Unfortunately, injuries following an accident can sometimes result in the inability to work. In such cases, it might be possible to file a long-term disability benefits claim with an insurance company.

The recent case of Kumarasamy v Western Life Assurance Company demonstrates the importance of filing long-term disability benefits claims in a timely manner. Following an unsuccessful claim with the insurance company, the Court of Appeal for Ontario decided that the plaintiff’s court proceedings for compensation were time-barred, and as such, could not advance. In doing so, it provided important guidance on assessing limitation periods in disability cases. The Court held that a “clear and unequivocal denial” of the plaintiff’s claim by the insurance company is generally not required in order to start the clock on the statutory limitation period. 

Plaintiff suffers injuries in a car accident

In 2014, the plaintiff sustained back, neck, shoulder and leg injuries in a car accident. At the time of the accident, he was employed as a truck driver. His driver’s licence was medically suspended following the accident due to the injuries he sustained. He has been unable to work since the accident and suffers from depression, anxiety and chronic pain disorder.

At the time of the accident, he was employed by Morris National Inc. (Morris) and was covered under its long-term disability policy with the defendant, Western Life Assurance Company. Under the policy, the deadline to provide a notice of claim was February 26, 2015. The plaintiff retained legal counsel to represent him with respect to the tort and accident benefit claims, but not concerning any long-term disability benefits claim. 

Plaintiff attempts to file long-term disability benefits claim with the insurer

The plaintiff’s sister worked as an assistant to the lawyers retained by the plaintiff. As a favour to her brother, she emailed Morris on December 15, 2014, to request a notice of long-term disability claim form. The plaintiff completed this form and his sister, who also signed the form as his “representative”, sent the form to the defendant on March 9, 2015. This notice of claim was a brief form, but not the complete and full long-term disability benefits claim. 

The defendant sent the long-term disability benefits claim forms to the plaintiff shortly thereafter, but the plaintiff did not receive them. The defendant followed-up, including with a letter on June 2, 2015, which was received by the plaintiff, indicating that it had closed the file because he had not completed the claim forms.

In October 2016, the plaintiff’s lawyers requested the long-term disability benefits claim file from the defendant. It replied noting that the file was closed and enclosing a copy of the notice of claim form submitted by the plaintiff. The defendant expressly noted that it was not waiving any applicable time limit. The plaintiff’s lawyers submitted the complete long-term disability benefits claim in March 2017, but the defendant denied the claim in June because of the delay. 

The plaintiff commenced proceedings in the Superior Court of Justice of Ontario. The issue for the Court to decide was whether these proceedings were commenced within the limitation period.

What was the relevant limitation period?

According to section 4 of the Limitations Act 2002 and subject to exceptions, a proceeding must be commenced by the second anniversary of the day on which the “claim was discovered”.

Section 5(1) sets out a complex test for determining this day. A claim is discovered on the day that the plaintiff first knew of four matters: (i) that the injury, loss or damage occurred, (ii) that it was contributed to by an act or omission, (iii) that the act or omission was that of the defendant, and (iv) that a proceeding would be an appropriate means to seek to remedy it. However, if a reasonable person with the abilities and in the circumstances of the plaintiff ought to have known of these matters on an earlier day, that earlier day is the day that the claim is deemed to have been discovered. 

When was the plaintiff’s claim discovered?

The plaintiff argued that he could not have become aware of the loss until the claim was denied in June 2017. The defendant contended that the loss occurred on the day the benefits would have been paid (February 26, 2015) and that a reasonable person ought to have discovered this in June 2015 upon receiving the letter indicating that the file had been closed. 

Justice Steele of the Superior Court of Justice sided with the plaintiff and allowed the proceedings to ensue because they had been commenced within two years of the relevant day in June 2017. The defendant appealed against this decision. 

The Court of Appeal referred to the statutory presumption in section 5(2) of the Limitations Act 2002, which provides that the plaintiff shall be presumed to have known of the four relevant matters on the day the act or omission occurs unless the contrary is proved. Justice of Appeal Nordheimer decided that the claim was discovered when the plaintiff knew he was injured, believed himself entitled to long-term disability payments and knew the insurer was not making those payments, which occurred sometime in 2015 or 2016. 

As a result, the Court decided that the plaintiff’s claim was statute-barred because the court proceedings were commenced more than two years later in 2019.  

Contact the Personal Injury Lawyers at Tierney Stauffer LLP in Ottawa, North Bay, and Eastern Ontario for Advice on Disability Benefits

At Tierney Stauffer LLP, we understand being denied disability benefits can cause financial ruin for injury victims. We recognize no two claims are the same, which is why we give each client the personal attention needed to bring about the best possible resolution.

Our personal injury lawyers can provide advice to those who believe they have been unfairly denied insurance benefits. If you are injured in an accident, it is critical to receive knowledgeable legal advice to ensure that you meet any applicable deadlines. Contact us at 1-888-799-8057 or reach out online to set up a consultation today.

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