The plaintiff was injured in a car accident on September 30, 2015. He applied for accident benefits and received income replacement benefits (IRBs) until Dec 2, 2015 when he returned to work full time.
On September 28, 2018, almost 3 years later, the plaintiff filed an application with the Licence Appeal Tribunal (LAT) disputing the termination of IRBs. The LAT adjudicator found that the plaintiff’s application was statute barred as it was filed more than 2 years from the termination of benefits.
The plaintiff appealed to the Divisional Court arguing that the termination letter was deficient as it did not list a medical reason for the denial as required by s.37(4) of the Statutory Accident Benefits Schedule (SABS). The appeal was successful.
Allstate appealed further, arguing that a medical reason was not required in this case, and that the termination letter “provided clear and unequivocal notice that it was terminating the IRBs and the reasons for doing so,” which was sufficient to meet the requirements of s.37(4).
The Court of Appeal agreed with Allstate and overturned the Divisional Court decision. Its analysis centered around the interpretation of s.37(2) and 37(4), as well as “the modern principles of statutory interpretation.” Under s.37(2)(e), an insurer can terminate IRBs if the insured has resumed his or her pre-accident employment duties. Under s.37(4), an insurer is then required to provide notice of such termination to the insured, and provide “the medical and any other reasons for its determination.”
The question before the Court of Appeal was whether the “and” in s.37(4) should be interpreted in a joint or several sense, in other words, does “and” mean “and”, or does “and” mean “or”. The court concluded that in certain situations, it should be the latter.
The Divisional Court had found that s.37(4) was meant to provide the insured with both medical and other reasons, interpreting the “and” as conjunctive or joint, meaning “and” means “and”. They also commented that an insured would not be able to fully assess the impact of a termination of benefits without knowing the medical reasons for doing so. As well, the Divisional Court interpreted s.37(4) as requiring both medical and other reasons as being consistent with interpreting insurance coverage provisions broadly and the SABS being consumer protection legislation.
The Court of Appeal rejected this approach. Firstly, it found that the Divisional Court did not apply the modern principle of statutory interpretation properly; and secondly, it found that the s.37(4) was not an insurance coverage provision that had to be interpreted broadly.
In its analysis, the court noted that the requirements to provide medical reasons under s.37(4) is inextricably tied to the reasons in s.37(2) as to why a benefit is terminated: “These two sections read together simply require the insurer to determine the basis for disqualifying an insured person under s.37(2) from receiving specified benefits and to communicate the basis for that decision to the insured. Some of the grounds under s.37(2) are medical and some are not.” From this the court concluded that s.37(4) allowed an insurer to “rely on a single non-medical reason for termination of benefits, even though the insured might be otherwise medically entitled to the benefit”.
The Court of Appeal ruled that s.37(4) does not mandate that an insurer provide medical reasons in all cases, rather it requires an insurer to provide sufficient reason or reasons: “If the insurer relies on a medical and non-medical reason to deny benefits, the insurer must advise the insured person of both. However, if the insurer is relying on a non-medical ground under s.37(2), the provision requires only that the insurer provide notice of the cancellation of the benefits and to provide the insured with the non-medical reason for that determination.”
In this case, the insurer relied on a non-medical reason to terminate benefits (the return to work) and as such did not have to provide a medical reason in its notice. This case is not helpful to plaintiffs, and unfortunately makes it that much more difficult to dispute a termination of benefits.
