Neutral Citation: 1993 ONICDRG 63

File No. A-002389

ONTARIO INSURANCE COMMISSION

BETWEEN:

BEN BENNETT

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON PRELIMINARY ISSUE

Issues:

The Applicant, Ben Bennett was injured in a motor vehicle accident on July 30, 1990. He applied for and received accident benefits from the Insurer payable under Ontario Regulation 672 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8.

Weekly income benefits were paid until December 22, 1990, when they were terminated. On January 30, 1991, the Senior Claims Representative for the Insurer met with the Applicant at his home. At that meeting, the Insurer provided the Applicant with a cheque in the amount of $2,500.42 and the Applicant executed a document entitled "Release of All Claims".

The Applicant seeks further weekly income benefits under section 12 of the No-Fault Benefits Schedule from February 2, 1991 to September 22, 1991. The Insurer contends that the Applicant entered into a final binding settlement of his weekly income benefit claim with the Insurer, as evidenced by the document entitled "Release of All Claims", signed by the Applicant. Mediation was unsuccessful in resolving the dispute between the Applicant and the Insurer. The Applicant applied for arbitration under the Insurance Act.

The issues in this hearing are:

1. Did the parties complete a binding agreement in which the Applicant released all further claims for weekly income benefits against the Insurer?

2. Is the Applicant entitled to refer his claim for further weekly income benefits to arbitration under section 281 of the Insurance Act?

The Applicant also claims his expenses in connection with this hearing on the preliminary issue.

Result:

1. The parties completed a binding agreement in which the Applicant released all further claims for weekly income benefits against the Insurer.

2. The Applicant is precluded from referring his claim for further weekly income benefits to arbitration, under section 281 of the Insurance Act.

3. The Applicant is entitled to his expenses incurred with respect to the arbitration.

Hearing:

This hearing on a preliminary issue was heard in North York, Ontario, on Monday, May 10 and Thursday, May 13, 1993, before me, Janice Mackintosh, arbitrator.

Present at the Hearing:

Applicant:

Ben Bennett

Applicant's

Representative:

Altor Shields

Barrister and Solicitor

Insurer's

Representative:

James Flaherty

Barrister and Solicitor

Witnesses:

Five witnesses appeared and are listed in Appendix A.

Exhibits: The parties filed twelve exhibits. In addition, counsel for each of the parties provided a Brief of Authorities. An index of documents is provided in Appendix A.

Evidence and Findings:

The central issues to be decided in this case are whether the Applicant entered into a settlement of his weekly income benefit claim with the Insurer and if so, whether the Applicant ought to be able to strike down the settlement on the basis that the written release of all claims obtained by the Insurer was faulty, that the terms of the agreement were unfair, and that the Insurer failed to follow certain procedures during the negotiations, including failing to explain the specific calculation of the weekly income benefit and certain deductions upon which the settlement figure was based.

While I am troubled by the Insurer's casual and somewhat high-handed approach to the settlement negotiations with the Applicant, I remain convinced that the Applicant fully understood the negotiation process in which he was engaged, intended to finally settle his claim for weekly income benefits, and recognized that he was giving up a claim for future benefits under the No-Fault Benefits Schedule. The deficiencies in the Insurer's approach are serious and should not have occurred but, in my opinion, they do not vitiate the settlement made by the Applicant.

The Applicant is 37 years old and was born in Sierra Leone, West Africa. He was educated in the English language and completed his high school education in Sierra Leone. After immigrating to Canada in 1987, he continued his education, taking courses at Emery Collegiate and George Brown College in bookkeeping, taxation, insurance, and computers.

Prior to the accident, the Applicant worked at two full-time jobs, reported a total income from employment of approximately $900 to $1,000 per week (Exhibit 3), maintained a bank account, submitted his income tax returns, rented part of his dwelling to a tenant, obtained a driver's licence and purchased and drove a car. From my observations of the Applicant and from the history obtained through the evidence, I conclude that the Applicant is an intelligent and capable person.

Following the accident on July 30, 1990, the Applicant was unable to return to either of his two former jobs. On August 8, 1990, Mr. Greg Meyer, a senior claims representative from Allstate Insurance, met with the Applicant at his home. Together they prepared the factual statement marked as Exhibit 2, which was reviewed, amended and signed by the Applicant. Mr. Meyer provided the Applicant with documentation related to his claim for benefits. The Applicant later completed and signed several documents and mailed them back to the Insurer (Exhibits 3 and 4).

Following this meeting, Mr. Meyer recalled frequent telephone contacts with the Applicant. The Applicant regularly reported his attendances at various medical appointments and his medical progress as it related to his ability to return to work. Mr. Meyer contemporaneously recorded significant conversations and facts concerning the Applicant's claim in his claims diary, to which he referred to refresh his memory of events.

The Applicant recalled far fewer contacts with Mr. Meyer. However, the Applicant explained that his recollection during this period was poor, due to the pain and emotional anxiety he was experiencing following his accident.

Neither the Applicant nor Mr. Meyer were entirely forthright in their recollection of events. They each experienced significant lapses of memory at crucial stages in their evidence. However, as between the two of them, I find the chronology of events as recorded in Mr. Meyer's claims diary more reliable than the somewhat sketchy and selective recollections of the Applicant.

On September 25, 1990, Mr. Meyer recorded in his claims diary that the Applicant's job with one of his two pre-accident employers was no longer available. On November 13, 1990, Mr. Meyer noted a conversation with the Applicant in which the Applicant proposed a target date of December 18, 1990 to return to work at his other job with Cara Airline Services. Mr. Bennett did not recall this conversation. On November 21, 1990, Mr. Meyer wrote to Dr. Dorfman, the Applicant's family doctor, requesting information concerning the Applicant's medical condition. Mr. Meyer received a handwritten note and summary of mileage claims from Mr. Bennett, dated November 29, 1990 (Exhibit 12). The handwritten note states in part:

Please, try that all my benefits including this bill will be paid to me up to the 18th/12/90 as it was already been notified. Thanks. [Signature, Ben Bennett]

Mr. Meyer noted a further contact with the Applicant on December 18, 1990. At that time, the Applicant informed the Insurer that he had seen his doctor and that he would be returning to work on December 22, 1990. Mr. Bennett did not recall this conversation. Mr. Meyer arranged for payment to be mailed to the Applicant and placed the Applicant's claim file on routine hold for 35 days. It was the Insurer's understanding that the Applicant was ready to return to work and that his weekly benefit claim was at an end. Mr. Meyer anticipated that the Applicant's file would be closed following the 35-day hold period.

Mr. Meyer recalled no further contact with the Applicant until January 23, 1991. The Applicant called to inform Mr. Meyer that he had been unable to return to work in December 1990 and that he had sent the Insurer a letter, along with a note from his family doctor. The letter dated January 22, 1991 (Exhibit 1) and the note from Dr. Dorfman dated January 22, 1991 (Exhibit 8) were received by Mr. Meyer on January 24, 1991. In his letter, Mr. Bennett demanded payment of weekly income benefits to February 10, 1991, under threat of court action as follows:

...The whole fact is that I couldn't return to work as it was discussed with you due to my poor health and some medical reasons. I was under medication until 10, February 1991. I should official report to work by 10/02/91...

The attach paper is a sheet from my Doctor (Dorfman) to confirm my final day and date (10th/02/91 to report to work.

...Any rejection to this payment will make me to seek court action on legal claims about this issue. I hope (All State) will pay me without delay. I need a reply from you without delay or. This must be paid... [Signature: Ben Bennett]

Exhibit 8, from Dr. Dorfman, written on a prescription pad, reads as follows:

For...Ben Bennett Rx - may return to work on 10/02/91 after absence for medical reasons. [Signature]

Mr. Bennett recalled events differently from Mr. Meyer. His evidence was that in mid-December 1990, the Insurer unilaterally stopped mailing his weekly income benefit cheques. By mid-January 1991, the Applicant was desperate for money. This desperation compelled him to write the letter dated January 22, 1991 (Exhibit 1). On cross-examination, the Applicant acknowledged a month-long gap in his communications with Mr. Meyer. The Applicant explained that the gap occurred because he was upset and in pain.

I accept Mr. Meyer's recollection of these events. The Applicant admitted on cross-examination that his memory of these events was poor. Furthermore, Mr. Meyer's recollections are supported by Exhibits 1 and 12, both of which were written by the Applicant. I find that the Applicant and the Insurer shared the understanding that the Applicant had been cleared by his doctor to return to work in December 1990, and that the Insurer's obligation to pay weekly income benefits would stop at that time.

Mr. Meyer testified that he was surprised to learn that the Applicant had not returned to work in December 1990 when he spoke to him on January 23, 1991. Mr. Meyer noted in his claims diary that he telephoned Dr. Dorfman on January 25, 1991. Mr. Meyer questioned Dr. Dorfman about the new return to work date of February 10, 1991 and urged him to canvass an earlier return to work date with his patient. Dr. Dorfman agreed to discuss this with the Applicant.

On January 23 and 25, 1991, Mr. Meyer contacted the Applicant's remaining employer, Cara Airline Services, and their disability insurer. Mr. Meyer was informed that the Applicant's job with Cara was still available. Mr. Meyer was also informed that Cara Airline Services had not paid long-term disability benefits to the Applicant in connection with the July 1990 motor vehicle accident. The disability insurer referred to an assessment by Dr. Borden, company medical director for Cara, which concluded that the Applicant was cleared to return to work.

On January 28, 1991, Mr. Meyer met with his supervisor to discuss the Applicant's file. Mr. Meyer testified that he and his supervisor decided to pay the Applicant weekly income benefits beyond December 1990. Several approaches to the Applicant's claim were discussed, including a final settlement of the claim for weekly income benefits, along with a written release of claims from the Applicant.

After meeting with his supervisor, Mr. Meyer telephoned the Applicant on January 29, 1991 to set up a meeting at the Applicant's home the following afternoon. Mr. Meyer testified that he arranged the meeting with the Applicant for the sole purpose of finally settling the weekly income benefit portion of the Applicant's claim, obtaining a written release, and closing the file.

Mr. Bennett did not recall whether the term "settlement" was used by Mr. Meyer during their January 29, 1991 telephone conversation. The Applicant testified that Mr. Meyer informed him there would be a cheque for him, but did not say why he required a meeting. Mr. Bennett agreed that all other cheques from the Insurer were received by mail. On re-examination, Mr. Bennett stated that the topic of settlement had been discussed during their telephone discussion on January 23, 1991 in connection with the Applicant's letter of demand dated January 22, 1991 (Exhibit 1).

I find it very unlikely that Mr. Meyer would set up a face-to-face meeting with the Applicant at his home without communicating the purpose of the meeting. In the context of their previous dealings, I find that the Applicant understood that Mr. Meyer was coming to his home for the purpose of reaching a final settlement of his weekly income benefit claim.

Mr. Meyer testified that he reviewed the calculations on the Applicant's file in preparation for the meeting. He decided to pay benefits from December 1990 to Friday, February 1, 1991 rather than Sunday, February 10, 1991 as demanded by the Applicant in his letter dated January 22, 1991 (Exhibit 1). Mr. Meyer reduced the weekly income benefit by an unspecified amount equivalent to the long-term disability benefits the Applicant could have applied for through his employer Cara Airline Services. Mr. Meyer calculated this deduction despite his understanding that Cara would likely deny such benefits to the Applicant. The Applicant could not have anticipated this deduction. The Insurer had not deducted long-term disability benefits from previous weekly income benefit payments to the Applicant. Mr. Meyer concluded that the Insurer would pay a further $2,500.42 in weekly income benefits to the Applicant, bringing the total amount of benefits paid to $16,871.19.

Mr. Meyer testified that he had little specific recollection of the January 30, 1991 meeting with the Applicant. He reconstructed events on the basis of what he normally does in such situations. He estimated that the meeting lasted approximately 10 to 15 minutes. He remembered sitting in the Applicant's living room. He speculated that he would have explained the weekly income benefit calculations to the Applicant, and testified further about his standard procedures during a settlement negotiation when obtaining a release of claims.

On cross-examination, Mr. Meyer added that he would "certainly" have told the Applicant of the deduction for potential long-term disability benefits from Cara, and would have told the Applicant to pursue his claim with Cara. But he "probably wouldn't have" discussed the Applicant's position if Cara denied the claim. Mr. Meyer did not communicate his knowledge, obtained directly from Cara, that the long-term disability benefit would likely be denied to the Applicant on the basis of Dr. Borden's medical assessment.

The evidence of the three witnesses called on behalf of the Applicant, concerning the January 30, 1991 meeting between the Applicant and Mr. Meyer, differed from Mr. Meyer's reconstruction of events. Each witness estimated that Mr. Meyer was in Mr. Bennett's home approximately five minutes in total. Each of the witnesses recalled that the Applicant was called from upstairs, that the meeting took place in the kitchen, and that the Applicant and Mr. Meyer stood throughout the meeting. Each of the witnesses noticed that Mr. Meyer carried a brown envelope on top of a sheet or sheets of paper and requested the Applicant to sign the paper. Each observed that Mr. Bennett bent over the kitchen table, signed the paper and received the envelope. Each of the witnesses recalled that little else was said between the parties. One of the witnesses, Patricia Frimpong, stated that she was under the impression that Mr. Meyer was a mail man or delivery person with a registered letter which required the Applicant's signature.

The Applicant recalled that Mr. Meyer asked him to sign a document in order to receive the envelope. The Applicant did not bother to read the document placed before him by Mr. Meyer. The Applicant testified that he understood that the envelope contained a cheque and that the document he was asked to sign related to that cheque. The Applicant testified that he thought Mr. Meyer required his signature on the document to confirm his receipt of the cheque because of his threat to seek court action if he did not receive payment of benefits to February 10, 1991. After the meeting, the Applicant opened the envelope and saw the amount of the cheque for the first time. I find that the Applicant did not bother to read the document placed before him by the Insurer nor did he bother to open the cheque because he knew that they were both delivered to him by the Insurer in respect of the final settlement of his claim.

I accept the description of the meeting given by the Applicant's witnesses over the conjectural reconstruction of events proposed by Mr. Meyer. I find that Mr. Meyer did not review the $2,500.42 benefit calculations and deductions with the Applicant either before or at the meeting. At the invitation of Mr. Meyer, the Applicant signed the document called Release of All Claims (Exhibit 6) without reading it and in ignorance of the amount of the Insurer's cheque. Mr. Meyer made no comment upon the release. I find that the cheque was prepared prior to the meeting and was inside the brown envelope delivered to the Applicant. I find that the Applicant learned of the amount of the cheque when he opened the envelope after the meeting. The carbon file copy of the cheque states "final payment, T.D. benefits result of 7.30.90 M.V.A." (emphasis added). The words "To Feb. 1, 1991" have been added in ink to the Insurer's carbon file copy of the cheque (Exhibit 11).

I conclude that the parties were not "ad idem" (of one mind) at the January 30, 1991 meeting. The Insurer's cheque in the amount of $2,500.42, for weekly benefits to February 1, 1991, less certain deductions related to collateral long-term disability benefits, amounted to a counter-offer to the Applicant's demand for payment of benefits up to February 10, 1991 contained in his letter dated January 22, 1991 (Exhibit 1).

For reasons stated below, I also conclude that the Release of All Claims executed by the Applicant at the January 30, 1991 meeting is not binding upon the Applicant. Despite these findings, I am satisfied that subsequent to the January 30, 1991 meeting, the Applicant freely, voluntarily and deliberately accepted the Insurer's counter-offer of $2,500.42 and settled his claim for weekly income benefits, well knowing its effect on any future claim for benefits.

Following the meeting on January 30, 1991, the Applicant reviewed the Insurer's cheque. He recalled that the amount of the cheque was somewhat less than he expected by "a few days or weeks". The Applicant testified that he immediately and repeatedly attempted to reach Mr. Meyer by telephone following their meeting. The Applicant speculated that he reached Mr. Meyer around February 4, 1991 and repeated his demand for payment of full benefits up to February 10, 1991. The Applicant recalled Mr. Meyer's response that the Insurer would not give the Applicant more money, that the benefits were finished, and that the Insurer would do nothing more for him.

Mr. Meyer had no record of any calls or messages from the Applicant following January 30, 1991 and denies that he spoke with the Applicant after the meeting. I accept Mr. Meyer's evidence on this point.

The Insurer's final offer was less than the Applicant felt he was entitled to. The Applicant testified that, at the time, he thought he had no choice but to accept the Insurer's reduced offer because the no-fault insurance system precluded him from suing the Insurer. He cashed the Insurer's cheque and made no further effort to contact the Insurer until he met with a lawyer some 14 months later.

I do not accept the Applicant's explanation of events following the January 30, 1991 meeting. Upon reviewing the cheque, the Applicant knew that it was the Insurer's final offer of settlement in respect of his claim. The Applicant was aware of his right to challenge the Insurer's position from the outset and refers to these rights in his letter dated January 22, 1991 (Exhibit 1), previously set out at page 6 of this decision.

I find that the Applicant decided to accept the Insurer's final offer of settlement, even though it was somewhat less than he had demanded. February 10, 1991 came and went and the Applicant did not return to work as anticipated. In fact, he did not return to work until September 1991. During that time, the Applicant did not approach the Insurer for further weekly income benefits because he knew that he had entered into a final settlement of his claim with the Insurer.

In the context of their previous dealings and in the context of the settlement negotiations in which they were engaged, the Applicant's silence and inaction warrants the inference of acceptance of the final settlement figure offered by the Insurer. I find that the Applicant was aware of the Insurer's belief that the matter was settled. The Applicant did nothing to disabuse the Insurer of this understanding but acted as though an agreement had been reached.

Mr. Meyer's claims diary entry for February 4, 1991 notes the receipt of Dr. Dorfman's medical report in response to Mr. Meyer's November 21, 1990 request for further information (Exhibit 10). Dr. Dorfman's report confirmed the February 10, 1991 return to work date for the Applicant. Mr. Meyer's diary note refers to the amount of the cheque delivered to the Applicant and states "final payment, release obtained", and "all clear, diary forward". The Insurer closed the Applicant's file on March 11, 1991. In reliance upon the settlement with the Applicant, the Insurer conducted no surveillance of the Applicant and made no further inquiries concerning the Applicant's medical condition or the availability of collateral long-term disability benefits to the Applicant.

Release of All Claims

Counsel for the Applicant submitted that Mr. Bennett ought to be released from the settlement he reached with the Insurer on several grounds, including that the Release of All Claims obtained by the Insurer at the January 30, 1991 meeting was invalid. I agree with counsel for the Applicant's submissions that the provisions of the Release of All Claims are ambiguous. However, in this case, I view the Release of All Claims to be largely irrelevant in the negotiations between the parties.

The relevant portions of the pre-printed release form are quoted below. The handwritten insertions of Mr. Meyer are underlined.

This indenture witnesseth that, in consideration of payment of the sum of... sixteen thousand, eight hundred and seventy one 19/100...dollars ($ 16,871.19) to....Ben Bennett…….

I, do hereby release, acquit and forever discharge, and by these presents do for myself, my heirs, executors, administrators and assigns release and forever discharge......

Allstate Insurance Company from all 'total disability' claims........and any other person, firm or corporation charged or chargeable with responsibility or liability, their heirs, representatives and assigns, from any and all claims, demands, damages,costs,expenses,loss of services, actions and causes of action, arising from any act or occurrence up to the present time and particularly on account of all personal injury, disability, property damage, loss or damages of any kind already sustained or that I may hereafter sustain in consequence of an accident that occurred on or about the...30th..day of..,Tuly...19..90, at or near...Finch Ave. Malton, Ontario-...

It is not clear from the words "total disability claims" what sections of the No-Fault Benefits Schedule are in issue. The wording of the release does not correspond to the wording of any section of the Schedule and could be interpreted to apply to more than one. Since the document was created by the Insurer, any ambiguity must be construed against the interests of the Insurer.

Furthermore, Mr. Meyer did not bring the reduced amount of the cheque and the basis upon which it was calculated to the attention of the Applicant at the time he signed the release. At Mr. Meyer's invitation, the Applicant signed the release on January 30, 1991 without knowing that the cheque covered benefits to February 1 rather than February 10, 1991, as demanded by the Applicant in his letter of January 22, 1991, and that collateral benefits had been deducted. Where an Insurer intends to rely upon a standard form document which the Applicant has signed without reading, and the Insurer knows the Applicant signed the document without reading it, and the Insurer has reason to know that the document does not reflect the Applicant's reasonable expectations, I find that the document should not be enforced. Support for this finding is found at paragraphs 341 to 343, pages 229 to 232 of Professor S.M. Waddams reference text entitled The Law of Contracts, third edition, Canada Law Book, 1993.

However, in this case, the Insurer need not rely upon the flawed and unenforceable release to establish the terms of the final settlement ultimately reached with the Applicant. I find that subsequent to the January 30, 1991 meeting, the Applicant accepted the Insurer's final counter-offer, in full knowledge of the amount. The Applicant's bargaining power and the voluntariness of his acceptance were not impaired or even affected by the release previously obtained by the Insurer. The Applicant testified that he was unaware that he had signed a release of claims until the Insurer sent his lawyer a copy of the release in April 1992.

Unconscionability, undue influence, and inequality of bargaining power

Counsel for the Applicant submitted that if a final settlement was reached, such settlement should be set aside on the basis of unconscionability, undue influence and inequality of bargaining power. Counsel for the Applicant referred me to a line of cases beginning with Lloyds Bank v. Bundy [1974] 3 All E.R. p. 757 at p. 765, and concluding with the recent British Columbia Court of Appeal case of Smyth v. Szep (1992) 8 C.C.L.I. (2d) p. 81. In each of the cases referred to, the terms of the agreement reached between parties of unequal bargaining power were found to be grossly or substantially unfair.

In the present case, the Applicant demanded approximately seven more weeks of income benefits from December 1990 to February 10, 1991. The shared understanding of the parties was that the Applicant would return to work on February 10, 1991 and all further responsibility on the part of the Insurer would be terminated. The Applicant ultimately accepted approximately six more weeks of income benefits from December 1990 to February 1, 1991, from which an unspecified amount had been deducted for potential collateral long-term disability benefits over the six-week period.

Counsel for the Applicant submitted that the Insurer's payment of $2,500.42 was inadequate compensation for the Applicant relinquishing his claim for future weekly income benefits. I do not agree. All the medical opinion available to the parties at the time of settlement supported the Applicant's return to work on February 10, 1991 or earlier. I find that at the time he concluded his agreement, the Applicant was willing to assume the risk that he would be fit to return to work in February 1991 and accepted the Insurer's reduced counter-offer of settlement on that basis.

Counsel for the Applicant submitted that in paying the Applicant further weekly income benefits to February 1, 1991, the Insurer was basically bringing the Applicant's benefits up to date and was only doing what it was already bound to do under contract and statute. Counsel suggested that, in fact, the Applicant received no benefit from the settlement. I do not agree. The Insurer did not share the Applicant's conviction that he was entitled to further benefits to February 10, 1991. I find that, in the spirit of compromise, the Insurer was prepared to make a further payment of $2,500.42 in order to finally resolve the claim. While the Applicant did not receive all that he demanded, I conclude that the settlement reached is neither grossly nor substantially unfair, nor does it offend the "community standard of commercial morality", as suggested by Applicant's counsel.

Counsel for the Applicant speculated that Mr. Bennett may have been entitled to continuing payment of a portion of his weekly income benefit even after returning to work at one of his two former jobs at half his former total salary. Counsel also suggested that the Applicant may have been entitled to a higher weekly income amount than the Insurer had previously been paying. No other evidence or calculations were adduced in support of these suggestions. I need not speculate whether the settlement accepted by the Applicant would be considered grossly or substantially unfair in such circumstances. Insufficient evidence was adduced to establish these suggestions.

Special or fiduciary relationship

On the basis of Lloyds Bank and Bundy (supra), counsel for the Applicant claimed that a special or fiduciary relationship existed between Mr. Meyer and the Applicant. Counsel proposed that this relationship imposed certain duties on Mr. Meyer vis-a-vis the settlement negotiations, which he failed to perform. In my view, the relationship between the Applicant and Mr. Meyer is similar to the one described by arbitrator Palmer in the case Mehmet Tuzin and Allstate Insurance Company of Canada, Commission File No. A-000596, May 28, 1992, at page 35:

It is true that the Applicant had developed a relationship with the adjuster as a result of his contact with him through numerous telephone conversations and at face to face meetings. However, by no means could it be said that the Applicant had come to "rely" on the adjuster in the same way that the Applicant might have been said to rely upon the advice of his physician. The Applicant had very much come to see the adjuster as "the adversary". The Applicant knew that he had seen many doctors who had differing opinions about his ability to return to work. I find that at the time he concluded this agreement, the Applicant was willing to assume the risk that he would be fit to return to work in January 1992, if work was available.

In the circumstances of this case, I do not find that a special or fiduciary relationship existed between the parties.

This case has several disturbing features. I am greatly troubled by the obvious shortcomings of Mr. Meyer's approach during the January 30, 1991 meeting with the Applicant. Mr. Meyer failed to follow virtually all of the standard procedures that he himself described. The Insurer should use the Assessment of Claim by Insurer Form (the "Form") to advise its insureds of how their claims for motor vehicle accident benefits have been assessed. The Insurer should explain how the amount to be paid for weekly income benefits was calculated. Any calculation of a partial payment or a deduction made in respect of collateral benefits should be provided on the Form. The Applicant's accident occurred in July 1990, which was soon after the implementation of the No-Fault Benefits Schedule. Mr. Meyer conceded on cross-examination that in the early months following the passage of the Schedule, the Insurer rarely used the Assessment of Claim by Insurer Form when dealing with a claim. Mr. Meyer explained that the Form is now regularly used by the Insurer.

Mr. Meyer was less than frank in dealing with the deduction of potential collateral long-term disability benefits from the amount paid to the Applicant. He failed to communicate his knowledge, obtained directly from Cara, that the long-term disability benefit would likely be denied to the Applicant on the basis of Dr. Borden's medical assessment.

Despite these deficiencies, I am persuaded that the Applicant understood the general nature and purpose of the benefits paid to him by the Insurer and the nature of his negotiations with the Insurer. I am satisfied that, subsequent to the January 30, 1991 meeting with the Insurer, the Applicant freely, voluntarily, and deliberately accepted the Insurer's offer of settlement of his claim for weekly income benefits in connection with his July 30, 1990 accident, well knowing its effect on a claim for future benefits.

The Applicant made a bargain. Subsequent events may have shown that bargain to have been unwise, but that does not prevent the Applicant from being held to it. The Applicant is precluded from bringing a claim for further weekly income benefits in respect of this accident against the Insurer.

Expenses:

The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:

(11) The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664 R.R.O. 1990), Dispute Resolution Expenses.

I am satisfied that the issues raised by the Applicant were genuine. In fact, the perfunctory approach adopted by Mr. Meyer at the settlement meeting of January 30, 1991 likely contributed to the Applicant's uncertainty regarding the status of the settlement subsequently reached between the parties. Had Mr. Meyer adhered to the standard procedures described in his evidence, the Insurer may well have avoided the present dispute.

I conclude that I should exercise my discretion under section 282(11) to award Mr. Bennett his expenses. If the parties are unable to agree on the amount of the expenses to be paid by the Insurer, I remain seized of this matter and either party may apply for an assessment of the expenses.

Order:

1. The parties completed a binding agreement in which the Applicant released all further claims for weekly income benefits against the Insurer.

2. The Applicant is precluded from referring his claim for further weekly income benefits to arbitration, under section 281 of the Insurance Act.

3. The Applicant is entitled to his expenses incurred in respect to the arbitration.

October 19, 1993

Janice Mackintosh

Arbitrator

Date

APPENDIX "A"

Witnesses

Mr. Ben Bennett, Applicant

Mr. John Alu, friend of Applicant

Ms. Grace Oromitan, friend of Applicant

Ms. Patricia Frimpong, tenant of Applicant

Mr. Greg Meyer, Representative from Allstate Insurance

Exhibits

Exhibit 1

Letter from Ben Bennett to Insurer, dated January 22, 1991

Exhibit 2

Statement prepared by Mr. Meyer, executed by Mr. Bennett, dated August 8, 1990

Exhibit 3

Ontario Automobile Insurance Application for Benefits, prepared by Mr. Bennett, dated September 10, 1990

Exhibit 4

Waivers, executed by Mr. Bennett, dated September 10, 1990

Exhibit 5

Memorandum from Dr. Dorfman, dated January 22, 1991

Exhibit 6

Release of all claims, executed January 30, 1991

Exhibit 7

Medical Report of Dr. Borden, dated January 28, 1993

Exhibit 8

Note from Dr. Dorfman on a prescription pad, dated January 22, 1991

Exhibit 9

Computer-generated summary of accident benefits, dated November 5, 1992

Exhibit 10

Dr. Dorfman's report, dated January 28, 1991

Exhibit 11

Flimsy file copy of cheque, issued to Mr. Bennett at meeting January 30, 1991

Exhibit 12

Handwritten note from Mr. Bennett, dated 2?/11/90

List of Applicant's Authorities

Susan Clancy v. Eric John Linguist, 2 C.C.L.I. (2d), p.63 (B.C.S.C.)

Hermanson v. Makkar et al., 1988 CanLII 10340 (BC SC), 33 C.C.L.I., p.207 (B.C.S.C.)

Stephane Lavoie v. Russell William Musey, 5 C.C.L.I. (2d), p.131 (B.C.S.C.)

Lloyds Bank Ltd. v. Bundy [1974] 3 All E.R., p.757

Lopes v. Knox, 1990 CanLII 13841 (BC SC), 45 C.C.L.I., p.90 (B.C.S.C.)

Martin v. Schneider et al., 1984 CanLII 5966 (BC SC), 6 C.C.L.I., p.93 (B.C. Cty.Ct.)

McCumber v. Mastin et al. [1981] I.L.R., p.127 [Ont.High Ct.]

Morrison v. Coast Finance Ltd., 55 D.L.R. (2d) p.710

Prismore v. Calvert et al., 54 D.L.R. (3d), p.133 (B.C.S.C.)

Sebastian v. Bonitatibus, 1988 CanLII 10395 (ON HCJ), 31 C.C.L.I., p.80 (Ont.Dist.Ct.)

Martina Joanne Smyth v. Maria Teresa Szep, 8 C.C.L.I. (2d) p.81 (B.C.C.A.)

Smyth v. Szep, 1990 CanLII 403 (BC SC), 45 C.C.L.I., p.97 (B.C.S.C.)

Maria Teresa Szep v. Martina Joanne Smyth, 11 C.C.L.I. (2d) p.79 (Appeal Note)

Stevens et al. v. Howitt, 4 D.L.R. (3d), p.50 (Ont.High Ct.)

Towers v. Affleck [1974] 1.WW.R., p.714 (B.C.S.C.)

Insurer's Authorities

Cambrian Ford Sales (1975) Ltd. v. Horner (1989), 1989 CanLII 4259 (ON HCJ), 69 O.R. (2d) 431 (H.C.J.)

Canadian Bank of Commerce v. Dembeck 1929 CanLII 113 (SK CA), [1929] 4 D.L.R. 220 (Sask. C.A.)

International Loan Co. v. Kostniuk 1936 CanLII 539 (MB KB), [1936] 3 D.L.R. 227 (Man. K.B.)

Letourneau v. Carbonneau (1904), 1904 CanLII 25 (SCC), 35 S.C.R. 110

Marvco Color Research Ltd. v. Harris et al. (1982), 1982 CanLII 63 (SCC), 141 D.L.R. 577 (S.C.C.)

Saunders v. Aredia Building Society [1971] A.C. 1004 (H.L.)

Summer v. Sapkos et al. (1955), 1955 CanLII 219 (SK CA), 17 W.W.R. 21 (Sask. C.A.)

Summer v. Sapkos et al. (1955), 1955 CanLII 219 (SK CA), 5 D.L.R. 102 (Sask. C.A.)

Taylor v. Armstrong (1979), 1979 CanLII 1811 (ON HCJ), 24 O.R. (2d) 614 (H.C.J.)

Vieczorek et al. v. Piersma et al. (1987), 1987 CanLII 4403 (ON CA), 58 O.R. (2d) 583 (C.A.)