Introduction
In December 2024, the Ontario Court of Appeal released its decision in The Personal Insurance Company v. Tagoe, reaffirming that the doctrine of discoverability applies to limitation periods under the Statutory Accident Benefits Schedule (SABS) for specified benefits. Building on the principles established in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 839 (CanLII), the Court firmly concluded that insured individuals cannot be barred from seeking income replacement benefits (IRB) before those benefits become meaningfully discoverable.
Factual Background
The insured, Mr. Tagoe, returned to work the day after being injured in an April 2016 motor vehicle collision. Although he continued working, he submitted standard OCF forms (OCF-1 and OCF-3) for accident benefits. In May 2016, The Personal Insurance Company (TPIC) issued an Explanation of Benefits (EOB) stating that he did not qualify for IRBs because he was not substantially unable to perform his job. The insurer noted that the OCF-3 indicated he had continued working, thereby negating initial IRB eligibility. This denial was effectively issued while the insured was still working and thus not yet functionally prevented from performing his essential employment tasks.
Over a year later, after ceasing employment due to medical reasons, undergoing surgery, and experiencing a deteriorating condition, Mr. Tagoe submitted further documentation to support an IRB claim. On December 5, 2019, he submitted a second OCF-3, which indicated that he was substantially unable to perform the essential tasks of his job. In January 2020, he formally applied for IRBs. In June 2020, TPIC informed him that the claim was barred by the expiry of the limitation period on May 20, 2018, relying on the initial EOB from May 2016.
When TPIC refused to pay IRBs on that basis, the dispute proceeded to the Licence Appeal Tribunal (LAT).
Proceedings Before the LAT and Divisional Court
The LAT adjudicator found that the 2016 denial letter was both clear and unequivocal, thereby starting the two-year limitation period immediately. The adjudicator reasoned that a pre-emptive denial could start the limitation clock even if the insured’s eligibility had not yet materialized. A request for reconsideration by the insured was also denied.
On appeal, the Divisional Court overturned the LAT’s decision. Drawing on Tomec, the Court explained that strictly enforcing a limitation period without considering discoverability leads to unjust outcomes. Simply put, an insured cannot be expected to challenge a denial of benefits they are not yet eligible to receive. As the Court noted:
“The appellant did not qualify for income replacement in May 2016 and did not apply for it… the appellant 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.”
TPIC appealed this ruling to the Ontario Court of Appeal.
The Court of Appeal’s Analysis and Ruling
The Court of Appeal affirmed the Divisional Court’s reasoning. It held that the doctrine of discoverability applies directly to IRB claims. Limitation periods cannot be triggered by hypothetical or pre-emptive denials issued before the insured’s entitlement is reasonably knowable. The Court rejected TPIC’s argument that the Divisional Court had overturned a factual finding by the LAT. Instead, it found that the LAT never truly addressed whether Mr. Tagoe had formally applied for IRBs when he was still able to work. Equally important, the Court clarified that submitting OCF-1 and OCF-3 forms while continuing to work does not constitute seeking IRBs, even if the OCF-3 (Disability Certificate) indicates that the medical criteria for IRBs are met.
Significance and Takeaways
This landmark clarification aligns with the consumer protection purpose underlying Ontario’s auto insurance regime, emphasizing fairness over strict technicality. For insurers, the message is clear: a denial issued before the insured’s entitlement is established does not start the limitation clock. For claimants, the decision offers reassurance. They can now rely on the principle that limitation periods will not bar their claims before the very conditions necessary for their entitlement have emerged.
The Personal Insurance Company v. Tagoe represents a decisive step in harmonizing the treatment of limitation periods with the underlying purpose of the SABS—protecting accident victims. By confirming that discoverability governs when the clock begins to run, the Ontario Court of Appeal ensures that claimants are judged on their actual circumstances, not on premature or technical denials. For lawyers, insurers, and claimants alike, this decision provides a clearer, more equitable framework for navigating claims and limitation periods under SABS.
OTLA Intervention!
Thank you to OTLA members Steven Rastin, Alexander Voudouris, Stanley Pasternak and Jessica Golosky for intervening in this case!
