Doctrine of Discoverability Applies: Tomec v. Economical
Dec 03, 2019
Significant implications stem from the recent decision of the Ontario Court of Appeal (“ONCA”) in Tomec v. Economical, 2019 ONCA 839 (“Tomec”), released November 8, 2019. This decision overturned the previous decision of the Divisional Court which upheld decisions from the LAT.
The Applicant, Ms. Tomec, was seriously injured in pedestrian motor vehicle accident on September 12, 2008. Her insurer, Economical Insurance Company (“Economical”), funded her attendant care and housekeeping and home maintenance benefits until the 104 week anniversary of her accident on September 12, 2010, as required by her policy as it applied to non-catastrophically impaired claimants. Ms. Tomec was formally advised in writing that her entitlement to the funding for these two benefits would expire effective September 12, 2010 on the basis that she was not catastrophically impaired and the coverage period therefore ended at the 104 week mark. She was provided with notice of her right to dispute this decision within two years of receiving this letter and of the various options available to her. The two year limitation period from the denial date expired on September 12, 2012. It was not until November 2015 that Economical accepted Ms. Tomec’s application for catastrophic impairment. It would have been at this time that the enhanced accident benefits associated with this designation would potentially have been made available to Ms. Tomec, subject to her meeting the requirements pursuant to the SABS. Ms. Tomec initiated a LAT Application in 2016, with respect to the entitlement to funding of attendant care and housekeeping and home maintenance benefits.
In Tomec, the issue was whether litigation would have to be commenced within two years of Economical’s denial of entitlement to the funding of Ms. Tomec’s housekeeping and home maintenance and attendant care benefits, pursuant to section 281.1 (1) of the Insurance Act, to allow her to proceed with her LAT Application and the potential entitlement to the funding of these benefits once she attained the catastrophic designation.
In its decision, the ONCA relied heavily upon that recent Supreme Court of Canada (“SCC”) decision, Pioneer Corporation v. Godfrey, 2019 SCC 42 (“Pioneer”), a case that was not available to the Divisional Court at the time of its decision. In this case, the SCC elaborated on the doctrine of discoverability and its application. In summary, the SCC held that “where the running of a limitation period is contingent upon the accrual of a cause of action or some other event that can occur only when the Plaintiff has knowledge of his or her injury, the discoverability principle applies in order to ensure that the Plaintiff had knowledge of the existence of his or her legal rights before such rights expire.”
The ONCA concluded that applying a hard limitation period in the Tomec case would be contrary to the purposes of the Statutory Accident Benefits Schedule (“SABS”) and the decision of the SCC in Pioneer. The SABS, as consumer protection legislation, is designed to provide protection to insured claimants and ensure fair compensation. The application of a hard limitation period in a situation where Ms. Tomec’s potential entitlement to a benefit had not yet arisen, would be speculative, at best, and place her in an impossible situation, as any declaratory request would likely not be granted.
An absurd result would arise if Ms. Tomec was required to claim a benefit when she was ineligible to do so. By enforcing a hard limitation period in the circumstances, Ms. Tomec would be barred from making a claim for benefits that the SABS intended to provide, thereby usurping the nature of the legislation, namely consumer protection.
Barring an appeal to the Supreme Court of Canada and the potential for a different outcome resulting from same, which is unlikely due to the application of Pioneer, this decision could have far reaching implications in its application to the handling of accident benefit matters. Where it has previously been decided that catastrophic status is not a benefit, and thus no limitation applies to it, up until the within Court of Appeal decision, insurers have had the ability to create more certainty around late claims for catastrophic designations by denying the underlying benefits that only exist if someone is catastrophic, and rely on the two year limitation. This decision puts an end to that practice.
Melinda Baxter is the an associate at the firm and author of this blog. For more information about this decision or if you have a question about a similar file, please contact Melinda at 416-777-5240.