



COURT OF APPEAL FOR ONTARIO

CITATION: Sietzema v. Economical Mutual Insurance
    Company, 2014 ONCA 111

DATE: 20140211

DOCKET: C57368

Juriansz, Pepall and Strathy JJ.A.

BETWEEN

Tanya Sietzema

Plaintiff (Appellant)

and

Economical Mutual Insurance Company

Defendant (Respondent)

Jane Poproski, for the appellant

Lisa Armstrong and Shalini Thomas, for the respondent

Heard: January 28, 2014

On appeal from the order of Justice James W. Sloan of the
    Superior Court of Justice, dated June 21, 2013, with reasons reported at 2013
    ONSC 4299.

ENDORSEMENT


[1]

The motion judge granted summary judgment, dismissing the appellants claim
    for statutory accident benefits as time-barred. She appeals.

[2]

The appellant was involved in a car accident on November 11, 2005. On
    November 16, 2005, the respondent sent her an application package for benefits
    under the
Statutory Accident Benefits Schedule
, O. Reg. 403/96 (SABS),
    including application forms and a summary of the benefits available to her,
    subject to eligibility.

[3]

The appellant filed an application for benefits on November 29, 2005. She
    was employed at the time of the accident and her application included an
    Employers Confirmation Form, giving details of her employment and income. It
    also included a Disability Certificate, signed by her physician. That form described
    her injuries and included the physicians response to questions about the
    appellants eligibility for various benefits. Under Income Replacement Benefits,
    the physician answered yes to the question whether the appellant was substantially
    unable to perform the essential tasks of his/her employment at the time of the
    accident as a result of and within 104 weeks of the accident. This indicated
    that in the physicians opinion she met the disability test for Income
    Replacement Benefits. Under the category Non-Earner Benefits, the physician
    answered No to the question, Does the applicant suffer a complete inability
    to carry on a normal life? This answer indicated that in the physicians
    opinion the appellant did not meet the disability test for Non-Earner
    Benefits.

[4]

The respondent replied to the appellants application on December 19,
    2005. It sent her a form entitled Explanation of Benefits Payable by Insurance
    Company (OCF-9). This stated she was eligible for Income Replacement Benefits
    of up to $400 per week and that no benefit was payable beyond March 2, 2006, as
    her injury fell under the Whiplash Grade II Guideline. The form indicated that
    she was not eligible for Non-Earner Benefits because she was employed at the
    time of the accident.

[5]

Although the appellant was not eligible for Non-Earner Benefits, the
    reason given by the respondent was wrong. She was not eligible for Non-Earner Benefits
    because she qualified for Income Replacement Benefits and the SABS did not
    permit her to receive both benefits. Although it was generally assumed in the
    insurance industry in 2005 that employment at the time of the accident
    precluded receipt of Non-Earner Benefits, this courts decision in
Galdamez
    v. Allstate Insurance Company of Canada
, 2012 ONCA 508, 111 O.R. (3d) 321,
    clarified that, rare though the situation might be, a person who was able to
    continue to work might nevertheless qualify for Non-Earner Benefits.

[6]

The OCF-9 explained the appellants right to dispute the insurers
    assessment of her claim and to have the claim addressed through mediation
    followed by arbitration, litigation or neutral evaluation. At the bottom of the
    page, under the heading, WARNING: TWO YEAR TIME LIMIT, it explained she had
    two years from the insurers refusal to pay a benefit, or from reduction of a benefit,
    to arbitrate or commence a lawsuit.

[7]

The appellant returned to work on February 13, 2006. The respondent
    terminated her Income Replacement Benefits on March 2, 2006. The appellant had
    retained counsel in January, 2006, shortly after receiving the OCF-9. However,
    she did not re-assert a claim for Non-Earner Benefits until February 3, 2010,
    when her lawyer wrote to the respondent stating that the appellant had not been
    informed on the termination of her Income Replacement Benefits that she had a
    right to claim Non-Earner Benefits. The lawyers letter took the position that
    there had been no refusal of Non-Earner Benefits and the limitation period
    had not started to run. There followed an unsuccessful mediation of the
    appellants claim. The statement of claim in this action was issued on April
    14, 2011.

[8]

Section 281.1(1) of the
Insurance Act
, R.S.O. 1990, c. I.8, and
    s. 51(1) of the SABS establish a two year limitation period for the
    commencement of litigation or arbitration after the insurers refusal to pay a benefit
    claimed.

[9]

The appellants submission before the motion judge and in this court is
    that the respondent misled her concerning her entitlement to Non-Earner Benefits.
    She thought she could never receive the benefits because she had been working
    at the time of the accident, so she did not apply for them when her Income Replacement
    Benefits were terminated. At the time the respondent terminated her Income
    Replacement Benefits, she should have been told of her right to apply for
    Non-Earner Benefits.

[10]

The
    motion judge held that although the appellant may have been personally misled,
    she had hired a lawyer in early 2006 to advise her of her rights as a result of
    the accident and this would have included her right to accident benefits. Her
    lawyer would have known that limitation periods were running. The OCF-9
    contained a clear refusal to pay Non-Earner Benefits, and this triggered the
    limitation period in s. 51(1) of the SABS, which required mediation to be
    commenced within two years after the insurers refusal to pay the amount claimed.

[11]

The
    appellant says the motion judge erred. The fact that she retained a lawyer in
    2006, and did not commence an action until 2011, is irrelevant and has no
    effect on the insurers duty to provide complete information to its insured. She
    relies on
Smith v. Co-Operators General Insurance Co.
, 2002 SCC 30,
    [2002] 2 S.C.R. 129, in which the Supreme Court of Canada emphasized the
    importance of consumer protection in insurance law and the need for
    bright-line boundaries between the permissible and the impermissible (at
    para. 16). In that case, a majority of the court held the limitation period did
    not begin to run because the insurer had failed to notify the claimant of the
    limitation period as a feature of the dispute resolution process.

[12]

Here,
    the appellant submits the insurer breached its duty to provide her with a
    written explanation of the benefits available and to assist her in applying for
    them: SABS, ss. 32(2)(b) and (c). We disagree. The information package sent to
    the appellant complied with the SABS and stated the test for Non-Earner Benefits
    as it was then understood, including the requirement that the claimant suffer a
    complete inability to carry on a normal life as a result of the injuries
    sustained. The appellants physician stated that she did not meet this
    disability test. The appellants real complaint is that she was given an
    incorrect reason for her ineligibility for Non-Earner Benefits.

[13]

That
    argument is answered by this courts decision in
Turner v. State Farm
    Mutual Automobile Insurance Co.
(2005), 195 O.A.C. 61. In that case, this
    court held that clear and unequivocal notice given by the insurer, cancelling
    the insureds benefits, was sufficient to trigger the limitation period,
    notwithstanding the insurer gave legally incorrect reasons for cancelling the
    benefit. The court stated, at para. 8:

We also conclude that the Divisional Court erred in requiring
    that the reasons for cancelling the benefit must be legally correct. Section
    24(8) of the
Statutory Accident Benefits Scheme
obliges the insurer to
    give the insured the reasons for the refusal. It does not provide that the
    reasons must be legally correct. The purpose of the requirement to give reasons
    is to permit the insured to decide whether or not to challenge the cancellation.
    If the reasons given are legally wrong the insured will succeed in that
    challenge. Requiring that the reasons be legally correct goes beyond both the
    requirement in the relevant regulation, and the purpose of such a notice.

See also
Katanic v. State Farm Mutual Automobile
    Insurance Co.
, 2013 ONSC 5103, [2013] O.J. No. 3605; and
Sagan v.
    Dominion of Canada General Insurance Co.
, 2013 ONSC 7886, [2013] O.J. No.
    6022.

[14]

Here,
    the OCF-9 sent to the appellant clearly stated that she had been approved for
    Income Replacement Benefits, which would terminate on March 2, 2006, and that
    the respondent had determined she was not eligible for Non-Earner Benefits. The
    form gave her clear notice of her rights to mediation, followed by arbitration,
    litigation or neutral evaluation if she wished to dispute the refusal or
    reduction of benefits. It also gave her clear notice of the two year limitation
    period. She admitted on cross-examination that when she received the OCF-9 she
    knew she was being denied Non-Earner Benefits. The limitation period began to
    run when the appellants claim for Non-Earner Benefits was refused.

[15]

There
    is nothing in the
Insurance Act
or the comprehensive SABS regime to
    require an insurer, on termination of benefits, to give the claimant a further
    notice advising that he or she may have a right to renew a claim for a benefit
    that had previously been denied. As this court observed in
Haldenby v.
    Dominion of Canada General Insurance Co.
(2001), 55 O.R. (3d) 470, at
    para. 30,

there is no provision in the [
Insurance Act
] or the
    SABS which allows a claimant to reapply for further benefits after an insured
    persons benefits have been terminated by the insurer. The only remedy for the
    insured person is to appeal the termination of benefits within the two-year period.

[16]

If
    we accepted the appellants argument, the limitation period for making a claim
    for Non-Earner Benefits never began to run. This would defeat one of the
    primary purposes of the SABS regime, namely, to ensure the timely submission
    and resolution of claims for accident benefits.

[17]

For
    these reasons, the appeal is dismissed, with costs to the respondent in the
    agreed amount of $6,000.00, inclusive of applicable taxes and disbursements.

Russell
    G. Juriansz J.A.

Sarah E.
    Pepall J.A.

G.R.
    Strathy J.A.


