A person is injured in a motor vehicle accident. He returns to work two days after the accident. He submits an application for accident benefits to his insurer, which denies his Income Replacement Benefit claim based on his return to work. More than two years after the denial, the insured person claims that his accident-related injuries have developed to the point that they now prevent him from returning to work. Is his IRB claim out of time? According to the recent Ontario Court of Appeal decision in The Personal Insurance Company v. Tagoe, the answer is “no” because his claim only became discoverable once he became eligible to receive the IRB.
The facts of Tagoe are important, but not unique. The accident occurred on April 28, 2016. The insured returned to work two days after the accident. He submitted an application for benefits that indicated his injuries did not prevent him from working. Three weeks after the accident, he submitted a Disability Certificate with the box checked indicating that he met the IRB disability test, but that he was also capable of working modified duties. The Disability Certificate further noted that he had been advised not to return to work, but he did so anyway for financial reasons. Upon receiving the Disability Certificate, the insurer denied the IRB because the insured continued to work, he did not meet the legal requirement for the IRB, and therefore he did not quality for the benefit.
In August 2017, the insured underwent arthroplasty surgery and stopped working. In April 2018, he suffered a stroke while recovering from surgery. In December 2019, the applicant submitted a second Disability Certificate indicating that he met the IRB disability test and was not capable of modified duties. In June 2020, in response to the second Disability Certificate, the insurer confirmed the IRB denial based on its May 2016 denial letter and the fact that the applicant had failed to dispute the initial denial within the two-year limitation period.
The insured appealed the IRB denial. The LAT adjudicator found that the initial denial letter was proper. She ruled that the insurer was entitled to pre-emptively deny the IRB, regardless of whether or not he had applied for the IRB in May 2016. Thus, the denial started the running of the limitation period.
After a request for reconsideration and the filing of two appeals, the Court of Appeal applied its 2019 decision in Tomec v. Economical Mutual Insurance Co, [1] to uphold the Divisional Court’s finding that the LAT adjudicator erred by failing to consider whether the claimant’s IRB claim was discoverable in May 2016 when he was still working. It also agreed with the Divisional Court that there was conflicting and inconclusive evidence as to whether the applicant intended to apply for the IRB in May 2016. The Court of Appeal therefore upheld the Divisional Court’s finding that the claimant did not apply for the IRB in May 2016. Rather, he only discovered the claim when he received the insurer’s June 2020 denial letter. The Court dismissed the insurer’s appeal, such that the case has been remitted back to the LAT for a determination of Mr. Tagoe’s claim of entitlement to payment of IRBs under sections 5 and 6 of the Schedule pursuant to the decision of the Divisional Court from which the insurer had appealled.
The Court of Appeal decision is problematic based on the facts of the case as presented. The facts were unlike those in Tomec, where the denial letter in question advised the claimant that she would not qualify for benefits as of a future date. In Tagoe, the insured based its denial of benefits on information that the claimant had actually returned to work two days after the accident. Furthermore, Mr. Tagoe satisfied the statutory requirements in May 2016 by submitting a completed application. The May 2016 Disability Certificate indicated that he met the legal test for the IRB. There was also never any question that the insurer’s initial denial letter was clear and unequivocal. In these circumstances, the initial denial ought to have been sufficient to commence the running of the limitation period even if the applicant did not stop working until approximately 16 months after the accident.
The case is also factually similar to previous Court of Appeal decisions – albeit in cases prior to the release of that court’s decision in Tomec – where the insured person returned to work and the Court found the insurer’s denial was valid and not premature. For example, in Bonaccorso v. Optimum Insurance, [2] the applicant returned to work 16 months after the accident in February 2008. In June 2009, the insurer denied funding further IRB’s based on her return to work. In 2011, she stopped working due to her injuries from the accident. In 2012 she requested reinstatement of the IRB. The insurer then denied the claim based on the expiration of the limitation period. The court confirmed the denial was valid and that the insured’s appeal was out of time.
The clearest take away from Tagoe is that after Tomec, an IRB denial that is found to be pre-emptive does not commence the running of the limitation period. The Court of Appeal’s decision also suggests that the Tribunal in this case ought to have issued a more definitive ruling at first instance regarding whether or not Mr. Tagoe had actually applied for IRBs in May 2016. Arguably, based on the facts of the case as presented in the decisions, it appears that he did so.
Jonathan White is the author of this blog and associate at ZTGH. If you have a question about this decision or a similar file, please contact Jonathan at 416-777-5204.
[1] Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882.
[2] Bonaccorso v. Optimum Insurance Co, 2016 ONCA 34.at
