Rutledge v. Security National Insurance Company, 2024 CanLII 67354

Citation: Rutledge v. Security National Insurance Company 2024 ONLAT 23-010828/AABS-PI

Licence Appeal Tribunal File Number: 23-010828/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:

Mary Clare Rutledge

Applicant

and

Security National Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR:

Ulana Pahuta

APPEARANCES:

For the Applicant:

Ivy So, Counsel

For the Respondent:

Crystal Law, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Mary Clare Rutledge, the applicant, was involved in a motor vehicle accident on September 13, 2017 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, Security National 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 to a hearing for all of the benefits claimed in this application because the applicant failed to dispute their denial within the 2-year limitation period?

RESULT

3The applicant is barred from proceeding with her application.

PROCEDURAL ISSUES

Applicant’s Motion to exclude respondent’s reply submissions

4Subsequent to the parties’ written submissions being filed, the applicant filed two Notice of Motions (“NOM”). The first NOM dated May 14, 2024 requested that the Tribunal exclude the respondent’s reply submissions, as they were filed one day past the deadline stipulated in the Case Conference Report and Order dated April 15, 2024.

5I decline the applicant’s request to exclude the respondent’s reply. The applicant submits that it would be procedurally unfair to allow the respondent to file its reply submissions late. However, she has not led any evidence to establish that she suffered any prejudice as a result of the one day delay. In contrast, excluding the entirety of the respondent’s reply submissions would limit its ability to effectively participate in these proceedings. Given the severe prejudice to the respondent if I were to strike its submissions in this manner, I decline the applicant’s request to strike the reply submissions and will consider them in their entirety.

Applicant’s Motion to provide a sur-reply

6The applicant subsequently filed another NOM dated May 27, 2024 requesting to file a sur-reply and that the Tribunal strike certain paragraphs of the respondent’s reply submissions. The applicant’s motion is denied.

7Sur-reply submissions are provided in limited circumstances, where a party made additional legal arguments or introduced additional issues in reply, provided an inaccurate statement of law, or an inaccurate statement of facts that would be critical to the determination of the issues in dispute. The applicant has not established that any of these conditions have been met.

8The applicant argues that paragraph 4 of the respondent’s reply submissions inaccurately stated that she had returned to work. I am not persuaded that the paragraph is factually inaccurate given that the applicant agrees that she returned to work in 2018. Further, in the applicant’s motion submissions she requests certain documents from the respondent, including copies of pay stubs, an Application for Benefits (“OCF-1”) and Income Replacement Benefit (“IRB”) calculations. I agree with the respondent that these documents are not relevant to the preliminary issue of whether the application should be barred pursuant to s. 56 of the Schedule. Such productions should have been requested well-before this preliminary issue hearing.

9Further, I agree with the respondent that a sur-reply is not intended to be an additional opportunity for a party to bolster its case. The factual background specified in the applicant’s sur-reply were details that should have been properly raised in her initial responding submissions. Finally, I am not persuaded by the applicant’s argument that the respondent raised new issues in its reply submissions. In my view, the paragraphs cited by the applicant are not evidence of a new line of argument, but rather, a response to arguments raised in the applicant’s responding submissions.

10As such, the applicant’s request to provide a sur-reply and strike certain paragraphs of the respondent’s reply submissions is denied.

ANALYSIS

Background

11The applicant was involved in an accident on September 13, 2017, and submitted an OCF-1 to the respondent on October 5, 2017. The respondent initially found the applicant to be entitled to IRBs but determined the quantum to be $0 due to the applicant’s return to work. On May 25, 2018 the applicant submitted a new Disability Certificate (“OCF-3”) which indicated that she did not suffer a substantial inability to perform the essential tasks of her employment, which is the test for entitlement to an IRB. The OCF-3 also confirmed that the applicant had returned to work.

12On June 7, 2018 the respondent wrote to the applicant advising her that upon review of the OCF-3, the applicant was not entitled to IRBs and no further income benefit would be payable effective June 15, 2018. The correspondence further stated that if the applicant’s circumstances changed, a new OCF-3 was required and the respondent may require the applicant to attend an insurer’s examination.

13The applicant filed her Tribunal application disputing the denial of IRBs on September 12, 2023, five years after the respondent’s denial correspondence.

Law

14Section 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.

15Section 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”) allows the Tribunal to extend a limitation period. In considering whether to exercise its discretion to extend the limitation period, the Tribunal must consider the following four factors set out in Manuel v. Registrar, 2012 ONSC 1492, to determine if the justice of the case requires the extension:

i. A bona fide intention to appeal within the limitation period;

ii. The length of delay;

iii. Prejudice to the other party; and

iv. Merits of the appeal.

16The onus is on the applicant to establish reasonable grounds for an extension under section 7 of the LAT Act.

Parties’ Positions

17The respondent submits that the applicant has far exceeded the two-year limitation period stipulated in s. 56 of the Schedule. It argues that it provided a clear and unequivocal denial of the IRB in its June 2018 letter, as per Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111. The respondent further submits that the Tribunal should not exercise its discretion to extend the limitation period, pursuant to s. 7 of the LAT Act.

18The applicant does not dispute that her Tribunal application was submitted on September 12, 2023. However, she submits that the two-year limitation period was never triggered, as the respondent failed to provide a clear and unequivocal denial of IRBs. The applicant argues that the language contained in the June 7, 2018 notice was unclear and that it implied that the denial was not definitive, but that if “circumstances changed” the respondent would reconsider payment of an IRB. The applicant argues that her circumstances did change as she stopped working in February 2019 and submitted a new OCF-3 on August 16, 2021.

June 7, 2018 notice

19I find that the respondent’s June 7, 2018 correspondence was a clear and unequivocal denial of IRBs.

20The applicant argues that the respondent’s notice was unclear, as it stated that no further “income benefit” will be payable, instead of “income replacement benefit”. Further, the applicant submits that the June 7, 2018 letter did not state that IRBs were terminated, but rather, that the benefit will not be “payable.”

21I do not agree with the applicant that the respondent’s notice was unclear. Although the applicant points to the fact that the respondent stated that no further “Income benefit will be payable”, in my view, the sentence was not ambiguous. The respondent expressly stated that it found that the applicant was “not entitled to the Income Replacement Benefit and no further Income benefit will be payable effective June 15, 2018”. As such, it was clear that IRBs were being denied.

22Further, although the notice did not use the word “terminated”, a refusal or denial can take many forms. Stating that a claimant was not entitled to IRBs and that no further benefit will be payable was a refusal to pay benefits and did not affect the clarity of the denial. The June 7, 2018 correspondence provided reasons for the denial, being that the OCF-3 indicated that the applicant was not substantially unable to complete the essential tasks of her employment, and that the applicant had returned to work.

23The applicant further points to the language in the notice that stated that if the applicant’s circumstances changed, the respondent would require a new OCF-3 and the applicant may be requested to attend an insurer’s examination. The applicant relies on Tribunal decision 17-004556 v Aviva Insurance Canada, 2018 CanLII 13157 (ONLAT) to argue that such language creates ambiguity, since it informed the applicant that if her “circumstances changed” she could still remain eligible for IRBs.

24I do not agree with the applicant that this language creates such ambiguity to render the notice invalid. I agree with the respondent that the language does not suggest that the applicant would automatically be entitled to IRBs if her circumstances changed. Rather, it stipulated that a new OCF-3 would be required which, in my view, implies that new investigations and assessments would be made. An insurer has an ongoing obligation to adjust a file when new circumstances and information are presented. I do not find that this detracts from the denial in the notice. Nor would the presentation of new evidence extend the limitation period of the initial denial.

25Further, I agree with the respondent that 17-004556 is distinguishable from the case at hand. In that decision the sole reason for stopping IRB payments was the applicant’s return to work. The notice went on to say that if the applicant was “off work again”, a new OCF-3 would be required to determine eligibility. However, in the present matter the respondent denied the applicant IRBs not only because the applicant had returned to work, but also because the OCF-3 indicated that the applicant did not meet the substantial inability test. As such, the June 7, 2018 notice provided a clear statement of the respondent’s determination that the applicant was not entitled to IRBs.

26Having determined that respondent provided a clear and unequivocal denial that complies with s. 37 of the Schedule, I must still consider whether an extension of the limitation period should be granted.

Section 7 of the LAT Act

27I find that the applicant has not established that the limitation period should be extended under s. 7.

28The applicant has not provided any 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. Given the lack of submissions or evidence, I find that the applicant has not established reasonable grounds for an extension under s. 7 of the LAT Act.

ORDER

29I find that the applicant is statute-barred from proceeding with her application pursuant to s. 56 of the Schedule.

30The application is dismissed and the substantive hearing is vacated.