Court File and Parties
CITATION: Zuchelkowski v. Zenith Insurance Co., 2024 ONSC 3512
DIVISIONAL COURT FILE NO.: 301/23
DATE: 20240619
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, Lococo, and Myers JJ.
BETWEEN:
JOLANTA ZUCHELKOWSKI
Appellant (Applicant)
– and –
ZENITH INSURANCE COMPANY and THE LICENCE APPEAL TRIBUNAL
Respondents
Meghan Fyall, for the Appellant (Applicant)
Linda M. Kiley, for Zenith Insurance Company
Jesse Boyce for the Licence Appeal Tribunal
HEARD at Toronto: June 4, 2024, by videoconference
REASONS FOR DECISION
Myers J.:
The Appeal
[1] On August 18, 2017, Ms. Zuchelkowski submitted to her insurer an initial application for accident benefits for treatment of mental health issues arising from her son’s motorcycle accident two years earlier on May 2, 2015.
[2] The claim was adjusted on a without prejudice basis by the insurer. It denied each treatment plan and invoice submitted by Ms. Zuchelkowski.
[3] Ms. Zuchelkowski applied to the Licence Appeal Tribunal for the recognition of her entitlement to statutory accident benefits.
[4] The Tribunal held that Ms. Zuchelkowski was too late to make her claim. In particular, at para. 16 of its reasons, the Tribunal made an explicit finding of fact, or mixed fact and law, that Ms. Zuchelkowski,“did not provide a reasonable explanation for the delay” of more than two years from the date of the accident to the date of her first notice to her insurer.
[5] The substance of the Tribunal’s reasons for rejecting Ms. Zuchelkowski’s claim are:
[21] It is clear that the respondent attempted to receive further information about the claim from the applicant and was largely unsuccessful because she would not provide it. Ten days after receiving the application, on August 31, 2017, the respondent replied that it was in the process of confirming the policy coverage in force at the time of the accident in 2015. It requested the OCF-3 Disability Certificate. The applicant's family physician did not complete the Disability Certificate for almost another year, in July 2018. Another important example of the respondent's attempt to obtain information is its request for the applicant to attend an EUO [Examination Under Oath]. The applicant did not attend. Her reasons for not attending the EUO were contained in a February 25, 2019 letter by Hannah Rockman, psychologist, who described the applicant's psychological presentation. When speaking of the EUO, she stated" ... the stress of being questioned and asked to justify her feelings is likely to make her worse and, in turn, will increase her feelings of depression and being neglected".
[22] The evidence clearly shows that the applicant was having some psychological difficulties well before her son's accident, that continued during the period of the accident and following it. For example, during cross-examination, Dr. Szulc, the applicant's primary care physician, acknowledged that as early as 2009, she recorded the applicant's complaints of issues with her son. These included but were not limited to his driving under the influence, threatening police with a knife and indications that he was incarcerated for a period but not sticking to the requirements of his house arrest. Dr. Szulc agreed that in 2009, she wrote that the applicant had stress and depression
secondary to family issues at home. The medical records following the period of her son's accident also indicate that her concerns were primarily related to her son's use of drugs, his lifestyle and rather significant troubles with the law.
[23] The evidence does not support the applicant's position that her psychological issues only emerged in 2017, more than two years after her son's accident, or that her psychological issues somehow contributed to the delay in applying for accident benefits.
[24] I find that the applicant failed to comply with the time limitations set out in s. 32 of the Schedule and failed to provide a reasonable explanation for her failure to do so, under s. 34. Therefore, pursuant to Section 55(1) of the Schedule, she is statute-barred from applying to the Tribunal.
[6] The appellant submits that the Tribunal committed an error of law by dismissing her claim without reference to s. 32 (10) of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (SABs) promulgated under the Insurance Act, R.S.O. 1990, c. I.8.
[7] The appellant submits that under s. 32 (10) of the SABs, if her claim was late, without reasonable explanation, the insurer’s sole remedy was that it became entitled to more time to respond to her claim. The Tribunal erred therefore in holding that the application could be dismissed under s. 55 of the SABs.
[8] For the reason that follow, I disagree and dismiss the appeal.
Jurisdiction
[9] This court has jurisdiction over this appeal pursuant to s. 11 (1) of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G. Under s. 11 (6) of the statute, the court’s jurisdiction on appeal is limited to considering questions of law only.
Standard of Review
[10] The court reviews issues of law for correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at paras. 36-37.
Analysis
[11] The relevant provisions of the SABs provide:
Notice to insurer and application for benefits
- (1) A person who intends to apply for one or more benefits described in this Regulation shall notify the insurer of his or her 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.
(10) Despite any shorter time limit in this Regulation, if an applicant fails without a reasonable explanation to notify an insurer under subsection (1) within the time required under that subsection, the insurer may delay determining if the applicant is entitled to a benefit and may delay paying the benefit until the later of,
(a) 45 days after the day the insurer receives the completed and signed application; or
(b) 10 business days after the day the applicant complies with any request made by the insurer under subsection 33 (1) or (2).
Result if fail to comply with time limits
- 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.
Restriction on proceedings
(1) Subject to subsection (2), an insured person shall not apply to the Licence Appeal Tribunal under subsection 280 (2) of the Act if any of the following circumstances exist:
The insured person has not notified the insurer of the circumstances giving rise to a claim for a benefit or has not submitted an application for the benefit within the times prescribed by this Regulation.
[12] Counsel for the Tribunal takes no position on the merits of this appeal. He advises however that there are more than 70 reported decisions of the Tribunal in which a claimant’s failure to provide reasonable explanation for delay in giving notice to the insurer has led to dismissal of the claim under s. 55 (1)1.
Question of Law vs. Question of Fact
[13] Counsel for the appellant advises that she withdrew a parallel application for judicial review on receiving confirmation from counsel for the Tribunal that the issue raised on the appeal is an issue of law and is therefore appealable. This occurred after the Court of Appeal had ruled in Yatar[^1] but prior to the Supreme Court of Canada’s seminal ruling that allows applications for judicial review to be brought on issues that cannot be made the subject of an appeal: Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8, 489 D.L.R (4th) 191.
[14] While not bound by counsel’s views, I agree that the issue of whether s. 32 (10) of the SABs precludes dismissal of a claim under s. 55 (1)1 is a question of law and is therefore properly the subject of this appeal.
[15] It is theoretically possible that the appellant still could have continued a judicial review proceeding in relation to the unappealable finding that, as a matter of fact, she did not provide a reasonable explanation for her late claim. However, that submission is truly more theoretical than real. In para. 125 of Vavilov, the Supreme Court of Canada reinforced that, “absent exceptional circumstances, a reviewing court will not interfere with [a tribunal’s] factual findings.” This is not a case where it can be asserted that the Tribunal, “fundamentally misapprehended or failed to account for the evidence before it” so as to support a rare judicial review of a finding of fact: see Vavilov, at para. 126.
New Issue on Appeal
[16] The Tribunal did not consider s. 32 (10) because it does not seem to have been raised before it. Rather, the appellant understood that dismissal was the remedy sought and she made submissions against such an “extremely prejudicial” outcome.
[17] The court typically will not hear new issues raised for the first time on appeal: R. v. Brown, 1993 114 (SCC), [1993] 2 S.C.R. 918, at para. 20. It is important to prevent undue interference with the finality of tribunal proceedings. Allowing new issues on appeal and then sending matters back for a do-over can lead to litigation by instalment. In this case, I cannot know if the issue was missed below or if it was jettisoned tactically to try to make the remedial choice for the Tribunal more stark. I see no basis to exercise the discretionary authority to allow the appellant to raise this issue for the first time in this appeal.
[18] As the outcome is clear in any event, I will provide a brief discussion on the merits despite this holding.
Section 32 (10) is not an exclusive remedy
[19] Section 32 (10) gives an insurer extra time to respond to a late application. The appellant submits that s. 32 (10) therefore takes a breach of the time limit in s. 32 (1) out of s. 55 (1)1. Rather, when faced with a late claim, the insurer can make requests for missing information under s. 32 (6) and s. 33 of the regulation and then it gets more time to make a decision under s. 32 (10).
[20] There are several responses to this submission. First and foremost, subsection 55 (1)1 does not say that. By its terms, it applies whenever a claimant, “has not submitted an application for the benefit within the times prescribed by this Regulation.” If it meant, “ any time other than the time limit under s. 32 (1),” it would have said so.
[21] Second, the insurer makes the point that the facts of this case show why an extension of time to respond would not make sense as an exclusive remedy. In this case, the appellant has yet to attend an examination under oath as required under s. 33 (2) of the SABs. Under s. 32 (10), the insurer still has ten business days after a claimant complies with a requirement under s. 33 (2) to allow the insurer to conclude its investigation and make a final decision. If the insured is right, her claim continues forever unless or until she complies and the insurer can never bring the claim to an end no matter how unreasonably late it was brought.
[22] The appellant submits that s. 34 preserves late claims for which there is a reasonable explanation. It does not bar claims. That is true. It says nothing at all about late claims for which there are no reasonable explanations. That is the role of s. 55 (1)1 if a claim is not saved by s. 34.
[23] The appellant submits that it is the insurer who delayed and led her to continue providing information without ever raising the insured’s own delay. But in its initial “Explanation of Benefits” in response to the appellant’s Application for Benefits, the insurer made clear it was adjusting without prejudice. It rejected every claim filed while awaiting information. It cannot be faulted for continuing to adjust claims while information remained outstanding from the appellant. There is no indication that the appellant relied to her detriment on anything said or done by the insurer that could possibly set up an estoppel (assuming the doctrine of estoppel applies before the Tribunal).
[24] The SABs process is one aimed at consumer protection. The regulation is to be given a fair, large, and liberal interpretation bearing in mind its distinctly consumer-oriented purpose. But the chosen manner of carrying out the regulatory purpose must be gleaned from the words used in the relevant sections and in the regulation as a whole. There is simply no basis in the wording of any of the relevant sections to find that a claimant who, without reasonable justification, delays giving notice to the insurer for two years and then does not provide required information is entitled to continue her claim despite the explicit wording of s. 55 (1)1 to the contrary.
[25] Finally, the appellant falls back on the final words in s. 32 (1) that notice is to be given “as soon as practicable.” This, she submits, provides an element of judgment or discretion in the decision maker and thereby shows that a claim cannot be dismissed just for being late. This submission runs squarely into the finding of fact, referred to at the outset, that there was no reasonable explanation for the appellant to give notice as late as she did in this case. At para. 24 of the decision, the tribunal held that the appellant did not comply with s. 32 and was not saved by s. 34. That left her claim to be dismissed under s. 55. That is a cohesive interpretation of the interplay among all the relevant sections.
Outcome
[26] The appeal is therefore dismissed.
[27] The appellant shall pay to the insurer its costs of the appeal fixed at $7,500 all-inclusive pursuant to the terms of an agreement reached by the parties.
Myers J.
I agree _______________________________
Backhouse J.
I agree _______________________________ Lococo J.
Released: June 19, 2024
CITATION: Zuchelkowski v. Zenith Insurance Co., 2024 ONSC 3512
DIVISIONAL COURT FILE NO.: 301/23
DATE: 20240619
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, Lococo, and Myers JJ.
BETWEEN:
JOLANTA ZUCHELKOWSKI
Appellant (Applicant)
– and –
ZENITH INSURANCE COMPANY and THE LICENCE APPEAL TRIBUNAL
Respondents
REASONS FOR DECISION
Myers J.
Released: June 19, 2024
[^1]: Yatar v. TD Insurance Meloche Monnex, 2022 ONCA 446.