COURT OF APPEAL FOR ONTARIO

CITATION: Machaj v. RBC General Insurance Company, 2016 ONCA 257

DATE: 20160408

DOCKET: C60814

Sharpe, Juriansz and Roberts JJ.A.

BETWEEN

Zofia Machaj

Plaintiff (Appellant)

and

RBC General Insurance Company

Defendant (Respondent)

Sandi J. Smith, for the appellant

Harry P. Brown, for the respondent

Heard: April 5, 2016

On appeal from the order of Justice A.C.R. Whitten of the Superior Court of Justice, dated July 3, 2015.

ENDORSEMENT

[1] This is an appeal from an order dismissing an action for catastrophic injury Statutory Accident Benefits on the ground that it is statute barred by virtue of the Insurance Act, R.S.0. 1990, c. I-8, s. 281.1(1). The motion judge found that the appellant’s claim was barred because a mediation proceeding had not been commenced “within two years after the insurer’s refusal to pay the benefits claimed”.

[2] The central issue is whether motion judge erred by concluding that the decision of the Divisional Court in Do v. Guarantee Insurance Co., 2015 ONSC 1891 did not apply.

[3] Do upheld a consistent line of arbitral decisions holding that an insurer’s denial of the existence of the status of catastrophic impairment does not in itself amount to a denial of a benefit and that is it is only where a specific benefit is denied that the limitation period commences to run against the claimant. The Divisional Court accepted the proposition that catastrophic impairment status is not itself a benefit, but rather a designation that entitles a claimant to request extended medical, rehabilitation and/or attendant care benefits and other expenses.

[4] In this case, the appellant completed an OFC-19 form claim seeking a “catastrophic determination”. No claim was made for specific benefits. The respondent insurer denied the request for catastrophic impairment status. Its OFC-9 Explanation of Benefits gave the following reason for the denial: “Please note that the assessors have formed the consensus opinion that you have not sustained a Catastrophic Impairment and therefore you do not qualify for the increased benefits” [Emphasis added]. Part 4 of the respondent’s OFC-9 form’s list of specific benefits was left blank.

[5] The respondent submits, and the motion judge found, that by adding the words “and therefore you do not qualify for the increased benefits”, the insurer did deny benefits within the meaning of s. 281.1(1). The insurer’s denial in Do did not contain that language and the motion judge concluded that Do was therefore distinguishable.

[6] We respectfully disagree with that conclusion. In our view, there is no difference in substance between the denial that was made in the case at bar and the denial that was made in Do. We agree with the appellant that the line of authority culminating in Do establishes that there is a clear distinction to be drawn between the claim for determination of catastrophic status and a claim for the specific benefits to which an injured person is entitled if found to have suffered a catastrophic injury. Do stands for the proposition that the two year limitation period only applies to claims for specific benefits and not to a claim for a determination of catastrophic injury status. In our opinion, by adding the words “and you therefore you do not qualify for the increased benefits”, the respondent insurer was doing nothing more than telling the appellant that she lacked status to claim increased benefits. The additional words did not convert what was, in substance, a denial of a catastrophic determination into a denial of the specific benefits that would trigger the commencement of the two year limitation period.

[7] Accordingly we allow the appeal, and set aside the motion judge’s order dismissing the claim as being statute barred. The appellant is entitled to her costs of this appeal fixed at $7500, inclusive of disbursements and applicable taxes.

“Robert J. Sharpe J.A.”

“R.G. Juriansz J.A.”

“L.B. Roberts J.A.”