The Court of Appeal for Ontario has upheld an insurer's
summary judgement motion, dismissing a claimant's action
against her accident benefits insurer because she missed the
two-year limitation period.
Tanya Sietzema was involved in a car accident November 11, 2005.
She filed an application for benefits on November 29, 2005 with
Economical Insurance. She was employed at the time of the accident.
Her application included a Disability Certificate, signed by her
physician. That form described her injuries and included the
physician's response to questions about the appellant's
eligibility for various benefits. Under the category Non-Earner
Benefits, the physician indicated that the appellant did not meet
the "disability test" for Non-Earner Benefits.
Economical replied to the appellant's application on
December 19, 2005. It sent her a an Explanation of Benefits Payable
by Insurance Company (OCF-9). This stated she was eligible for
Income Replacement Benefits of up to $400 per week. The form
indicated that she was not eligible for Non-Earner Benefits because
she was employed at the time of the accident.
Although the appellant was not eligible for Non-Earner Benefits,
the reason given by the insurer was wrong. She was not eligible for
Non-Earner Benefits because she qualified for Income Replacement
Benefits and the SABS did not permit her to receive both benefits.
Although it was generally assumed in the insurance industry in 2005
that employment at the time of the accident precluded receipt of
Non-Earner Benefits, the Court of Appeal's decision in
Galdamez v. Allstate Insurance clarified that, rare though
the situation might be, a person who was able to continue to work
might nevertheless qualify for Non-Earner Benefits.
The appellant returned to work on February 13, 2006. Economical
terminated her Income Replacement Benefits on March 2, 2006. The
appellant had retained counsel in January, 2006, shortly after
receiving the OCF-9. However, she did not re-assert a claim for
Non-Earner Benefits until February 3, 2010, when her lawyer wrote
to Economical stating that the appellant had not been informed on
the termination of her Income Replacement Benefits that she had a
right to claim Non-Earner Benefits. The lawyer's letter took
the position that there had been no "refusal" of
Non-Earner Benefits and the limitation period had not started to
run. There followed an unsuccessful mediation of the
appellant's claim. The statement of claim in this action was
issued on April 14, 2011.
The appellant's submission before the motion judge and the
Court of Appeal was that the insurer misled her concerning her
entitlement to Non-Earner Benefits. She thought she could never
receive the benefits because she had been working at the time of
the accident, so she did not apply for them when her Income
Replacement Benefits were terminated. At the time the insurer
terminated her Income Replacement Benefits, she should have been
told of her right to apply for Non-Earner Benefits.
The motion judge held that although the appellant may have been
personally misled, she had hired a lawyer in early 2006 to advise
her of her rights as a result of the accident and this would have
included her right to accident benefits. Her lawyer would have
known that limitation periods were running. The OCF-9 contained a
clear refusal to pay Non-Earner Benefits, and this triggered the
limitation period in s. 51(1) of the SABS, which required mediation
to be commenced "within two years after the insurer's
refusal to pay the amount claimed."
The Court of Appeal agreed with the motion judge and dismissed
the appeal. The Court held that the information package sent to the
appellant complied with the SABS and stated the test for Non-Earner
Benefits as it was then understood. The Court held:
There is nothing in the Insurance Act or the
comprehensive SABS regime to require an insurer, on termination of
benefits, to give the claimant a further notice advising that he or
she may have a right to renew a claim for a benefit that had
previously been denied.
The interesting (or perhaps obvious) point to this matter is
that it is the claimant's lawyer's responsibility to inform
the claimant of her rights to claim certain benefits. The insurer
is not obligated to assist the claimant in applying for benefits,
even though in practice this happens often, especially where the
claimant is unrepresented.
The insurer might have caught a break here because the claimant
was represented, although what really helped the insurer in this
case was that its refusal-of-benefits package was foolproof.
Special shout-out to my good friend Lisa Armstrong, who argued
this case successfully for the insurer.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).