Licence Appeal Tribunal File Number: 22-009102/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:
Nicholas T. Shaver
Applicant
and
Onlia Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Tavlin Kaur
APPEARANCES:
For the Applicant:
Nicholas Shaver, Applicant
Michael Wade, Counsel
For the Respondent:
Jonathan Heeney, Counsel
HEARD:
By way of written submissions
OVERVIEW
1Nicholas Shaver, the applicant, was involved in an automobile accident on August 17, 2020, 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, Onlia Insurance Company (“Onlia”), 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 as the applicant failed to notify the respondent of the circumstances giving rise to a claim for benefits no later than the seventh day after the circumstances arose, or as soon as practicable after that day (as required by section 32(1) of the Schedule)?
RESULT
3The applicant may proceed with this application.
ANALYSIS
Background
4The applicant was involved in an accident on August 17, 2020. He was a pedestrian who was struck by an unknown driver. He notified the respondent of his intention to claim accident benefits on February 25, 2022 when he submitted an Application for Accident Benefits (“OCF-1”). This was approximately 18 months after the subject accident. The cover letter from his counsel stated that the applicant did not notify the respondent or submit an OCF-1 within the prescribed time following the accident, as he "was not aware of his entitlement to accident benefits".
Relevant Legislation
5Pursuant to section 32(1) of the Schedule, a person who intends to apply for statutory accident benefits shall notify the insurer of their intention no later than the seventh day after the circumstances that give rise to the entitlement to the benefit, or as soon as practicable after.
6Once an insurer receives notice of an applicant’s intention to apply for statutory accident benefits, the insurer must provide the applicant with the appropriate OCF-1 forms, a written explanation of the benefits available, information to assist the person in applying for benefits and information on the election relating to the specified benefits, as required by section 32(2). Pursuant to section 32(5) of the Schedule, the applicant must then submit a completed and signed application for benefits to the respondent within 30 days after receiving the forms.
7I note that section 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.” The interpretation of “reasonable explanation” is guided by Horvath and Allstate Insurance Company of Canada, FSCO A02-000482, June 9, 2003, and was more recently reiterated in K.H. vs Northbridge, 2019 CanLII 101613 (ON LAT). The guiding principles are summarized as follows:
- An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.
- The onus is on the insured person to establish a “reasonable explanation”.
- Ignorance of the law alone is not a “reasonable explanation”.
- The test for “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.
- The lack of prejudice to the insurer does not make an explanation automatically reasonable.
- 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.
Parties’ positions
8It is the respondent’s position that the applicant should not be entitled to claim accident benefits because he did not provide a reasonable explanation for the delay. At the Examination Under Oath (“EUO”), the applicant testified that the main reasons were that he is not "smart with this stuff", he "wanted to look into it", he "didn't know there was anything I could do about it", and he "wasn't sure at all". The applicant has offered no evidence, medical or otherwise, to support a lack of sophistication that rises to the level of incompetence or inability to inquire as to his rights to apply for accident benefits.
9The applicant concedes that it took him approximately 18 months to notify the respondent of his intention to apply for benefits. He submits that a combination of his injuries, caregiving responsibilities, financial stress and lack of education constitute a reasonable explanation for the delayed notification of his intention to claim accident benefits.
Did the applicant fail to notify the insurer of his 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?
10It is not disputed that the applicant did not notify the respondent within the timeframe set out in section 32(1) of the Schedule. I must now determine whether the applicant had a reasonable explanation for the delay.
11At the EUO, the applicant stated:
I had assumed -- like, I -- I'm not really, like, really, like, smart with this stuff; and, like, I just, like, wanted to look into it; and I-- I didn't know -- I didn't know there was anything I could do about it; and I wasn't sure at all, to be honest. I didn't know, like, (inaudible) but that's why, mainly. And then also my anxiety and stuff like that, it makes me think about the accident and like --yeah.
12When asked “did you ever, before submitting an application for accident benefits in February 2022, contact your insurance company to tell them that you had been in an accident?”, he responded “No. Like, to my knowledge, I thought it was just for my car if -- if I crashed or something. I didn't think it was for my -- my own things too.” The applicant reported that he also has anxiety and that was one of the reasons for the delay.
13Based on my review of the evidence, the applicant has provided two explanations: first, he did not know that he could apply for accident benefits and, second, his anxiety contributed to the delay. I agree with the respondent that there is no evidence that the applicant’s anxiety played a role in the delay. The applicant did not submit any medical evidence to corroborate this fact. Nor did he see a medical professional for his psychological issues.
14However, I find it credible and worthy of belief that an unsophisticated party might not realize that that one can apply for accident benefits through their insurer in circumstances where they were hit as a pedestrian. While I agree that ignorance of the law is not a reasonable explanation, the test of “reasonable explanation” is both a subjective and objective test that should take into account both the personal characteristics and the “reasonable person” standard.
15The applicant is an unsophisticated party. He has a limited level of education and worked as a labourer/landscaper. Given the applicant’s personal characteristics, I am persuaded that he would not have known that he was entitled to benefits after being struck as a pedestrian. He also stated that if he had known that accident benefits were available to him, he would have contacted the respondent right away. I do not have any reason to disbelieve him. It was not until he spoke to a lawyer that he found out that he was able to file an application for accident benefits. Once he retained counsel in February 2022, he immediately notified the respondent of his intent.
16Similar to the reasoning in Abbany v. Pafco Insurance Co, 2013 ONFSCDRS 120, I do agree that the respondent has been prejudiced by the delay because they were not aware of the applicant’s intention to seek accident benefits and could not assess him. The delay has prevented the respondent from obtaining contemporaneous medical examinations and records. A significant amount of time has passed since the subject accident. But I also note that the applicant will face hardship as well if he is prevented from proceeding with his application. Based on the testimony at the EUO, the applicant’s ankles were fractured, and he hit his head during the accident. He had to undergo surgery for both of his ankles. He required a wheelchair, crutches and a cane. It took him a few months to heal. However, as per his testimony, he has been struggling with moving, walking and lifting.
17Without addressing the merits of the case, it appears that the applicant has sustained some significant injuries as a result of the accident. In my view, the hardship to the applicant if he is prevented from proceeding to a substantive issue hearing would be far greater than any prejudice faced by the respondent. On a balance, I find it would be equitable to relieve against the consequences of the applicant’s failure to comply with s. 32 because he has provided a reasonable explanation for the delay. I find that the applicant has met his onus and may proceed with his application.
ORDER
18It is ordered that the application will proceed to the substantive issue hearing.
Released: June 29, 2023
_______________________
Tavlin Kaur
Adjudicator