Overview
In Traders General Insurance Company v. Rumball, 2025 ONSC 779 (CanLII) the Divisional Court rejected an application for Judicial Review of a Licence Appeal Tribunal (LAT) decision concerning an insured’s entitlement to Income Replacement Benefits (IRBs) and the two-year limitation period to dispute an insurer’s decision under the Statutory Accident Benefits Schedule (SABS).
In rejecting the application for Judicial Review, the Divisional Court upheld the LAT’s determination that the Respondent, Shelley Rumball, could appeal her insurer’s denial of her claim for IRBs beyond what the insurer claimed was the two-year limitation period. Although her insurer sent a letter dated March 4, 2015, claiming to deny her benefits, the LAT found the letter was not a clear and unequivocal denial of Ms. Rumball’s IRBs.
The Divisional Court’s ruling focused on what constitutes a clear and unequivocal denial under the SABS, highlighting how the insurer’s letter failed to meet this standard. The Court also sent a signal for future disputes by stating the LAT’s finding that the letter was not clear and unequivocal was not only reasonable but correct.
Facts
On December 28, 2014, a pickup truck rear-ended Ms. Rumball, injuring her back and neck causing a whiplash associated disorder and a lumbar spine strain. Ms. Rumball stopped working due to her injuries and submitted the requisite Disability Certificate (OCF-3) and an Employer’s Confirmation Form (OCF-2).
Ms. Rumball eventually returned to work and on March 4, 2015, she received a letter from her insurer, Traders General Insurance Company (Traders), stating (emphasis added):
“As per Section 37(2)(e) of the Statutory Accident Benefits Schedule (SABS), we are therefore terminating your IRB effective February 25, 2015, as you have resumed your pre-accident employment duties. Should you be off work again due to the injuries sustained as a result of the subject motor vehicle accident, we would require an updated Disability Certificate (OCF-3) to determine your eligibility.”
Ms. Rumball stopped working again on May 31, 2015, and one year later on June 15, 2016, she informed Traders she had been unable to work due to her injuries.
On June 13, 2017, Ms. Rumball obtained a second OCF-3, but Traders did not pay her IRBs. As a result, on July 17, 2017, she applied to the LAT on the basis that Traders had withheld or denied IRBs.
Procedural History
Ms. Rumball’s matter proceeded to a case conference on October 5, 2017, where Traders stated her IRB claim was barred by the statute of limitations and must be dismissed as the date of denial was March 4, 2015. Traders argued this was clearly and unequivocally communicated to the claimant in their letter dated the same day and that Ms. Rumball had not disputed the termination of IRBs within two years of the date of denial (i.e. before March 4, 2017).
Counsel for Ms. Rumball instead responded that the ambiguous wording of the letter failed to meet the clear and unequivocal standard, instead leaving open the possibility for the applicant to re-apply for IRBs.
Following the case conference, a preliminary issue written hearing was scheduled to determine whether Ms. Rumball’s IRB claim was statute barred pursuant to s. 56(1) of the SABS. On February 5, 2018, the Preliminary Issue Decision was released, and the LAT held that Traders’ letter dated March 4, 2015, was not a clear and unequivocal denial of Ms. Rumball’s claim for IRBs. The LAT cited the ambiguous language around requiring an updated OCF-3 if she were to be off work again.
Traders then appealed the Preliminary Issue Decision to the Divisional Court, but this was dismissed as being premature as a hearing on the merits of Ms. Rumball’s claim had not yet occurred. Traders then requested a reconsideration of the Preliminary Issue Decision on March 20, 2019, which was dismissed as being beyond the 21-day deadline.
A hearing on the merits for Ms. Rumball’s claim occurred on July 24, 2020, where she was awarded 104-weeks of IRBs but her claim beyond the 104-week entitlement was rejected. Then on August 18, 2020, Traders second request for a reconsideration of the Preliminary Issue Decision was dismissed as being beyond the 21-day deadline.
Traders then appealed the Preliminary Issue Decision to the Divisional Court while Ms. Rumball cross-appealed on her entitlement to post-104 benefits. Both appeals were dismissed.
Traders then brought an application for judicial review on the Preliminary Issue Decision.
Issues
As the matter came to the Divisional Court, there were three issues:
(1) What is the standard of review?
(2) Was the Preliminary Issue Decision unreasonable?
(3) Should the Reconsideration Decision be set aside for being procedurally unfair?
On the first issue, the Divisional Court found that this was a question of mixed fact and law, so the reasonableness standard applied.
On the third issue, the Divisional Court dismissed this as being a challenge primarily directed at the merits of the LAT’s decision rather than one on the procedure used by the LAT to come to its decision.
Was the Preliminary Issue Decision Unreasonable?
The Court began by examining the requirements for when an insurer denies benefits. They must provide “clear and unequivocal” notice denying or cancelling the insured’s benefits to trigger the two-year limitation period, as per Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111. Further, as stated in Smith v. Co-operators General Insurance Co., 2002 SCC 30 (Smith), given the consumer protection purpose of the Insurance Act and the SABS, such notice must be in “…straightforward and clear language, directed towards an unsophisticated person.”
Traders had reiterated their argument at the case conference that Ms. Rumball knew they refused to pay her IRBs beyond February 25, 2015, and she had not challenged that decision and so the limitation period had expired on March 4, 2017.
The Divisional Court described Traders’ position as being “disingenuous,” highlighting that there was nothing in the letter dated February 25, 2015, which stated that Ms. Rumball’s IRBs would never be paid beyond February 25, 2015, even if she stopped working again. The Divisional Court then agreed with the LAT’s finding that the letter dated February 25, 2015, was ambiguous, adding that this was not only an “entirely plausible” and reasonable interpretation — it was the correct one.
Takeaways
The SABS is remedial legislation with a consumer mandate from which certain specific obligations stem. Notably, there is no room for ambiguity when an insurer wishes to deny someone’s claim, and this case underscores the importance that denials must be clear and unequivocal as directed in Smith. The Divisional Court affirmed that importance when stating the LAT’s finding was not only a reasonable result but the correct one.
