Citation: Buttenham v. Northbridge General Insurance Company 2024 ONLAT 23-008795/AABS-PI

Licence Appeal Tribunal File Number: 23-008795/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:

Kaitlyn Buttenham

Applicant

and

Northbridge General Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR:

Ulana Pahuta

APPEARANCES:

For the Applicant:

Sherilyn Pickering, Counsel

For the Respondent:

Linda Kiley, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Kaitlyn Buttenham, the applicant, was involved in an automobile accident on May 29, 2018, 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 General Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for resolution of the dispute.

PRELIMINARY ISSUE IN DISPUTE

2The preliminary issue to be decided is:

i. Is the applicant barred from proceeding with their claim for benefits as they failed to submit the application for benefits (OCF-1) within the time prescribed by the Schedule without a reasonable explanation?

Result

3The applicant is not statute-barred from proceeding with her application.

ANALYSIS

Background

4The applicant was involved in an accident on May 29, 2018. She advised the respondent of the accident on May 30, 2018. The respondent sent the applicant an accident benefits application package the following day, including the OCF-1 form. The accompanying letter stated that the OCF-1 must be provided within 30 days, or the applicant’s eligibility to accident benefits may be affected.

5The applicant did not provide her completed OCF-1 to the respondent within 30 days, but did submit a Disability Certificate (OCF-3) and treatment plan (OCF-18) on June 4, 2018. By way of an Explanation of Benefits (EOB) dated June 14, 2018 the respondent again requested an OCF-1 “at your earliest convenience”.

6However, on June 19, 2018, the respondent partially approved the June 4, 2018 OCF-18 in the amount of $2,514.39, and subsequently paid an invoice from the treating clinic. The respondent also continued to request the completed OCF-1 on July 17, 2019 and September 25, 2019. On December 5, 2019 the respondent denied an OCF-18 for physiotherapy services, on the basis that an OCF-1 had not been submitted and requested the completed OCF-1.

7The applicant retained counsel in July 2019 and by way of letter dated October 25, 2019, the legal representative advised the respondent that they represented the applicant and stated that they were to be copied on all correspondence. The letter also included an Authorization and Direction executed by the applicant and requested a copy of the complete accident benefits (AB) file. The parties disagree as to whether the AB file was provided at that time. The respondent submits that it provided the AB file to applicant’s representative on November 22, 2019, while the applicant submits that her representative did not receive the file. By way of letter dated April 1, 2020 and email dated April 22, 2020 the applicant’s legal representative again requested the complete AB file and the parties agree that the respondent emailed the file to applicant’s representative on April 22, 2020.

8A completed OCF-1 was then submitted the following day, on April 23, 2020. On April 30, 2020, the respondent requested additional information and documents, including an explanation for the delay in submitting the OCF-1. On May 14, 2020, the applicant’s legal representative sent a letter providing various explanations for the delay, including that:

i. the applicant had started experiencing increased shoulder pain a year after the accident;

ii. prior to retaining her current counsel she believed that her former law firm had submitted the forms;

iii. in September 2019 she was focused on her schoolwork and raising her daughter;

iv. the applicant suffers from pre-existing psychological conditions which worsened after the accident; and

v. the applicant’s law firm had requested the complete AB file on October 25, 2019, April 1, 2020 and April 20, 2020 and did not receive it until April 22, 2020. It was only at this time that the applicant’s legal representative was aware of the fact that an OCF-1 had not been submitted, at which point the OCF-1 was immediately submitted.

Law

9Section 32(1) of the Schedule provides that a person who intends to apply for accident benefits shall notify the insurer of their intention no later than the seventh day after the circumstances arose that give rise to the entitlement, or as soon as practicable after that day. Once 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 along with various other documents.

10Pursuant 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.

11Section 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 onus is on the applicant to establish a reasonable explanation for the delay. The interpretation of “reasonable explanation” is guided by Horvath and Allstate Insurance Company of Canada, 2003 ONFSCDRS 92, and was more recently reiterated in K.H. vs Northbridge, 2019 CanLII 101613 (ON LAT). The guiding principles are summarized 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. Ignorance of the law alone is not a “reasonable explanation”.

d. 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.

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.

Parties’ Positions

12The applicant does not dispute that she first provided her OCF-1 to the respondent on April 23, 2020, well outside the 30 day time limit stipulated in s. 32(5) of the Schedule. However, she submits that she has a reasonable explanation for the delay, pursuant to s. 34 of the Schedule. The applicant argues that during the period of the delay, she was suffering from significant psychiatric and cognitive impairments that limited her ability to understand and complete tasks. She further submits that she had mistakenly believed that she had previously retained a law firm that had submitted the form on her behalf, and it was only when she retained her new counsel and they received the complete AB file that they realized that her application was incomplete.

13The applicant also contends that she was a vulnerable and unsophisticated party and that the respondent’s actions throughout the delay period led her to believe that her claim had been accepted. This included its continued response to the claim throughout 2018 to 2020, including paying benefits despite the lack of an OCF-1. The applicant further argues that after she late-filed her OCF-1, the respondent accepted her claim and continued to respond to her submissions of OCF-18s on the basis of whether they were reasonable and necessary rather than a denial due to the late-filed OCF-1. As such, in addition to submitting that she had a reasonable explanation for the delay, the applicant relies on the remedies of waiver, estoppel and relief from forfeiture.

14The respondent disputes that the applicant has provided a reasonable explanation for the almost two year delay in submitting her OCF-1. It argues that it had followed up multiple times with the applicant to request the completed OCF-1 and that the applicant’s argument that she thought her former counsel had previously submitted the form is not credible. The respondent further submits its letter dated November 22, 2019, to support its claim that it provided the complete AB file to the applicant’s new legal representative after the first request for the file.

15With respect to the applicant’s claim that she was unable to submit her application as a result of psychological and cognitive impairments, the respondent argues that the applicant had suffered from psychological impairments both before and after the accident. However, she was still able to access medical care and attend online schooling throughout the delay period, and the respondent submits there is no evidence that the applicant’s psychological condition or a head injury prevented her from submitting an OCF-1. Finally, the respondent argues that the Tribunal does not have jurisdiction to grant equitable remedies such as relief from forfeiture or estoppel.

Late-filed OCF-1 and Reasonable Explanation for the Delay

16There is no dispute that the applicant did not submit her OCF-1 within the timelines stipulated in s. 32(5) of the Schedule. However, I find that the applicant has established that she has a reasonable explanation for the delay pursuant to s. 34 of the Schedule.

17I find the applicant’s explanation that her various psychological conditions impaired her ability to submit the completed OCF-1, to be credible and worthy of belief. The applicant submits clinical notes and records (CNRs) from her family physician and psychiatric consultation reports from the period of delay. They establish that throughout 2018 and 2019, the applicant was suffering from anxiety and depression, was diagnosed with bi-polar disorder, had a severe panic attack and was prescribed medication. The CNRs indicate that the applicant reported a number of times that she suffered from forgetfulness, decreased focus and concentration.

18I am persuaded by the applicant’s argument that these psychiatric and cognitive impairments contributed to her inability to complete the task of submitting the OCF-1, and her erroneous belief that the form had been submitted by a previous law firm. The applicant has submitted correspondence between her current law firm and the one that she thought she had previously retained. It shows that while the applicant did contact the previous law firm, they were never actually retained.

19I am not persuaded by the respondent’s argument that the applicant had suffered from psychological impairments both before and after the accident. While the applicant’s pre-accident psychological impairments may be relevant to the issue of causation, this would be determined at the substantive hearing. Without addressing the merits of the case, it does appear that the applicant was suffering from significant psychological impairments throughout 2018 and 2019 which prevented her from following through with the task of having the OCF-1 submitted.

20Moreover, I accept that the applicant was operating on the mistaken belief that her claim had been accepted by the respondent, particularly as the respondent had partially approved an OCF-18 three weeks after the accident, and paid for the incurred treatment. Further, the EOB dated June 19, 2018 which had partially approved the treatment plan, did not say anything about the failure to provide an OCF-1. I find that this partial approval could have reasonably led to confusion for the applicant and encouraged her mistaken belief that she had properly submitted an accident benefits claim.

21I further agree with the applicant that the respondent’s subsequent correspondence did not alleviate the confusion caused by the partially approved OCF-18. While the respondent’s September 25, 2019 letter did state that it had not received an OCF-1 and that it would close the applicant’s file if it did not hear from her, it also reassured the applicant that the closure of her file would not limit her rights under the Schedule.

22Further, I am persuaded by the applicant’s evidence that her legal representative was unaware of the failure to file the OCF-1 until April 2020. The respondent was notified on October 25, 2019 that the applicant had retained counsel. While the December 5, 2019 EOB did clearly state that the submitted OCF-18 was denied on the basis that the applicant had not submitted an OCF-1, this correspondence was only sent to the applicant and not her legal representative. This is despite the fact that the October 25, 2019 letter requested that all correspondence was to be copied to the law firm and included an executed Authorization and Direction. I agree with the applicant that the respondent failed to copy the applicant’s legal representative on correspondence that would have identified the lack of an OCF-1.

23The applicant has also submitted correspondence to show that her law firm had requested the complete AB file on three separate occasions beginning on October 25, 2019. Although the respondent has submitted a letter dated November 22, 2019 indicating that the AB file was provided, the applicant submits that her legal representative did not receive it until the third request on April 20, 2020. I agree with the applicant that the adjuster’s log notes and subsequent correspondence between the respondent and the law firm do not support the respondent’s assertion that the AB file was sent on November 22, 2019. The only log note entry showing that the AB file was sent was dated April 22, 2020. Upon receipt of the AB file, the applicant’s legal representative immediately submitted the completed OCF-1.

24As such, I find the applicant’s explanations that her psychological and cognitive impairments limited her ability to complete and submit the OCF-1, and that she was operating under the mistaken belief that her accident benefits claim had been accepted by the respondent, are both credible and reasonable.

25While I accept that the respondent has been prejudiced by the delay as it was unable to assess the applicant during the period of delay or obtain contemporaneous medical evidence, the applicant will face hardship as well if she is prevented from proceeding with her claim. Without addressing the merits of the case, the applicant is seeking a catastrophic determination with corresponding medical benefits and attendant care services. On balance, I find that the hardship to the applicant if she is prevented from proceeding to the substantive hearing to be far greater than the prejudice to the respondent due to the delay.

26Having found that the applicant has a reasonable explanation for the delay, I do not need to decide whether the circumstances warrant granting an equitable remedy based on waiver and estoppel or relief from forfeiture. Given that the applicant has provided several reasonable explanations in accordance with s. 34 of the Schedule for her delay in submitting her OCF-1, I find that the applicant may proceed with her application.

CONCLUSION AND ORDER

27The applicant may proceed with her application to the substantive issue hearing.