Khan v. Economical Insurance Company, 2024 CanLII 49024

Citation: Khan v. Economical Insurance Company, 2024 ONLAT 22-000852/AABS

Licence Appeal Tribunal File Number: 22-000852/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.

Parties

Between:

Faaria Khan

Applicant

and

Economical Insurance Company

Respondent

DECISION

ADJUDICATOR:

Ulana Pahuta

APPEARANCES:

For the Applicant:

Ivy So, Paralegal

For the Respondent:

Louise Kanary, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Faaria Khan, the applicant, was involved in an automobile accident on July 27, 2021 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, Economical Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

PRELIMINARY ISSUES

2The preliminary issue to be decided is:

i. Is the applicant barred under s. 55(1)1 of the Schedule from appealing the respondent’s refusal to pay her claims because she did not follow the procedures for claiming accident benefits that are required by s. 32(1) without a reasonable excuse?

SUBSTANTIVE ISSUES

3The substantive issues in dispute are:

i. Are the applicant’s injuries predominantly minor as defined in s. 3 of the Schedule and therefore subject to treatment within the $3,500.00 Minor Injury Guideline limit?

ii. Is the applicant entitled to $1,748.05 for physiotherapy services, proposed by Toronto Medical Centre in a treatment plan (“OCF-18”) submitted on January 5, 2022?

iii. Is the applicant entitled to $200.00 for the completion of an OCF-3 Disability certificate, proposed by Toronto Medical Centre in an OCF-18 submitted on October 12, 2021?

iv. Is the applicant entitled to interest on any overdue payment of benefits?

RESULT

4I find that the applicant is statute-barred from proceeding with the substantive issues in dispute pursuant to s. 55(1).

ANALYSIS

The Law

5Section 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 to the benefit, or as soon as practicable after that day.

6Pursuant to section 32(5) of the Schedule, the applicant must submit a completed and signed application for benefits to the respondent within 30 days after receiving the forms. Section 36(2) of the Schedule, states that an applicant for a specified benefit must submit a completed OCF-3 with her application.

7Section 55(1) provides that the applicant shall not apply to the Tribunal if she has not notified the insurer of the circumstances giving rise to a claim for a benefit or has not submitted an application for the benefit within the times prescribed by the Schedule.

8However, s. 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

9The applicant was involved in a motor vehicle accident on July 25, 2021. She reported the accident to the respondent on July 27, 2021, but did not report any injuries at that time. The respondent received a Disability Certificate (“OCF-3”) on October 15, 2021 and emailed an accident benefits package to the applicant on October 18, 2021. The applicant submitted a completed application for accident benefits (“OCF-1”) on November 24, 2021.

10The respondent submits that the applicant should be barred from proceeding with her application, since she failed to apply for accident benefits in accordance with the Schedule. It argues that the applicant did not notify the respondent of her intention to apply for accident benefits until almost three months after the accident, well-outside the seven-day timeline prescribed by s. 32(1) of the Schedule. It further submits that the applicant has failed to provide a completed application within the 30-day timeline prescribed by s. 32(5).

11The applicant submits that she has a reasonable explanation for the delays. She argues that she delayed in notifying the respondent after the accident because she was unaware of the seven-day timeline and thought her injuries would resolve on their own. She was unable to seek medical treatment during this time, as her doctor was very busy and she did not have access to a vehicle. Further, the OCF-3 was provided less than three months after the accident, therefore the applicant argues that the respondent is not prejudiced by the short delay. However, she submits that barring her from proceeding would cause her substantial hardship as she would be forced to pay out of pocket for treatment.

Section 32(1) – failure to notify the respondent within seven days or as soon as practicable

12I find that the applicant did not notify the respondent within the timeframe set out in s. 32(1) of the Schedule. The applicant does not dispute that she first notified the respondent of her intention to apply for benefits on October 15, 2021, almost three months after the accident, when her treating clinic submitted an OCF-3. This delay of almost three-months is well outside the seven-day time line as mandated by s. 32(1). Therefore, the main issue is whether the applicant has provided a reasonable explanation for the delay.

Section 34 - reasonable explanation for the delay

13I find that the applicant has not established a reasonable explanation for her delay in notifying the respondent of her intention to apply for accident benefits.

14In her submissions, the applicant argues that she thought her back pain would go away and that she was unable to go to the doctor during this period, as her doctor was very busy and she did not have access to a vehicle. The applicant further stated in a recorded interview with the respondent, that she got busy with school and did not have time to seek medical attention.

15I am not persuaded that the applicant’s stated reasons for the delay meet the “reasonable explanation” test as delineated in Horvath. Although the applicant states that her doctor was very busy and that she was unable to be driven to the doctor’s office on the days that her doctor was available, I note that the applicant is not disputing that she was aware of her injuries soon after the accident. The applicant stated in her interview that she was aware of her pain two days after the accident. In her submissions, the applicant argues that her initial pain symptoms were “mild” and that she hoped that it would go away.

16However, in her recorded interview although at one point the applicant stated that her back pain was mild, at other points in the interview she stated that she first had “bad neck and back pain” soon after the accident. The applicant further stated that there has not been a change in her symptoms from when she first noticed them. As such, I agree with the respondent that this was not a situation where the applicant was unaware of her injuries until a later date.

17Although the applicant states that she was unable to go to her doctor’s office for a variety of reasons, failing to receive medical attention would not have prohibited her from notifying the respondent. She was not incapacitated but rather, one of her stated reasons for the delay was that she had gotten busy at school.

18Further, I note the respondent’s argument that the applicant had prior experience with accident benefit claims. She had previously been in three motor vehicle accidents, and had claimed accident benefits for one of them, an August 3, 2018 accident. In her recorded interview, the applicant confirmed that she had started an accident benefit claim for this accident and had managed her own claim. However, in the 2018 accident the applicant submitted her OCF-1 much quicker, within “a couple of weeks”. As such, I do not find that this was a situation where a claimant was unaware of the accident benefit process.

19Finally, I am not persuaded by the applicant’s argument that three months is an insignificant period with no prejudice to the respondent, and that it is a “slippery slope” to deny such a claim as it will permit insurers to deny claims even if they are one day late. In my view, a three month delay is substantially different from a one day delay. Particularly in a case such as this, where the claimant was aware of her injuries, they did not appear to change substantially over the three month duration and she had previously managed her own accident benefit claim where she had promptly submitted an OCF-1. Although the applicant argues that the respondent is not prejudiced by a three month delay, as specified in Horvath, the lack of prejudice to the insurer does not make an explanation automatically reasonable. Rather, the onus rests with the applicant to provide a reasonable explanation for the delay.

20Having considered the evidence before me, I am not persuaded that the applicant has provided a reasonable explanation for the delay in notifying the respondent of her intention to apply for accident benefits.

ORDER

21The applicant has not provided a reasonable explanation for failing to notify the respondent of her intention to apply for accident benefits within the time limits prescribed by s. 32(1) the Schedule.

22The applicant is barred pursuant to s. 55(1) of the Schedule from proceeding with the substantive issues in dispute. The application is dismissed.