The LAT decision in RBC General Insurance Company v Kuhanesa Balasubramaniam affirms that the LAT will deny an application to vary or revoke a FSCO Order if the proceedings commenced after June 8, 2019. 

The Respondent, Kuhanesa Balasubramaniam, was involved in a motor vehicle accident on August 24, 2005, and sought benefits pursuant to the SABS. FSCO issued an Order on April 13, 2010, requiring the Applicant Insurer, RBC General Insurance Company, to pay a weekly income replacement benefit of $311.21. The Order was issued by FSCO under previous legislation that is no longer in force. The Insurer submitted an application to the LAT to vary or revoke the FSCO Order. The issue is whether a FSCO Order can be amended by the LAT. The Insurer submits that the Insurance Act provides exclusive jurisdiction over accident benefits to the LAT. The current dispute is an accident benefits dispute, and therefore the LAT can resolve the dispute by amending the FSCO Order. Adjudicator Harry Adamidis rejected this submission finding that it is not supported by legislation. Section 281 of the Insurance Act governs how benefits may be reduced after the LAT issues a decision. The Insurer is seeking to reduce benefits under paragraph 2(c), which states that the Insurer may reduce benefits if authorized to do so by the Tribunal. Section 281 gives authority to reduce benefits ordered by the LAT. The adjudicator ultimate found that this authority is not extended to benefits ordered by FSCO.

The Insurer further submits that the legislature created an identical scheme and section 287 of the previous Act under which FSCO operated mirrors the legislative intent of the current Act. The legislature protected benefit payments ordered by FSCO by requiring Insurers to bring an application to request an amendment to the benefits. The scheme is reflected at the LAT under current legislation.

Adjudicator Adamidis held that the intention of the legislature is found in the transitional provisions which govern how matters from the previous Act are dealt with under the current Act. The current Act came into force on April 1, 2016, and section 22(1) provided authority to the LAT to amend FSCO Orders. As of June 8, 2019, new regulations have come into force, and section 22(1) explicitly states that no party may commence an application for a variation or revocation of an Order under subsection 284 of the pre-transition date Act.   Adjudicator Adamidis acknowledges that an accident benefit dispute exists between the parties and that the LAT has exclusive jurisdiction to resolve this dispute. The legislative intent with regard to resolving disputes arising from the previous Insurance Act is expressed in the transitional provisions in paragraph 22(2) of the current regulations which state that it must be done by way of a new application to the LAT under subsection 280(2) of the Act, and the dispute shall be resolved in accordance with the rules of the LAT. The legislation is clear and the LAT cannot vary or revoke FSCO Orders if a proceeding was commenced after June 8, 2019. The Insurer commenced this proceeding on July 22, 2019, and therefore Adjudicator Adamidis found that this matter cannot proceed. The application to vary or revoke the FSCO Order was therefore dismissed.

If this decision is correct, then there is clearly a legislative gap or lacuna which precludes a party from seeking to vary or revoke an earlier order from FSCO, where there is simply nowhere to turn to obtain such relief.  While the obvious implication is on an insurer who seeks to reduce its obligation to pay a benefit ordered to be paid ongoing by FSCO on the basis of a change of circumstances, the implication is the same for an insured person, found not entitled to a benefit or found entitled to a reduced benefit by reason of post accident income or receipt of collateral benefits.  Where the circumstances change (aggravation of injury, loss of post accident job or of collateral benefit), if the FSCO order compels payment at a lower amount, there would seemingly be no way for the insured person to alter the FSCO order.  Thus, while the Applicant in this case was obviously quite pleased with the result in capitalizing on this lacuna to the detriment of the insurer, there could be other circumstances where the insured person is penalized. 

Eric Grossman and Adrienne Bramson are authors of this blog. if you have any question about this decison or a related file, please contact Eric at [email protected] or Adrienne at [email protected].