November 01, 2017, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
LK and Guarantee - 16-003577 v The Guarantee, 2017 CanLII 56674 (ON LAT)
Date of Decision: August 11, 2017
Heard Before: Adjudicator Gemma Harmison
INCOME REPLACEMENT BENEFITS: Applicant fails to provide information requested in timely manner; applicant fails to show reason for delay; insurer well within right to request information
LK was injured in car accident on October 9, 2001, and was receiving IRBs from Guarantee. Effective July 13, 2016, Guarantee suspended payment of LK’s IRBs because LK had not provided certain documentation which Guarantee had requested. Subsequently, on or about December 19, 2016, Guarantee reinstated payment of LK’s IRBs after LK provided Guarantee with the requested documentation. No IRBs were paid to LK by Guarantee between the date of suspension and the date of reinstatement. LK submitted an application to the LAT to resolve the dispute. LK seeks payment of IRBs for the disputed period, and costs of the proceeding.
- Is LK entitled to receive income replacement benefits for the disputed period of July 13, 2016 to December 19, 2016?
- Is LK entitled to costs of the proceeding?
- LK is not entitled to payment of IRBs for the disputed period.
- LK is not entitled to costs of the proceeding.
At issue in particular is Guarantee’s request for LK’s Canada Pension Plan Disability file (“CPPD file”).
Guarantee sent a letter dated April 12, 2016 to LK asking that she provide Guarantee with certain documents by May 3, 2016. This letter advised LK that Guarantee was requesting the foregoing documentation per section 33(1) of the Schedule in order to assess LK’s (ongoing) entitlement to IRBs. The letter asked that LK provide the requested documentation to Guarantee by May 3, 2016, and informed her that Guarantee was not liable to pay IRBs to LK “in respect of any period during which you failed to comply with this request…until such time as you do provide the requested information and/or documentation.” The letter went on to advise that if LK “[did] provide the requested information and/or documentation, we will resume payment of [IRBs] to which you may be entitled.”
The letter further advised LK as follows: “Only the benefits withheld during the period of non-compliance will be considered if you provide a reasonable explanation for the delay in complying with this request…Therefore, if you would like to make a claim for any withheld [IRBs], we will also require that you provide an explanation for the delay.”
Guarantee subsequently sent a letter dated May 9, 2016 to LK. In this letter, Guarantee not only requested that LK provide the information that had been requested in Guarantee’s previous letter of April 12, 2016 letter (i.e. the two forms), but also asked that it be provided with a copy of LK’s CPPD file in order for Guarantee to assess LK’s (ongoing) entitlement to IRBs. The letter asked that LK provide the requested documentation to Guarantee by May 31, 2016. The letter noted that “no [IRBs] will be payable for the time period that you do not comply with our request.” Guarantee again included the following statements: “Only the benefits being withheld during the period of non-compliance will be considered if you provide us with a reasonable explanation for the delay in complying with this request…Therefore, if you would like to make a claim for any withheld [IRBs], we will also require that you provide an explanation for the delay.”
May 20, 2016 letter from applicant’s counsel to Guarantee that letter contained a single sentence, “Further to your letter of May 9, 2016, we enclose herewith the requested signed releases.” [i.e. the two forms].
Guarantee sent a letter to LK dated June 24, 2016 referring back to its earlier letter of May 9, 2016 in which Guarantee had requested a copy of LK’s CPPD file by May 31, 2016. Guarantee advised that it had not received or been allowed access to LK’s CPPD file, which it had requested in order to assess LK’s (ongoing) entitlement to IRBs. Guarantee put LK on notice that since the CPPD file had not been received by the May 31, 2016 deadline, LK was “now considered in non-compliance” and that her IRB payments would be suspended effective July 13, 2016. The letter indicated that if LK provided or allowed Guarantee access to the CPPD file, Guarantee would resume payment of LK’s IRBs to which she may be entitled. The letter further advised that the IRBs withheld during the period of non-compliance would be considered if LK provided a reasonable explanation for the delay in providing the requested documentation.
LK’s counsel sent a letter to the federal government dated October 11, 2016 requesting a complete copy of LK’s CPP records. The federal government sent the information to LK’s counsel November 8, 2016. LK’s counsel sent a letter to Guarantee dated December 14, 2014 enclosing the records received from the federal government.
LK seeks “retroactive reinstatement” of IRBs for the disputed period, asserting that Guarantee “was not entitled to terminate the benefits for a number of reasons”, as summarized below:
- LK contends that the word used in section 33(1) is “eligibility”. Based on this contention, LK argues that Guarantee is only entitled to obtain information that deals with “eligibility of benefits” which LK asserts speaks only to the threshold questions of whether LK was employed at the time of the accident and whether LK was disabled from working as a result of the accident. LK further submits that Guarantee’s request for CPPD documentation “was for the purpose of determining quantum of the [IRBs]” and that the request for the CPPD file “was outside the purview of the regulations as the requested information did not deal with the issues of eligibility and rather that of quantum.”
- LK contends that Guarantee was already “well aware” that LK would not qualify for CPPD, asserting that it “is common ground and well-known to a sophisticated insurance company” that an individual must have worked in Canada and contributed to CPP for at least four years to qualify. LK asserts that it was clearly evident from LK’s statement dated October 24, 2001 submitted to Guarantee that LK had “only worked in Canada for three years” and thus would not be entitled to CPPD benefits.
- LK further contends that awareness that LK had not worked for four years in Canada was also apparent from other documentation, referring in particular to “Case Conference Brief at Tab Four, eighth page.”
- LK submits that Guarantee waited some 15 years after the accident to raise the issue of CPPD and argues that from this delay it can be drawn that Guarantee “made the request as a form of harassment or an attempt to terminate the benefits for reasons that are unfounded in fact or law.”
- In the alternative, LK asserts that there was a reasonable explanation for the delay in providing the requested CPPD file. In this connection, it was LK’s belief that by providing the two completed forms to Guarantee, LK had satisfied all of Guarantee’s requirements. LK contends that, once it became apparent that Guarantee “was dissatisfied with the compliance”, LK “retained counsel to obtain the [CPPD] file” which confirmed that LK was not entitled to CPPD.
- In the further alternative, LK submits that Guarantee “should not be rewarded” for sending LK “on a paper chase to obtain the necessary information”, asserting that Guarantee could have asked LK to execute a release to obtain the CPPD file “as was done with respect to medical records”.
Guarantee asserts that the request for the CPPD file was “proper to determine the correct amount of the IRB benefit” to which LK is entitled, and that insurers “are entitled to deduct payments of CPPD from IRB payments” and in this connection cited in its submissions the applicable sections of the Schedule in effect at the time of the accident. Guarantee further asserts that, in view of the provisions it cited in its submissions above, it made a request of LK for the CPPD file pursuant to section 33 of the Schedule.
Guarantee submits, and has included case law in support of its position, that the purpose of section 33 is “to ensure that insured persons facilitate the insurer’s ability to obtain sufficient information to assess a claim for benefits”, and that it “has long been established that these requests include determining quantum.”, and therefore contends that it was correct in its requests for information from LK, including the CPPD file. Guarantee further submits that no evidence or law was produced by LK to the contrary.
Guarantee asserts that it was therefore entitled to suspend payment of LK’s IRB payments until the CPPD documentation it had requested from LK had been received. In its submissions, Guarantee additionally makes note of the following:
- Guarantee’s letter of May 9, 2016 (in which the request for the CPPD file was originally made) indicated that LK’s IRB benefits would be suspended if the requested documentation was not received by May 31, 2016. Guarantee did not immediately suspend LK’s IRBs and instead Guarantee sent a follow-up letter granting her additional time to provide the requested documentation failing which her IRBs would be suspended effective July 13, 2016. Guarantee submits that it received no response from LK to its June 24, 2016 letter, “not even an acknowledgement.” Guarantee submits that, rather than providing the requested documentation, LK proceeded to file an application to the Tribunal.
- Once the CPPD file was produced to Guarantee “on December 19, 2016, the benefits were duly reinstated.”
- Guarantee submits that the record shows LK and her counsel took no steps to obtain the CPPD file until October 7, 2016, “some 5 months after” Guarantee had requested the CPPD file in its May 9, 2016 letter.
- The record further shows that the letter sent by the federal government dated November 8, 2016 to LK’s counsel enclosing the requested records was date stamped November 22, 2016, but was not sent to Guarantee for over three weeks.
Guarantee contends that no reasonable explanation from LK for the delay was provided to Guarantee which “could mitigate the suspension.”
Guarantee also disagrees with LK’s assertion that LK’s statement of October 24, 2001 to Guarantee made clear that LK had only worked in Canada for three years. Guarantee submits that LK’s statement “indicates a working history of unknown years, continuous or otherwise”, and does not disclose when LK “arrived in Canada and when she commenced work.” In response to the issue raised by LK as to the passage of 15 years as between the date of the accident and Guarantee’s request for the CPPD file, Guarantee submits that there is “no prohibition or limitation as to when [insurer’s requests for information] can be made” and that LK “refers to no authority to support her argument.” In conclusion, Guarantee submits that it correctly requested the CPPD file two times, properly suspended LK’s IRB when LK did not comply with the request and, once the CPPD file had been produced, Guarantee reinstated LK’s IRBs.
The onus rests with LK to prove, on a balance of probabilities, entitlement to the relief being sought in this application. Having considered the submissions and evidence before me, the Adjudicator found that LK has failed to meet that onus for the following reasons:
- Issue 1 - Disputed period of IRBs. Contrary to LK’s submissions, the word contained in section 33(1) is “entitlement”, not “eligibility”.
- LK presented no evidence or case law to support the contention that section 33(1) is or should be narrowly confined to limit an insurer to requesting only documentation that addresses threshold issues of employment status at the time of the accident and disability arising from the accident.
- The Adjudicator disagreed with LK’s assertion that LK’s statement of October 24, 2001 to Guarantee clearly demonstrated to Guarantee that LK had only been working in Canada for three years at the time of the accident and therefore would not be eligible to CPPD in any event. It is not clear from her statement whether LK was describing her entire employment history, or only her employment positions in the time most contemporaneous to the accident. The statement does not clearly articulate when [i.e. what year] LK first came to Canada, or the year she first obtained employment in Canada.
The remaining issues to decide are:
- whether Guarantee’s request for the CPPD file was reasonably required as per section 33(1) of the Schedule, and
- whether LK has, as per section 33(4) (b) of the Schedule, provided a reasonable explanation for the delay in providing the CPPD file to Guarantee.
Guarantee submits that its request for the CPPD file was properly made, and in support of its position cited section 2(9) of the Schedule, which specifically identifies CPPD benefits as an “income continuation benefit plan” that can reduce the amount of IRBs payable to an insured under section 7(1). Guarantee has however overlooked in its submissions reference to section 2(10), which provides that Subsection (9) only applies in respect of accidents that occur on or after January 1, 2002.
The accident in which LK was injured happened on October 9, 2001. This was before CPPD was specifically and explicitly identified as an “income continuation benefit plan” subject to reduction from IRBs under section 7(1). This does not, however, cause an automatic finding that Guarantee was altogether precluded from requesting LK’s CPPD file. Before section 2(9) was added making clear that CPPD was a collateral benefit to be deducted from IRBs, it was left open to interpretation and argument as to whether, in the circumstances of a particular case, CPPD benefits should or should not be deducted when assessing IRBs.
The onus rests with LK to prove her case that Guarantee’s request for her CPPD file was not reasonably required. Guarantee contends that its request for LK’s CPPD file was reasonably made. LK did not submit a reply or any case law in response to Guarantee’s submissions to persuade me otherwise. Accordingly LK has failed to prove that Guarantee’s request for the CPPD file was not reasonably required.
Has LK has provided a reasonable explanation for the delay in providing the CPPD file to Guarantee?
Guarantee first asked for LK’s CPPD file in its letter to LK dated May 9, 2016. In its submissions, Guarantee contends that it did not receive a response from LK or LK’s counsel, or even acknowledgement, to the June 24, 2016 letter. LK has not adduced any evidence or documentation to dispute Guarantee’s assertion in that respect. LK submits that Guarantee could have asked LK to sign a release allowing Guarantee access to the CPPD file rather than sending LK “on a paper chase” to obtain that documentation.
The Adjudicator found a number of problems with LK’s submissions on the reasonable delay issue. First, it is clear from the evidence on record that LK’s counsel had been acting for LK even before Guarantee sent its June 24, 2016 letter. LK’s counsel wrote to Guarantee on May 20, 2016 and in that letter directly referred to Guarantee’s letter of May 9, 2016, which was, notably, when Guarantee specifically requested LK’s CPPD file. There is no evidence to show that LK contacted or corresponded with Guarantee to advise Guarantee about any delay in obtaining the CPPD file. Further, LK has provided absolutely no explanation as to why the CPPD file was not requested until October 7, 2016 (some five months after Guarantee first requested it in the May 9, 2016 letter, and more than three months after Guarantee’s follow-up letter of June 24, 2016). Nor has any explanation been provided as to why, having received the CPPD file on or about November 22, 2016, it was not forwarded to Guarantee for a further three weeks until mid-December 2016.
For all of the foregoing reasons LK has failed to prove that Guarantee’s request for her CPPD file was not reasonably required. LK has failed to provide a reasonable explanation for the delay in producing her CPPD file to Guarantee. Accordingly, LK has not proven, on a balance of probabilities, that she is entitled to IRBs for the disputed period.