Machaj v. RBC General Insurance Company

[Indexed as: Machaj v. RBC General Insurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

Whitten J.

July 3, 2015

127 O.R. (3d) 395 | 2015 ONSC 4310

Case Summary

Insurance — Automobile insurance — Statutory accident benefits — Plaintiff submitting application for determination of catastrophic impairment to defendant — Defendant responding with Explanation of Benefits (OCF-9) which stated that assessors had formed opinion that plaintiff had not sustained catastrophic impairment and that plaintiff therefore did not qualify for increased benefits — OCF-9 constituting refusal to pay benefits which triggered running of two-year limitation period in s. 281.1 of Insurance Act — Insurance Act, R.S.O. 1990, c. I.8, s. 281.1.

Limitations — Insurance — Statutory accident benefits — Plaintiff submitting application for determination of catastrophic impairment to defendant — Defendant responding with Explanation of Benefits (OCF-9) which stated that assessors had formed opinion that plaintiff had not sustained catastrophic impairment and that plaintiff therefore did not qualify for increased benefits — OCF-9 constituting refusal to pay benefits which triggered running of two-year limitation period in s. 281.1 of Insurance Act — Insurance Act, R.S.O. 1990, c. I.8, s. 281.1.

The defendant insurer brought a motion for summary judgment dismissing the plaintiff's action on the ground that it was statute-barred by reason of s. 281.1 of the Insurance Act, which provides that a mediation proceeding with respect to statutory accident benefits shall be commenced within two years of the insurer's "refusal to pay the benefit claimed". The plaintiff had submitted an Application for Determination of Catastrophic Impairment (OCF-19) to the defendant. The defendant had responded with an Explanation of Benefits (OCF-9) dated May 25, 2009, which stated that assessors had formed the opinion that the plaintiff had not sustained catastrophic impairment and therefore the plaintiff did not qualify for the increased benefit. The plaintiff applied for mediation on July 18, 2011. The plaintiff argued that the running of the s. 281.1 limitation period was not triggered as a finding of no catastrophic impairment is not a denial of a benefit.

Held, the motion should be granted.

The OCF-9 in this case was not just a denial of the status of catastrophic impairment. The defendant went on to inform the plaintiff that she did not qualify for increased benefits. The OCF-9 was a denial of a benefit and triggered the running of the limitation period in s. 281.1 of the Act.

Do v. Guarantee Insurance Co. (2015), 125 O.R. (3d) 585, [2015] O.J. No. 1822, 2015 ONSC 1891 (Div. Ct.), distd

Other cases referred to

Combined Air Mechanical Services Inc. v. Flesch (2011), 108 O.R. (3d) 1, [2011] O.J. No. 5431, 2011 ONCA 764, 286 O.A.C. 3, 97 C.C.E.L. (3d) 25, 14 C.P.C. (7th) 242, 13 R.P.R. (5th) 167, 93 B.L.R. (4th) 1, 10 C.L.R. (4th) 17, 211 A.C.W.S. (3d) 845; Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317, 204 D.L.R. (4th) 721, 149 O.A.C. 172, 32 C.C.L.I. (3d) 1, 107 A.C.W.S. (3d) 482 (C.A.); [page396] Hryniak v. Mauldin (sub nom. Combined Air Mechanical Services Inc. v. Flesch), [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, 2014EXP-319, J.E. 2014-162

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, s. 281.1 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20.04, (2)(a), (2.1), 21.01

MOTION for summary judgment dismissing an action.

Sandi Smith, for plaintiff.

Harry P. Brown, for defendant.

WHITTEN J.: —

The Relief Sought

[1] The defendant has moved in accordance with rule 20.04 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] for summary judgment. The defendant asserts that there is no genuine issue for trial, an assertion which is based on a positive determination pursuant to rule 21.01, that the action of the plaintiff is statute-barred by reason of the operation of s. 281.1 of the Insurance Act, R.S.O. 1990, c. I.8.

[2] The latter section which establishes a limitation period provides that relative to statutory accident benefits that a mediation proceeding "shall be commenced within two years after the insurer's refusal to pay the benefit claimed" (underlining mine).

Factual Background

[3] The plaintiff had submitted to the defendant an Application for Determination of Catastrophic Impairment (OCF-19) form, dated January 6, 2009. Based on several medical assessments commissioned by the defendant, the insurer responded by an Explanation of Benefits (OCF-9) form dated May 25, 2009, "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."

[4] The plaintiff completed an Application for Mediation Form A, July 18, 2011. This application did not indicate under s. 2, i.e., issues in dispute, if the claim involved catastrophic impairment but it did make reference to "catastrophic determination" under "Medical Benefits" #1. Those words appear out of sync with that part of the form. In any event, the defendant advances that the filing of this application for mediation is almost two months [page397] beyond the two-year limitation period of s. 281.1 [of the Insurance Act]. Therefore, the action in this court is statute-barred; that would foreclose the possibility of there being any genuine issue for trial.

Limitation Period and a Genuine Issue for Trial

[5] The determination of the existence of a limitation period is not a convoluted exercise. Although rule 20.04(2)(a) [of the Rules of Civil Procedure] refers to the presence or absence of a genuine issue for trial, a determination in which the jurist pursuant to rule 20.04(2.1) considers the totality of the evidence submitted and, after weighing the evidence, making findings of credibility and drawing any reasonable inference, the determination is quite cut and dried. The jurist looks at the various forms and their dates and decides yes or no.[^1]

Limitation Periods

[6] In Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317 (C.A.), the Ontario Court of Appeal had occasion to consider limitation periods and the applicability to similar phraseology to what was set out before from the Insurance Act and its schedule.

[7] The rationale and general principles for limitation periods were set in paras. 17 through 19:

Limitation periods play an important role in the administration of justice by achieving a balance between every individual's right to justice on one hand and the systemic need for finality on the other. In their operation, limitation periods encourage the timely resolution of legal controversies and reconcile the competing interests of potential claimants, potential defendants and society at large.

The application judge properly outlined the three rationales underlying limitation periods, as set out by La Forest J. in M. (K.) v. M. (H.) (1992), 1992 31 (SCC), 96 D.L.R. (4th) 289 (S.C.C.), at pp. 301-2. They are: [page398]

Certainty rationale: "a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations."

Evidentiary rationale: this "concerns the desire to foreclose claims based on stale evidence. Once the limitation period has lapsed, the potential defendant should no longer be concerned about the preservation of evidence relevant to the claim."

Diligence rationale: "plaintiffs are expected to act diligently and not sleep on their rights; statutes of limitation are an incentive for plaintiffs to bring a suit in a timely fashion."

Also, in a more general sense, the SABS must be read in accordance with the modern approach to statutory interpretation. Thus, the "court's interpretation should comply with the legislative text, promote the legislative purpose, reflect the Legislature's intent and produce a reasonable and just meaning." Ontario (Minister of Transportation) v. Ryder Truck Rental Canada Ltd. (2000), 2000 5647 (ON CA), 47 O.R. (3d) 171 (C.A.).

[8] At para. 23, the panel noted that, notwithstanding some degree of ambiguity, "[i]t is the insurer's refusal which triggers the limitation period".

[9] Furthermore, there was no provision with the SABS regime to reapply for further benefits after an insurer's benefits had been terminated. "The only remedy for the insured person is to appeal the termination of benefits within the two year period."

[10] These reasons are quite sensible. To hold otherwise, that a mediation whatever the result, or a reapplication extends a limitation period would allow for a "rolling limitation period". Such a phenomenon would defeat the rationale for a limitation period referred by the Court of Appeal.

Analysis

[11] The respondent forcefully contends that with an eye to the decision of the Divisional Court in Do v. Guarantee Insurance Co. (2015), 125 O.R. (3d) 585, [2015] O.J. No. 1822, 2015 ONSC 1891 (Div. Ct.), the s. 281.1 limitation period does not run as a finding of no catastrophic impairment is not a denial of a benefit per se but a status. In other words, the determination of CAT eligibility is not a determination with respect to a benefit. Obviously, if the court acceded to this view, the matter would go on to trial to decide if the decision of no catastrophic impairment was erroneous.

[12] Do v. Guarantee Company of North America was an appeal of an appeal order of director's delegate, Lawrence Blackman, sitting on behalf of the Financial Services Commission of Ontario, Appeal Order P12-00037. Arbitrator Alves was the original arbitrator who had decided that in the absence of a denial of a benefit that the limitation period under the Insurance Act did not run. Additionally, the arbitrator had decided that the notice of denial was not clear and unequivocal.

[13] Delegate Lawrence Blackman stated, at p. 7:

At first glance it might seem self-evident than an insurer's refusal of CAT designation should trigger a limitation period. However, the limitation period under subsection 281.1(1) of the Insurance Act does not commence upon any refusal by an insurer. Rather, the legislature has specifically provided that this specific limitation period is triggered by "the insurer's refusal to pay the benefit claimed."

[Emphasis added]

[14] The delegate noted that the CAT designation "does not by itself bestow any monetary award" (p. 10). The designation merely "open[s] the door as it were to a higher threshold of potential benefit entitlement" (p. 11).

[15] The particular letter which accompanied the OCF-9 form in Do merely stated that the insurer had reviewed the (I.M.E.) report and determined that Do did not sustain a catastrophic impairment. There was absolutely no reference to benefits or a refusal to pay benefits.

[16] That refusal is quite different to the refusal in the case at hand. As mentioned, the insurer went on to state in the OCF-9 form, ". . . and therefore you do not qualify for the increased benefits".

[17] The delegate in Do reiterated on numerous occasions the mandatory link between a limitation period and a denial of benefits and accordingly upheld the arbitrator's decision.

[18] Justice Harvison-Young, writing on behalf of the panel sitting in review of the decision of the delegate, noted, at para. 28:

The central question in the present case is whether the notification letter dated May 2, 2007 constituted a "refusal" within the meaning of s. 281.1(1) of the Insurance Act. This is a question which demands consideration of the context of the Act and the particular wording and specific factual circumstances of that notification[.]

(Underlining mine)

[19] At para. 40, Justice Harvison-Young observed that the director's delegate had agreed with the arbitrator that the particular notification in Do, i.e., that the insurer was denying the existence of a status of catastrophic impairment was not in itself a denial of benefit. Her Honour agreed that "[w]hile a CAT determination may have a direct relationship to monetary or time limits for certain benefits, the determination of CAT eligibility is not in itself a benefit".

[20] Justice Harvison-Young concluded [at para. 50] that the director's delegate's decision was based on an analysis with clarity. The "decision readily satisfie[d] the requirements [page400] of justification, transparency and intelligibility and [fell] within the range of possible acceptable outcomes which are defensible in respect of the facts and the law". The application was therefore dismissed.

[21] Do is factually distinct from the matter at hand. Here, the detailed report from Riverfront Medical Services was attached to the OCF-9 form. The insurer referred to the fact that there was consensus opinion formed that Mrs. Machaj had not sustained a catastrophic impairment and "therefore you do not qualify for increased benefits". So the OCF-9 form is not just a denial of the status of catastrophic impairment; it is the communication of the fact that denial means that Ms. Machaj does not qualify for increased benefits. This is a denial of benefits from which the limitation period would run.

Conclusion

[22] The OCF-9 form in this matter was factually different from that of Do. It flushed out the consequences of the denial of the status of catastrophic impairment, namely, the enhanced benefits were not available. To ignore that additional phraseology would be a denial of the plain meaning of the language and work mischief for the operation of the limitation period.

[23] For all of the above, the limitation period is applicable and accordingly there is no genuine issue for trial and the matter is therefore dismissed.

[24] Counsel are to confer as to the quantum and entitlement as to costs. Failure to reach accord will require that there be submissions to the court within 60 days of this judgment, along with a draft bill of costs.

Motion granted.

Notes

[^1]: The "full appreciation" test referred to originally by the Ontario Court of Appeal in Combined Air Mechanical Services Inc. v. Flesch (2011), 2011 ONCA 764, 108 O.R. (3d) 1, [2011] O.J. No. 5431 (C.A.) is a contextual approach by a jurist who decides on the feasibility of making a decision on a motion instead of after a trial based on a fully developed evidentiary base. To paraphrase the Supreme Court of Canada in Hryniak v. Mauldin (sub nom. Combined Air Mechanical Services Inc. v. Flesch), 2014 SCC 7, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 366 D.L.R. (4th) 641 [at para. 49], the evolution of the logic of the jurist flows from (1) being able to make the necessary findings of fact; (2) applying the law to those facts; and (3) that simple process is a "proportionate, more expeditious and [obviously] less expensive" way of achieving a just reward.

End of Document