By Brandon Pedersen and Cassandra De Marco, Articling Student
The foundational case of Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 (Tomec) played a significant role in the recent Ontario Court of Appeal decision of The Personal Insurance Company v. Tagoe, 2024 ONCA 894 (Tagoe).
Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 is the leading case for discoverability as it applies to the SABS. In Tomec, the Court of Appeal ruled that the limitation period for catastrophic impairment benefits did not begin until a claimant’s condition met the threshold requirement. This limitation period does not begin even if there is an earlier denial that appeared final.
First, Tomec held that the two-year limitation period under s. 56 of SABS is subject to discoverability. This means that the limitation period does not start until the insured knows of the potential entitlement. This was seen in Tagoe, since Mr. Tagoe’s eligibility for IRBs did not become known until 2019 when his condition deteriorated.
Secondly, Tomec provided that premature denials are invalid. Tomec emphasized that limitation periods do not begin because of a premature denial of benefits. This was applied in Tagoe, as The Personal Insurance Company pre-emptively denied Mr. Tagoe’s access to IRBs in their May 2016 Explanation of Benefits.
In Tagoe, the Court of Appeal applied the ruling in Tomec to determine when the s. 56 limitation periods begin.
The Facts of Tagoe
In April 2016, the Applicant, Samuel Tagoe, was involved in a motor vehicle collision and sustained injuries. However, due to his financial situation, Mr. Tagoe continued working. During that time, he submitted accident benefits forms including an OCF-1, where he indicated his injuries were not preventing him from working, and an and OCF-3, indicating that he was substantially unable to perform the essential tasks of his employment and that he was unable to return to work, but that Mr. Tagoe was continuing to work against medical advice.
The Personal Insurance Company (TPIC) issued an Explanation of Benefits in May 2016, stating that Mr. Tagoe did not qualify for Income Replacement Benefits. However, the point of contention is that Mr. Tagoe had not applied for IRBs at this time, and so this denial was premature.
Over time, Mr. Tagoe’s condition worsened and in December 2019, a second OCF-3 was submitted stating Mr. Tagoe was substantially unable to perform the essential tasks of his employment and in January 2020, Mr. Tagoe applied for IRBs. However, TPIC denied his claim, stating that the two-year limitation period started from the May 2016 denial and as such, had expired.
Procedural History
License Appeal Tribunal (LAT)
Mr. Tagoe applied to the LAT to dispute TPIC’s position. Here, the LAT ruled in favour of TPIC, stating that the May 2016 denial was clear, and the limitation period began in May 2016 as per section 56 of the Statutory Accident Benefits:
Time limit for proceedings
- An application under subsection 280 (2) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed.
Divisional Court
Mr. Tagoe appealed to the Divisional Court and the LAT’s decision was overturned. The Divisional Court relied on the principle of discoverability as outlined in Tomec v. Economical Mutual Insurance Company. In Tomec, the ONCA ruled that limitation periods for claims under SABS are subject to the principle of discoverability.
At the Divisional Court, TPIC again argued their denial in May 2016 began the limitation period. However, the Divisional Court concluded the May 2016 denial letter was premature as Mr. Tagoe had not applied for IRBs. The Divisional Court held, “the appellant [Mr. Tagoe] was not required to apply for income replacement benefits before he was eligible for them. The adjudicator erred in law by failing to apply the doctrine of discoverability.”[1] Ultimately, the Divisional Court ruled in favour of Mr. Tagoe and reversed the LAT decision.
Ontario Court of Appeal
The Court of Appeal agreed with the Divisional Court, stating that when Mr. Tagoe checked off the box that he was he was substantially unable to perform the essential tasks of his employment, it did not lead to the conclusion that he was applying for IRBs at that time. This is because Mr. Tagoe’s statement in his OCF-1 that his injuries were not preventing him from working, “implied that he did not meet the threshold eligibility criteria of suffering ‘a substantial inability’ to perform the essential tasks of his employment.”[2]
As such, the Court of Appeal ruled that the limitation period did not begin in 2016 because Mr. Tagoe’s entitlement to IRBs only became apparent in 2019 when his medical condition worsened.
Conclusion
The Court of Appeal’s rulings in both Tomec and Tagoe emphasize that the insured cannot lose access to benefits due to the insurance company’s premature denial of benefits. These rulings further emphasize that limitation periods do not begin until the claimant discovers eligibility. Because of that, insurers must abide by the principle of discoverability and cannot rely on prematurely denying benefits.
If you or a loved one are in need of help in respect to a personal injury or Accident Benefits claim, contact our office for a free consultation to discuss your next steps.
[1] The Personal Insurance Compancy v. Tagoe, 2024 ONCA 894 at para 24.
[2] Ibid at para 42.
