Paramasamy v. TD General Insurance Company, 2023 CanLII 72636

Citation: Paramasamy v. TD General Insurance Company, 2023 ONLAT 22-009929/AABS-PI

Licence Appeal Tribunal File Number: 22-009929/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:

Saithyaseelan Paramasamy

Applicant

and

TD General Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR:

Tavlin Kaur

APPEARANCES:

For the Applicant:

Justin Mariani, Paralegal

For the Respondent:

Arfa Saeed, Counsel

Heard by way of written submissions

OVERVIEW

1Saithyaseelan Paramasamy (the “applicant”) was involved in a motor vehicle accident on May 29, 2019 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). TD General Insurance Company (the “respondent”) denied certain benefits. The applicant submitted an application 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 all of the benefits claimed in this application because the applicant failed to dispute their denials within the 2-year limitation period.

RESULT

3The applicant may proceed with his application.

ANALYSIS

Parties’ position

4The respondent submits that the applicant failed to bring their application disputing the denials of the benefits within the two-year time limit. The applicant submits that the Explanation of Benefits (“EOB”) are not compliant with the requirements under the Schedule and therefore, the limitation period is not triggered.

[Emergency Management and Civil Protection Act,](https://www.canlii.org/en/on/laws/stat/rso-1990-c-e9/latest/rso-1990-c-e9.html) R.S.O. 1990, c. E.9

5In their submissions, the respondent provided the following chart to demonstrate the length of the delay:

Benefit in dispute

Date of denial

Limitation period expiration date

Date of application to the Tribunal

Length of delay

Minor Injury Guideline (MIG)

January 23, 2020

January 23, 2022

September 9, 2022

7 months and 2 weeks

Non-earner benefit (NEB)

May 21, 2020

May 21, 2022

May 26, 2023

1 year and 5 days

Medical services ($1,384.70)

January 23, 2020

January 23, 2022

September 9, 2022

7 months and 2 weeks

Medical services ($2,569.40)

March 10, 2020

March 10, 2022

September 9, 2022

5 months and 4 weeks

6The calculations do not account for the suspension of the limitation period during the COVID-19 pandemic. On 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. As such, a limitation period that began running before March 16, 2020 can be extended by 183 days. This was affirmed in McAuley v Canada Post Corporation, 2012 ONSC 4528, where the Ontario Superior Court of Justice found that O. Reg. 73/20 extended all running limitation periods by 183 days.

7As such, the treatment plan for medical services in the amount of $2,569.40 was filed within the limitation period because the applicant had until September 9, 2022 to file the application with the Tribunal. This treatment plan will not be considered as part of my analysis.

Was the notice defective?

8Section 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. In 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”). 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. [emphasis added].

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 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.

15In the recent decision of the Court of Appeal for Ontario, Varriano v. Allstate Ins. Company of Canada, 2023 ONCA 78, a medical reason for a denial does not have to be provided if there was no medical basis for the denial at issue. However, where there is a medical basis for a denial, then in my view, medical reasons should be provided.

Letter dated January 23, 2020 for the OCF-18 in the amount of $1,384.70

16I have reviewed the letter dated January 23, 2020 and find that it does not comply with the requirements under section 38(8). There are no references made to his medical conditions. It is unclear what his medical conditions or impairments are. Furthermore, there is a reference to the Minor Injury Guideline, but the respondent does not set out the definition. In my view, the reasons provided are vague. In my view, the respondent has used boilerplate wording and therefore, these reasons constitute as no reasons at all in accordance with Hedley. I find that the letter dated January 23, 2020 is not in compliance with s. 38(8) of the Schedule.

17According 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. If the respondent’s notice to the applicant does not meet these basic requirements, the denial is invalid and the two-year limitation period in the Schedule is not triggered. I find that the notice of denial did not meet the basic requirements outlined in Smith and therefore the two-year limitation period was not triggered.

18As I have determined that the limitation period was not triggered by an invalid denial, the applicant may proceed with their application before the Tribunal. I find it unnecessary to conduct an analysis in relation to section 7 of the Licence Appeal Tribunal Act, 1999, SO 1999, c 12, Sch G.

Non-Earner Benefit: Letter dated May 21, 2020

19The respondent submits that they informed the applicant of its clear and unequivocal denial that he is not entitled to the non-earner benefit on the basis that they did not provide an OCF-10 pursuant to section 33 of the Schedule.

20The applicant submits that the respondent sought an Election of Benefits (“OCF-10”) in error. It is the applicant’s position that there was no requirement for an OCF-10 to be submitted. By way of a letter dated May 21, 2020, the respondent referenced the fact of the OCF-10 having not been provided. The respondent then advises that given same “we have made a determination that you are not entitled to the IRB and NEB.” The denial and determination of “no entitlement” in this case was based on the absence of the OCF-10 and not on an assessment of the applicant’s condition or impairments. The respondent’s position is that the OCF-10 was reasonably required.

21According to the applicant:

Absent therein is the actual reason or rationale for coming to this conclusion. The respondent had in error sought the OCF-10, indicating the need to ascertain which specified benefit for which there was eligibility. The respondent has failed to explain how they made the “leap” in determining now that the applicant was in fact entitled to neither specified benefit. Given the lack of anything resembling a fulsome rationale, it would be contrary to the spirit of the consumer protection legislation to trigger a limitation period when no reasons are provided.

22In response to the applicant, the respondent submits that there was a discrepancy in the OCF-3. The OCF-10 was reasonably required to assist the respondent in determining the applicant’s entitlement to either the IRB or the NEB.

23I have reviewed the letter dated May 21, 2020 and submissions and find that the respondent is attempting to bar the applicant from proceeding with his application for the NEB on the basis that the applicant did not submit the OCF-10 in accordance with section 33.

24In my view, section 33 non-compliance does not fall within the categories that have been set out in section 55(1) or 56. Although the Tribunal may have considered the section 33 non-compliance as a preliminary issue in the past, in my view, it is not a preliminary issue. Rather, it is a defence that the respondent can raise.

25The respondent has not directed me to any sections in the Schedule that prevents an applicant from disputing a denial of a benefit at the Tribunal due an alleged non-compliance with a section 33 request for information. In circumstances where an applicant has not complied with a section 33 request, the respondent is not liable to pay a benefit in respect of any period during which the insured person fails to comply with subsection (1) or (2). Pursuant to section 33(8), once the applicant complies, then the respondent will resume payment of the benefit if it was being paid and shall pay all amounts that were withheld during the period of non-compliance if the applicant provides a reasonable explanation for the delay in complying with the subsection.

26As such, I find that I do not have the authority to preclude the applicant from applying to the Tribunal due to non-compliance with section 33(1). Therefore, the applicant may proceed with his claim for the NEB.

ORDER

27It is ordered that the applicant may proceed with his application before the Tribunal.