Executive Summary: Key Legal and Evidentiary Issues

• Whether the insurer's May 3, 2021 letter constituted a clear and unequivocal denial triggering the two-year limitation period under the SABS.

• Whether subsequent correspondence from the insurer created ambiguity regarding entitlement to benefits.

• Whether procedural deficiencies in the denial invalidated the start of the limitation period.

• Whether the LAT erred in denying an extension of time to bring the claim.

• Whether the discoverability principle applied to post-104 week income replacement benefits.

• Whether the LAT acted unfairly or unreasonably in its handling of the reconsideration request.

Background and procedural history

Cameron Patton was injured in a motor vehicle accident in 2020. He initially sought income replacement benefits (IRBs) under Ontario's Statutory Accident Benefits Schedule (SABS) from Echelon Insurance, which was later taken over by Aviva. On May 3, 2021, Echelon issued a letter stating that no further IRBs would be payable due to Mr. Patton’s failure to submit an Employer’s Confirmation Form (OCF-2), as required under section 33(1) of the SABS. The letter stated IRBs would not be paid as of April 14, 2021, but also included language suggesting that benefits may be reassessed later. It enclosed a Dispute Form advising Mr. Patton of a two-year limitation period to challenge the denial through the Licence Appeal Tribunal (LAT).

Mr. Patton returned to full-time work four days later and declined to attend insurer medical examinations. On June 30, 2021, Echelon again stated there was no entitlement to IRBs after May 7, 2021 due to his return to work, and again provided the two-year limitation warning. Aviva later assumed the claim. Mr. Patton had difficulty obtaining the OCF-2 but eventually submitted it in August 2022. In February 2023, Aviva acknowledged a limited entitlement to IRBs for a past period and promised a cheque that was never sent. Then, in January 2024, Aviva reversed its position, denied any IRBs, and took the position that the claim was statute-barred due to the expiration of the two-year limitation period following the June 2021 denial.

Mr. Patton filed an application with the LAT in November 2023 seeking IRBs from November 25, 2021 onwards. The LAT held a preliminary hearing and dismissed the application, finding that the May 3, 2021 letter was a clear and unequivocal denial that started the limitation clock. The LAT also refused to extend the limitation period and dismissed Mr. Patton’s request for reconsideration.

Arguments and findings on appeal

Mr. Patton appealed and sought judicial review of the LAT's decision, arguing that the denial was not sufficiently clear to start the limitation period, that subsequent communications made the denial ambiguous, and that the LAT failed to properly consider discoverability for his post-104 week benefits claim.

The Ontario Divisional Court found that the May 3, 2021 letter met the criteria for a valid denial under Smith v. Co-operators, providing clear notice of refusal, reasons, and an explanation of the right to dispute. The court distinguished this case from 17-004556 v. Aviva, where the denial letter left open the possibility of future eligibility and was therefore ambiguous. In contrast, the court found that Mr. Patton was warned multiple times that ongoing communication with the insurer did not pause or extend the limitation period.

Mr. Patton also argued that Aviva’s later conduct, including its February 2023 acknowledgment of entitlement and the promised cheque, created confusion or restarted the limitation period. The court disagreed, noting that the two-year period runs from the first clear refusal, and later communications do not restart it unless the original denial was withdrawn or replaced, which did not happen.

As for the reconsideration, the LAT rejected Mr. Patton’s attempt to rely on new arguments and evidence, including a resignation letter from August 2024, which he claimed showed a new basis for post-104 week IRBs. The LAT found the letter inadmissible and concluded that Mr. Patton was already claiming both pre- and post-104 week IRBs in his original application, making his discoverability argument unpersuasive. The Divisional Court agreed and found that Mr. Patton failed to establish any error of law or unreasonable finding in the LAT’s dismissal.

Outcome

The Divisional Court dismissed both the judicial review and the appeal. It upheld the LAT’s decision that Mr. Patton’s claim was time-barred and that there were no valid grounds to extend the limitation period. The court declined to award costs to Aviva despite its success, citing concerns over Aviva’s conduct in advising Mr. Patton that a cheque would be issued and later reversing its position only after the limitation period had expired.