Licence Appeal Tribunal File Number: 24-000383/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:
Hafizullah Azizi
Applicant
and
Co-operators General Insurance Company
Respondent
DECISION
ADJUDICATOR:
Jeff Chatterton
APPEARANCES:
For the Applicant:
Mehrdad Salehi, Counsel
For the Respondent:
David Raposo, Counsel
HEARD:
In Writing
OVERVIEW
1Hafizullah Azizi, the applicant, was involved in an automobile accident on February 21, 2020, 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, Co-operators General Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE
2The issue to be decided is:
i. Is the applicant barred from proceeding to a hearing for Non-Earner Benefits (“NEB”) because the applicant failed to dispute their denial within the 2-year limitation period?
SUBSTANTIVE ISSUES
3The substantive issues in dispute are:
i. Is the applicant entitled to Non-Earner Benefits of $185.00 per week from April 22, 2020 to February 17, 2022?
ii. Is the respondent liable to pay an award under s. 10 of Reg. 664 because it unreasonably withheld or delayed payments to the applicant?
iii. Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
4The application is not barred from proceeding to a hearing for Non-Earner Benefits.
5As the respondent did not send a denial letter compliant with the Schedule upon receipt of the OCF-3, 36(7) of the Schedule applies. The applicant is entitled to 104 weeks of Non-Earner Benefits.
6Interest is due on the overdue benefits, as per the Schedule. No award is granted.
ANALYSIS
Law
7Section 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.
8To trigger the running of the limitation period, the insurer must provide clear and unequivocal notice of a refusal to pay benefits. In Smith v. Co-Operators General Insurance Co., 2002 SCC 30 (“Smith”), the Supreme Court of Canada articulated the requirements that an insurer must satisfy for there to be a proper denial of benefits: straightforward and clear language to inform a person of the dispute resolution process; language directed towards an unsophisticated person; identification of the person’s rights to dispute the denial; and the relevant time limits that govern that process.
9If the respondent’s denial satisfies these requirements and the applicant fails to dispute the respondent’s denial within two years, then the onus is on the applicant to establish reasonable grounds for an extension under Section 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”). Section 7 allows the Tribunal to extend a limitation period for filing an appeal. 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. The existence of 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.
Is the Applicant barred from applying for a Non-Earner Benefit due to a two-year limitation period?
10The applicant is not barred from applying for Non-Earner Benefits.
11The applicant suffered an accident on February 21, 2020, and submitted an OCF-1 (Application for Accident Benefits) form to the respondent on March 5, 2020.
12The respondent replied to the OCF-1 on March 18, 2020 in writing, and explained that based on the injuries, the respondent noted the applicant’s injuries were within the Minor Injury Guideline, but the applicant was not eligible for income replacement or non-earner benefits because the applicant had returned to work February 25, 2020, that he wasn’t prevented from working, and he was not a student or recent graduate at the time of loss. The respondent summarized with “Therefore, you have not met the eligibility criteria to qualify for a Non-Earner Benefit.”
13The applicant submitted an OCF-3 on April 22, 2020, indicating a substantial inability to perform the essential tasks of his employment. The insurer acknowledges they did not respond to this OCF-3, citing ‘inadvertence.’
14The applicant filed an application with the Tribunal on January 10, 2024, approximately 20 months after the expiration of the two-year limitation period.
15The applicant argues that the respondent, by not responding to the OCF-3, has violated the Schedule, and in so doing, has triggered section 36(4), which would place the insurer into a ‘must pay’ environment. The applicant has not submitted any medical evidence or provided any submissions as to the merits of the Non-Earner Benefit claim.
16The applicant further argues that because the respondent was non-compliant with s. 36(4), the two-year limitation period was never triggered. He submits that because the respondent did not issue a proper denial when the OCF-3 was submitted, that the applicant believed the appeal period was ongoing until the respondent had complied with its obligations and issued a proper denial of the OCF-3.
17To support his claim, the applicant refers to Mahhamoud v Aviva General Insurance, 2022 CanLII 11144 (ON LAT), (“Mahhamoud”) where the adjudicator ruled that the insurer was obligated to pay benefits until it provided notice to the insured responding to the application for a benefit.
18The applicant also cited the Divisional Court ruling of Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882, which stated that a benefit cannot be pre-emptively denied until it has been applied for.
19The applicant further relies on F.C. v Aviva Insurance Canada, 2020 CanLII 63586 (ON LAT) to support the argument that procedural errors result in benefit entitlement.
20The respondent argues that it did comply with the Schedule, in that upon receipt of the OCF-1, it did issue a notice under section 36(4)(b) wherein it denied the Non-Earner Benefit on the basis the applicant did not meet the eligibility criteria.
21Having reviewed the letter of March 18, 2020, I do not find this denial is compliant with the Schedule. The letter clearly indicates that the applicant was not eligible for a Non-Earner Benefit because he had already returned to the workplace on January 25, 2020, and he wasn’t a full-time student or recent graduate.
22Critically however, this does not, on its own, constitute a proper denial because at that point, Non-Earner Benefits had not yet been applied for as no disability certificate was submitted with the OCF-1 as is required by s. 36(2). As per Tomec, an insurer cannot pre-emptively deny benefits which have not been applied for.
23Section 36(4) of the Schedule clearly indicates that an insurer shall issue a notice outlining what it agrees to pay for and what it does not agree to pay for, within 10 days of receiving “the application and completed disability certificate.” There is no provision in the Schedule for ‘pre-emptively’ denying an application. In this case, the applicant is still awaiting a response after having sent in the completed disability certificate.
24In summary, the applicant did not receive a valid denial in compliance with the Schedule. In the absence of a proper denial, the limitation period has not yet been triggered. Therefore, the two-year limitation period does not apply. The applicant is free to continue his claim.
Consequences of not issuing a proper denial
25Section 36(4) of the Schedule clearly indicates that within 10 business days after an insurer receives the application and completed disability certificate, the insurer shall a) pay the benefit, b) give the applicant a notice (outlined in paragraph 23, above), or c) request additional information under subsection 33(1) or (2).
26Section 36(6) of the Schedule outlines the consequences of failing to adhere to the Schedule if the insurer does not issue a proper notice, with “the insurer shall pay the specified benefit for the period starting on the day the insurer received the application and completed disability certificate, and ending when the insurer gives the notice.
27As I have already ruled that the insurer has not issued a proper notice, I further find that the respondent is automatically liable to pay Non Earner Benefits. Section 36(4) clearly dictates that, failing to issue a proper notice, and being 10 days or more past the receipt of the application and disability certificate, the respondent is now in a ‘shall pay’ environment.
28Non Earner Benefits are paid for a maximum of 104 weeks after the accident. 104 weeks after the accident date of February 21, 2020 is calculated to expire February 18, 2022. As the application was filed in 2024, it is clear that notice has not yet been issued, and the full 104 weeks of Non Earner Benefits must be paid.
29104 weeks of $185 per week is calculated to be $19,240.00. I find that s36(6) of the Schedule applies, and the respondent is liable to pay the full amount to the applicant.
Interest
30Interest applies on the payment of any overdue benefits pursuant to s. 51 of the Schedule. Interest applies on the disputed amounts for Non Earner Benefits applies, as per the Schedule.
Award
31The applicant sought an award under s. 10 of Reg. 664. Under s. 10, the Tribunal may grant an award of up to 50 per cent of the total benefits payable if it finds that an insurer unreasonably withheld or delayed the payment of benefits. The onus is on the applicant to prove, on a balance of probabilities, that the respondent’s conduct meets this criteria.
32The applicant made a single-paragraph submission stating that the respondent has failed to provide compliant denial notices and statutory requirements, mishandling the claim and therefore he is entitled to an award. The applicant did not make a submission as to the amount of the award requested.
33The respondent points to S.M. v Unica Insurance Inc., 2020 CanLII 61460 (ON LAT), where it’s stated an award is justified where the delay or withholding of benefits by the insurer is unreasonable conduct, meaning “behaviour which is excessive, imprudent, stubborn, inflexible, unyielding or immoderate.”
34I do not find the insurer’s behaviour excessive or stubborn. I find they made a mistake, but the act of making a mistake on its own does not automatically mean the insurer acted or displayed behaviour that is excessive, imprudent, stubborn, inflexible, unyielding or immoderate and therefore conclude that the insurer is not liable to pay an award.
35No award is granted.
ORDER
36The applicant is not barred from proceeding to a hearing for Non-Earner Benefits because the applicant failed to dispute their denial within the 2-year limitation period.
37The Insurer has failed to comply with the Schedule, and as such, must pay $19,240.00 in Non-Earner Benefits to the applicant.
38Interest applies, as per the Schedule.
39No award is granted.
Released: December 31, 2025
Jeff Chatterton
Adjudicator