Sharma v. Allstate Insurance, 2022 ONSC 803

CITATION: Sharma v. Allstate Insurance, 2022 ONSC 803

DIVISIONAL COURT FILE NO.: DC-19-418-00

DATE: 2022/02/03

ONTARIO SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

McWatt A.C.J.S.C.J., Backhouse J., M. Smith J.

B E T W E E N:

SUSHMA KUMARI SHARMA

Appellant

AND

ALLSTATE INSURANCE COMPANY OF CANADA

Respondent

AND

LICENCE APPEAL TRIBUNAL

Intervenor

Stanley Razenberg for the Appellant

Peter Yoo, for the Respondent

Megan Peck and Valerie Crystal, for the Intervenor

HEARD in Toronto by videoconference on January 20, 2022

REASONS FOR DECISION

m. smith j

OVERVIEW

[1] Sushma Kumari Sharma appeals a Preliminary Issue Decision and Reconsideration Decision of the Licence Appeal Tribunal (“Tribunal”) dated June 26, 2019, and March 6, 2020, respectively. The Tribunal found that Ms. Sharma was statute-barred from adjudicating entitlement to Non-Earner Benefits (“NEB”). The Tribunal declined to extend the limitation period pursuant to s. 7 of the Licence Appeal Tribunal Act, S.O. 1999, c. 12, Sched. G. (“LAT Act”).

[2] Ms. Sharma was involved in a motor vehicle accident on February 20, 2015. She made a claim for payment of Statutory Accident Benefits from her insurer, Allstate Insurance Company of Canada (“Allstate”).

[3] By way of a letter and Explanation of Benefits dated March 9, 2016 (delivered to Ms. Sharma by facsimile on March 10, 2016), Allstate advised Ms. Sharma that the NEB were being terminated.

[4] On March 14, 2016, Ms. Sharma contested Allstate’s denial of the NEB by filing an application for mediation with the Financial Services Commission of Ontario (“FSCO”). FSCO scheduled a mediation to take place on June 29, 2016.

[5] On April 1, 2016, the Insurance Act, R.S.O. 1990, C. I.8, was amended to reflect that the jurisdiction over dispute resolution of Statutory Accident Benefits was removed from FSCO and the Courts. Jurisdiction was granted exclusively to the Tribunal.

[6] The mediation that had been scheduled by FSCO did not take place. No further communication concerning the mediation was received by Ms. Sharma or Allstate.

[7] On March 15, 2018, Ms. Sharma commenced an application to the Tribunal disputing Allstate’s denial of the NEB claim. Ms. Sharma’s application was started five (5) days after the two-year statutory deadline as set out in s. 56 of the Statutory Accident Benefits Schedule, O. Reg. 34/10 (“SABS”).

[8] Ms. Sharma submits that the Tribunal made three (3) errors of law in its analysis to refuse to extend the limitation period, pursuant to s. 7 of the LAT Act.

[9] For the reasons set out below, the appeal is granted.

STANDARD OF REVIEW

[10] Section 11(6) of the LAT Act provides that an appeal from a decision of the Tribunal may only be made on a question of law.

[11] The standard of review on a question of law is correctness.

[12] This Court recently reviewed the circumstances that may give rise to an error of law. A helpful summary is set out in Yatar v. TD Insurance Meloche Monnex, 2021 ONSC 2507 (Div. Ct.) at paras. 28 and 29:

28 On a statutory appeal limited to questions of law alone, the court considers whether the decision-maker correctly identified and interpreted the governing law or legal standard relevant to the facts found by the decision-maker. There are limited circumstances in which findings of fact, or the administrative decision-maker's assessment of evidence, may give rise to an error of law alone for the purposes of appeal. If the adjudicator ignored items of evidence that the law required him or her to consider in making the decision, then the adjudicator erred in law: Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748 at para. 41. Challenges to the sufficiency or weight of evidence supporting a finding of fact do not give rise to a question of law. An error in law or legal principle made during the fact-finding exercise, however, can give rise to an extricable question of law. A "misapprehension" of the evidence does not constitute an error of law unless the failure is based on a wrong legal principle: R. v. J.M.H., 2011 SCC 45, [2011] 3 S.C.R. 197, at paras. 25 and 29. It is an error of law to make a finding of fact on a material point where the factual finding is based solely on (a) no evidence, (b) irrelevant evidence, or (c) an irrational inference (Johannson v. Saskatchewan Government Insurance, 2019 SKCA 52 at paras. 24-25).

29 If the adjudicator considered all the mandatory or relevant evidence, but reached the wrong conclusion, then the error is one of mixed law and fact. If the adjudicator erred in applying the law (the correct legal standard) to the facts, that is a matter of mixed law and fact: Southam Inc. at paras. 41-42.

DECISIONS UNDER APPEAL

[13] The preliminary issue in dispute was whether Ms. Sharma’s application had been filed beyond the expiry of the two-year limitation period and therefore statute barred. The Tribunal determined that Ms. Sharma’s application was statute barred and refused to exercise its discretion to extend the limitation period pursuant to s. 7 of the LAT Act. In determining if the limitation period should be extended, the Tribunal considered four (4) factors: (i) the existence of a bona fide intention to appeal within the prescribed timeline; (ii) the length of delay; (iii) the prejudice to the other party; and (iv) the merits of the appeal. The Tribunal found that none of those factors supported extending the limitation period.

[14] The Tribunal denied Ms. Sharma’s request for reconsideration. The Tribunal rejected Ms. Sharma’s submissions regarding the analysis set out in s. 7 of the LAT Act. First, the Tribunal rejected Ms. Sharma’s claim that the Tribunal had erred in finding that Ms. Sharma did not have a bona fide intention to appeal within the limitation period. The Tribunal considered the new evidence filed by Ms. Sharma but maintained that there was no evidence of an intention to file an appeal within the appeal period. Second, the Tribunal rejected Ms. Sharma’s argument that the focus of the delay should be measured from the passage of time after the expiry of the limitation, being the five (5) day delay. The Tribunal held that it was entitled to consider the overall delay, and, in any event, Ms. Sharma had failed to adequately explain the delay in filing her application. Third, the Tribunal found that the expiry of a limitation period created a presumption of prejudice. And finally, the Tribunal found that Ms. Sharma could have, but chose not to submit evidence to support her claim that the merits of the appeal justified an extension of the limitation period.

ANALYSIS

Legal principles

[15] Section 7 of the LAT Act grants the Tribunal the jurisdiction to extend the limitation period that is set out in s. 56 of the SABS: see Fratarcangeli v. North Blenheim Mutual Insurance Company, 2021 ONSC 3997, at para 61.

[16] In determining if an extension of time should be granted pursuant to s. 7 of the LAT Act, four (4) factors are to be considered, namely the bona fide intention to appeal within the time limit, the length of delay, the prejudice to the other party, and the merits of the appeal: see Manuel v. Registrar, Motor Vehicle Dealers Act, 2012 ONSC 1492 at paras. 14 to 17.

Position of the parties

Ms. Sharma

[17] The Appellant argues that the Tribunal made three (3) errors of law in its determination that an extension of the limitation period should not be granted.

[18] First, in assessing the length of delay criterion, the Tribunal erred in law by not considering the time that passed after the expiry of the limitation period. The relevant consideration for the Tribunal should have been how far beyond the two-year limitation was the extension being requested. By determining that the length of delay was 735 days, the Tribunal misunderstood and misapplied the criterion. Ms. Sharma’s application was only filed five (5) days after the passage of the two-year limitation anniversary.

[19] Second, in evaluating whether there was prejudice to Allstate, the Tribunal erred in law by focusing its attention on the period dating back to Allstate’s denial on March 10, 2016, as opposed to the five (5) days extension that was being sought by the Appellant. The Tribunal failed to identify or cite any prejudice to Allstate, beyond the general institutional need for respect of rules and deadlines.

[20] The third error of law pertains to the Tribunal’s treatment of some evidence during reconsideration. The Tribunal found that Ms. Sharma did not have a bona fide intention to appeal within the time limit. It is argued that the Tribunal failed to consider new evidence that was filed during the reconsideration, namely an email from Ms. Sharma’s former counsel dated March 8, 2018, where counsel requested the date of the NEB denial. Moreover, the Tribunal erred in determining that this email was sent outside of the limitation period.

Allstate

[21] Allstate submits that Ms. Sharma’s appeal deals with the Tribunal’s weighing of the facts and the application of the law to those facts. The errors raised by Ms. Sharma are questions of fact and questions of mixed fact and law, neither of which are appealable to this Court.

[22] Turning to the first error raised by Ms. Sharma regarding the the length of delay, Allstate responds that the Tribunal considered both periods of time, 735 days vs 5 days. In specific reference to the short delay, the Tribunal properly determined that the short delay did not entitle Ms. Sharma to an extension of the limitation period and in any event, she had not provided a reasonable explanation for the delay. Furthermore, Allstate says that the length of delay criterion does not require that the Tribunal consider the passage of time after the expiry of the limitation period.

[23] With respect of the second error of law raised, Allstate disagrees with Ms. Sharma’s position that the Tribunal’s assessment of prejudice had to focus only on the passage of time that extended beyond the limitation period. Allstate submits that the Tribunal properly held that there is an inherent prejudice to the insurer for actions which arise after the passage of a limitation period. The Tribunal had the discretion to weigh all factors and found that the prejudice issue alone would not outweigh the other factors.

[24] As for Ms. Sharma’s bona fide intention to appeal, Allstate says that the Tribunal considered the March 8, 2018 email. The Tribunal disagreed with Ms. Sharma that this email represented new evidence of an intention. It is submitted that the Tribunal did not ignore the evidence and clearly dealt with it during the reconsideration. While Allstate says that the Tribunal’s conclusion that the email was sent beyond the limitation period may be incorrect, it is nonetheless not appealable because it is a question of fact and a question of mixed fact and law.

Licence Appeal Tribunal

[25] The Intervenor takes no position on the facts, no position on the merits of the appeal and no position on the outcome of this appeal.

[26] The Intervenor reminds the Court that questions of whether the limitation period had expired and whether the Tribunal ought to have extended the limitation period are questions of mixed facts and law, subject to any extricable question of law that the appellant may identify.

[27] In terms of introducing new evidence at the reconsideration hearing, the Intervenor points the Court to the criteria used for granting reconsideration. Specifically, the Intervenor refers us to the fourth criteria, listed at r. 18.2(d) of the Tribunal’s Common Rules of Practice and Procedure (“Common Rules”). The criteria is described as follows: “There is evidence that was not before the Tribunal when rendering its decision, could not have been obtained previously by the party now seeking to introduce it, and would likely have affected the result.”

Discussion

Error #1 - Did the Tribunal apply the correct legal principle regarding the length of delay criterion?

[28] In the Preliminary Issue Decision, the Tribunal was concerned with Ms. Sharma’s lengthy delay in the filing of her application. At paragraph 21 of the decision, the Tribunal wrote:

The applicant filed this appeal within 3 days of receiving the AB file and is asking to extend the limitation period by 5 days. From the applicant’s perspective, this may seem like a short length of delay, but this perspective fails to account for the significant time gap between the end of the mediation process at FSCO and the filing of this application.

[29] In the Reconsideration Decision, the Tribunal remained concerned with Ms. Sharma’s lengthy delay and found that the entire delay (end of the FSCO mediation to Ms. Sharma’s application to the Tribunal) could be considered. The relevant passages are found at paragraphs 22 and 23 of the Reconsideration Decision:

…I see no reason why the overall delay in filing an application cannot be considered during the analysis and the applicant provided no specific reference to any caselaw to support her position.

If I am wrong, I find the caselaw is unsupportive of the applicant’s position. Specifically, Manuel notes that a short delay does not automatically entitle the application to an extension of the limitation period…

[30] Recently, in the Fratarcangeli decision[^1], at para. 89, this Court concluded that the first two years ought not to be considered in any assessment of delay:

It is clear from Manuel v. Registrar, Motor Vehicle Dealers Act, 2012 ONSC 1492, at para. 26, that the delay to be considered is the delay in filing the appeal. Vice-Chair Kershaw considered the delay that occurred in the context of the FSCO mediation that did not take place, and the subsequent closure of FSCO's file. She concluded that the LAT erred when, in determining the delay, it took into account that almost two years had elapsed between North Blenheim's denial and the Respondents' request for a mediation with FCSO. Vice-Chair Kershaw observed that the Respondents appealed the denials within the prescribed two-year timeframe and that the prior two years ought not to be considered in any assessment of delay.

[31] The Tribunal erred in law by applying the incorrect legal principles. In both the Preliminary Issue Decision and the Reconsideration Decision, the Tribunal focused its analysis on the period starting with the date of the denial, as opposed to focusing on the period starting from the expiry of the limitation period.

[32] In every instance where an analysis is being undertaken in accordance with s. 7 of the LAT Act, the applicable limitation period to a SABS dispute is two years. Within that two-year period, an applicant to a SABS dispute has the statutory right to appeal the insurer’s decision. Because of this statutory right to appeal, it is incorrect in law to factor this two-year period in its analysis to extend the limitation period. The proper consideration is the length of delay that is beyond the two-year anniversary of the insurer’s denial.

[33] While the Tribunal was correct in stating that a short delay does not automatically entitle an applicant to an extension of the limitation period, an applicant is entitled to have his or her case assessed based upon the correct length of delay. In the case at bar, Ms. Sharma was entitled to have the Tribunal undertake an analysis based upon a delay of five (5) days, rather than 735 days.

[34] We find that the Tribunal applied the wrong legal test by focusing on the longer delay, which amounts to an error of law.

Error #2 - Did the Tribunal apply the correct legal principle regarding the prejudice criterion?

[35] In both the Preliminary Issue Decision and Reconsideration Decision, the Tribunal found that there is an inherent prejudice to Allstate because of Ms. Sharma’s lengthy delay in filing her application. The Tribunal further noted that defending untimely claims that are long passed the insurer’s initial denial is prejudicial because of the difficulty in locating, producing, and relying upon experts and other evidence that may no longer be available.

[36] In Fratarcangeli, this Court confirmed that the prejudice to be considered is the one that exists beyond the limitation period. At paragraph 95, the Court writes:

Manuel (at paras. 31-32) makes it clear that the prejudice to be considered is the prejudice to the Appellant "as a result of the delay that would have resulted from the extension of the appeal period" and that the prejudice must go beyond the "general institutional need for respect of the rules and deadlines".[^2]

[37] The Tribunal’s focus of the prejudice was clearly on the period dating back to Allstate’s denial of the NEB, referring to Ms. Sharma’s delay as “long”. The Tribunal should have considered the actual prejudice that resulted from Ms. Sharma’s five (5) days delay in filing her application.

[38] We find that the Tribunal applied the wrong legal test in assessing Allstate’s prejudice. This represents an error of law.

Error #3 - Did the Tribunal err in finding that Ms. Sharma did not demonstrate a bona fide intention to appeal within the time limit?

[39] At the preliminary hearing, the Tribunal concluded that Ms. Sharma’s actions, or lack thereof, did not support a finding that she had a bona fide intention to appeal.

[40] On the reconsideration, Ms. Sharma submitted new evidence, namely an email from her counsel to Allstate dated March 8, 2018, which read in part the following: “Could you please advise if the client received NEB, if so, how much was paid to date and when was the denial date.” Ms. Sharma argued that this email was evidence of her intention to appeal. The Tribunal disagreed and noted that the email was sent on the day that the two-year limitation period expired. The Tribunal further noted that this email was not provided in the preliminary issue hearing. The Tribunal therefore considered it as making a new argument at the reconsideration stage and chose to reject it.

[41] The Tribunal concluded that the March 8, 2018 email was sent on the day of the expired limitation period (March 9, 2018) because it was sent after 6:00 p.m. and, pursuant to the Common Rules, it is deemed to have been sent the following day. However, in the agreed statement of facts, the limitation period expired on March 10, 2018, the day that Allstate’s denial of NEB was delivered via facsimile to Ms. Sharma’s counsel. The Tribunal was incorrect.

[42] Although the Tribunal referred to Ms. Sharma’s email in the Reconsideration Decision, the Tribunal rejected the email because it was interpreted as a new argument that should have been made at the preliminary issue hearing. In our view, this was an error of law. In deciding whether the reconsideration should be granted, the Tribunal was required to consider Ms. Sharma’s new evidence. The Tribunal was tasked with considering new evidence that had not been previously filed and determining to what extent it changed or altered the Preliminary Issue Decision.

[43] By rejecting the March 10, 2018 email, the Tribunal failed to consider new evidence in its analysis of Ms. Sharma’s bona fide intention to appeal Allstate’s denial of NEB. We find that failure to do so is an error of law.

CONCLUSION

[44] For these reasons, the appeal is granted. The matter is remitted to the Tribunal for a new hearing to be conducted by another Adjudicator.

COSTS

[45] As agreed by the parties, costs are to be paid by Allstate to Ms. Sharma in the amount of $3,500.00, all inclusive. No costs are payable by or to the Intervenor.

M. Smith J.

I agree _______________________________

ACJSC McWatt J.

I agree _______________________________

Backhouse J.

Released: February 3, 2022

CITATION: Sharma v. Allstate Insurance, 2022 ONSC 803

DIVISIONAL COURT FILE NO.: DC-19-418-00

DATE: 2022/02/03

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SUSHMA KUMARI SHARMA

Appellant

– and –

ALLSTATE INSURANCE COMPANY OF CANADA

Respondent

– and –

LICENCE APPEAL TRIBUNAL

Intervenor

REASONS FOR Decision

M. SMITH J

Released: February 3, 2022

[^1]: Fratarcangeli v. North Blenheim Mutual Insurance Company, 2021 ONSC 3997 at para.89.

[^2]: Fratarcangeli v. North Blenheim Mutual Insurance Company, 2021 ONSC 3997 at para.95.