Licence Appeal Tribunal File Number: 21-007948/AABS
In the matter of an application pursuant to subsection 280(2) of the Insurance Act, RSO
Between:
Gavin Goode
Applicant
and
Northbridge General Insurance Company
Respondent
DECISION
ADJUDICATOR: Lyndra Griffith
APPEARANCES:
For the Applicant: Gavin Goode, Applicant David Levy, Counsel Ha Vu, Law Clerk Marina Samokhvalov, Law Clerk
For the Respondent: Jason Goodman, Counsel Nicole Dowling, Counsel
Court Reporter: Julia Tappin
HEARD: by Videoconference: March 29, 2023
OVERVIEW
1Gavin Goode, the applicant, was involved in an automobile accident on August 22, 2019, 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, Northbridge, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE
2The preliminary issue to be determined is as follows:
- Is the applicant precluded from bringing a claim for accident benefits pursuant to section 34?
RESULT
3I find that the applicant is not precluded from bringing a claim for accident benefits because they provided a reasonable explanation for the delay pursuant to section 34.
ANALYSIS
Background
4The applicant was 22 years old and studying film production at the time of the accident. He was working a summer job as a field technician. The applicant was in the course of his employment at the time of the accident, and he was the driver of a company vehicle insured by his employer. The applicant’s vehicle was rear-ended by a tractor trailer on a major highway and the vehicle was crushed. The applicant required staples in his scalp. As a result of the accident, he was diagnosed with a concussion, post traumatic stress disorder, major depressive disorder and disc herniation in his back. There is no dispute that the respondent was aware of the accident shortly following the accident.
The applicant has a reasonable explanation for his failure to comply with s. 32 of the Schedule
Relevant Sections of the Schedule
5Section 32(1) provides that a person who intends to apply for one or more benefits described in the Regulation shall notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day. Then, the Schedule provides that insurer shall promptly provide the person with:
a) the appropriate application forms;
b) a written explanation of the benefits available;
c) information to assist the person in applying for benefits; and
d) information on the election relating to income replacement, non-earner and caregiver benefits, if applicable.
6Section 34 of the Schedule states that a person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.
Reasonable explanation test
7The test for interpreting whether the applicant has a reasonable explanation for a delay was set out in Horvath and Allstate Insurance Company of Canada, (FSCO A02-000482, June 9, 2003) as follows:
a. An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed;
b. The onus is on the insured person to establish a reasonable explanation;
c. The test for a reasonable explanation is both a subjective and objective test that should take into account both personal characteristics and a reasonable person standard;
d. Ignorance of the law alone is not a reasonable explanation;
e. The lack of prejudice to the insurer does not make an explanation automatically reasonable;
f. An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.
The applicant’s position
8The applicant submits that he did nothing wrong, that the respondent was made aware of the accident and that it never contacted the applicant to advise him of the benefits available to him.
9The applicant submits that section 32 of the Schedule states that once the insurer has notification of an intention to make a claim, it shall send an application of benefits (OCF-1) to the applicant. The applicant submits that the respondent failed to provide the applicant with an OCF-1 as there was no record of one being provided and it was not included in the respondent’s hearing brief. The applicant alleges that the respondent breached its contract and has not met its obligations under the Schedule.
10The applicant submits that after his accident he tried to get back on with his life. He submits that he is unsophisticated, had no knowledge of his rights, and the respondent had a duty to inform him of these rights. The applicant testified that he reported his injuries to his family physician shortly following the accident. He also testified that he retained counsel in the fall of 2020 and his counsel helped him complete an OCF-1. The applicant submits that at no point did the respondent say that there was an issue with the delay in submitting his OCF-1.
11The applicant submits that the application for accident benefits is not late because he never received the application pursuant to s. 32. The applicant further submits that the cases relied upon by the respondent are distinguishable from this case. The applicant further submits that the adjuster’s log notes indicate the respondent knew there would possibly be a claim.
12The applicant submits that if there was any delay, it was reasonable in light of the respondent’s conduct as it never asked for an explanation for delay in the explanation of benefits (OCF-9) but rather it consistently stated it was investigating coverage.
The respondent’s position
13The respondent submits that the applicant does not have a reasonable explanation for his late accident benefits application, which was filed 14 months after the accident in October 2020. The respondent submits that the applicant was able to engage in numerous other activities.
14The respondent submits that its log notes indicate that a representative reached out to the applicant several times and that the applicant was unsure whether he wanted to pursue a claim. The respondent further submits that it was incumbent upon the applicant to call the insurer to notify the respondent that he intended to seek benefits.
15The respondent submits that a delay of over one year is presumptively prejudicial to the insured and that regardless of his reasons for the delay, the applicant’s demonstrated activities contradict the reasonableness of the explanation. For example, the respondent argues that he did not require surgery beyond the staples in his head, he was discussing returning to work one week later, he returned to driving to school 30 minutes to 1 hour each way and he maintained his status as an honours student. The respondent submits that the applicant’s explanation does not meet the threshold established in Horvath and as a result his claim for accident benefits should be barred.
The applicant has a reasonable explanation
16The adjuster’s log notes indicate that on October 15, 2019, when adjuster Nick Stagliano spoke to the applicant, the applicant was uncertain whether he would be advancing a claim and requested that the respondent follow-up with him. That same day, the respondent sent a letter to the applicant’s employer at their office in Calgary. The letter was addressed to the applicant and advised that it would close his file if he did not inform the respondent within 14 days whether or not he had sustained any injuries as a result of the accident. The applicant testified that he never received this letter.
17A letter was sent to the respondent on September 28, 2020 enclosing the applicant’s OCF-1. On October 2, 2020, the respondent sent a letter to the applicant advising, “...This policy was cancelled effective July 2, 2019 by Golder Associates Ltd. in conclusion of our investigation, the claim has been reviewed and it has been determined that there is no coverage for Accident Benefit under this policy”. There was no mention that the applicant’s application for benefits was delayed.
18The adjuster’s log notes dated November 17, 2020 indicate that an Examination Under Oath (EUO) of the applicant was required due to late reporting, a lack of detail regarding accident, the injuries sustained, and insurer priority.
19During the EUO on January 8, 2021, when asked why there was a delay in submitting his OCF-1, the applicant responded, “My personal health. Immediately after the accident…I was battling with my brain injury. I refused communication. I became reclusive. My anxieties and just mental health were at an all-time low. And I wasn't in a place to want help or anything whatsoever.”
20Although the OCF-9s dated August 12, 2021, October 13, 2021, March 16, 2022 and June 17, 2022 make reference to an explanation for the delayed application for benefits, I find the respondent did not make it clear to the applicant that it required a reasonable explanation for the delay in order for the applicant’s claim to be approved. The OCF-9s states “…The provided records do not support your explanation for the delayed application for benefits. Once we are in receipt of the requested documentation, our investigation will be complete, and we will provide you with a response …”. The sentence relating to the applicant’s explanation was buried within lengthy text related to the benefits being sought and documents being requested. I find that the respondent’s requirement for a reasonable explanation was not clearly stated, and it would not be reasonable to expect the applicant to provide a more compelling explanation if this was not made clear to him.
21The respondent submitted nine cases in support of its position. I find them all to be distinguishable from this case for two main reasons. First, the cases dealt with situations where the applicant did not notify the insurer of the accident for several years. Second, in the cases relied on by the respondent, the OCF-1 provided to the insured was not returned within the 30-day timeframe and the explanation for the delay was not reasonable. In this case, the respondent did not produce any correspondence to the applicant attaching an OCF-1. I find that an OCF-1 was never provided to the applicant by the respondent, pursuant to its obligation under s. 32, and the applicant has presented a reasonable explanation for the delay under s. 34.
22The respondent’s position is that it was unsure whether the applicant would want to pursue a claim and that it was up to the applicant to call the respondent to notify the respondent that he intended to seek benefits. I am not convinced that the applicant understood what benefits were available and how to apply, especially when the accident occurred during the course of his employment. For example, there is evidence that at the time of the accident, he had collateral benefits through his mother, school and possibly through his employer. I accept that there may have been confusion as to which benefit coverage applied to his claim. Further, where there was no letter sent by the respondent directly to the applicant advising him of the benefits available to him as a result of the accident, I find the respondent did not meet its obligations under the Schedule.
23I find there was also confusion with how the respondent communicated with the applicant once it received the OCF-1. When the respondent received the applicant’s OCF-1, it did not request an explanation for the delay, but rather indicated that there is no coverage for accident benefits under this policy, as the policy had been cancelled in July 2019. Then in an EOB dated February 1, 2021, there was no mention that the applicant’s application for benefits was delayed.
24In applying the relevant portions of the Horvath test, I find that the applicant’s explanation to be credible. He was forthright with his testimony, and he was worthy of belief. While ignorance of the law alone is not a reasonable explanation, in this case the applicant was not only unaware of his rights under the Schedule because he was not given any documentation to assist him to navigate the law, but there was also confusion surrounding the applicable policy and coverage. I find that the hardship to the claimant outweighs any prejudice to the respondent, and it is equitable to relieve against the consequences of the failure to comply with the time limit to apply for benefits. The respondent was promptly made aware of the accident and was later made aware of some of the applicant’s injuries. Its failure to provide the applicant an OCF-1 contributed to any delays receiving documentation or conducting evaluations.
25In light of this evidence, I find that the applicant has proven on a balance of probabilities that he has a reasonable explanation for not filing an application for benefits within the prescribed timeframe set out by the Schedule, as he was never fully informed of the benefits available to him or the process for applying for same.
ORDER
26The applicant is not precluded from bringing a claim for accident benefits pursuant to section 34 of the Schedule, as he has provided a reasonable explanation for the delay.
Released: June 8, 2023
Lyndra Griffith
Adjudicator