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Insurance - Auto - Income Replacement Benefits. Adam v. Aviva General Insurance Company
In Adam v. Aviva General Insurance Company (Div Court, 2024) the Divisional Court dismissed an appeal, here on the appellant's argument that non-compliance with IRB notice and disclosure duties voided the related decision:Issue 2: Did LAT err in failing to find that the Appellant is entitled to post-104-week IRBs because Aviva failed to comply with s. 37(4) and (5) of the SABS?
[6] The Appellant submits that LAT erred for failing to find that the Appellant is entitled to post-104-week IRBs because Aviva failed to comply with s. 37(4) and (5) of the SABS which provide:(4) If the insurer determines that an insured person is not entitled or is no longer entitled to receive a specified benefit on any one or more grounds set out in subsection (2), the insurer shall advise the insured person of its determination and the medical and any other reasons for its determination. O. Reg. 34/10, s. 37 (4).
(5) Within 10 business days after receiving the report of an examination under section 44, the insurer shall give a copy of the report to the insured person and to the person who completed the disability certificate, if one was provided in accordance with subsection (1). O. Reg. 34/10, s. 37 (5). [7] Having reviewed the denial letter sent to the Appellant, I agree with LAT that Aviva complied with s. 37(4) of the SABS. The denial letter included a list of the medical and other reasons as to why the post-104-week IRB was denied, the denial does not lack medical reasons and provided enough specificity about her condition. There is no merit to the Appellant’s argument that because it was a statutory requirement for the insurer to provide the medical reports to the insured, LAT erred by referring in the denial letter to the fact that in addition to medical reasons provided to the Appellant, she was also provided with the ss.44 IE medical reports.
[8] I also find no merit in the Appellant’s argument that there are four requirements that a denial letter must meet under Varriano to comply with s. 37(4) of the SABS.
Issue 3: Did LAT err in its finding that ss. 36 and 38 of the SABS were not applicable?
[9] Having found that Aviva complied with s.37(4) and (5) of the SABS, it was neither necessary nor relevant for LAT to address the Appellant’s argument about the consequences of non-compliance set out in completely different sections, s. 36 and 38 of the SABS. I also agree with LAT and Aviva that had Aviva been found to have failed to comply with s. 37 of the SABS, the consequences based on s. 36 and s. 38 of the SABS were not applicable. . Fagundes v. Intact Insurance
In Fagundes v. Intact Insurance (Div Court, 2024) the Divisional Court dismissed a LAT SABS appeal against a reconsideration decision, here "denying the appellant post-104-week income replacement benefits (or IRBs) under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (SABS)":[2] The appellant was involved in an automobile accident on April 6, 2019. At the time, she was employed as a housekeeper. The appellant sought accident benefits from her insurer. The respondent insurer paid IRBs until May 2021 and then stopped following an Insurer’s Examination. The insurer concluded that the appellant did not meet the requirements of s. 6 of the SABS.
[3] Subsection 6(2)(b) of the SABS provides that the insurer is not required to pay an income replacement benefit, “after the first 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience.”
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[12] The appellant further submits that the Adjudicator erred in ignoring subjective evidence from the appellant. The appellant relies on a sentence in the reasons for decision, at para. 10, where the Adjudicator says that: “There must be objective evidence that supports a complete inability to work ...”. That sentence must be read in context. In the same paragraph, the Adjudicator is discussing the applicant’s evidence, including the lack of any post-employment attempts. He also observed that he had not been directed to any medical records or opinions that would support the appellant’s position that she had a complete inability to work. His considerations did not exclude the appellant’s subjective evidence or say that only objective evidence was relevant. He did not err in law.
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[14] The applicant also submits that the Adjudicator erred in law in his interpretation and application of the post-104-week test by failing to consider and address the factors set out in previous LAT cases relating to suitable alternative employment, as summarized in Burtch v. Aviva Insurance Co. of Canada, 2009 ONCA 479, 97 O.R. (3d) 550, at para. 15:In deciding suitable employment, one must consider such factors as the nature and status of the work compared with what the applicant did before, the hours of work and level of remuneration, the applicant's employment experience and the length of time spent in different jobs, his or her age, and his or her qualifications and technical training and know-how. [15] The applicant also argues that the Adjudicator failed to appreciate that the post-104-week test required the appellant “to show that she had a complete inability to engage in employment in a competitive real-world setting, rather than an abstract ideal setting” in which an employer would accommodate the appellant’s disabilities as a matter of course: see Wawanesa Mutual Insurance Co. v. Renwick, 2020 ONSC 2226, 150 O.R. (3d) 65 (Div. Ct.), at para. 56.
[16] In Traders General Insurance Co. v. Rumball, 2022 ONSC 7215 (Div. Ct), at para. 60, leave to appeal granted, COA-23-OM-0005 (July 5, 2023), this court concluded that “the only test to be applied in establishing an entitlement to post-104 IRBS is the one set forth in [s. 6(2)(b) of] the Schedule and it does not include employment in a competitive, real-world setting, nor does it include any test that suitable employment should be comparable in terms of status and wages.”
[17] In considering the current appeal, it is not necessary to determine whether factors beyond those set out in the wording of s. 6(2)(b) of SABS are required to be considered in determining entitlement to post-104-week IRBs. It is clear from the Adjudicator’s decisions that after considering the evidence, he preferred the insurer’s evidence in reaching the conclusion that the appellant did not suffer from a complete inability to engage in any employment or self-employment for which she was reasonably suited. We are satisfied that the result would have been the same, whether or not the Adjudicator considered the additional factors that the appellant identified. . Landa v. The Dominion of Canada General Insurance Company
In Landa v. The Dominion of Canada General Insurance Company (Div Court, 2024) the Divisional Court denied an appeal/JR of a LAT ruling that denied a "claim for IRBs on the basis that she had failed to provide the information, which had been requested by Dominion pursuant to s. 33 of the SABS":(a) Claim for IRBs
[51] The LAT denied Ms. Landa’s claim for IRBs on the basis that she had failed to provide the information, which had been requested by Dominion pursuant to s. 33 of the SABS.
[52] S. 33(1)1 of the SABs obligates an applicant to provide the insurer with “any information reasonably required to assist the insurer in determining the applicant’s entitlement to a benefit”. S. 33 (6) provides that the insurer is not liable to pay a benefit in respect of any period during which the insured person fails to comply with subsection (1).
[53] The LAT considered the evidence and the submissions put forth by Ms. Landa that the information she had provided was sufficient to calculate her IRB entitlement and that, if Dominion required more information, it had an obligation to specify what information was required.
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[56] The LAT considered Ms. Landa’s submissions and explained why it concluded that Dominion needed the information it requested. Based on the record before it, the LAT found that Ms. Landa had failed to provide the financial documents requested by Dominion, specifically rejecting her assertion that she had provided the requested documents to her legal representative or directly to Dominion, which assertion it found was not supported by the evidence.
[57] Ms. Landa submits that the LAT should have evaluated “all alternatives” and chosen the “least harsh option, considering the consumer protection scheme”, which would have been to delay, rather than to deny, payment. Ms. Landa offers no case law to support her submissions, which run counter to the clear wording in the SABs.
[58] To the extent that the LAT’s determination of Ms. Landa’s IRB claims involve a question of fact or mixed fact and law, they are not subject to appeal.
[59] The LAT’s findings of fact were supported by the evidence and, as noted above, it is not the role of this court to re-weigh the evidence. . Nouracham v. Aviva General Insurance Company
In Nouracham v. Aviva General Insurance Company (Div Court, 2024) the Divisional Court dismissed an appeal from a LAT ruling that denied the appellant SABS benefits as they were "not an employee under s. 5(1)1(i) of the SABS and was therefore not eligible for Income Replacement Benefits as an employee":[2] The Tribunal denied the benefits because of this Court’s decision in Kawa Arab v. Unica Insurance, 2022 ONSC 5761 (Arab). The Tribunal found that the appellant was not an employee under s. 5(1)1(i) of the SABS and was therefore not eligible for IRBs as an employee. The appellant was not entitled to IRBs as a person who was not employed under s. 5(1)1(ii) of the SABS because she had not been employed for at least 26 of the 52 weeks prior to the accident.
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[7] At the time of the accident, the appellant was working on an on-call basis through an agency called Blitz Personnel. When called, she worked at a factory for a period of one day or several days at most. She had not worked for six weeks at the time of the accident. She had not worked for at least 26 of the prior 52 weeks. She had worked nine of the prior seventeen weeks, for between 11 and 26 hours in each of those weeks.
[8] When the IRBs were terminated, the appellant applied to the Tribunal to get them restored. The Adjudicator found that the appellant did not meet the eligibility criteria in s. 5(1)1(i) because she was not “employed” at the time of the accident. The Adjudicator considered this Court’s decision in Arab and followed the Court’s interpretation of the word “employed” in s. 5(1)1(i) of the SABS.
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[10] The appellant’s main issue is whether the Adjudicator erred in law by applying Arab to this case, rather than distinguishing it. There was no error of law. In Arab, the Court engaged in the statutory interpretation of the term “employed” in s. 5 (1) of the SABS and determined its meaning. That interpretation also applies here.
[11] The Court in Arab then applied the interpretation to the facts of that case. In Arab, the appellant had been absent from work for more than six months prior to the accident but his employment was not formally terminated until several months after the accident. Further, he had refused to return to work before the accident. The Court held that he was not “employed” for the purposes of s. 5(1)1(i) of the SABS.
[12] Here, the Adjudicator applied the statutory interpretation of “employed” that had been determined by the Court in Arab. At para. 29 of Arab, the Court summarized its interpretation of “employed” as follows:Although the legislation does not define the term “employed”, when the term is read in its ordinary grammatical sense and considered within the context of Part II of the Schedule it is clear and unambiguous that section 5(1) is not just about the existence of a formal employment relationship. Its purpose is to determine the eligibility to income replacement benefits with reference to the exchange of wages, salary, or other remuneration for services, over a defined period. [Emphasis added.] [13] The legal issue that arises from Arab is what the Court meant by “a defined period”. The Adjudicator quoted the above and concluded that the accident did not occur during a period when the appellant was receiving renumeration for services.
[14] The Adjudicator found that the accident did not occur during the short time periods that the appellant ordinarily worked on call, specifically a period of one or several days at most. The Adjudicator commented that the outcome would be the same if the appellant had been offered work on a weekly or monthly basis. The Adjudicator noted that the appellant had not worked for six weeks prior to the accident. Since the appellant had also not worked 26 of the past 52 weeks, as required for IRBs as an unemployed person, she was not entitled to IRBs.
[15] On the reconsideration, the appellant submitted that the “defined period” referred to in Arab should be interpreted to mean the entire period that the appellant was on call at the agency, whether or not she was actually called to work. In other words, even if the appellant was not called to work for a year or more, it was enough that she had signed up for on-call work at the agency and was willing to work. The Adjudicator disagreed and cited Arab, at para. 33, where the Court held as follows: “Had the Legislature intended for income replacement benefits to be paid during temporary and/or prolonged absences from employment, it could have included that in the legislation, but it did not.”
[16] Other potential scenarios regarding the interpretation of “defined period” were raised in the argument of the appeal. For example, the respondent made it clear that it was not suggesting that a person had to be at work on the day of the accident. Nor would it be disqualifying if the person was on vacation or it was a weekend, for examples. There are likely cases with scenarios that will require further interpretation of Arab and the meaning of “defined period.” That interpretation should be addressed in the context of specific cases, as they may arise.
[17] As set out in the Tribunal decisions in this case, the Adjudicator concluded that in the context of an on-call relationship that gave rise to a period of work that was normally one day or several days at most, the absence of any renumeration for services for a six-week period did not meet the definition of “employed” under s. 5(1)1(i). The Adjudicator did not err in law in reaching this conclusion and the underlying facts are not in dispute.
[18] The appellant also submitted that the Adjudicator erred in failing to consider whether she met the legal disability test in s. 6 of the SABS. However, this required that the appellant be employed or self-employed, and therefore does not arise given the finding under s. 5. . Waterloo Insurance v Switzer
In Waterloo Insurance v Switzer (Div Court, 2023) the Divisional Court canvassed SABS income replacement benefit law regarding employed and self-employed claimants:Analysis
[13] IRBs are addressed in Part II of the SABS, in ss. 4 – 11. The eligibility criteria are in s. 5. There is no issue that the respondent sustained an impairment as a result of the accident, a requirement for eligibility. Subsection 5(1) then distinguishes between eligibility for employees and for self-employed persons:5.(1) The insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies one or both of the following conditions:
1. The insured person,
i. was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment, or
ii. was not employed at the time of the accident but,
A. was employed for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident,
B. was at least 16 years old or was excused from attending school under the Education Act at the time of the accident, and
C. as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment in which the insured person spent the most time during the 52 weeks before the accident.
2. The insured person,
i. was a self-employed person at the time of the accident, and
ii. suffers, as a result of and within 104 weeks after the accident, a substantial inability to perform the essential tasks of his or her self-employment. [Emphasis added.] ...
[14] There is no issue that the respondent was a self-employed person at the time of his accident and for the relevant period prior to the accident.
[15] Subsection 5(1) distinguishes between employed persons (addressed in s. 5(1)1) and self-employed persons (addressed in s. 5(1)2). Subsection 5(1) allows for the possibility that an employed person may also be self-employed. However, the respondent was self-employed only.
[16] The respondent is eligible under s. 5(1)2 as a self-employed person, not under s. 5(1)1.
[17] The above eligibility provisions have a role in determining the quantum of IRBs. Section 4 addresses income using the eligibility categories from s. 5 and incorporates the possibility (which does not arise here) that a person may have been both employed and self-employed in the relevant time periods:4.(1) In this Part,
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(2) The gross annual employment income of an insured person is determined as follows:
1. In the case of a person referred to in subparagraph 1 i of subsection 5 (1) who was not a self-employed person at any time during the four weeks before the accident, the person’s gross annual employment income is whichever of the following amounts the person designates:
i. The person’s gross employment income for the four weeks before the accident, multiplied by 13.
ii. The person’s gross employment income for the 52 weeks before the accident.
2. Subject to paragraph 3, the person’s gross annual employment income is his or her gross employment income for the 52 weeks before the accident if,
i. the person qualifies for a benefit under subparagraph 1 i of subsection 5 (1) and was a self-employed person at any time during the four weeks before the accident, or
ii. the person qualifies for a benefit under subparagraph 1 ii of subsection 5 (1).
3. If the person described in subparagraph 2 i was self-employed for at least one year before the accident, the person may designate as his or her gross annual employment income the amount of his or her gross employment income during the last fiscal year of the business that ended on or before the day of the accident.
(3) A self-employed person’s weekly income or loss from self-employment at the time of the accident is ...
(4) A self-employed person’s loss from self-employment after an accident is … [Emphasis added.] [18] The Adjudicator applied s. 4(2)3. The Adjudicator erred in overlooking the s. 5(1)1 i requirements of s. 4(2)3, which are not met by the respondent. Subsection 4(2)3 applies to people described in s. 4(2) i – people who qualify under s. 5(1) 1 i – not the respondent.
[19] The Adjudicator therefore erred in law in proceeding under s. 4(2)3. Subsection 4(2)3 is available only if the person qualifies for a benefit under s. 5(1)1 i and was a self-employed person at any time during the four weeks before the accident.
[20] In this case, the Adjudicator ought to have proceeded under s. 4(3), which provides as follows:A self-employed person’s weekly income or loss from self-employment at the time of the accident is the amount that would be 1/52 of the amount of the person’s income or loss from the business for the last completed taxation year as determined in accordance with Part I of the Income Tax Act (Canada). [21] Subsection 4(4) may also be applicable.
[22] Unfortunately, due to the above error, there is no adequate analysis of the correct subsections or the evidentiary record (including expert evidence) from which to proceed. While there may be overlap between arguments and evidence for the different subsections, this court is not in a position to fully address the matter. The other issues raised on this appeal will therefore not be addressed. This matter must be sent back for a fresh hearing, allowing for additional evidence, based on these legal principles. . Traders General Insurance Company v. Rumball
In Traders General Insurance Company v. Rumball (Div Court, 2022) the Divisional Court considers an auto insurance SABS issue, here the issue of the test for disability after 104 weeks of disability:[55] The words of a statute will always be open to judicial interpretation. An insured is entitled to receive an income replacement benefit so long as he or she meets the definition of disability in s. 6 of the Schedule.
[56] An insured person is disabled when he or she “suffers a substantial inability to perform the essential tasks of his or her employment or self-employment”. The disability test changes 104 weeks after the accident. No longer is the test one which requires the insured to establish a substantial inability to perform the essential tasks of his or her employment. Rather, the test is more stringent. It requires the insured to demonstrate that because of the accident he or she is “suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience”.
[57] Counsel for Ms. Rumball argues that a proper interpretation of the post-104 disability test includes an assessment of what is “reasonably suitable employment”. It is argued that reasonably suitable employment must be commensurate with the insured person’s pre- accident employment in nature, stature and remuneration. In support of that argument, heavy reliance is placed on Burtch.
[58] In his Reasons in Burtch, Juriansz J.A. at para. 24 makes it clear that the proper test to establish post-104 entitlement to an income replacement benefit is the one in the Schedule. While it is accepted at para. 22 of his Reasons that it is quite proper for arbitrators at FSCO (now the LAT) and for trial judges to consider earlier jurisprudence interpreting the post-104 test, those decisions are not binding on the court. Ultimately, at para. 24 Juriansz J.A. concludes that:... It is not necessary that the insured person be formally qualified and able to begin work immediately in order for a particular employment to be considered a reasonably suitable alternative. A job for which the insured is not already qualified may be a suitable alternative if substantial upgrading is not required. [59] Burtch was cited for the proposition that “suitable employment” means employment in a competitive, real-world setting, considering an employer’s demands for reasonable hours and productivity, and that the work must be comparable in terms of status and wages. A careful reading of Burtch does not support that proposition. In fact, the insured in Burtch was employed as a general labourer pre-accident. His employment position required him to do heavy lifting, drive a vehicle and receive instructions from his employer. He earned $25,000 per annum. He argued at trial there was no reasonably suitable employment alternative. The trial judge made a factual finding that long haul trucking was a suitable alternative despite the fact he lacked formal qualifications for this type of employment. Despite making this factual finding, the trial judge concluded the insured met the post-104 test for disability. The Court of Appeal reversed the decision of the trial judge because “the trial judge’s findings simply did not support his conclusion that the respondent was suffering from a complete inability to engage in any employment for which he is reasonably suited by education training or experience under s. 5 (2) (b) of the Schedule...”
[60] I do not accept that Burtch incorporates any other disability test other than that set forth in s. 6 of the Schedule. While the Court of Appeal endorses reference to earlier jurisprudence, including cases from FSCO and now the LAT, as clarifying how specialized tribunals interpret and apply the Schedule, those decisions are not binding on the court. While those decisions include as part of the post-104 disability test a test that suitable employment means employment in a competitive, real-world setting, considering an employer’s demands for reasonable hours and productivity and a test that the work should also be comparable in terms of status and wages, we do not accept that is the test set forth in the Schedule. As such this court, being bound by the decision of the Court of Appeal in Burtch, concludes that the only test to be applied in establishing an entitlement to post-104 IRBS is the one set forth in the Schedule and it does not include employment in a competitive, real-world setting, nor does it include any test that suitable employment should be comparable in terms of status and wages.
[61] The Adjudicator in this case heard the evidence and made a factual determination that Ms. Rumball had reasonable suitable alternative employment available to her, specifically the evidence as it related to her work as a wedding planner and the evidence that she had some functional ability to work in the retail sector. While counsel for Ms. Rumball takes issue with the factual findings of the Adjudicator as they relate to the medical evidence, those findings are not reviewable on this appeal. Furthermore, even if those findings of fact were reviewable, it is noteworthy that the evidentiary foundation for Ms. Rumball’s claim that she was disabled was grounded in the evidence called on her behalf.
[62] The onus was on Ms. Rumball to establish that she was disabled and met the test of post-104 disability as set forth in the Schedule. At the very least, where the hearing was being heard in March 2020, it was incumbent on the moving party to put before the decision maker evidence, including opinion evidence, that was not only persuasive but also timely. In this case, apart from the evidence of the family doctor, the expert evidence came from two medical doctors whose reports were prepared in 2017. The conclusions reached by the Adjudicator as they relate to this opinion evidence were not only supported by the evidence but also a matter of common sense. In addition, where the disability test speaks to “suitable alternative employment”, I question why Ms. Rumball chose not to call any evidence from a vocational expert. Ms. Rumball had the onus in this case and the evidence did not meet that onus.
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