Tomec v Economical Mutual Insurance Company – SABs limitation period is a ‘hard’ one set at two-years – Not subject to Discoverability

November 30, 2018, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Tomec v. Economical Mutual Insurance Company, 2018 ONSC 5664 (CanLII)

Date of Decision: October 2, 2018
Heard Before: Morawetz R.S.J., Whitten and Gray JJ.

LIMITATION PERIOD: Is limitation period subject to discoverability; limitation period set out in Insurance Act; is the limitation hard (does it begin two years from date of benefit denial) or soft (does it begin two years from when insured’s right to claim the benefit is discovered); determination made that SABs are ‘hard’ limitation periods and any denial must be mediated or disputed within two years

In this application, the court is required to grapple with the difficult question of whether a limitation period is a “hard” one, that is, one that bars a claim regardless of whether the claimant is aware of whether he or she has a claim; or whether it may be relieved against where the claimant only becomes aware that he or she has a claim sometime after the limitation period expires.

Tomec seeks judicial review of a decision of the LAT which the Tribunal ruled that the applicant’s claim for attendant care and housekeeping benefits under the SABs is statute barred.

For the reasons that follow, the application is dismissed.

Tomec was injured in car accident while walking across the street suffering a variety of injuries including multiple fractures in her left shoulder.  She was hospitalized and required surgery. On October 13, 2008 she submitted an application for SABs benefits.  She was found to be entitled to, and received, attendant care and housekeeping benefits from the date of her application for benefits up to September 12, 2010, which was two years from the date of the collision.

On August 10, 2010, Dr. Harold Becker submitted an application for approval of an assessment or examination to the respondent for a file review to evaluate the issue of catastrophic impairment. On August 26, 2010, the respondent sent the applicant a letter enclosing an application of benefits form.  Both the letter and the form contained the following paragraphs:

In accordance with Section 18(2) of the Statutory Accident Benefits Schedule, no attendant care benefit is payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined by the Statutory Accident Benefits Schedule.

In accordance with Section 22(3) of the Statutory Accident Benefits Schedule, no payment for housekeeping and home maintenance benefits are payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined the Statutory Accident Benefits Schedule.

 The letter also contained the following paragraph:

Please note that should you disagree with our assessment of your claim and wish to dispute, mediation must be commenced within 2 years from your receipt of this letter.  The dispute process has been outlined in the Explanation of Benefits Payable (OCF-9/59) which is attached for your records.

On May 5, 2014, the applicant’s treating orthopedic surgeon prepared an updated report, in which he noted that the development of osteoarthritis in her left knee as a result of the collision necessitated the use of a cane.  On May 13, 2015 an Application for Determination of Catastrophic Impairment was submitted to the respondent.  It opined that the applicant had sustained a catastrophic impairment as a result of the collision of September 12, 2008.

The insurer subsequently denied payment of the past owing benefits and denied ongoing attendant car and housekeeping benefits on the basis that these benefits had been denied at the 104 week mark and the denial was not mediated within the two-year period.

The LAT decision determined that the insured was barred from proceeding with the application for ACBs and Housekeeping benefits notwithstanding the CAT Impairment determination as the two-year time limit has passed.

The insured put forth two arguments:

1. The 2010 denial was not valid as at the time of denial the CAT determination had not been made and therefore she was not able to claim the housekeeping benefits
2. The limitation clock could not begin to run since the insured has not known she was CAT impaired and therefore would be entitled to higher levels of benefits.

The LAT rejected both arguments finding the 2010 denials clear and unequivocal. They were sufficient to trigger the two-year limitation period as set forth in the Insurance Act s. 281.1 (1):

A mediation proceeding or evaluation under s.280 or 280.1 or a court proceeding or arbitration under s.281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.

The Vice-Chair of the LAT found this provision is a fixed limitation period triggered by a specific event and it does not include the doctrine of discoverability.

The Divisional Court upheld the LAT decision, noting that this wording is analogous to s. 39 (3) of the Trustee Act and that both sections are triggered by fixed events:

An Action under this section shall not be brought after the expiration of two years from the death of the deceased.

This is a tough decision for this Plaintiff and others and takes a restrictive approach, ignoring that the insured had no claim until she was deemed CAT impaired.

About Deutschmann Law

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.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.