Insured not statute barred to pursue Catastrophic Impairment denial.

May 14, 2016, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Date of Decision: 2016-04-08

COURT OF APPEAL FOR ONTARIO  On appeal from the order of Justice A.C.R. Whitten of the Superior Court of Justice, dated July 3, 2015.

Heard Before: Justice Juriansz Sharpe and Justice JJ. A. Roberts

Zofia Machaj appealed the decision ordering dismissal of her action for SABs pursuant to the Insurance Act on the basis that it is statute barred as the mediation proceeding had not been commenced “within two years after the insurer’s refusal to pay the benefits claimed”.

The central issue is whether the motion judge erred in his decision in ruling that an insurer’s denial of the existence of the status of catastrophic impairment does not in itself amount to a denial of a benefit and that is it is only where a specific benefit is denied that the limitation period commences to run against the claimant. The Divisional Court accepted the proposition that catastrophic impairment status is not itself a benefit, but rather a designation that entitles a claimant to request extended medical, rehabilitation and/or attendant care benefits and other expenses.

In this case Ms. Machaj completed an OFC-19 form claim seeking a “catastrophic determination”, but did not make a claim for specific benefits. RBC denied the request for catastrophic impairment status for the following reason: “Please note 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” [Emphasis added]. Part 4 of the OFC-9 form’s list of specific benefits was left blank. The trial judge based his decision on a previous ruling involving Do v. Guarantee Insurance Co., 2015 ONSC 1891. The trial judge ruled the precedent in Do did not apply. In Do, the Divisional Court accepted the proposition that catastrophic impairment status is not itself a benefit, but rather a designation that entitles a claimant to request extended medical, rehabilitation and/or attendant care benefits and other expenses.

Ms. Machaj submits that by adding the words “and therefore you do not qualify for the increased benefits”, RBC did deny benefits. The Appellant court respectfully disagreed with that conclusion ruling there is no difference in substance between the denial that was made in the case at bar and the denial that was made in Do. The Appellant court judges agreed  with Ms. Machaj that the line of authority culminating in Do establishes that there is a clear distinction to be drawn between the claim for determination of catastrophic status and a claim for the specific benefits to which an injured person is entitled if found to have suffered a catastrophic injury. Do stands for the proposition that the two year limitation period only applies to claims for specific benefits and not to a claim for a determination of catastrophic injury status. In our opinion, by adding the words “and you therefore you do not qualify for the increased benefits”, RBC was doing nothing more than telling the appellant that she lacked status to claim increased benefits. The additional words did not convert what was, in substance, a denial of a catastrophic determination into a denial of the specific benefits that would trigger the commencement of the two year limitation period.

Accordingly the appeal is allowed and the motion judge’s order dismissing the claim as being statute barred is set aside.

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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