Adjudicator Jesse Boyce reaffirms in R.S. vs. Pafco Insurance Company, that the limitation period for income replacement benefits (“IRBs”) is triggered by the denial of the benefit, notwithstanding that there is a different test for entitlement to IRBs before and after the 104 week mark from the date of the impairment.
In Pafco, The applicant sought various benefits, including IRBs from his insurer, Pafco. IRBs were eventually terminated and the applicant applied to the LAT to have the benefit reinstated.
Despite significant delays in appealing Pafco’s denials (130 days after the termination of IRBs and 334 days following the expiry of the limitation for a disputed treatment plan), the applicant sought relief under s. 7 of the Licence Appeal Tribunal Act (“LAT Act”). In addition, the applicant attempted to rely on the Ontario Court of Appeal’s decision in Tomec v. Economical Mutual Insurance Company, alleging that the limitation period to claim IRBs had not expired because of the discoverability doctrine.
Discoverability Doctrine and IRBs
The applicant advanced the novel position that IRBs within 104 weeks of disability are a separate benefit than IRBs beyond 104 weeks, thereby constituting separate causes of action. Therefore, the cause of action for entitlement to IRBs beyond 104 weeks is not discoverable until the insured has been disabled for at least 104 weeks.
The applicant’s argument was rejected on the basis that Tomec dealt with attendant care and housekeeping benefits in the CAT Context. Further, Adj Boyce found no indication that the Tomec decision overturned the Ontario Court of Appeal’s decision in Bonillia, which established an insured’s cause of action for IRBs crystallizes when a notice of termination is received. Further, Adjudicator Boyce noted that accepting the applicant’s argument would have the effect of overturning the finding from a further decision of the Ontario Court of Appeal, Bonaccorso, that IRBs constitute a single claim.
The applicant’s request for relief under s. 7 of the LAT Act was rejected. Unsurprisingly, the applicant’s admission of mere inadvertence as an explanation for filing an appeal 130 days after termination of IRBs and 334 days following the expiry of the limitation for a disputed treatment plan were not reasonable grounds for granting relief. Therefore, Adjudicator Boyce held the applicant was statute-barred from proceeding with his claim for IRBs and other benefits under the Schedule for failure to appeal Pafco’s denials within the two-year limitation period.
Given the plethora of disputes arising under 56 of the Schedule, the Pafco decision provides welcome clarity to the state of law on limitation periods in the context of IRBs. Following Pafco, it is now clear that IRBs constitute a single claim and the limitation period is triggered by the denial, notwithstanding the recent decision in Tomec which until the release of Pafco had cast uncertainty into this issue.
Further, the Pacfco decision reinforces the expectation that insured’s with bona fide claims must be attentive to the timeliness requirements under s. 56 of the Schedule. As made clear by Adjudicator Boyce, mere inadvertence in appealing a denial of benefits within the two-year deadline will be insufficient grounds to warrant relief under s. 7 of the LAT Act.