her correctly, she argues that, since there has been no hearing on the merits to consider whether the benefits should be deemed incurred, the matter should proceed to a hearing and not fall (fail?) at the preliminary issue stage.

11I am also somewhat baffled by the applicant’s submission that the Limitations Act, 2002, S.O. 2002, C. 24, Sched. B. creates an overriding bar. With respect, the scope of the Limitations Act, 2002 is set out in s. 2(1) and it “applies to claims pursued in court proceedings.” A proceeding before the Tribunal is not a court proceeding and that legislation has no application. Later in her submissions the applicant does cite the two-year imitation period in s. 56 of the Schedule, and it is, of course, that limitation period that applies. The applicant’s arguments about the Limitations Act, 2002 easily translate to arguments about s. 56 and I will interpret them as such.

12The pith and substance of Wawanesa’s submissions is that the definition of incurred expense in s. 3(7)(e) of the Schedule, when combined with s. 20, places an absolute bar on Wawanesa’s liability to pay for prospective treatment that has not been provided within 260 weeks. S. 3(7)(e) states:

… an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,

(i) the insured person has received the goods or services to which the expense relates,

(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and

(iii) the person who provided the goods or services,

(A) did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or

(B) sustained an economic loss as a result of providing the goods or services to the insured person.

13This approach leads to several absurdities. Firstly, it relieves Wawanesa of the obligation to pay for approved treatments that have not been fully consumed within the 260 weeks, even though the insured person has been attending the treatment provider conscientiously according to the approved program. For instance, an insured person applies and is approved for 20 weekly physiotherapy treatments with less than 20 weeks out of the 260 weeks left. Does the right to treatment terminate halfway through the approved treatment? Secondly, as in the current matter, the insured person applies and is denied treatment and appeals to the Tribunal, a process that takes many months. According to Wawanesa, the whole appeal process is rendered nugatory because the Tribunal’s decision will be rendered after 260 weeks. I do not accept that the Legislature intended to reduce the 260 week appeal period, in practical terms, to 260 weeks less the time it takes for the Tribunal to process a claim to resolution.

14This result would offend the principles of statutory interpretation set out by the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), cited in Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200 (“Suarez”):

It is a well established principle of statutory interpretation that the legislature does not intend to produce absurd consequences. According to Côté, supra, an interpretation can be considered absurd if it leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislative enactment (at pp. 378-80). Sullivan echoes these comments noting that a label of absurdity can be attached to interpretations which defeat the purpose of a statute or render some aspect of it pointless or futile (Sullivan, Construction of Statutes, supra, at p. 88). (para. 27)

15Rather, the only way to resolve any apparent absurdities is to see a treatment approval as an undertaking to pay for the whole course of treatment even though it terminates beyond the 260 week period. Similarly, where a treatment plan is appealed to the Tribunal, the effective date for the Tribunal’s consideration is the date of denial of the treatment plan, not the date of the Tribunal decision. In effect, the Tribunal decision is stating that the insurer should have approved the plan within 10 days as required by the Schedule. On the current facts, if the applicant is successful in her substantive appeal and avoids the minor injury limitations in s. 18(1), then the Tribunal is determining that Wawanesa should have approved the treatment plan in December 2019, approximately 21 months before the lapse of the 260 weeks.

16Once Wawanesa denied the treatment plan, another timetable kicked in that supersedes the 260 weeks. The applicant had 2 years to file an application with the Tribunal and the Tribunal process would then run its course. In this analysis, the deemed incurred rule plays no part. The deemed incurred rule addresses situations where the insurer has been incalcitrant and the insured person is entitled to payment of a benefit despite not having incurred it. The theory is that the insurer’s incalcitrance prevented the insured person from getting much needed benefits. The insurer is liable to pay without proof that services were actually incurred, for instance, in a case where an insured person needs an attendant care benefit. The fact that there are no receipts for services does not belie the fact that the services were needed and provided by somebody.

17There is support for my approach in Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200 (“Suarez”). Suarez dealt with an applicant’s need to prove that expenses had been incurred before the Tribunal. Following earlier Tribunal case law, the Tribunal held that payment of the expenses was not a “threshold” issue. The Tribunal was deciding entitlement to treatment. If the Tribunal found treatment should have been approved, it was then open to Ms. Suarez to attend for treatment and have Aviva pay. In its analysis, the Court recognized that the Tribunal has broad remedial powers. Quoting Stegenga v. Economical Mutual Insurance Company 2019 ONCA 615, it stated at paragraph [27]:

The LAT has broad remedial powers to address Accident Benefit disputes. As the court in Stegenga noted:

Taken together, the words of s. 280(1) cover a wide array of disagreements connected in some way to the SABs to which an insured person was or is entitled. Viewed in the context of the purpose and history of the dispute resolution provisions, those words include disagreements about when the insurer’s obligation to provide SABs should be or should have been performed, and how the obligation to provide them should be or should have been performed. (para. 45) [Emphasis added]

18This proceeding, then, is about whether Wawanesa should have approved a treatment plan in December 2019. If the Tribunal finds that it should have, then it will be obliged to pay for the treatment plan once incurred in the same manner as if it had approved the plan in the first place. It cannot escape that liability because the appeal process affords the applicant two years to appeal, followed by the time to process that appeal.

19In arriving at this conclusion, I did not find the case law relied upon by Wawanesa helpful, as it was largely focussed on the question of deemed incurred. Equally, I agree with Wawanesa’s submission that s. 7 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G has no application as we are not extending the time to file an appeal. This decision considers the statutory limitation on coverage and not the time to file an appeal to the Tribunal.

ORDER

20Based on the above, I dismiss preliminary issue motion and order the matter to proceed to a hearing of the substantive issues. Pursuant to paragraph 4 of the Case Conference Report and Order, the matter will proceed to a written hearing as set out in that order without a further case conference.