Citation: Ganesharatnam v. Certas Home and Auto Insurance Company 2024 ONLAT 23-004835/AABS-PI

Licence Appeal Tribunal File Number: 23-004835/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:

Sumatheeswary Ganesharatnam

Applicant

and

Certas Home and Auto Insurance Company

Respondent

Ulana Pahuta

For the Applicant:

Tal Eshel, Counsel

For the Respondent:

John Justin, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Sumatheeswary Ganesharatnam, the applicant, was involved in a motor vehicle accident on June 8, 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 certain benefits by the respondent, Certas Home and Auto Insurance Company, the respondent, 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:

a) Is the applicant barred from proceeding to a hearing for the substantive issues in dispute, because she failed to dispute their denial within the 2-year limitation period?

result

3The applicant is barred from proceeding to a hearing with the following treatment plans:

a) Treatment plan dated September 26, 2018, in the amount of $1,190.00;

b) Treatment plan dated January 3, 2020, in the amount of $2,200.00.

4The applicant may proceed to the substantive issue hearing with the remaining treatment plans and issues in dispute.

PROCEDURAL ISSUE – APPLICANT’S LATE SUBMISSIONS

5The respondent requests that the Tribunal not consider the applicant’s late-filed submissions. It argues that the applicant filed her preliminary issue hearing submissions two weeks past the deadline stipulated in the Case Conference Report and Order dated November 23, 2023, although in her email, she inaccurately stated that they were only “one-day” late. The respondent submits that it has suffered prejudice as a result of the delay, and that the applicant’s wilful disregard for Tribunal rules not be rewarded.

6I agree with the respondent that the applicant has filed her submissions two weeks late. However, although the respondent submits that it has suffered prejudice as a result of the delay, no details or evidence of the prejudice suffered have been provided by the respondent. The applicant agreed to the respondent’s request for additional time to provide its reply submissions. From my review, the respondent provided fulsome reply submissions.

7When weighing procedural fairness and any potential prejudice brought, I find the scales tip in favour of the applicant. The applicant would be severely prejudiced and unable to mount a defence if her hearing submissions were completely excluded. As such, I am considering the applicant’s written preliminary issue submissions in rendering this decision.

ANALYSIS

Parties’ Positions

8The respondent submits that the applicant failed to bring her application within the two-year limitation period stipulated in s. 56 of the Schedule. It argues that the length of delay was egregious, varying from three to four years post-denial, and that the Tribunal should not exercise its discretion to extend the limitation period, pursuant to s. 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”).

9The applicant does not dispute that she has brought her application outside of the two-year limitation period. However, she argues that all six of the respondent’s denials were non-compliant with the requirements under the Schedule, and therefore the limitation period was not triggered.

Law

10Section 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.

11However, in order for the provision under s. 56 to be triggered, the respondent must have provided a proper notice of denial, in accordance with the principles set out in Smith v. Co-operators General Insurance Co, 2002 SCC 30. Pursuant 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.

12The respondent submits that all of its denial letters comply with Smith. It argues that the denials provided an unequivocal refusal to pay, set out in clear language and that they provided details as to how to dispute the denials, emphasizing the two-year limitation period.

13The respondent further disputes the applicant’s argument that a purported failure to provide a medical reason would prevent the limitation period from being engaged. The respondent argues that the Supreme Court of Canada in Smith did not mention the need for medical reasons for a denial to be valid. It further submits that the Court of Appeal in Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA) held that an insurer’s reasons for a denial need not be “legally correct” in order for the limitation period to be triggered. This analysis was echoed in further Court of Appeal decisions, Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111 and Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78.

14I am not persuaded by the respondent’s argument that a medical reason is not required to constitute a valid denial, triggering the limitation period. I agree with the respondent that the Supreme Court of Canada in Smith did not stipulate that medical reasons were required for a denial to be valid, and that the Court of Appeal in Turner and Sietzema stated that a denial need not be “legally correct” for the limitation period to be triggered. However, all of these decisions were rendered on an earlier version of the Schedule that did not require medical and all of the other reasons to be included in the notice.

15The final decision cited by the respondent, Varriano, was decided after the amendments to the Schedule. However, I note that the Court of Appeal limited its analysis to situations where an insurer was relying on non-medical grounds for denying a benefit, such as where the insurer denied an income replacement benefit on the basis that the applicant returned to work. The Court of Appeal expressly stated that it was not addressing the insurer’s other argument, that “even if the notice was deficient in failing to provide a medical reason, it had triggered the limitation period”. Therefore, I interpret Varriano to hold that a medical reason for a denial is not required if there was no medical basis for the denial at issue. However, where there is a medical basis for a denial, in my view, medical reasons should be provided.

16As such, I find that in order for the provision under s. 56 to be triggered, the denial notice must provide a valid medical and other reason for the denial. In accordance with the principles set out in T.F. v. Peel Mutual Insurance Company, 2018 CanLII 39373 (ON LAT) and Hedley v. Aviva Insurance Company of Canada, 2019 ONSC 5318, a medical reason 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.

17Further, 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.

18If 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.

19However, if the notice of denial does satisfy these requirements, then the onus is on the applicant to establish reasonable grounds for an extension under section 7 of the LAT Act. Section 7 allows the Tribunal to extend a limitation period to file an appeal. In considering whether to exercise its discretion to extend the limitation period, the Tribunal must consider the following four factors to determine if the justice of the case requires the extension:

a) A bona fide intention to appeal within the limitation period;

b) The length of delay;

c) Prejudice to the other party; and

d) Merits of the appeal.

Denial Notices dated February 2, 2019, September 25, 2019, May 29, 2019 and October 23, 2018

20I find that the above-listed denial letters do not comply with the requirements under s. 38(8) of the Schedule. The February 2, 2019, September 25, 2019, May 29, 2019 and October 23, 2018 denial notices refer to the applicant’s “injuries” and “minor injuries”, without listing or providing any detail about said injuries. It is not enough to simply list the criteria in the Minor Injury Guideline without any further reference as to how the applicant’s injuries fit within it. Further, the respondent does not identify what additional information it did not have, but required from the applicant.

21The denial letters further state that “recommendations must address your diagnosis”, however, no diagnosis was specified. The language provided was vague and boilerplate wording, and was not sufficient to allow the applicant to make an informed decision to either accept or dispute the respondent’s decision. As such, I find that the denial letters dated February 2, 2019, September 25, 2019, May 29, 2019 and October 23, 2018 are not consistent with the Schedule or with T.F. v. Peel.

22As I have found that the limitation period was not triggered due to invalid denials, the applicant may proceed with the underlying treatment plans dated December 20, 2018, September 14, 2019, May 18, 2019 and September 6, 2018.

Denial notice dated October 12, 2018

23I find that the correspondence dated October 12, 2018 complies with s. 38(8) of the Schedule. The letter advises the applicant that the treatment plan dated September 26, 2018 was partially approved. It further states that the denied portions were not approved, as they exceeded the maximum rate for the service providers, with reference to s. 15(2)(b) and 16(4)(a) of the Schedule.

24The applicant has not provided any specific submissions on how this notice is non-compliant with s. 38(8) of the Schedule. I find that the correspondence was a clear and unequivocal denial, on the basis of the service provider’s rate. I do not find that the respondent was obliged to manufacture a medical reason, where there was none. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue.

25The applicant has provided limited submissions on s. 7 of the LAT Act. She did not address the relevant factors of: a bona fide intention to appeal within the limitation period; the length of the delay; the prejudice to the respondent, or the merits of the appeal. Rather, her sole argument was that the respondent ignored “credible medical evidence”, without providing evidence in support of this claim. Given the lack of specific submissions or evidence, I find that the applicant has not established reasonable grounds for an extension under s. 7 of the LAT Act, for the treatment plan dated September 26, 2018.

Denial Notice dated January 9, 2020

26In my view, the letter dated January 9, 2020 complies with the Schedule. The respondent identified the treatment plan dated January 3, 2020 and denied the treatment plan on the basis that the applicant’s injuries were minor. However, the respondent expanded upon its reasons, detailing the specific information on file that it had reviewed, the findings contained on the OCF-12 regarding cognitive abilities, and clinical notes and records referencing functional limitations.

27I find that the denial was clear and unequivocal. The benefit in dispute was identified and the applicant was provided with information regarding her right to appeal. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue.

28As I have already noted that the applicant has not established reasonable grounds for an extension under s. 7 of the LAT Act, she is barred from proceeding with the treatment plan dated January 3, 2020.

CONCLUSION AND ORDER

29The applicant is barred from proceeding to a hearing with the following treatment plans: