When is an Application for Benefits Complete?

January 19, 2012

The Ontario Court of Appeal has released a new decision discussing the meaning of “completed application” for the purpose of triggering the 90-day notice period in section 3 of O. Reg. 283/95.

In Ontario (Finance) v. Pilot Insurance, the Fund received an application for benefits from a cyclist who was hit by an unidentified driver. He did not attach a police report to the OCF-1 as he was unable to obtain one. Seeking to dispute its obligation to pay benefits to the cyclist, the Fund took steps to determine the insurer of the striking vehicle, which required it to identify the driver. However, it took the Fund some 18 months after it received the cyclist’s application before it gave Pilot its priority dispute notice (but within 30 days after the Fund had identified the driver).

At arbitration, Pilot argued successfully that the Fund failed to comply with section 3 of O. Reg. 283/95. The arbitrator found that the Fund had not been diligent in investigating the missing information and so failed to meet the 90-day deadline when it put Pilot on notice. On appeal, the application judge disagreed with the arbitrator and held that the Fund had met the notice requirements of section 3. The application judge concluded that the Fund did not have a functionally adequate application – so as to be treated as a completed application under s. 3 – until the Fund obtained the 911 call records, which identified the driver of the vehicle.

The Court of Appeal restored the arbitrator’s decision, finding that the Fund failed to comply with section 3 of the Regulation. The Court wrote:

I would adopt the approach that has developed through the jurisprudence – particularly as set out by Perell J. in Lombard – to determine when an insurer has received a “completed application” for the purposes of s. 3 of O. Reg. 283/95.  That is to say, and as I will discuss below, a completed application is one that is:

(1)  genuinely complete;

(2)  functionally adequate for its legislated purpose; or

(3)  treated as complete based on the conduct of the first insurer.

. . .

Consistently, a functionally adequate application constitutes a “completed application” under s. 3.  An insurer is not permitted to rely on shortcomings in written documentation as grounds for claiming that the 90-day notice period has not commenced.  As soon as the insurer has sufficient information to notify another insurer that it is disputing liability to pay the benefits, the 90-day notice period starts running.

The Court of Appeal held that the cyclist’s application to the Fund was not genuinely complete because it was missing the police report. It became “functionally adequate” when the Fund obtained the 911 records. However, the Fund’s delay in pursuing the 911 call information forms the basis for treating the Fund as if it had received a completed application in February 2008. Accordingly, the Court of Appeal held that the Fund’s notice to Pilot was late.

It isn’t clear whether this decision would apply to any accidents on or after September 1, 2010, as the Regulation now defines “application” to mean an OCF-1 and “completed application” to mean a completed and signed application. Nevertheless, insurers would be wise to be diligent when investigating priority so they could give written priority dispute notices as soon as possible.

Ontario (Finance) v. Pilot Insurance Company, 2012 ONCA 33

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