Licence Appeal Tribunal File Number: 24-005061/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:
Dawn Gigault
Applicant
and
The Dominion of Canada General Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Kate Grieves
APPEARANCES:
For the Applicant:
Devan T. Shafer, Counsel
For the Respondent:
Christopher P. McCormack, Counsel
Heard:
By Way of Written Submissions
OVERVIEW
1Dawn Gigault (the “applicant”) was involved in an accident on July 14, 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 Dominion of Canada General Insurance Company (the “respondent”) 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:
i. Is the applicant barred from proceeding to a hearing for the income replacement benefits (IRB) claimed in her application because she failed to dispute their denial within the 2-year limitation period?
RESULT
3The applicant may proceed to a hearing.
ANALYSIS
The Law
4The limitation period for accident benefits claims is set out in section 56 of the Schedule. It states that applications to dispute the denial of a benefit shall be commenced within two years after the insurer’s refusal to pay the benefit.
5In order for section 56 to be triggered, the respondent must have provided a valid notice of denial in accordance with the principles set out in Smith v. Co-operators General Insurance Company, 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: see paragraph 14.
6If an insurer’s notice of a refusal to pay a benefit does not satisfy these requirements, it may be determined to be invalid, and fail to trigger the two-year limitation period under s.56 of the Schedule.
Background
7Following the accident, the respondent accepted the applicant’s claim and began paying IRB. The applicant returned to work in November 2019. She stopped working again in July 2021 to undergo surgery and received short-term and long-term disability benefits.
8By letter dated January 13, 2020, the respondent acknowledged the applicant’s return to work in November 2019, receipt of some paystubs, and requested repayment of IRB paid after the applicant’s return to work. The respondent wrote:
Your income replacement benefit has been ceased as of November 18, 2019 due to your post-accident income weekly gross amount at 70% exceeds your income replacement benefit. Please provide further pay stubs past December 29, 2019 in order to allow an accurate calculation of possible income replacement benefits owed.
9The letter included a notice of right to dispute which stated that the applicant had two years from the date of the insurer’s refusal to pay to dispute the determination.
10IRB were not reinstated at any point after January 13, 2020.
11The respondent sent subsequent repayment request letters on February 10, 2020; March 5, 2021; and June 7, 2021.
12Upon receipt of updated information, on December 8, 2021 the respondent requested a new disability certificate (OCF-3) addressing entitlement (i.e. in the post-104 period). The OCF-3 completed by Dr. Kocsis on December 22, 2021 indicated that the applicant did not have a substantial inability to perform the essential tasks of her pre-accident work and was able to do modified work, however Dr. Kocsis also indicated that she was under the care of an orthopaedic surgeon. On January 7, 2022 the respondent acknowledged receipt of the OCF-3 by Dr. Kocsis and requested a further OCF-3 from the treating orthopaedic surgeon. No further OCF-3 was submitted.
13In February 2022 the respondent advised that it was arranging insurer examinations to address entitlement to post-104 IRB. The assessments were completed in April 2022, and concluded that she did not meet the “complete inability” test for post-104 IRB. By letter dated April 29, 2022 the respondent provided copies of the insurer’s examination reports to the applicant and advised that she was not entitled to IRB.
14On April 22, 2024, the applicant filed an application to the Tribunal seeking entitlement to income replacement benefits.
15The respondent submits that the January 13, 2020 letter was a clear and unequivocal denial of the income replacement benefits, triggering the limitation period, and the applicant did not appeal the denial within two years. Rather, the application was filed more than four years after the denial of the benefits.
16The applicant submits that the denial letter was not sufficiently clear, and thus the limitation period was not triggered. In the alternative, the applicant submits that the respondent’s subsequent communications undermined that denial.
The January 13, 2020 letter was not a valid denial
17I find that the January 13, 2020 letter was not a valid and proper refusal to pay the benefit, as it failed to meet the “clear and unequivocal” requirements as outlined in Smith.
18In the letter the respondent calculated that there were some overpayments, but also that the applicant was entitled to keep portions of the IRB paid to her after her return to work on November 18, 2019 after deducting 70% of her gross income from the weekly IRB paid. I find that the denial is ambiguous because after indicating that the benefit was ceased, it goes on to state: “please provide further pay stubs past December 29, 2019 in order to allow an accurate calculation of possible income replacement benefits owed”. The respondent suggests that this was meant to calculate any further repayment owed by the applicant. But that is not clearly communicated by the language used in the letter. To me, the language suggests that the respondent may owe her further income replacement benefits, and the paystubs were required in order to make that calculation, as it had just done. By suggesting that the applicant may be owed further income replacement benefits, the denial was not clear and unequivocal, as required by Smith.
19The Schedule is consumer protection legislation, and therefore ambiguities should be construed in favour of the insured. I find that the letter could reasonably lead the applicant to believe that her entitlement to IRB was not denied with finality, and that she may be owed further benefits. It would be unreasonable to hold that the letter is a clear and final denial of the IRB when the same letter indicates the possibility of further IRB owing.
20Given that the January 13, 2020 was not a clear and unequivocal refusal, the limitation period was not triggered.
21Having found that the letter did not trigger the limitation period, there is no need for me to consider the parties’ submissions regarding the respondent’s other communications. I would note, however, that if the limitation period was triggered by the subsequent April 29, 2022 denial letter, then application was filed within the 2-year limitation period from that denial.
ORDER
22The applicant may proceed to a hearing.
Released: December 5, 2024
Kate Grieves
Adjudicator