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Insurance - Auto - Limitations. Zuchelkowski v. Zenith Insurance Co.
In Zuchelkowski v. Zenith Insurance Co. (Div Court, 2024) the Divisional Court considered a LAT appeal where a mother sought to claim "for the recognition of her entitlement to statutory accident benefits" on her son's motorcycle accident.
Here the court considers a limitation denial by the insurer, canvassing related IA SABS provisions:[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.
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Analysis
[11] The relevant provisions of the SABs provide:Notice to insurer and application for benefits
32. (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
34. 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
55. (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:
1. 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.
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. . 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 dismissed a LAT-SABS appeal, which focussed on the Insurance Act [Reg. 34/10: SABS - Sept 1, 2010] s.56 two-year limitation, and - separately - the LATA s.7 ['Extension of time'] limitation provision as it applied to SABS matters. This case was one of the first Yatar joint appeal/JR cases, which allow attempts to include review of 'fact' and 'mixed fact and law' issues within otherwise 'questions of law'-limited appeals:[9] The Vice Chair considered whether Dominion issued valid denials to trigger the limitation period. The limitation period begins when an insurer gives a clear and unequivocal denial of a benefit that is accompanied by notice of the two-year period for commencing the dispute resolution process. ...
[10] Finally, the Vice Chair considered whether to extend timelines to extend the limitation period to allow Ms. Landa’s claim to proceed. The Vice Chair relied on the LAT decision of SS v. Certas Home and Auto Insurance Company, 2016 CanLII 153125 (ON LAT) in holding that the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G (“LATA”), does not allow for an extension of time for a proceeding under the SABS. She therefore determined that she had no jurisdiction to grant an extension of time.
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[42] Under s. 56 of the 2010 Schedule and s. 51 of the 1996 Schedule, LAT proceedings under the Insurance Act must be commenced within two years of the insurer’s denial of benefits. Section 7 of the LATA provides that the LAT may extend the time for commencing a proceeding where it “is satisfied that there are reasonable grounds for applying for the extension and for granting relief.”
[43] As noted above, at the time that the LAT rendered its October 9, 2020 Preliminary Issue Decision and its December 23, 2020 Reconsideration Decision, the LAT’s case law was divergent on whether s. 7 of the LATA allowed the LAT to extend the limitation period in the Schedule. However, this Court subsequently held in Fratarcangeli v. North Blenheim Mutual Insurance Company, 2021 ONSC 3997 (Div. Ct.) at para. 61 that the LAT has that authority. On its own initiative, the LAT reconsidered the Preliminary Issue Decision a second time.
[44] To determine whether to grant an extension of time under s. 7 of the LATA, the LAT generally considers four factors which it must weigh in order to determine whether the justice of the case requires granting the extension. The four factors are set out by the Divisional Court in Manuel v. Registrar, 2012 ONSC 1492 (Div. Ct.) at paras. 13-17 and 40 (“Manuel”):1. The existence of a bona fide intention to appeal within the appeal period;
2. The length of the delay;
3. Prejudice to the other party; and,
4. The merits of the appeal. [45] The LAT noted that Manuel directs a holistic analysis of these factors, no single factor is determinative, an extension should not be granted unless the “justice of the case” requires it, and the onus is on Ms. Landa to establish that there are reasonable grounds for granting an extension.
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[48] The decision not to extend the time is a discretionary one to which this court owes considerable deference. Ms. Landa has not demonstrated an error in principle. There was documentary evidence to support the facts as found, and “it is not the role of the court in this appeal to ‘second-guess’ the weight to be given to the evidence nor to interfere with the inferences drawn from the facts as found.” (Fratarcangeli, at para. 85). Ms. Landa has not established that the reconsideration decision was unreasonable. . Tagoe v. The Personal Insurance Company
In Tagoe v. The Personal Insurance Company (Div Court, 2023) the Divisional Court considered the limitation issue of 'discoverability' although here in a SABS context where the insurer denied benefits "before the appellant was eligible for those benefits", perhaps in an effort to commence running of the limitation period while the insured is unsuspecting of it's effect:Discoverability
[15] On this issue, the adjudicator said this in her reconsideration decision:[24] The [appellant] submits that the Tribunal made an error of law by allegedly failing to apply the Court of Appeal’s decision in Tomec and address the argument relating to discoverability and prematurity of the denial in its decision, such that the [appellant] was denied procedural fairness pursuant to Rule 18.2(a).
[25] I disagree. Discoverability and prematurity of a denial were addressed in the decision. For instance, paragraph 34 outlines the applicant’s arguments with respect to pre-emptive denial, and paragraph 35 goes on to outline my position on premature benefit claims:…there is a considerable body of case law that deals with premature benefit claims that are denied pre-emptively by an insurer. I find that a benefit can be denied by an insurer pre-emptively and that the use of the phrase “you do not qualify” would be found to be acceptable under the Schedule. [16] There was no other discussion of Tomec. The appellant submits that the adjudicator erred in law in failing to follow Tomec, which addressed a like situation. In Tomec, the Court of Appeal held that a limitation period, without discoverability, created an absurd result because it effectively barred the appellant in that case from claiming benefits before the appellant was eligible for those benefits. The Court of Appeal underscored the purpose of the SABS, to maximize benefits for victims of motor vehicle accidents, and concluded that the limitation period was subject to discoverability.
[17] The respondent insurer argues that the unequivocal denial of May 2016 began the limitation period with respect to the subsequent claim for income replacement benefits even though the appellant had gone back to work the day after the accident. The respondent insurer relies on part of the initial request to the insurer, where the appellant claimed that he had a substantial inability to work. The respondent insurer submits that the appellant having so claimed, the denial of income replacement benefits in May 2016 created the dispute that had to be addressed in two years.
[18] I disagree with the respondent’s position. The appellant did not qualify for income replacement in May 2016 and did not apply for it. I cannot distinguish this case from Tomec. The appellant was not required to apply for income replacement benefits before he was eligible for them. The adjudicator erred in law by failing to apply the doctrine of discoverability.
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