McDonald v. Definity Insurance Company, 2025 CanLII 84226

McDonald v. Definity Insurance Company

Citation: McDonald v. Definity Insurance Company 2025 ONLAT 25-004782/AABS-PI

Licence Appeal Tribunal File Number: 25-004782/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:

Katherine Jeanne Hiltunen McDonald

Applicant

and

Definity Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR: Ulana Pahuta

APPEARANCES:

For the Applicant: Nikolai Singh, Paralegal

For the Respondent: Melinda Baxter, Counsel

HEARD: By way of written submissions

OVERVIEW

1Katherine Jeanne Hiltunen McDonald, the applicant, was involved in an automobile accident on April 12, 2023, 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, Definity 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 with her claim for benefits as she failed to submit the application for benefits (OCF-1) within the time prescribed in the Schedule?

RESULT

3The applicant is barred from proceeding with her application.

ANALYSIS

Background and Parties’ Positions

4The applicant was involved in an accident on April 12, 2023, when she was cycling and a parked vehicle opened its door into the bike lane. The applicant submits that this caused her to fall off her bicycle, sustaining injuries to her shoulder and knee. She subsequently sought medical care and treatment and required surgery to her left knee ACL ligament.

5The respondent submits that it did not receive any notice of the accident until it received an Application for Accident Benefits (OCF-1) dated January 9, 2025, approximately one year and nine months after the accident. It argues that the applicant has not provided a reasonable explanation for the delayed application, and that it has been prejudiced in its ability to investigate and assess the applicant’s claim due to the delay. The respondent submits that the applicant should be barred from proceeding with her application pursuant to s. 55(1) of the Schedule for failing to notify the respondent of the circumstances giving rise to a claim for a benefit and failing to submit her application within the times prescribed by the Schedule.

6The applicant does not dispute that her legal representative first sent the respondent her OCF-1 on January 13, 2025. However, she argues that she has a reasonable explanation for the delay. The applicant submits that she thought that her injuries would get better with medical care through OHIP and her extended health coverage. When she did not recover, the applicant sought legal advice and only then became aware of her entitlement to accident benefits. The applicant also submits that she was unaware of the time limits set out in s. 32 of the Schedule, and that the delay was partly caused by her inability to determine who the third party insurer was.

Law

7Section 32(1) of the Schedule provides that a person who intends to apply for accident benefits shall notify the insurer of their intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day.

8Once an insurer receives notice of an applicant’s intention to apply for statutory accident benefits, the insurer must provide the applicant with the appropriate OCF-1 forms, a written explanation of the benefits available, information to assist the person in applying for benefits and information on the election relating to the specified benefits, if applicable (s. 32(2)). Pursuant to section 32(5) of the Schedule, the applicant must then submit a completed and signed application for benefits to the respondent within 30 days after receiving the forms.

9Section 34 of the Schedule states that “a person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.” The onus is on the applicant to establish a reasonable explanation for the delay. The interpretation of “reasonable explanation” is guided by Horvath and Allstate Insurance Company of Canada, 2003 ONFSCDRS 92, and was more recently reiterated in K.H. vs Northbridge, 2019 CanLII 101613 (ON LAT). The guiding principles are summarized as follows:

a. An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.

b. The onus is on the insured person to establish a “reasonable explanation.”

c. Ignorance of the law alone is not a “reasonable explanation”.

d. The test for “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.

e. The lack of prejudice to the insurer does not make an explanation automatically reasonable.

f. An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.

Did the applicant comply with s. 32 of the Schedule?

10I find that the applicant did not comply with the timelines prescribed in s. 32.

11There is no dispute that the respondent was first notified of the accident on January 13, 2025, when it received the applicant’s completed OCF-1. This is well-outside the s. 32(1) requirement that an insurer be notified no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day. However, pursuant to s. 34 of the Schedule, I must still consider whether the applicant has provided a reasonable explanation for her failure to comply with the s. 32 time limit.

The applicant has not provided a reasonable explanation for the delay in notifying the respondent

12In her submissions, the applicant has provided a number of reasons for her delay in providing the OCF-1 to the respondent. She argues that since she does not possess automobile insurance, she was unaware that she was entitled to accident benefits and of the s. 32 time limits. Further, the applicant submits that she thought she would recover from her injuries through her OHIP and extended health benefits medical care. Finally, the applicant submits that it was difficult to identify the at-fault driver insurance, since the applicant did not have any insurance policies, or the police report from Toronto Police Services.

13While I find these explanations to be credible, when considering the principles set out in Horvath, I do not find that the explanations are reasonable.

14The applicant submits that she was unaware of who the third party insurer was, because she did not have access to the motor vehicle accident report, and that multiple MTO searches had failed to yield results. I agree with the applicant that not being able to identify the insurer can be a reasonable explanation for the delay. However, the evidence establishes that the applicant did not even request the motor vehicle report or attempt to identify the insurer until almost a year and a half after the accident. I do not find this delay in seeking out the insurer to be reasonable.

15With respect to the applicant’s argument that she was unaware that she was entitled to accident benefits or of the time limits under the Schedule, the respondent has cited a number of Tribunal decisions which hold that ignorance of the law is not a “reasonable explanation”. I find these decisions to be persuasive. Further, this Tribunal has also found that a claimant’s subjective belief that their injuries would resolve, does not exempt them from the time limits set out in s. 32. I agree with the respondent that this was not a situation where the applicant was unaware of her accident-related impairments for a period of time. Rather, the applicant was aware of her injuries immediately after the accident and sought and received treatment for them. The applicant has not cited any caselaw in support of her position that such reasons constitute reasonable explanations.

16Rather, the applicant cites the Divisional Court decision Hussein v. Intact Insurance Company, 2025 ONSC 842, to argue that the Schedule is remedial and constitutes consumer protection legislation. She notes that the Divisional Court in Hussein stated that the seven day time limit prescribed under s. 32(1) is “a very short notice period”. However, the facts in Hussein are distinguishable from the present case. In Hussein, the claimant notified the insurer that he had been in an accident one day after the accident. The central issue in Hussein was whether notifying an insurer of the accident was sufficient to comply with the claimant’s obligations under s. 32(1), or whether the claimant was required to specifically advise the insurer that he had suffered injuries in the accident. While I agree with the applicant that the Court in Hussein noted that seven days was a “very short” notice period, the Court was not considering a situation where the insurer had been first notified one year and nine months after the accident.

17Further, while I agree with the applicant that the Schedule is consumer protection legislation, I agree with the reasoning in Thangavelautham v. The Dominion of Canada General Insurance Company, 2025 CanLII 13568 (ONLAT), cited by the respondent, that even considering the consumer protection mandate, at times it is not equitable to relieve against the consequences of continued failure to comply with the time limits in the Schedule. In the present matter, the respondent argues that as a result of the delay, it has been denied the opportunity to obtain contemporaneous medical information and assessments of the applicant’s claim. This was exacerbated by the fact that causation is an issue, given a similar injury to the applicant’s left knee from a skiing accident. I find that the applicant has not established hardship capable of outweighing the prejudice to the respondent.

18As such, I find that the applicant has not met her onus to establish a reasonable explanation for the delay in notifying the respondent.

Section 55

19Pursuant to s. 55(1)1 of the Schedule, an insured person shall not apply to the Tribunal under subsection 280(2) of the Insurance Act if the insured person has not notified the insurer of the circumstances giving rise to the claim within the time limits prescribed in s. 32.

20As outlined above, I have found that the applicant did not notify the respondent within the timelines prescribed by the Schedule and has not provided a reasonable explanation for the delay. Accordingly, I find that the applicant is statute-barred from proceeding with her application before the Tribunal.

CONCLUSION AND ORDER

21The applicant is barred by s. 55(1) from proceeding with her application before the Tribunal. The Tribunal shall vacate any date that has been scheduled for the substantive issue hearing.