Citation: Muudey v. Co-operators General Insurance Company, 2025 ONLAT 24-015434/AABS-PI

Licence Appeal Tribunal File Number: 24-015434/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:

Jamal Muudey

Applicant

and

Co-operators General Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR:

Ulana Pahuta

APPEARANCES:

For the Applicant:

Anthony Gullo, Counsel

For the Respondent:

Russell Tilden, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Jamal Muudey, the applicant, was involved in an automobile accident on August 9, 2022 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.

2At the case conference held on March 31, 2025, 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:

i. Is the applicant barred from proceeding to a hearing for all benefits claimed in this application, as the applicant failed to dispute their denial within the 2-year limitation period?

RESULT

4I find that the applicant is barred from proceeding with his 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.

8If 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.

Background and parties’ positions

9The applicant was involved in a motor vehicle accident on August 9, 2022 and submitted his Disability Certificate (OCF-3) on August 26, 2022. By way of a letter dated August 31, 2022 the respondent advised the applicant that based on his OCF-1 and OCF-3 it had determined that the applicant was not entitled to a non-earner benefit (NEB) because he was eligible for an income replacement benefit (IRB) and was not a student or a recent graduate. With respect to the IRB, the respondent requested an Employer’s Confirmation Form (OCF-2).

10The respondent sent a subsequent letter on October 20, 2022 stating that the OCF-2 it had received indicated that the applicant had not been employed at the time of the accident or had been employed for 26 weeks of the previous 52 weeks prior to the accident. As such, it stated that IRBs had mistakenly been paid to the applicant, and repayment was required. With respect to NEBs, the October 20, 2022 further letter stated that the information in the OCF-3 did not medically support that the applicant suffered a complete inability to carry on a normal life as a result of the accident. Given the lack of medical information, the respondent determined that the applicant was not entitled to receive NEBs.

11On December 18, 2024 the applicant submitted an application to dispute the denial of accident benefits with the Tribunal. The respondent submits that the applicant should be barred from disputing the NEB denial, since he failed to initiate his claim within the two-year limitation period. It also asserts that there is no evidence to justify the Tribunal exercising its discretion to extend the limitation period under s. 7 of the LAT Act.

12The applicant submits that he should not be barred pursuant to s. 56 of the Schedule from pursuing his claim, because the two year limitation period did not begin to run. The applicant argues that both of the respondent’s denial letters were not valid notices of denial, because they failed to provide sufficient medical and any other reasons for the NEB denial. He further submits that even if the Tribunal determines that the two year limitation period was triggered, the discretionary remedy in s. 7 of the LAT Act should be applied.

Did the respondent’s denials trigger the s. 56 limitation period?

13I find that the respondent provided valid denials of the NEB claim, sufficient to trigger the two year limitation period.

14The August 31, 2022 denial letter stated that the respondent determined that the applicant was not entitled to NEBs because he was eligible for IRBs and was not a student or a recent graduate. A clear reason for the NEB denial was given, namely, that the respondent determined that the applicant was entitled to IRBs instead. I further find that the denial used straightforward and clear language, identified the two year limitation period and outlined the dispute resolution process as required by Smith v. Co-operators.

15The applicant argues that the reason provided in the August 31, 2022 letter was ambiguous and incapable of triggering the two-year limitation period, since soon after the letter was sent, the respondent determined that IRBs had been paid in error. He submits that this inconsistency rendered the August 31, 2022 denial ambiguous.

16However, even if I were to accept the applicant’s argument with respect to the August 31, 2022 denial letter, I find that the subsequent October 20, 2022 letter was a valid denial. In the October 20, 2022 letter the respondent stated that there was not sufficient medical information in its file to medically support that the applicant suffered from a complete inability to carry on a normal life. As such, the respondent determined that the applicant was not entitled to NEBs.

17The October 20, 2022 letter was a clear and unequivocal denial of the applicant’s NEB claim. I am not persuaded by the applicant’s argument that sufficient medical reasons were not provided in the denial. The applicant cites s. 36(4) of the Schedule, which states that with respect to NEBs, within 10 business days of receiving an application and completed OCF-3, the insurer shall either pay the specified benefit, send a request under s. 33, or give the applicant notice explaining the medical and any other reasons why the insurer does not believe the applicant is entitled to the benefit and, if the insurer requires an examination under s. 44, advise the applicant of the requirement for an examination.

18However, the wording of s. 56 is different from s. 36(4). The only requirement for the time limit of s. 56 to be triggered is that the insurer must refuse to pay the amount claimed. Section 56 does not require medical reasons in order for the limitation period to begin. In order for a denial notice to trigger s. 56, it must comply with the principles set out in Smith, being that the information in a denial notice must be provided in straightforward and clear language, directed towards an unsophisticated person. The information should also include a description of the most important points of the dispute resolution process, and the relevant time limits that govern the process. This information was all included in the October 20, 2022 denial letter.

19In addition, the Court of Appeal in Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111, stated that clear and unequivocal notice by an insurer of ineligibility for benefits was sufficient to trigger the limitation period, despite the fact that the insurer gave legally incorrect reasons for the ineligibility. The Court stated that the limitation period begins to run when the claim is refused. Although the parties did not refer to this case in their submissions, I am bound by it. The applicant cites a Tribunal decision, Dowman v. Belair Insurance Company, 2024 CanLII 126342 (ONLAT), where medical reasons were required in a denial in order to trigger the two-year limitation period. However, I note that unlike Supreme Court and Court of Appeal decisions, Tribunal caselaw is not binding upon me.

20Accordingly, I find that the respondent’s denials satisfied the requirements in Smith and triggered the s. 56 limitation period.

Section 7 of the LAT Act

21I find that the applicant has not established that an extension is warranted pursuant to s. 7.

22The applicant has not led evidence of a bona fide intention to appeal the denial within the limitation period. He submits that he provided medical documentation to the respondent on December 9, 2022, and that on September 5, 2024 his counsel requested a copy of the respondent’s file. I do not find that these examples establish an intention to appeal the NEB claim. Rather, the respondent has submitted evidence indicating that the applicant’s file was placed in abeyance on three separate occasions. The applicant further does not dispute that the length of the delay was beyond the two-year period, but argues that the claim “remained live and under discussion”. From the evidence, I am not persuaded that the claim was under discussion for this period.

23Although the applicant argues that there is no prejudice to the respondent since the respondent had the opportunity to request additional medical information, I agree with the respondent that the delay in disputing the NEB denial has caused prejudice. Given that the NEB period arises within 104 weeks of the accident, the delay affects the respondent’s ability to investigate the claim during the period of entitlement.

24Finally, I find that the applicant has not established that s. 7 should be engaged due to the merits of the claim. The only evidence provided by the applicant on this point were limited family doctor records beginning more than a year post-accident. The applicant argues that the records establish ongoing serious functional limitations. However, from my review of the records, they refer to a workplace finger injury and back pain. In terms of functional limitations, the applicant reported that despite the back pain, he was working as a construction worker from Monday to Friday, was independent with his activities of daily living, had moderate range of motion of the spine in all planes and exhibited only mild discomfort or pain. As such, I do not find that the merits of the appeal justify an extension.

ORDER

25I find that:

i. the applicant is barred pursuant to s. 56 of the Schedule from proceeding with his application, because he failed to dispute the NEB denial within the two-year limitation period. I decline to exercise my discretion to extend the limitation period.

ii. the application is dismissed and the substantive hearing is vacated.