Khan v. Allstate Insurance Company of Canada, 2023 CanLII 7283

Citation: Khan v. Allstate Insurance Company of Canada, 2023 ONLAT 20-000806/AABS – R

RECONSIDERATION DECISION

Before: Deborah Neilson, Adjudicator

Licence Appeal Tribunal File Number: 20-000806/AABS

Case Name: Timur Khan v. Allstate Insurance Company of Canada

Written Submissions by:

For the Applicant: Ashu Ismail, Counsel

For the Respondent: Peter Yoo, Counsel

BACKGROUND

1This request for reconsideration was filed by the Applicant in this matter. It arises out of a decision in which I found that the applicant was not entitled to medical or attendant care benefits because his policy limits were exhausted. I found that he did not sustain a catastrophic impairment as a result of injuries he sustained from a motor vehicle accident on February 21, 2017.

2The issue that was before the Tribunal was whether the applicant’s health conditions were caused by the accident tor some other health reason(s). I found that the applicant failed to prove that his present impairments were caused by the accident and that he has a catastrophic impairment as a result of his accident injuries.

[3] The Applicant submits that the Tribunal i. acted outside its jurisdiction or violated the rules of procedural fairness, and ii. made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made.

[4] The Applicant is seeking an order: a. Cancelling the Tribunal’s decision; b. For a rehearing on all or part of the matter; and c. For his costs of the hearing

5Pursuant to s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, I have been delegated responsibility to decide this matter in accordance with the applicable rules of the Tribunal.

RESULT

6The applicant's request for reconsideration is dismissed.

ANALYSIS

[7] The grounds for a request for reconsideration to be allowed are contained in Rule 18 of the Tribunal’s Common Rules of Practice and Procedure. A request for reconsideration will not be granted unless one or more of the following criteria are met: a) The Tribunal acted outside its jurisdiction or violated the rules of procedural fairness; b) The Tribunal made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made; c) The Tribunal heard false evidence from a party or witness, which was discovered only after the hearing and likely affected the result; or d) There is evidence that was not before the Tribunal when rendering its decision, could not have been obtained previously by the party now seeking to introduce it, and would likely have affected the result.¹

8Reconsideration is only warranted in cases where an adjudicator has made a significant legal or evidentiary mistake preventing a just outcome, where false evidence has been admitted, or where genuinely new and undiscoverable evidence comes to light after a hearing.²

9Relying on Rule 18.2(a), the applicant submits that I acted outside of my jurisdiction and violated the rules of procedural fairness because it had no notice of the respondent’s position on causation until the respondent’s opening statement. The applicant submits that, as a result, my decision was rendered on an issue outside the respondent’s denial reasons, the response and pleadings, thus depriving the applicant of an opportunity to know and prepare his case with the necessary experts to prove a causal connection.

10Relying on Rule 18.2(b), the applicant also submits that I made an error of law such that I would likely have reached a different result had the error not been made by applying the “but for” test of causation instead of the “material contribution test.”

JURISDICTION AND PROCEDURAL FAIRNESS

11The applicant submits that it is well accepted that the parties to an action are entitled to have a resolution of their differences based on the pleadings. More specifically, the applicant submits that an insurer cannot utilize a defence to a claim at the Tribunal unless those reasons were provided by the insurer in its denial letter. He relies on case law that holds a trial judge cannot make a finding of liability and award damages against a defendant on a basis not pleaded in the statement of claim because it deprives the defendant of the opportunity to address that issue.³ I am not persuaded that the case law supports the applicant’s submissions. All of the cases relied upon by the applicant pertaining to pleadings in court proceedings dealt with damage awards made against a defendant where the pleadings did not contain the allegations of liability or the claim for damages determined by the trial judge. That was not the case before me. The applicant did not seek a claim that was not listed in the application or the case conference Order.

12The applicant also relies on the Divisional Court’s decision of Varriano v. Allstate⁴ as support for his submission that deciding a case on issues outside of the reasons provided by the insurer or outside their pleaded response is a fundamental breach of the applicant’s procedural rights. Varrianno v. Allstate was an appeal of the Tribunal’s determination at hearing and on reconsideration that the applicant’s claim for income replacement benefits was barred because of his failure to commence an application within two years of his receipt of the insurer’s denial. The Divisional Court determined that the limitation period did not begin to run because there was no proper denial. The insurer had denied IRBs because the applicant had returned to work. The denial letter from the insurer failed to provide medical reasons for the denial as required under s.37(4) of the Schedule. The Divisional Court determined that medical reasons are required for a denial of benefits, even if the denial is because the insured returned to work, in order for the insured to know whether or not his impairment is an issue when it comes time to apply for future benefits.

13I am not persuaded that Varrianno v. Allstate assists the applicant. There was no allegation by the respondent that the applicant missed a limitation period such that the sufficiency of the catastrophic impairment denial was brought into play. If the sufficiency of the denial affected the benefits payable to the applicant, this ought to have been raised by the applicant at the outset of the hearing. The time to raise the issue is not on reconsideration.

14The applicant relies on a preliminary issue decision of the Tribunal in Harland-Bettany v Aviva,⁵ In that case, the Tribunal found that the insurer did not raise the preliminary issue of whether her injuries were directly caused by an automobile accident as defined in the Schedule in a timely fashion, such that the Tribunal determined that it missed its opportunity to challenge whether the incident constituted an “accident” under the Schedule. The Tribunal found that under s.32 of the Schedule, insurers have an obligation to adjust an initial application in a timely manner and the tools to determine whether or not the insured person was involved in an accident. In that case, the insurer chose not to pursue any of those means to determine if Ms. Harland -Bettany was involved in an accident, but instead commenced the payment of benefits for years until the case conference, when it first alleged there was no accident. The Adjudicator in that case determined that there was no new information that arose between the time the applicant submitted her accident benefit application and the hearing to revive the preliminary issue.

15I do not find that Harland-Bettany v Aviva assists the applicant. In that case, the applicant advised in her submissions that the respondent was too late in taking the position years later that there was no accident as defined in the Schedule. In the case before me, the applicant was silent about the respondent’s defence. Harland-Bettany v Aviva is also distinguishable from this case because, unlike Aviva, the respondent consistently took the position in this case that causation was an issue. Further, that the applicant was always alive to the causation issue is supported by the adjusters’ notes, especially the June 13, 2017 note where the applicant’s legal representative agreed in a phone conversation that causation is the most critical issue.⁶ The adjusters’ log notes were produced no later than August 5, 2021. If the applicant had developed a belief that the respondent was no longer disputing causation at some point after receiving the respondent’s October 2, 2020 letter denying that the applicant was catastrophically impaired, he certainly had reason to believe that was not the case when he received the adjusters’ log notes.

16Although the Tribunal is required to ensure the dispute resolution process is fair, that does not mean the Tribunal has the power to award accident benefits when there is no entitlement under the Schedule. The Schedule is very clear about when and what benefits are payable in the face of a denial that does not provide requisite reasons.⁷ However, those benefits are not payable indefinitely when a deficient denial is made, but may be terminated once the requisite denial is provided. This is in keeping with the Legislature’s intent to ensure claimants have quick access to treatment and benefits regardless of fault. I find that this means that, in the absence of a waiver of rights, the trade off between the quick payment of benefits is that insurers are not limited in the defences they may make when a defending a denial of benefits at the Tribunal. Otherwise, I would expect the Schedule to state that an insurer is prohibited from asserting a defence to catastrophic determination or is required to pay enhanced benefits when an insurer does not list all of the reasons for denying a catastrophic claim. At the very least, I would expect that the Schedule would state that an insurer is required to pay enhanced benefits pending the requisite denial as it does for ss. 36(6) and s.36(8). The fact that the Schedule does not supports my interpretation that the trade off for ensuring a quick payment of benefits is the preservation of an insurer’s right to dispute entitlement at a later date.

17The denial of catastrophic impairment made by the respondent was set out in its letters dated January 20, 2020⁸ and October 20, 2020.⁹ In its letter dated January 7, 2020, the respondent advised that because of the applicant’s extensive pre-accident medical history, it required the applicant to attend insurer’s examinations (“IE”) to determine whether his accident injuries were catastrophic. This was repeated in subsequent letters when different dates for the IEs were arranged.¹⁰ The letter of October 20, 2020 stated that the applicant was not catastrophic as a result of the accident. “As a result of” is another way of stating “caused by.” I find that this response, in addition to the findings in all the IE reports, was notice to the applicant that the cause of his impairments was in issue. Further, the applicant was clearly aware that causation was in issue because he made submissions with respect to the production of an unredacted version of the log notes at the start of the hearing on the basis that the redacted notes were relevant to the causation issue. These submission were made by the applicant before the respondent ever made its opening statement.

18At the hearing, the applicant did not object to the respondent’s opening statement that, if the applicant was catastrophically impaired it was because of the March 9, 2017 incident and was not related to the accident. If this was the first time the applicant was aware that causation was a central issue to his claim, he should have objected at that point instead of doing it in a request for reconsideration. However, the applicant made no mention before he started entering evidence that he had no knowledge that causation was the respondent’s defence until the respondent’s opening submissions were made. If there was any prejudice to the applicant in proceeding with the hearing, the applicant should have raised the issue at that point in time. In fact, the applicant’s opening submissions referred to causation and the “but for” test. This also points to the applicant knowing that causation was the central issue for him to address in proving that he sustained a catastrophic impairment as a result of the accident. Further, the applicant’s claim that I acted outside of my jurisdiction flies in the face of the fact that the applicant has the onus of proof.

19In any event, I agree with the respondent that if the applicant felt that he had been blindsided and subsequently prejudiced by the issue of causation, he ought to have raised the issue at that time when I could have addressed any concerns the applicant had about procedural fairness. This was not done by the applicant at all during the hearing. Further, given that the hearing was then adjourned from August 16, 2021 until February 14, 2022, the applicant would have had ample time to have prepared for any further causation issues that he was allegedly unaware of prior to the commencement of the hearing. The only comment made by the applicant about not having prior notice that causation was an issue was in his closing submissions when he sought costs and in his reply submissions. The applicant submitted that he should be entitled to costs because his pre-existing issues were not listed as the reasons for denial. The applicant made no submission that he experienced any prejudice or that the Tribunal’s ability to carry out a fair, efficient and effective process was jeopardized as a result. In reply submissions, the applicant submitted that “there was no explanation from the respondent that said there was a significant problem with cause and that the applicant should have prepared for this.” The applicant’s submission was in reply to the respondent’s claim that the applicant did not call any pre-accident treating physicians. At no point in the hearing did the applicant make any submissions that I was precluded from determining causation because causation was not explicitly stated in the denial letters. Nor did he provide any case law to support such a submission.

20The decisions relied upon by the applicant in his reconsideration request do not support the proposition that the respondent was not entitled to defend its denial of the benefits for reasons not set out in its responses. All of the case law the applicant relied on dealt with damage awards made against defendants where the pleadings did not contain the allegations of liability or the claim for damages determined by the trial judge. The applicant provided no case law addressing defences available to defendants other than Harland-Bettany v Aviva. However, as noted earlier, the case is distinguishable, I am not bound by it, and the applicant by his own comments and the evidence believed from the outset that causation was an issue. This is also clearly apparent from a review of the medical documents relied on by both parties.

21In any event, the applicant has provided no reason why he could not raise the issue of having late notice of the respondent’s causation defence at the outset of the hearing or why he could not make submissions on my jurisdiction to determine causation at the hearing. He has not provided any reason why he did not seek an adjournment at that time. Without such reasons, I am unable to find that there has been any procedural unfairness.

22I agree with the respondent that the applicant cannot be permitted to raise the issue of the causation defence being outside the pleadings, or otherwise being improperly relied on by the respondent by way of a reconsideration request when it was never raised as an issue at the outset of the hearing. I also find that the applicant’s submission that I lacked the jurisdiction to address causation cannot be raised as a reason for reconsideration when the issue was never raised by the applicant at the hearing. For all of these reasons, the applicant’s request for reconsideration on the basis that I acted outside of my jurisdiction and violated the rules of procedural fairness because it had no notice of the respondent’s position on causation until the respondent’s opening statement is dismissed.

TEST OF CAUSATION

23The applicant submits that I erred in law in applying the “but for” test of causation instead of the “material contribution test.” He submits that, once the March 9, 2017 fall became part of the defence to the claim, the multiple potential medical causes should have been analyzed via the “material contribution” test, rather than the “but for” test. If this is correct, then the applicant must also show that if I had applied the material contribution test, then I would likely have reached a different result.

24The applicant relies on The Supreme Court of Canada’s recognition that where it is impossible to prove causation under the but for test because of medical uncertainty or the limits of science, the material contribution test is to be applied.¹¹ I agree. However, in this case, I determined that the applicant failed to prove causation under the “but for” test because the March 9, 2017 incident was an intervening event and I provided my reasons for that determination. This was not a case where it was impossible to filter out the accident injuries from the applicant’s pre-accident health issues as to what caused the applicant to fall on March 9, 2017. However, even if the applicant is correct and the material contribution test is the applicable test in this case, I am not satisfied, for the reasons given in my decision, that there was a nexus between the accident injuries and the fall on March 9, 2017. Accordingly, if I erred on the causation test, I would not have reached a different result. For these reasons the applicant’s request for reconsideration on an error of law is dismissed.

COSTS

25The applicant’s submissions on costs are an attempt at relitigating an issue I already determined. The applicant has provided no authority or reasons to indicate I erred in my discretion to not award costs. Reconsideration is not an opportunity to relitigate the issues. Accordingly, the applicant’s claim for reconsideration on the dismissal of his claim for costs is dismissed.

CONCLUSION

26For the reasons noted above, I deny the applicant's request for reconsideration.

Deborah Neilson

Adjudicator

Tribunals Ontario – Licence Appeal Tribunal

Footnotes

1. 1Rule 18.2 of the Fire Safety Commission Common Rules of Practice and Procedure, Version I (October 2, 2017).
2. 2Sidiura v Aviva General Insurance, 2021 CanLII 100863
3. 3460635 Ontario Limited v. 1002953 Ontario Inc., 1999 CanLII 789 (ON CA) at para 9; Rodaro v. Royal Bank of Canada, 2002 CanLII 41834 (ON CA), at para 60; Link v. Venture Steel Inc., 2010 ONCA 144, at para 35. Kalkinis (Litigation guardian of) v. Allstate Insurance Co. of Canada (1998), 1998 CanLII 6879 (ON CA), 41 O.R. (3d) 528 (C.A.), leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 253.
4. 4Varriano v. Allstate, 2021 ONSC 8242 (Varriano v. Allstate)
5. 5Harland-Bettany v Aviva Insurance Canada, 2022 CanLII 78879 (ON LAT), (Harland-Bettany v Aviva)
6. 6Ex.4 pp.10 to 15, 17, 18, 19, 22, 23, 24, 26, 29, 30, 31, 32, 34, 37, and 39 for adjusters’ notes dated April 3,5, 11, 2017, June 2, 2017, June 21, 2017, July 27, 2017, August 21, 2017, September 1, 2017, January 19, 2018, March 2, 2018, April 24, 2018, June 7, 2018, September 26, 2018, October 19, 2018, March 4, 22, 2019, April 8, 2019, July 4, 2019 and September 6, 2019
7. 7See ss. 36(6) and s.38(11) of the Schedule
8. 8Ex.2 Tab B.7 p.80.
9. 9Ex.3 Tab 8 p.156 October 20, 2020
10. 10Ex.3, letters from the respondent dated February 18, 2020 p.126, March 19, 2020 p.131, April 29, 2020 p.137
11. 11Resurfice Corp. v. Hanke, 2007 SCC 7, [2007] 1 SCR 333, at para 23-26