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Application of Tomec at the LAT

By Alon Barda

The Licence Appeal Tribunal (“LAT”) recently released the first reconsideration decision applying the Court of Appeal’s decision in Tomec v. Economical Mutual Insurance Company.[1]

In Tomec, the applicant applied for and was denied attendant care and housekeeping benefits on the grounds that such benefits are not available beyond the 104-week entitlement period, unless the applicant is determined to have sustained a catastrophic impairment. The applicant was later found CAT.

The applicant subsequently applied for attendant care and housekeeping benefits but these were denied by the insurer on the basis that these benefits had been not been disputed within two years of the original denial.

Both the LAT and the Divisional Court held that the limitation period found at the applicable time in s. 51(1) of the SABS and s. 281.1(1) of the Insurance Act is a “hard” limitation period such that discoverability does not apply and that a claim may be barred even before a claimant becomes aware of it.

The Ontario Court of Appeal allowed the appeal and set aside the orders of the Divisional Court and the LAT. The court held that it was unreasonable to construe the applicable limitation period as a hard limitation. Instead, the court held that the relevant limitation period is subject to the rule of discoverability.

The case of P.V. and Economical Insurance[2] is the first reconsideration decision to address Tomec.[3]  While not indicated at the outset, it appears the claimant did not initially apply for IRBs and the insurer pre-emptively denied the applicant’s IRB claim on September 12, 2013. The claimant worked for 3 years and 9 months post-accident but his condition subsequently deteriorated and it appears he was deemed catastrophically impaired.

In the preliminary issue decision, the adjudicator held that the insurer issued a valid pre-emptive denial of the IRB claim and that the two-year limitation period began to run as a result.

However, in reconsideration of his own decision, the adjudicator applied Tomec and found that the claimant’s substantial inability to perform the essential tasks of his employment “accrued” over time as his impairments increased and his responsibilities at work diminished.

Ultimately, the adjudicator found that it would be an absurd result to find that the time for the applicant to claim an IRB and the limitation period for him to dispute the insurer’s pre-emptive denial commenced and elapsed prior to the claimant being eligible to make a claim.

As such, he found that the pre-emptive denials issued by Economical prior to January 16, 2018 were premature and the Tribunal’s finding of a valid denial was an error of fact pursuant to the reasoning in Tomec.

The adjudicator’s reasoning appears to follow the decision in Tomec. However, the adjudicator notably states, at paragraph 4 of the decision, that he determined at the preliminary issue decision that if the claimant was successful in the limitation period argument before him, the claimant would “likely have difficulty getting over the ‘hurdle’ of the secondary limitation period in ss.4 & 5 of the Schedule, namely the requirement that [the claimant] be found ‘substantially’ unable to perform his pre-accident occupation within 104 weeks of the accident in order to be eligible to receive post-104 weeks IRBs.”

Therefore, while the claimant may not be barred based on the pre-emptive denials and his discoverability of his IRB claim, it is unclear why the adjudicator did not address the above requirement that the claimant meet the substantial inability test within 104 weeks of the accident to receive payment of post-104 IRBs.

The adjudicator found that the claimant may proceed to the Tribunal with the claim so perhaps it will be decided at that time. Based on the facts of this case, it does not appear the claimant will be entitled based on this requirement. The decision in Tomec should not have any application on this eligibility criteria.

[1] 2019 ONCA 882.

[2] 2020 CanLII 12744 (ON LAT).

[3] Reconsideration decision was released by the adjudicator that heard the preliminary issue hearing on the issue.