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Insurance (Auto) - Claims - Time Limits. Clouthier v. Co-Operators General Insurance [s.34 time limit extension]
In Clouthier v. Co-Operators General Insurance (Ont Div Ct, 2025) the Ontario Divisional Court allowed an appeal, this brought against a LAT finding that the appellant was not entitled to non-earner benefit at the 'retroactive' date she claimed, here where lateness in filing the claim [under Reg.34/10 (SABS) - s.34 'Result if fail to comply with time limits' and s.36 'Claim for Income Replacement Benefit, Non-Earner Benefit, Caregiver Benefit or Payment for Housekeeping or Home Maintenance Services'] was due to her temporary incapacity stemming from the accident.
Here the court considers auto insurance claims [under SABS s.36] and time extension [under SABS s.34], here in what IMHO is an obvious decision:[3] Ms. Clouthier applied to the Licence Appeal Tribunal (the “Tribunal”) to receive non-earner benefits from March 12, 2020, through to July 7, 2020. During that interval, she was physically and mentally incapable of signing the required forms. Ms. Clouthier argued that s. 36(3) of the SABS, which requires the form to be submitted to receive non-earner benefits, should be read to exclude incapable persons. ....
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[28] No dispute arises that since the resolution of this appeal centers on the interpretation of specific provisions of a regulation - a question of law and one of significant importance - it falls within the scope of the statutory appeal and therefore the standard of review is correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at paras. 36-38; International Air Transport Assn. v. Canada (Transportation Agency), 2024 SCC 30, 496 D.L.R. (4th) 385, at para. 25; Hussein v. Intact Insurance Co., 2025 ONSC 842 (Div. Ct.), at para. 21.
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The Relevant Regulatory Framework
[39] Together, the Insurance Act and the SABS codify Ontario's no-fault accident benefits regime. This regime requires that every automobile insurance policy in Ontario provides its holder with access to certain benefits in the event of a motor vehicle accident, regardless of fault. To that end, every automobile insurance policy in Ontario is deemed, pursuant to s. 268(1) of the Insurance Act, to include the benefits provided in the SABS. Those who are injured in a motor vehicle accident may then claim the SABS’s benefits from their insurer.
[40] Section 36 is found within Part VIII of the SABS, which is titled “Procedures for Claiming Benefits”.
[41] Beginning with s. 32, the process to claim benefits commences with a person seeking to apply for a benefit notifying the insurer of their intention to do so, no later than seven days or as soon as practicable after that day, after the circumstances arose giving entitlement to the benefit. The insurer is then obliged to promptly provide the person with, amongst other things, the appropriate application forms. The provisions following s. 32 ensure the timely determination of the application.
[42] Sections 36 to 46 fill out the remainder of Part VIII and they specify the various benefits that a person may receive including income replacement benefits, non-earner benefits, medical or rehabilitation benefits, and attendant care benefits and the particulars required to obtain them.
[43] Sections 36 and 37 deal with a “specified benefit” which means an income replacement benefit, non-earner benefit, caregiver benefit, or a payment for housekeeping or home maintenance services.
[44] Non-earner benefit is defined in s. 12 and provides a payment of $185 a week under certain conditions to an insured person who suffers a complete inability to carry on a normal life as a result of and within 104-weeks of a motor vehicle accident and who does not qualify for income replacement benefits or was a student. One condition is that an insurer is not required to pay a non-earner benefit for the first four weeks after the onset of the complete inability to carry on a normal life.
[45] Subsection 36(2) requires an applicant for a specified benefit to submit a completed disability certificate with their application for benefits under s. 32. Subsection 3(1) defines a disability certificate to be:“disability certificate” means, in respect of a person, a certificate from a health practitioner of the person’s choice that states the cause and nature of the person’s impairment and contains an estimate of the duration of the disability in respect of which the person is making or has made an application for a benefit described in this Regulation [46] The key provision under consideration on this appeal is s. 36(3), which states:36(3) An applicant who fails to submit a completed disability certificate is not entitled to a specified benefit for any period before the completed disability certificate is submitted. [47] The other key provision is s. 34. This states:34. A person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.
The Interpretation of s. 34 Applies to s. 36(3)
[48] Both provisions must be scrutinized carefully in order to determine the appropriate interpretation of these key provisions.
[49] The purpose of s. 36(3) must be read along with the other provisions in Part VIII. When that is done, I find that the purpose of the subsection is to assist in the receipt by the insurer of required information in a timely fashion in order to adjust the claim; in this case, a certification by a health practitioner. By denying a specified benefit for the period when an applicant fails to submit a completed disability certificate, this incentivizes the applicant to fully complete their application as quickly as reasonably possible to provide the insurer the opportunity to assess the claim close in time to the accident.
[50] The respondent submits that s. 36(3) is simply a precondition for eligibility. Subsection 36(3) does not specify a time limit for the submission of a disability certificate. This subsection simply establishes a coverage period for which an applicant would be entitled to a specified benefit. In other words, it merely confirms the requirements for coverage for specified benefits to advance such a claim. The respondent submits that its clear wording reflects the legislature’s intent for this section.
[51] As such, the respondent argues that s. 34 does not apply to s. 36(3) since the latter does not involve any “time limit” as that term is found in s. 34. The respondent relies upon Tribunal decisions that have previously held that the compulsory consequences of s. 36(3) are not saved by the provisions of section 34. It is submitted that Ms. Clouthier is requesting that the court read in a condition to s. 36(3) by improperly rewriting the regulation.
[52] In my view, the fact that s. 36(3) does not provide for exceptions for a failure to meet the requirement of a disability certificate or make an explicit reference to a specific period of time is not determinative. Put another way, this is not by itself evidence of a clear legislative intent to invoke an absolute and rigid prohibition of payment of benefits prior to the submission of a disability certificate.
[53] The subsection must be viewed along with s. 34. The latter is a general provision that excuses compliance with “time limits.” It expressly applies to all the provisions in Part VIII including s. 36. Moreover, it explicitly provides the very type of remedy that is at stake in a situation like this. That is, no disentitlement of a person to a benefit if they have a reasonable explanation.
[54] The term “time limit” is not defined in the SABS. However, the use of the term in the SABS is not confined to s. 34. In some subsections, the context of the use of the term “time limit” refers to a specific period of time such as a notice or a limitation period.[1] That said, s. 22(2) refers to a “time limit of a 104 weeks” after the accident for which reasonable and necessary expenses of certain persons visiting the insured person during treatment or recovery, is not applicable if the person sustained a catastrophic impairment. This refers not to the passing of time before some action is required but a period of eligibility or a coverage period. Thus, the use of the term “time limit” in the SABS is not confined to a single meaning but depends upon the context of its use. This contextual analysis of the term’s use in the SABS supports the broader interpretation of the term “time limit” within s. 34 than the one argued for by the respondent.
[55] Under the modern principle, the interpretation of a phrase in a statute must accord with the context of its use and the underlying purpose of the provision: Lundin Mining Corp. v. Markowich, 2025 SCC 39, at para. 69.
[56] The respondent relies upon authorities such as R. v. A.A., 2015 ONCA 558, 327 C.C.C. (3d) 377, para. 68, citing with approval Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Toronto: LexisNexis, 2008), at p. 1 which holds that “legislatures use language carefully and consistently so that, unless the contrary appears, the same words have the same meaning within a statute and different words have different meanings”. When it comes to the term “time limit”, I find that the legislature uses it inconsistently in different parts of the SABS. Said differently, there is no single use of the term. Its meaning depends upon context.
[57] In my opinion, within the context of s. 34 as applied to s. 36(3), “time limit” as found in s. 34 refers to the “period before the completed disability certificate is submitted” as found in s. 36(3). This is effectively the “time limit” placed upon the eligibility for that benefit; similar to how the legislature used “time limit” in s. 22(2) in demarcating a coverage period.
[58] As submitted by the intervenor Ontario Trial Lawyers Association, s. 36(3) functions as a real-time disentitlement provision. It continuously denies benefits for every day a claimant fails to submit a disability certificate. Each day the form is not submitted is a day of permanently lost entitlement, even where, as in the case at bar, the claimant was medically eligible but incapable of compliance. Interpreting s. 36(3) as involving a “time limit” within the meaning of s. 34, is consistent with the wording found in the provisions and the context of the whole regulation.
[59] This interpretation is supported by the purposes of the SABS. A primary object of the SABS is consumer protection. In Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882, 148 O.R. (3d) 438, at paras. 42-43, leave to appeal refused [2020] S.C.C.A. No. 7, citing with approval MacKinnon J.’s judgment in Arts (Litigation Guardian of) v. State Farm Insurance Company (2008), 2008 CanLII 25055 (ON SC), 91 O.R. (3d) 394 (S.C.), at p. 448, the Court of Appeal said “the SABS are remedial and constitute consumer protection legislation” and the “goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and as such, assumes an importance which is both pressing and substantial.” See also Smith v. Co-Operator’s General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, at para. 11.
[60] Section 34 is meant to be remedial and inclusive: Tracy Adams v. Aviva Insurance Co., 2024 ONSC 715 (Div. Ct), at para. 21. The interpretation argued for by the respondent is restrictive and “[i]nstead of fostering fairness for people with the most health needs, it increases their suffering and economic hardship”: Kellerman-Bernard v. Unica Insurance Company, 2023 ONSC 4423 (Div. Ct.), at para. 26.
[61] Given my views, I find the LAT authorities holding to the contrary like Kunaseelan v. Aviva Insurance Company of Canada, 2022 CanLII 11134 (ON LAT), at para. 21, unpersuasive.
[62] The respondent also submits that an absurdity would result if a claimant could wait until several months or years after an accident before submitting an OCF-3 for non-earner benefits or income replacement benefits and yet still be reimbursed retroactively to the date of the accident, all the while robbing an insurer of its ability to, in real time, investigate the validity and causation of the claimant’s self-reported impairments.
[63] The respondent submits that this would leave insurers in the impossible position of either (i) having to pay retroactive benefits blindly with no ability to undertake contemporaneous investigation or (ii) incurring the cost of all manner of expert assessments and underlying investigation on all claims, just in case one claimant eventually applies for a specified benefit. It argues that none of these options can be what the legislature intended and neither of these comply with the purpose of the SABS.
[64] Respectfully, the respondent’s position ignores the requirement that a “reasonable explanation” be provided under s. 34. It will remain up to the insurer and ultimately the LAT to determine what a reasonable explanation is within the meaning of s. 34 as applied to s. 36(3). Certainly, it should permit the consideration of the legal incapacity of an applicant: Van Galder v. Economical Mutual Insurance Company, 2016 ONCA 804, 61 C.C.L.I. (5th) 41, at para. 96. But the concept of a “reasonable explanation” is broader than that. All the circumstances should be considered including what steps were taken to find a litigation guardian or a substitute decision-maker during this period of incapacity.
[65] This added flexibility permits consideration of what this Court has confirmed to be basic to the purposes of the SABS. As stated in Dominion of Canada General Insurance Co. v. Ridi (Litigation guardian of), 2021 ONSC 3707, 79 M.V.R. (7th) 78 (Div. Ct), at para 29, aff’d 2022 ONCA 564, 474 D.L.R. (4th) 321, “[a]utomobile insurance is designed to be both fair and affordable…In other words, the statutory scheme specifically contemplates that insured persons may not be fully compensated for the costs associated with their care and rehabilitation as a result of their accident”.
[66] This interpretation of these provisions is one that strikes the appropriate “balance that provides some speedy payment but, in company with, insurance rates that are not unreasonably high”: Malitskiy v. Unica Insurance Inc., 2021 ONSC 4603, 15 C.C.L.I. (6th) 281 (Div. Ct.), at para 42.
[67] While a disability certificate allows an insurer to substantively adjust the claim, s. 36(3)’s main purpose is to ensure the process of timely submission is met. Permitting the discretion to relieve those applicants who can provide a reasonable explanation under s. 34 will not impair the objectives of s. 36(3). To avoid the risk of being denied a period of benefits and because of the obvious needs of injured or disabled persons for financial support, the majority of applicants will still submit a disability certificate in a timely fashion and the insurer will not be prejudiced in adjusting a claim: Tomec, at paras. 53-54; Van Galder, at para. 95.
[68] In conclusion, the cohesive and harmonious interpretation of s. 34 is that of a safety valve to make sure a rigid adherence to the procedural requirements in claiming benefits based upon time, does not work an injustice in an individual case.[2] Indeed, this interpretation avoids an absurdity in the sense used in Tomec. In Tomec, a strict literal reading of the limitation period in the SABS under consideration conflicted with the underlying purpose and spirit of the SABS. The Court of Appeal's approach in Tomec interpreted the plain language of s. 56 of the SABS dealing with limitation periods to include the additional requirement of discoverability, something that was nowhere to be found in the SABS. The Court of Appeal’s exercise in statutory interpretation to allow for the doctrine of discoverability avoided an absurdity, promoted the purpose and object of the SABS, and increased access to justice. Hourigan J.A. highlighted the contents of this principle of statutory interpretation that eschews absurdity in the following fashion (at para. 46):Statutes are to be interpreted in a manner that does not lead to absurd results. An interpretation is absurd if it "leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislative enactment": [Rizzo & Rizzo Shoes Ltd. (Re) 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 27]. [Emphasis added.] [69] To deny a person specified benefits when they were medically incapacitated from submitting a disability certificate is more than simply “unfortunate” as the respondent describes it. It is manifestly and extremely unreasonable and inequitable. It is incompatible with the primary objective of the SABS. The legislature could not have intended such an absurd result.
[70] And it did not. It enacted s. 34 to apply to the provisions found in Part VIII, including s. 36(3).
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