Licence Appeal Tribunal File Number: 24-011368/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:
Errol Frederick
Applicant
and
Co-operators General Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR: Ulana Pahuta
APPEARANCES:
For the Applicant: William Coke, Counsel
For the Respondent: Emily Schatzker, Counsel
HEARD: By way of written submissions
OVERVIEW
1Errol Frederick, the applicant, was involved in an automobile accident on June 1, 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 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 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 two-year limitation period?
RESULT
3The applicant is barred from proceeding with his application pursuant to s. 56 of the Schedule.
ANALYSIS
Background
4The applicant was involved in a motor vehicle accident on June 1, 2018 and submitted an Application for Accident Benefits (“OCF-1”) on July 27, 2018. By way of letter dated August 9, 2018, the respondent informed the applicant that as per his OCF-1, he was not entitled to an income replacement benefit (“IRB”) because his injuries did not prevent him from returning back to work. The respondent also stated that the applicant was not entitled to a non-earner benefit (“NEB”) because he had been able to return to work and did not suffer a complete inability to carry on a normal life.
5The applicant subsequently submitted two Disability Certificates (“OCF-3”) dated June 11, 2018 and October 19, 2020. In the June 11, 2018 OCF-3 the applicant confirmed that he had returned to work on modified duties. In the October 19, 2020 OCF-3 the applicant stated that he had stopped working. In letters dated September 6, 2018 and November 3, 2020, the respondent reiterated its denials for both IRBs and NEBs. The applicant filed his application with the Tribunal on September 12, 2024, disputing the NEB denial, interest and an award.
Law
6The limitation period for accident benefits claims is set out in s. 56 of the Schedule. It states that an application to dispute a denial of a benefit shall be commenced within two years of the insurer’s refusal to pay the benefit.
7In 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.
8Further, 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.
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.
Parties’ positions
10The respondent submits that the applicant disputed the NEB denial well-outside the two-year limitation period set out in s. 56 of the Schedule. The respondent argues that it first denied the applicant’s NEB claim on August 9, 2018, but the applicant did not file his application with the Tribunal until September 12, 2024, six years after the denial. Even if the latest denial letter dated November 3, 2020 is accepted, the applicant still disputed the denial almost two years after the expiration of the s. 56 limitation period.
11The applicant argues that the limitation period under s. 56 did not start to run, since the respondent’s denial letters did not comply with the procedural requirements of s. 35 and s. 36 of the Schedule. He submits that his OCF-1 and OCF-3s indicated that he was qualified for both IRBs and NEBs. As such, the applicant argues that pursuant to s. 35(1) of the Schedule the respondent was required to offer him an OCF-10 election of benefits form to allow him to elect which benefit he wished to receive. Since the respondent failed to comply with s. 35(1), the applicant’s position is that all three of the respondent’s denial letters were not clear and unequivocal denials and the limitation period in s. 56 did not start to run.
Did the respondent’s denials trigger the s. 56 limitation period?
12I find that the respondent’s denials of the NEB claim were valid and triggered the two year limitation period.
13The August 9, 2018 letter stated that the applicant did not qualify for NEBs, since he had been able to return to work and as a result, did not suffer a complete inability to carry on a normal life. The respondent cites the Tribunal decision Lakshman v BelairDirect Insurance Company, 2023 CanLII 72657 (ON LAT), to argue that an insurer’s denial of NEBs on the basis that the applicant was working at the time of the accident was valid. It further relies on the Court of Appeal decision Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78, to argue that a return to work has been found to be a valid “medical and other reason” for denying a specified benefit.
14With respect to the applicant’s argument that the denial was invalid since an OCF-10 election had not been requested, the respondent argues that an OCF-10 was not required in the present case, since the applicant’s OCF-1 had indicated that he had returned to work after the accident. Therefore, he could have only been entitled to NEBs and there was no need for an election. It also relies on Tribunal decisions J.G. v. Co-operators General Insurance Company, 2019 CanLII 110087 (ON LAT) and MK v. TD General Insurance Company, 2020 CanLII 34500 (ON LAT) to argue that insurers are entitled to decide on eligibility for a specified benefit based on the information they have available, and that in such circumstances, they are not obligated to provide an OCF-10.
15I find that the respondent’s denial letters were clear and unequivocal denials of the applicant’s NEB claim, meeting the requirements set out in Smith v. Co-operators. The August 9, 2018 letter used straightforward and clear language, identified the two year limitation period and outlined the dispute resolution process.
16A clear reason for the denial was given, being that the applicant had returned to work and as such, the respondent had determined that the applicant did not suffer from a complete inability to lead a normal life. On this point, I find the decision Lakshman v BelairDirect, cited by the respondent, to be persuasive. In similar factual circumstances the Tribunal found that an insurer’s denial of NEBs on the basis that the applicant returned to work almost immediately after the accident, was valid.
17With respect to the applicant’s argument that an OCF-10 election was required, I note the respondent’s argument that given the applicant’s return to work, he would have only been eligible for NEBs. Further, even if an election was required, I find the reasoning in Ekefre v TD Home and Auto Insurance Company, 2024 CanLII 115416 (ONLAT), cited by the respondent, to be persuasive.
18The claimant in Ekefre also argued that the insurer’s denial letter was legally wrong, since pursuant to s. 35(1) of the Schedule, an OCF-10 was required. However, the Tribunal determined that as per the Court of Appeal decision Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ONCA), the reasons provided in a denial letter are not required to be legally correct. Rather, the Court in Turner v. State Farm found that a limitation period begins following a clear and unequivocal denial of benefits. As such, even if I were to accept the applicant’s argument that an OCF-10 election was required in the present circumstance, I agree with the reasoning in Ekefre and Turner v. State Farm that the reasons in a denial letter need not be legally correct.
19I find that the respondent’s August 9, 2018 denial letter meets the requirements in Smith and triggered the two year limitation period.
The application was not filed within the limitation period
20Given that I have found that the respondent provided valid denial notices, the applicant was required to dispute the respondent’s denial within two years. There is no dispute that the applicant filed his application with the Tribunal well-outside the s. 56 limitation period. However, pursuant to s. 7 of the LAT Act, the Tribunal has statutory discretion to extend the two year limitation period.
21The applicant argues that the doctrine of discoverability as set out in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 is applicable. He submits that the s. 56 limitation period is not a “hard limitation deadline” and may not be triggered by an insurer’s denial letter. Rather, it may be triggered only when the insured becomes aware of material facts on which their claim is based. The applicant argues that given the respondent’s non-compliance with s. 35 and s. 36, the denial letter did not properly trigger the limitation period.
22I find that the applicant has not established that an extension of the limitation period pursuant to s. 7 is warranted. As previously noted above, with respect to the applicant’s arguments relating to s. 35 and s. 36 non-compliance, I have found that the respondent’s denial notices were valid and compliant with the principles set out in Smith v Co-operators. Further, the applicant has not provided submissions on the factors set out in Manuel v. Registrar, to determine if the justice of the case requires the extension.
23The applicant has not provided submissions or evidence as to whether he had a bona fide intention to appeal within the limitation period, or the merits of his NEB claim. I further find that the delay in the present matter is substantial, being more than three years after the expiration of the s. 56 limitation period. With respect to prejudice to the other party, I agree with the respondent that permitting such a late claim would cause it prejudice, as the respondent was prevented from making enquiries in respect to the applicant’s medical condition or from further assessing the applicant.
24As such, I find that the applicant has not established that an extension of the limitation period pursuant to s. 7 is warranted.
ORDER
25I find that:
i. the applicant is barred pursuant to s. 56 of the Schedule from proceeding with his application. I decline to exercise my discretion to extend the limitation period.
ii. the application is dismissed and the substantive hearing is vacated.
Released: June 9, 2025
Ulana Pahuta
Adjudicator```