In the recent decision of Machaj v. RBC General Insurance
Company, 2016 ONCA 257 (CanLII), the Ontario Court of
Appeal confirmed that the denial of the status of catastrophic
impairment does not amount to a denial of a benefit.
Machaj v. RBC was an appeal from an order by a Judge of
the Superior Court dismissing an action for catastrophic impairment
under the Statutory Accident Benefits Schedule on the
ground that the claim was statute barred by virtue of s. 281.1(1)
of the Insurance Act, R.S.0., 1990, c. I-8.
At first instance, the Motion Judge found that the
Applicant's claim was statute barred as a mediation proceeding
had not been commenced "within two years after the
Insurer's refusal to pay the benefits claimed".
The central issue on the Appeal was whether the motion judge had
erred by concluding that the decision of the Divisional Court in
Do v. Guarantee Insurance Co., 2015 ONSC 1891 (CanLII),
did not apply to the particular facts of the case.
The decision in Do v. Guarantee upheld a consistent
line of arbitral decisions that an Insurer's denial of the
status of catastrophic impairment did not, in itself, amount to a
denial of a benefit and that it was only in situations where a
specific benefit was denied that the limitation period commenced
running against the Applicant. The Divisional Court in Do
accepted the proposition that catastrophic impairment status was
not itself a benefit, but rather a designation that entitled an
Applicant to request extended medical, rehabilitation and/or
attendant care benefits and other expenses.
In Machaj v. RBC, the Applicant had completed an OFC-19
seeking a "catastrophic determination" however no claim
was made for a specific benefit.
The Insurer, in response, denied the Applicant's request for
catastrophic impairment status.
In the OFC-9 (Explanation of Benefits) the Insurer gave the
following reason for the denial: "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
At first instance, the Insurer submitted, and the motion judge
found, that by adding the words "and therefore you do not
qualify for the increased benefits", the Insurer did deny
benefits within the meaning of s. 281.1(1) of the Insurance
Act. As the Insurer's denial in Do did not
contain such language, the motion judge concluded that Do
was therefore distinguishable from the present case.
However, the Court of Appeal disagreed. The Court of Appeal
noted that there was no difference in substance between the denial
that was made in the case at bar and the denial that was made in
The Court of Appeal highlighted the fact that there was a line
of authority culminating in Do which established that
there is a clear distinction to be drawn between a claim for
determination of catastrophic impairment and a claim for the
specific benefits to which an injured person is entitled if found
to have suffered a catastrophic impairment.
According to the Court of Appeal, 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 impairment.
In addition, the Court of Appeal was of the view that by adding
the words "therefore you do not qualify for the increased
benefits", the Insurer was doing nothing more than
telling the Applicant that she lacked status to claim increased
benefits. The Court of Appeal found that the additional words did
not convert what was, in substance, a denial of catastrophic
impairment into a denial of the specific benefits that would
trigger the commencement of the two year limitation period.
Accordingly, the appeal was allowed and the Motion Judge's
order dismissing the claim as being statute barred was set
Overall, this case confirms that an application for catastrophic
impairment is not an application for benefits, and as such, the two
year limitation period set out in the Insurance Act will
For the two year limitation period to apply, a
"specific" benefit under the Statutory Accident
Schedule must be sought and denied by the Insurer.
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