PRELIMINARY ISSUE HEARING DECISION AND ORDER
Licence Appeal Tribunal File Number: 24-009458/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:
Lauren Sparks
Applicant
and
Primmum Insurance Company
Respondent
Adjudicator: Ulana Pahuta
Appearances:
For the Applicant: Alexander M. Voudouris, Counsel Steven Arie Glowinsky, Counsel
For the Respondent: Jonathan B. White, Counsel
Heard: By way of written submissions
OVERVIEW
1Lauren Sparks, the applicant, was involved in an automobile accident on February 6, 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, Primmum Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2At the case conference held on November 18, 2024, the respondent raised a preliminary issue, to be heard prior to the substantive issues in dispute.
PRELIMINARY ISSUE
3The preliminary issue to be decided is:
- Is the applicant barred from proceeding to a hearing on all of the benefits claimed in this application because the applicant failed to dispute their denial within the two-year limitation period?
RESULT
4I find that the applicant is barred from proceeding with her application pursuant to s. 56 of the Schedule.
ANALYSIS
Law
5Section 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.
6In order for section 56 to be triggered, the respondent must have provided a valid notice of denial. Section 54 of the Schedule provides that if an insurer refuses to pay a benefit, the insurer shall provide the person with a written notice advising them of their right to dispute the benefit or reduction.
7Further, the Supreme Court of Canada in Smith v. Co-operators General Insurance Co, 2002 SCC 30 held that 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.
8If the respondent’s denial satisfies these requirements, 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”).
Background and Parties’ Positions
9The applicant was involved in a motor vehicle accident on February 6, 2020. On February 2, 2022 she submitted an OCF-18 for catastrophic assessments in the amount of $17,967.00. By way of an Explanation of Benefits (“EOB”) dated February 15, 2022 the respondent partially approved the OCF-18 in the amount of $14,577.00. The remaining balance was denied on the basis that the expenses exceeded the maximum fee allowed per assessment. The outstanding balance of the OCF-18 dated February 2, 2022 is the only substantive issue in dispute in the applicant’s present application. The respondent submits that the applicant disputed the denial of the OCF-18 five months and 15 days after the expiration of the two-year limitation period stipulated in s. 56 of the Schedule.
10The applicant argues that she is not statute-barred from proceeding with her application, because the two-year limitation period set out in s. 56 of the Schedule was never triggered. She submits that the respondent failed to deliver a compliant denial notice in accordance with s. 54 of the Schedule, since the February 15, 2022 EOB lacked important information about the dispute resolution process. While the applicant concedes that the EOB stated that she had two years from the date of the refusal to pay to file an application with the Tribunal, the applicant argues that this, together with the reference to the respondent’s internal complaint review system, only addressed 2 of the 7 steps (or 28%) of the dispute resolution process.
11Rather, the applicant submits that the EOB should have included reference to a claimant’s additional right to a reconsideration, judicial review and/or appeal to the Divisional Court, followed by an appeal to the Court of Appeal and then to the Supreme Court of Canada, along with applicable timelines and contact information for the Divisional Court, Court of Appeal and Supreme Court of Canada. Finally, the applicant argues that the denial should include language to address the issue of discoverability and s. 7 of the LAT Act. Only once all of this information is included in the denial notice, will it comply with the consumer protection objectives of the Schedule and the principles set out in Smith v. Co-operators and Tomec v. Economical Mutual Insurance Co., 2019 ONCA 882.
12The respondent submits that its denial is compliant with the principles set out in Smith and Turner v State Farm Mutual Automobile Insurance Company, 2005 CanLII 2551 (ON CA), [2005] OJ No 351. It included a full-page form entitled “Applicant’s Right to Dispute” which advised the applicant of her right to dispute the determination, identified the two-year limitation period, the consequences for failing to adhere to it, and how to file an application with the Tribunal. The respondent argues that the applicant’s argument that denial notices must include details of all of the potential avenues of dispute up to the Supreme Court of Canada, language with respect to discoverability and s. 7 of the LAT Act, is not supported by any Tribunal or Court decision.
13Rather, the respondent submits that pursuant to decisions such as Smith v. Co-operators, 16-003034 v Economical Mutual Insurance Company, 2017 CanLII 59507 (ON LAT) and Turner, the purpose of the notice requirement is to ensure whether the person has enough information to decide whether to accept or dispute the refusal and to trigger action. The additional information, including outlining all of the steps of the appeal process, information on discoverability and s. 7 of the LAT Act, holds the respondent to a standard of perfection that the Court of Appeal in Turner determined was not required.
Respondent’s denial notice
14I find that the respondent’s EOB dated February 15, 2022 was compliant with s. 54 of the Schedule and the principles set out in Smith v. Co-operators. While I agree with the applicant that it is well-established that the Schedule is consumer protection legislation and that as per Tomec, the Schedule should not be interpreted in a manner that would produce absurd results, I do not accept the applicant’s argument that a denial notice must include all of the additional information specified by the applicant.
15With respect to outlining every step of the dispute resolution and appeal process, including timelines and contact information for the various Courts, I note that s. 54 of the Schedule requires that an insurer provide a written notice advising the claimant of their right to dispute the refusal. It does not mandate specifics of every step of the reconsideration and appeal process. The applicant argues that a broad and liberal interpretation of s. 54 requires that an insurer must “do much more than simply quote the act” or provide information on the first step of the process. However, the applicant has not provided any support for this position, by way of a Tribunal or Court decision.
16Rather the applicant argues that all of the decisions that followed Smith v. Co-operators were incorrectly decided. With respect, I disagree with the applicant’s position. I do not see anything in the Schedule or caselaw that requires that the complete chronology of the dispute resolution process be articulated to an insured in a denial letter. While the Supreme Court of Canada in Smith held that an insurer is required to inform the person of the dispute resolution process, I do not see in Smith a requirement that the entire appeal process be detailed.
17I further am persuaded by the decisions cited by the respondent that a denial notice is compliant if the insured person has enough information to decide whether to accept or dispute the refusal. I agree with the reasoning in 18-004416 vs. Intact Insurance Company, 2019 CanLII 34593 (ONLAT), where the Tribunal held that providing information “sufficient to trigger action by the applicant is, in my view, the key point of disclosure [of the dispute resolution process].”
18In terms of the proposed additional language relating to discoverability and s. 7 of the LAT Act, the applicant again does not provide any caselaw in support of her position that a denial notice is misleading and incorrect when it states that a claimant has two years from the date of the denial to file an application with the Tribunal. Rather, she proposes additional language including that the applicant has two years from “when you knew or ought to have known you were otherwise entitled to the benefits being refused” and that if the limitation period was missed, “in very rare and exceptional cases, the Licence Appeal Tribunal may grant an extension”.
19I am not persuaded that the principles in Smith require the additional language relating to discoverability and s. 7 of the LAT Act. The additional descriptive language proposed by the applicant imposes a higher standard than that mandated by the Legislature and Courts. I agree with the decisions cited by the respondent that a standard of perfection is not required, and that the purpose of the denial notice was to ensure whether the applicant had sufficient information to decide whether to accept or dispute the refusal. I find that the EOB dated February 15, 2022 satisfied this requirement.
20As such, I find that the respondent provided a denial notice that was compliant with s. 54 of the Schedule, and that the applicant did not dispute the denial within the two-year limitation period stipulated in s. 56 of the Schedule.
21The applicant further did not provide submissions on s. 7 of the LAT Act or the four factors set out in Manuel v. Registrar, 2012 ONSC 1492, to determine if the justice of the case requires the extension. Without any submissions on s. 7, I am unable to find that an extension of the limitation period is warranted.
ORDER
22I find that:
i. the applicant is barred pursuant to s. 56 of the Schedule from proceeding with her application, because she failed to dispute the denial within the two-year limitation period.
ii. the Tribunal shall vacate any date that has been scheduled for the substantive hearing.
Released: April 28, 2025
Ulana Pahuta Adjudicator