Letter From Insurer Ambiguous - SR and Aviva Insurance Canada, 2018 CanLII 13157 ON LAT 17-004556

June 04, 2018, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer


SR and Aviva Insurance Canada, 2018 CanLII 13157 ON LAT 17-004556

Date of Decision: February 13, 2018-02-13|Heard Before: Adjudicator Christopher A. Ferguson

WAS THE DENIAL FROM THE INSURER CLEAR: the letter from the insurer was not clear; application is not statute-barred

SR was in a car accident on December 28, 2014 and applied for benefits from Aviva pursuant to the SABs. When the disputed benefits were denied SR applied to the LAT.

Aviva has raised a preliminary issue that could prevent the Tribunal from hearing this appeal.  It asserts that SR is “statute barred” from appealing its refusal to pay claimed IRBs because she failed to commence her appeal within two years of the date that her claim for benefits was denied as required by s. 56 of the Schedule.

The Tribunal issued an order dated October 31, 2017 for a hearing of the preliminary issue that directs:

  1. If SR’s appeal for IRBs is statute-barred, then it will be dismissed.
  2. If SR’s appeal for IRBs is not statute-barred, there will be an order that the Tribunal schedule a case conference to deal with the substantive issues in dispute.


Is SR barred from appealing Aviva’s denial of her claim for IRBs under s.56 of the Schedule because her appeal was filed more than two years after the insurer refused them?


The appeal is not statute-barred under s.56, and the appeal should proceed by way of a case settlement conference to be scheduled by the Tribunal.


Under s.56 of the Schedule, an appeal of an insurer’s denial of a benefit must be commenced within two years after the insurer’s refusal to pay the amount claimed.  The two years is called the “limitation period”.  If an appeal is not filed within the two-year limitation period prescribed by s. 56, then the Tribunal cannot hear it: the appeal is effectively dismissed without a hearing.  The appeal is said to be “statute barred.”  Section 11 of the Schedule prescribes that a person receiving an IRB may return to work or start new work without affecting his or her entitlement to resume receiving IRBs if he or she is unable to continue working as a result of the accident.  This only applies to the period during the first 104 weeks after receiving the IRB.

SR filed her first disability certificate on January 21, 2015 and was paid IRBs from January 4 to February 25, 2015.  Aviva insurer stopped the IRB payments when SR resumed working, and sent her a letter explaining its action, dated March 4, 2015.

In its letter of March 4, 2015, Aviva stated:

  1. its reason for stopping IRB payments, namely SR’s return to work;
  2. “Should you be off work again due to the injuries sustained [in the] accident, we would require an updated Disability Certificate (OCF-3) to determine your eligibility”;
  3. notice that the Schedule requires an applicant for a specified benefit to submit a completed OCF-3 that indicates she meets the disability test for IRBs; and
  4. notice that “there is no entitlement to benefits for any period before the updated OCF-3 is submitted.”
  5. a standard-form description of the procedure that SR could follow if she disagreed with the insurer’s decision, characterized as “this decision” – the same boilerplate used by the insurer in letters approving claimed benefits.
  6. a warning that the recipient “has TWO YEARS from the date” of the insurer’s “refusal to pay, or a reduction of a benefit, to arbitrate or commence a lawsuit in court”.

The letter of March 4, 2015 also included paragraphs outlining SR’s entitlement to IRBs for the period from January 4 to February 24, 2015, a statement of the calculation of the benefit and confirmation that payment of the IRB would be sent to SR under separate cover.

SR indicates that she had to stop working on May 31, 2015 as the result of symptoms arising from her accident-related injuries.

On June 15, 2015, SR received a letter from Aviva, which did not mention IRB issues expressly, but did request medical and income tax records for 2015.

SR obtained a second OCF-3 dated June 13, 2017.  SR filed her appeal with the Tribunal on July 17, 2017.

Aviva responded with a request to bar SR’s appeal as being filed after the limitation period set out the Schedule.

This dispute turns on whether or not Aviva’s letter of March 4, 2015 was a “clear and unequivocal” denial of SR’s claim for IRBs.  If it was, then the appeal is statute-barred, and the Tribunal cannot hear it.  If it was not, then I will order the matter to be heard.

For an insurer to be able to rely on the limitation period, it must provide SR a valid refusal of benefits that states a clear and unequivocal denial, it must give reasons for the denial, and it must provide a description of the dispute resolution process. The onus is on the insurer to establish that SR has received the proper notice of denial and that the denial was clear and unequivocal.

SR argues that Aviva insurer never provided her with a clear and unequivocal denial of the claimed benefit.  She contends that the letter from Aviva insurer dated March 4, 2015 and subsequent letters led her to believe that Aviva insurer would reconsider its decision to terminate IRB payments if she provided it with an updated disability certificate (“OCF-3”).

Aviva’s position is exactly the opposite: it contends that the March 4, 2015 letter was a clear and unequivocal denial of the claimed IRBs.

On reviewing the evidence the Adjudicator found that Aviva insurer’s letter of March 4, 2015 did not constitute a clear and unequivocal refusal to pay further IRBs, because:

            i.      The Adjudicator interprets it as clearly informing SR that she remains eligible for further IRBs if she has to leave work due to her accident-related injuries and submits an updated OCF-3 so that the insurer can determine her eligibility.

            ii.      It lacks any statement that the insurer would only consider an updated OCF-3 if it were sent within two years of the letter.

           iii.      The letter’s notice of a limitation period on SR’s right to dispute its termination of IRBs was equivocal because it referred to “this decision” [emphasis mine].  I find that “this decision” could reasonably be interpreted to:

a.   include the stipulation by the insurer that it would reconsider her IRBs upon submission of an updated OCF-3, and

b.   exclude any future “s.11 decision” by Aviva made with respect to an updated OCF-3 and accompanying documents.

           iv.      The wording of the bold-typed paragraph on page three of the letter, warning of a two-year time limit for commencing arbitration (i.e. an appeal), does not reinforce Aviva’s interpretation that it has set the limitation period running on future IRB claims.

            v.      As the result of my observations in subparagraphs i.-iv., I find that the letter could reasonably lead SR to believe that her options with respect to the IRBs were being kept open in case her circumstances changed – and not to believe that it had denied her eligibility for IRBs with finality.

           vi.      The ambiguity I see in the denial notice should be interpreted in favour of the insured, applying the contra proferentum rule that laws purporting to be consumer protection should be interpreted generously in favour of consumers, a widely understood principle in consumer and insurance contract law, articulated in Balzer and confirmed by the Supreme Court in numerous cases, including Smith.

The application is not statute-barred.


Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, LAT Case, LAT Decisions

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