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Notice Delayed by 18 Months Found Reasonable

18 Month Notice Delay Excused

 In 22-009102 v Onlia, the Tribunal was to decide on the preliminary issue as to whether the Applicant Shaver was “barred from proceeding to a hearing as the applicant failed to notify the respondent of the circumstances giving rise to a claim for benefits no later than the seventh day after the circumstances arose, or as soon as practicable after that day (as required by section 32(1) of the Schedule). In contrast to the case noted above, the Tribunal determined that, despite an 18 month delay in providing notice “it would be equitable to relieve against the consequences of the applicant’s failure to comply with s. 32 because he has provided a reasonable explanation for the delay.”

At his EUO, Shaver “testified that the main reasons were that he is not “smart with this stuff”, he “wanted to look into it”, he “didn’t know there was anything I could do about it”, and he “wasn’t sure at all”. The Tribunal however, found it “credible and worthy of belief that an unsophisticated party might not realize that that one can apply for accident benefits through their insurer in circumstances where they were hit as a pedestrian. While I agree that ignorance of the law is not a reasonable explanation, the test of “reasonable explanation” is both a subjective and objective test that should take into account both the personal characteristics and the “reasonable person” standard.”

The Tribunal further reasoned that Shaver “is an unsophisticated party. He has a limited level of education and worked as a labourer/landscaper. Given the applicant’s personal characteristics, I am persuaded that he would not have known that he was entitled to benefits after being struck as a pedestrian. He also stated that if he had known that accident benefits were available to him, he would have contacted the respondent right away. I do not have any reason to disbelieve him. It was not until he spoke to a lawyer that he found out that he was able to file an application for accident benefits. Once he retained counsel in February 2022, he immediately notified the respondent of his intent.”

Accordingly, Shaver was allowed to proceed with his application, with “the hardship to the applicant if he is prevented from proceeding to a substantive issue hearing would be far greater than any prejudice faced by the respondent.”

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Coffee Cup Lid Issue an Intervening Act

Coffee Lid “Intervening Act”

The Applicant Rathbone, in 22-009104 v Co-operators, was stopped at a drive through window, purchasing two coffees. As he transferred the second from the window into the car, the lid came off, resulting in coffee spilling onto his lap, and he reacted to same by dropping the remainder of the coffee onto his lap. He secured burn injuries, and ultimately sought treatment at the hospital for his injuries. Rathbone submitted both that the described incident satisfied the definition of “accident” in accordance with the Schedule, and as well that he had a reasonable explanation for not reporting this August 2021 incident to Co-operators until March 2022.

Rathbone contended that there was no intervening act that would absolve the respondent of liability. He relied on the Court in Dittmann v. Aviva, that was affirmed by the Court of Appeal. In Dittman, she was also transferring the coffee from the drive through window into the car, holding same by the lid, at which time the cup released from the lid, and the coffee thusly spilled onto her lap. The Court held “That the beverage might inadvertently spill is a normal incident of the risk created by that use. Accordingly, it cannot be said to have been outside the “ordinary course of things…”. Therefore, Dittman was involved in an “accident”, as there was no intervening act that would effectively break the chain of causation.

However, despite markedly similar circumstances, the Tribunal found that the facts of the within case were distinguishable. It was noted that Rathbone had mentioned at his EUO that the fact of the lid not being secured properly to his coffee cup a couple of times. Therefore, it was found that “the fact that the lid was not secured properly was the intervening act that caused the injuries and broke the chain of causation… his injuries resulted from an intervening cause, which was the improperly secured lid that caused the coffee to spill onto him.” Accordingly, the use or operation of the vehicle did not directly cause the injuries sustained by Rathbone.

With respect to the aforementioned late notice, Rathbone testified at his EUO that “…I understand it happened within a vehicle, but my — my first mind or my first reaction was not that this could be anything that could be covered under my car insurance policy.” It was not until he received a legal opinion that he discovered that he could apply for accident benefits as a result of the incident. The Tribunal did “not find this explanation credible or worthy of belief. The applicant had retained experienced legal counsel within weeks of the incident. It is unclear why it took almost seven months to notify the respondent… In my view, the applicant’s explanation for the delay is not reasonable”.

Therefore, Rathbone was found not to have complied with s.32 and s.34 of the Schedule, having “failed to provide a reasonable explanation for the delay in notifying the respondent regarding the circumstances that gave rise to the entitlement to the benefit…”.

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Bad Faith Award in Excess of $60K on a Catastrophic Client Case against Aviva Insurance Company

22-000554 v Aviva

The quantum of the award was informed by numerous factors. The applicant was a “particularly vulnerable member of society. He is a catastrophically impaired 27-year-old man who has a severe brain injury and requires a litigation guardian. He is immobile, non-verbal and dependent for all ADLs. This alone should have persuaded the respondent to act promptly, with the utmost care and due diligence in the handling of his file. The respondent failed to afford the applicant the consideration and dignity he deserved, particularly when he had access to optional benefits… the applicant was significantly and negatively impacted by the compounding effect of the errors made by the respondent’s adjusters, despite the efforts of his case manager and his mother/guardian.”

50% Award on CAT Case – Shortly prior to the start of the hearing, Aviva, in 22-000554 v Aviva, approved all issues in dispute. This consisted of $26,000.00 for a monthly difference in rent, $770,000.00 for a house purchase, $29,000.00 for renovations to suit the applicant’s medical needs and up to $100,000.00 for a wheelchair accessible vehicle and outstanding attendant care benefit (ACB) of $1753.50. However, the applicant (K.M.) requested a hearing with respect to a claim for an award and sought a finding that delayed benefits be deemed incurred. The Tribunal found that the Applicant was entitled to an award of 50 per cent, for the cost of the $100,000.00 vehicle, difference in rent of $26,000.00 and ACB payment of $1,753.50 and deemed incurred that rental differential.

Delay in Providing For Accessible Housing

The Applicant was deemed CAT in July 2021, given that he was immobile, non-verbal, dependent for all acts of daily living (ADLs). In May 2022, a year following the accident, he was discharged from hospital, with his mother opting to provide care for him at home as opposed to placing him in a complex continuing care unit.

The Tribunal found in this regard however that Aviva’s “unyielding and stubborn interpretation of its statutory duty delayed the applicant moving into an accessible location that would have afforded him the dignity he deserves.” In January 2022, seeking $924,671 for a house, renovations and wheelchair accessible vehicle, that Aviva ultimately approved, the applicant was met with an EOB denial, indicating that the proposed costs exceed the available policy limits. Second, an insurer is not liable for the purchase of a new home in excess of the value of the renovations to an existing home that would be required to accommodate the applicant’s needs.

Delayed IE and No Construction Report Ordered as Intended

The Tribunal found that the handing of this request “was imprudent from the start”, with the adjuster of record testifying that at the time of denial, she was not aware that the applicant had optional benefits. To further address entitlement, Aviva requested an OT IE in February 2022, which took place September 2022, and a report issued December 2022. Following the IE Aviva maintained its position, now 11 months after the OCF18 had been submitted. The EOB indicated that they now awaited “a construction report to determine these costs as the OCF-18 did not provide cost details from an appropriate professional and the applicant continues to recover therefore his long-term needs may change so a wheelchair accessible vehicle is not reasonable or necessary.” Ultimately however, Aviva never did order a construction report.

Optional Benefits not Recognized

The Tribunal found Aviva’s handing herein as unreasonable on numerous grounds, the first being the incorrect understanding as to the applicable policy limits. In addition, the adjuster further testified that she decided to order the construction report (that was never commissioned) after the OT IE, with this process itself taking 10 months. Electing “to take a two-step approach to evaluate this treatment plan slowed down the respondent’s adjustment of this file… the respondent failed to identify that this IE request was urgent due to the applicant’s circumstances. In my view, the respondent’s behaviour in this regard was inflexible and imprudent.”

Onus to Quantify Housing Options

The Tribunal also noted that “the wording of the letter did not outline options for the applicant to proceed towards a resolution. At the time the EOB was sent the applicant had been immobile, non-verbal and dependent for all ADLs for nearly a year.” The Tribunal found that “respondent’s inflexible behaviour failed to meet the statutory requirement set out by the Divisional Court. In Wynn v. Belair.” In that matter the Court stated that “there is a statutory requirement that the insurer has to meet to determine what it will cost to renovate, and that determination needs to be made, even though the rented premises of the plaintiff will not be renovated.” Accordingly, it was clear that “the onus is on the respondent to determine the cost to renovate the pre-accident dwelling or communicate the information it needs from the applicant to complete this calculation. Rather than work with a highly vulnerable applicant to seek a reasonable resolution, I find the respondent’s behaviour stalled the applicant from accessing the housing benefit or understanding how to move forward.”

Questioning CAT Severity?

Aviva further “took an unyielding approach to the severity of the applicant’s injuries. The EOB issued after the OT IE was complete, stated the applicant continues to recover therefore his long-term needs may change… (the adjuster) testified that she did not know where the applicant’s recovery would go until a doctor says the applicant has plateaued. Yet, she did not order a second IE from a medical doctor to quantify the applicant’s future prognosis…the respondent had an obligation to determine the applicant’s health status if it believed more information was necessary. I find its approach and the content of the EOB was lacking, stubborn and insensitive.”

Temporary Housing Refused

The OCF18 for $26,000 was to find temporary accommodation so the applicant could secure an accessible living arrangement ahead of his discharge from the hospital. The OCF-18 requested the difference in monthly rent in order to facilitate the applicant’s move into an accessible apartment and resume living with his family as he did pre-accident. The handling of this item was also determined to be “stubborn and inflexible”. The Tribunal found it difficult to reconcile the denial, within context of the adjuster having testified that she was concerned about the applicant’s safety if he returned to live in his former apartment. The EOB indicated “the cost of the difference in the monthly rental is for a larger apartment for your entire family. The policy only provides coverage for yourself and since you require 24-hour personal care, our responsibility would be for a 2 bedroom.”

The Tribunal found that “the respondent misapplied s.16(4)(c). The intention of this section is to cap the funds available for a new dwelling. It is not a tool meant to stop insurers from finding a reasonable solution for an applicant.” Further, Aviva “should have understood that the applicant’s need to secure a new living arrangement was urgent.” When the OCF18 was submitted, the applicant had been offered a bed in a unit that specialized in caring for the geriatric population, however his mother did not consent, contending that the applicant would be more stimulated and have the opportunity to socialize if living with his family as he did pre-accident. Accordingly, it was “clear that the applicant needed to secure a new dwelling as his discharge from the hospital was imminent.”

The Tribunal reasoned that this OCF18 “provided a second opportunity for the respondent to meet its statutory obligation to determine the cost of renovating the applicant’s pre-accident apartment pursuant to s. 16(4)(c) and calculate the funds that would have been available to the applicant. This would have afforded the applicant the opportunity to move from the hospital to a safe and accessible location. I find the respondent’s unwillingness to work with the applicant towards a viable solution was harsh, not to mention excessive and stubborn.”

Failure to Afford Consideration and Dignity

The quantum of the award was informed by numerous factors. The applicant was a “particularly vulnerable member of society. He is a catastrophically impaired 27-year-old man who has a severe brain injury and requires a litigation guardian. He is immobile, non-verbal and dependent for all ADLs. This alone should have persuaded the respondent to act promptly, with the utmost care and due diligence in the handling of his file. The respondent failed to afford the applicant the consideration and dignity he deserved, particularly when he had access to optional benefits… the applicant was significantly and negatively impacted by the compounding effect of the errors made by the respondent’s adjusters, despite the efforts of his case manager and his mother/guardian.”

Need for Deterrence

In this particular case, “there is a need to deter the respondent’s unyielding behaviour. In my view, the applicant and his mother/guardian have been treated more like adversaries… Post-accident, his injuries were so glaringly severe that within four months he was determined to be catastrophically impaired by the respondent…The respondent had an obligation to determine the applicant’s current needs. It is unreasonable to expect that after being deemed catastrophically impaired, because of a permanent disability due to a traumatic brain injury, the applicant’s medical condition would improve so much that his need for accessible housing or a wheelchair accessible vehicle would no longer be warranted. I find the respondent’s handling of this file added unnecessary strife to an already devastating situation.”

Ultimate Approvals Only Upon Advice From Counsel

Further, the adjuster of record, who failed to realize that the applicant had optional benefits until August 2022, “questioned the permanency of the catastrophic determination when it too had been detailed in the log notes after the respondent deemed the applicant to have a catastrophic impairment without ordering an IE. I find the respondent blatantly failed in its responsibility to adjust the applicant’s claim with due diligence.” In addition, had Aviva “determined the cost of renovating the applicant’s apartment and communicated that figure to the applicant, he could have moved directly into a safe, accessible dwelling directly from the hospital.” It was found concerning that the adjuster testified that Aviva only reversed the denial positioning upon advice from counsel, otherwise the denial would have remained in place, and that the 11 month delay was not significant. The Tribunal found this assessment on the part of Aviva regarding its handling, “highlights the need for a strong message of deterrence in this case”.

Maximum Award

Ultimately, “the maximum award of 50 per cent is merited because of the respondent’s repeated unyielding behaviour that resulted in the applicant living and toileting in his family’s living room for months despite having optional benefits worth three million dollars. In my view, the respondent’s unrelenting need to quantify the applicant’s current and future medical condition, despite his permanent disability due to a traumatic brain injury, caused unnecessary strife and hardship to the applicant.”

Deemed Incurred

Finally, the $26,000 rental differential was deemed approved, as Aviva “failed to provide the applicant with a calculation, pursuant to s. 16(4)(c), that would have enabled him to move to an accessible location when he was released from the hospital on May 5, 2022… In my view, the respondent’s unyielding behaviour resulted in the applicant living for many months in the living room of his former dwelling, despite having optional benefits which was missed by the respondent at the time this benefit was denied.” However, the Tribunal declined to find the other denials as deemed, given that they were ultimately approved, and the applicant has an opportunity to incur same.

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Discoverability Applies

Court Applies Tomec – The Applicant Tagoe, in Tagoe v. The Personal, sought an appeal to the court with respect to the finding, upheld on Reconsideration, that Tagoe was statute barred from proceeding with his claim for IRB, having failed to apply to the Tribunal within two years of the effective denial. Injured in an April 2016 MVA, Tagoe submitted an OCF-3 that confirmed he had continued to work, and The Personal sent a May 20, 2016 Explanation of Benefits (EOB) indicating that Tagoe had no initial eligibility for the income replacement benefits (IRB).

It was then not until July 2017 that Tagoe came off work, contending that the MVA related injuries contributed to his inability to work. Finally, in January 2019 Tagoe applied for IRB. In response, The Personal advised that his claim was barred by the expiry of the limitation period on May 20, 2018, relying on the Explanation of Benefits dated May 20, 2016. Tagoe applied to the Tribunal in February 2021, with the Tribunal finding that Tagoe’s claim was in fact statute barred, as the effective denial was clear and unequivocal, and that “The insurer could, as a matter of law, deny future benefits.” There were no references to the principle of discoverability as set out by the Court in Tomec.

One ground for the Reconsideration sought, was the failure of the Tribunal to consider Tomec. However, the Tribunal countered that “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”. However, a review of the Reconsideration reflects that there was in fact no specific reference to the doctrine of discoverability to be found.

Accordingly, one of the grounds for appeal sought by Tagoe, was that “The adjudicator erred by ignoring the discoverability doctrine, failing to follow the Court of Appeal in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 82. The appellant had gone back to work a day after the accident and did not know that he could not work until the time came in July 2017. The limitation period could not have begun to run before he became eligible for income replacement benefits.”

The Court confirmed that the Tribunal had spoken to the “premature benefits claim”, however “there was no other discussion of Tomec”, which stood for the principle 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.” Applying this principle, the Court disagreed with The Personal that the May 2016 EOB “created the dispute”, finding that Tagoe “did not qualify for income replacement in May 2016 and did not apply for it.”

As a result, the Court could not distinguish the within case from Tomec. Tagoe “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.” Accordingly, the “appeal is allowed, the decision of the Tribunal is set aside, and the matter is remitted to the Tribunal for a new hearing, with costs to the appellant payable by the respondent insurer in the agreed amount of $7,500 all inclusive.”