Neutral Citation: 1993 ONICDRG 70
File Nos. A-003279 and A-003280
ONTARIO INSURANCE COMMISSION
BETWEEN:
WILLIAM NTANA
Applicant
and
ZURICH INSURANCE COMPANY
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurers
DECISION
Issues:
The Applicant, William Ntana, was injured in a motor vehicle accident on June 27, 1991. He received accident benefits from Allstate Insurance Company of Canada ("Allstate") payable under Ontario Regulation 672 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8, until July 30, 1992.
Mr. Ntana was involved in a second accident on July 8, 1992. He applied for accident benefits for the second accident from Zurich Insurance ("Zurich"). Zurich maintained that the Applicant was not entitled to benefits for the second accident.
The Applicant claimed ongoing benefits from Allstate, as well as benefits from Zurich. Mediation was unsuccessful in resolving the disputes between the Applicant and the Insurers, and the Applicant applied for arbitration against both Insurers.
Allstate filed a response to the application for the appointment of an arbitrator, as well as its $1,000 assessment payable in respect of an arbitration.
Zurich failed to file a response or pay its assessment. This matter proceeded to a hearing on August 3, 1993, without the participation of Zurich. At the hearing, the Applicant withdrew his claim against Allstate, but continued against Zurich. The issues at the hearing were:
Is the Applicant entitled to receive accident benefits from Zurich?
Is the Applicant entitled to a special award because of Zurich's failure to pay benefits?
Subsequently, Zurich filed a response, paid its assessment, and moved to have the hearing re-opened. A hearing was held on October 13, 1993, to deal with the motion for the re-opening.
Result:
The hearing concluded on August 3, 1993 shall not be re-opened. Zurich will not have the opportunity to participate further in the proceedings.
The Applicant is entitled to weekly income benefits of $185.60 commencing July 31, 1992. The Applicant is also entitled to $1,649.80 in medical and rehabilitation benefits, and interest on all outstanding amounts at the rate of 2 per cent per month.
The Applicant is not entitled to a special award.
Hearing:
Present at the hearing on August 3, 1993 held in North York, Ontario, before me, Frederika M. Rotter, Senior Arbitrator, were:
Applicant: William Ntana
Applicant's Representative: Altor Shields Barrister and Solicitor
Representative of Allstate: Ian Kirby Barrister and Solicitor
The individuals named above attended at the motion to re-open on October 13, 1993. Also present were:
Representative of Zurich: James D. Tomlinson Barrister and Solicitor
Colleen MacDonald John Ormston
Exhibits:
The exhibits filed at the hearing on August 3, 1993 are as follows:
Exhibit 1 Document Book from Applicant
Exhibit 2 Letter from Purolator Courier, dated March 12, 1992
Exhibit 3 Applicant's medical and rehabilitation claims
Exhibit 4 CT Scan report from The Toronto Hospital, dated July 12, 1993
Findings:
Motion to Re-open
The first issue I must deal with is whether the hearing of August 3, 1993 should be re-opened. I rely on the Ontario Insurance Commission's arbitration file for documentation of many of the facts pertaining to the motion to re-open the hearing in this matter.
The file reveals that Mr. Ntana applied to the Ontario Insurance Commission (the "Commission") for the appointment of an arbitrator in respect of his dispute with Zurich on January 31, 1993. The application was stamped received by the Commission on February 2, 1993.
A letter dated February 5, 1993 was sent to Zurich from the Commission. The letter enclosed the application by Mr. Ntana, and advised that Zurich was required to complete a response form, and pay an assessment of $1,000 in respect of the application, by February 24, 1993. A blank response form and statement of service form was forwarded by the Commission, for the convenience of Zurich. At the hearing of the motion, counsel for Zurich conceded that it had received a copy of the application, together with the usual enclosures.
Zurich did not file its response or assessment fee by the due date of February 24, 1993. On March 24, 1993, a letter was sent to Zurich by J.G. Malcolm, Registrar and Executive Coordinator of the Dispute Resolution Group of the Commission, advising as follows:
This office wrote to you on February 5, 1993 to request payment of the $1,000.00 assessment fee in this arbitration.
The Insurance Act and regulations require that every insurance company that is a party to an arbitration must pay an assessment of $1,000.00.
Your company has failed to remit the $1,000.00 assessment fee as requested.
We must therefore advise you that Zurich Insurance has no standing to participate in this arbitration, nor will it receive any further notice or communication in these proceedings.
Mr. Ntana and his counsel were sent copies of this letter.
Zurich did not respond to the correspondence of March 24, 1993.
On March 30, 1993, Wenda McEachern, a representative of Zurich, was contacted by a Commission caseworker. The telephone log indicates that Ms. McEachern apologized to the caseworker for not having completed a response. She indicated that Zurich would "work on it" and send the response by courier the next day.
By April 8, 1993, the Commission had still not received Zurich's response. At 9:30 that morning, the Commission caseworker left a telephone message for Ms. McEachern, indicating that in the absence of a response and filing fee from Zurich, a pre-hearing discussion would be scheduled, without including Zurich.
At 1:45 that afternoon, the Commission caseworker received a telephone call from Mr. Mark Sones, another Zurich representative. The telephone log indicates that the caseworker asked Mr. Sones about the status of the response and filing fee in this case. He responded that he would have to speak to Ms. McEachern, and would let the caseworker know. The caseworker stated that she was obliged to schedule the pre-hearing discussion as soon as possible, and that Zurich would not be notified of the date in these circumstances.
No response was received from Zurich in the following week. The pre-hearing discussion was accordingly scheduled to take place on May 20, 1993. Notice of the pre-hearing discussion, dated April 13, 1993, was sent to Mr. Ntana and his counsel, and also to Allstate and its representative. Zurich received no notice of the pre-hearing discussion, and so did not attend or participate in the pre-hearing.
At the pre-hearing discussion, the hearing date was scheduled for August 3, 1993. Subsequently, a Notice of Hearing was sent to Mr. Ntana and his counsel, and to Allstate and its counsel. Zurich was not sent notice of the hearing.
At the hearing of the motion, Zurich argued that it should have been provided with notice of the hearing, in accordance with section 15.1 of the Dispute Resolution Practice Code. That section requires that "the parties" be given notice of a hearing.
However, section 10.4 of the Dispute Resolution Practice Code specifies that "Each insurer that is a party to the arbitration shall pay one thousand dollars ($1000) in respect of the arbitration." Section 11.1 specifies that "The insurer shall complete and serve a response on the insured person and any other parties within fourteen (14) days of having received the Application for Appointment of an Arbitrator". The language of both sections is mandatory. I conclude, therefore, that if an insurer fails to pay its one thousand dollars in respect of the arbitration, and fails to file its response, it cannot be considered a party, for the purpose of receiving notice of the hearing.
At the start of the hearing on August 3, 1993, I was advised that Mr. Ntana was withdrawing his claim against Allstate, including claims for interest and expenses. Counsel for Allstate accordingly withdrew from the proceedings. Later the same day, the Commission received by fax a letter from counsel for Mr. Ntana, confirming that Mr. Ntana had withdrawn the claim against Allstate, and had elected to proceed against Zurich only.
The hearing on August 3 proceeded, therefore, with evidence from Mr. Ntana regarding his claim against Zurich. I deal with the merits of that claim below.
The Commission file indicates that on August 4, 1993, the Registrar contacted Mr. Mark Sones of Zurich, and advised him that the hearing had taken place on the previous day, and that a decision would be forthcoming, based on the Applicant's evidence alone. The note on the file indicates that Mr. Sones responded in a manner "seemingly not very concerned".
However, subsequently, on August 6, 1993, the Commission received fax correspondence from Mr. Herb Graham, confirming a conversation with Mr. Malcolm, and apologizing for not having attended at the arbitration hearing.
The letter states:
We fully realize that we misperformed in this situation and we take full responsibility for this occurrence.
The reason we did not attend was that we inadvertently allowed this case to go unattended resulting in this consequence.
The letter also indicates that Zurich would be contacting its solicitor to find out what could be done to remedy the situation.
On August 18, 1993, the Commission received a letter from Zurich's solicitor, confirming that Zurich "had allowed through inadvertence the matter to go unattended". The letter notes that Zurich had issued a cheque for $1,000 payable in respect of the arbitration in April, but had never sent it. The letter also observes that Zurich did not receive notice of the arbitration hearing, pursuant to section 15 of the Dispute Resolution Practice Code.
On August 23, 1993, the Registrar responded to the August 18th letter, indicating it would be treated as notice of a motion for the re-opening of the hearing. Zurich filed its response (dated August 20, 1993) together with the $1,000 assessment fee on August 23, 1993.
At the hearing of the motion, counsel for Zurich did not present any explanation for its "inadvertence" in failing to deal with this case in a timely manner. Zurich failed to act after it received correspondence and repeated telephone calls from the Registrar's Office of the Commission's Dispute Resolution Group, drawing this matter to its attention. No reasons for the repeated failure to respond appropriately were given. I find that Zurich's conduct is better described as negligence, rather than simple inadvertence.
Counsel for Zurich submitted that courts often re-open cases when pleadings have been noted closed, and even re-open in cases where a default judgement is entered, if the plaintiff can be adequately compensated in costs. He further indicated that the Insurer is prepared to reimburse the Applicant, on a solicitor-and-client basis, for his expenses incurred with respect to the hearing of August 3, 1993.
However, I have no cost power which would adequately compensate Mr. Ntana and his counsel, and Allstate, the other party involved in this matter, for the expense and inconvenience of having to recommence this process. Although Zurich is prepared to sign a consent order to reimburse Mr. Ntana for his expenses, I have no ability to require that Zurich compensate Mr. Ntana himself for his lost time, and for the aggravation this matter has caused him.
Nor am I able to order that Allstate be reimbursed for its expenses, were this matter to be re-opened.
In the circumstances of this case, I have determined that the hearing ought not now to be re-opened in order to allow Zurich to participate in the proceedings.
The dispute resolution process under the Insurance Act was designed to deal with disputes about no-fault benefits speedily, informally, and in a cost-efficient manner. To this end, the process does not require elaborate pleadings, is relatively accessible, and is administered in a way that is "user-friendly" to the parties.
In keeping with the spirit of this process, Zurich was repeatedly reminded and invited to file its response and assessment fee, well after the due date for doing so had expired. However, even a user-friendly system cannot allow parties to ignore, with impunity, basic rules and requirements.
Zurich did not, at the hearing of the motion, address any argument towards the merits of its case. While it was not obliged to argue the substantive merits at the motion, some indication that a bona fide and legitimate defense existed (together with some explanation for its "inadvertence") might have assisted me to view Zurich's position more favourably.
I find that Mr. Ntana would be seriously prejudiced were the hearing to be re-opened. Allowing Zurich to participate meaningfully, at this point, would require, in effect, recommencing this entire matter, from the pre-hearing onwards. This defeats one of the primary objectives of the process - namely speedy and efficient delivery of services.
Accordingly, I have determined that Zurich, and not the other parties, must bear the costs and consequences of its own negligent failure to deal with this matter in a timely and organized fashion.
Claim for Weekly Income Benefits
At the hearing on August 3, 1993, Mr. Ntana presented evidence relevant to his claim for weekly income benefits from Zurich. I accept his evidence, in the absence of any contradictory information.
Mr. Ntana explained that he had been involved in a motor vehicle accident on June 27, 1991, and had been receiving no-fault benefits from Allstate in respect of this accident, until July 30, 1992.
He had a second accident (giving rise to the present dispute) on July 8, 1992. He was travelling to a therapy session, and was stopped at a light in an intersection, when a truck making a left turn collided with his car. As a result of this accident, Mr. Ntana sustained injuries to his chest, lower back, left hip, left leg, and left shoulder. The medical evidence indicates that his injuries exacerbated his pre-existing condition, as he had not yet fully recovered from the effects of previous accident.
Mr. Ntana claims that, subsequent to the second accident, he has had difficulty bending, walking and sitting, and suffers severe pain in his chest, and headaches. He has also been psychologically traumatized by the accident, and is currently receiving psychological treatment.
Prior to his first accident in June 1991, Mr. Ntana was employed by two different employers. He worked for Purolator Courier during a night shift, from 1 to 6 a.m., unloading boxes from trucks, and placing them on a conveyor belt. The boxes were not standard sizes and could weigh 80 - 120 pounds. Each truck carried about 6,000 - 7,000 boxes, and he generally would unload about seven trucks in one shift -- that is, about 50,000 boxes per shift (together with another worker).
Mr. Ntana was also employed at J & T Machine & Tooling. His job was grinding steel plates, to obtain a sharp edge. He had to carry the steel plates (which weighed 80 - 160 pounds) himself, grind them, clean the plates after the grinding, and then place the finished plate on a table. He also had to position and tighten the grindstones in the grinding machine.
Mr. Ntana testified that he could not return to work at either of his jobs after the first motor vehicle accident in June 1991. He tried to go back to work at Purolator for one week in January 1992, but could not do it. He was terminated from his job at Purolator in March 1992.
Mr. Ntana testified that he has not been terminated from his job at J & T Machine & Tooling. He claims he is still not fit to return to work there, because of his severe lower back pain, resulting from the accident of July 1992.
In a letter dated July 20, 1993 (marked Exhibit 1-4), Mr. Ntana's family physician, Dr. N. Agulefo, indicates that Mr. Ntana suffers a substantial inability to do his essential tasks, as he cannot lift weights over 40 pounds, and is unable to stand or sit for any length of time without pain. Dr. Agulefo also indicates that Mr. Ntana has been suffering psychologically, with post-traumatic symptoms.
I accept this evidence and conclude that Mr. Ntana is entitled to weekly income benefits from Zurich, effective July 31, 1992.
Mr. Ntana claimed benefits of $521.03 (the amount of his benefits from Allstate) based on his income from his employment prior to June 1991. Since Mr. Ntana earned no income from his employment or occupation in the twelve months prior to the accident of July 1992, I find that his weekly income benefits must be based on the deemed minimum earnings of $232, as stipulated in section 12(7) of the No-Fault Benefits Schedule. He is therefore entitled to the minimum weekly income benefit of $185.60.
Mr. Ntana is also claiming supplementary medical and rehabilitation benefits, as documented in Exhibit 3. He claims $2,153.80, less $504 in travel expenses which Zurich has paid. His net claim is therefore $1,649.80. I have reviewed the expenses claimed and allow them, as they appear to be straightforward, reasonable and legitimate.
Finally, Mr. Ntana is claiming a special award. A special award is payable under section 282(10) of the Insurance Act, which provides:
(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the No-Fault Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.
In this case, the Insurer has not paid any weekly income benefits to Mr. Ntana. I have before me a report of mediator, indicating that this issue had been mediated, and that the Insurer "saw no reason to grant entitlement to weekly income benefits".
I have no explanation for Zurich's conduct or its reasons for withholding benefits. Mr. Ntana has presented a prima facie case that he is entitled to benefits, but he introduced no evidence about Zurich's actions -- other than the failure to pay benefits and the further failure to respond to the arbitration application -- which would clearly show some element of unreasonableness.
Had Zurich participated in the hearing, a reasonable explanation for its conduct might well have been adduced. Under the circumstances, and without further evidence, I decline to find positively that Zurich has acted unreasonably. Such a finding would require that I come to a conclusion, on the balance of probabilities, in a case where I have no factual information to support that conclusion.
Moreover, the result would doubly penalize Zurich for its failure to participate in the hearing. In this case, I find that my ruling excluding Zurich from the hearing, and the consequent award of benefits to Mr. Ntana is a sufficient penalty.
Mr. Ntana is seeking his expenses incurred in the arbitration hearing. I have a discretion to award such expenses, and this is clearly a case where that discretion should be exercised in the Applicant's favour. Mr. Ntana is accordingly entitled to his expenses incurred in respect of this proceeding.
Order:
The hearing concluded on August 3, 1993 shall not be re-opened. Zurich will not have the opportunity to further participate in the proceedings.
The Applicant is entitled to weekly income benefits of $185.60 commencing July 31, 1992. The Applicant is also entitled to $1,649.80 in medical and rehabilitation benefits, and interest on all outstanding amounts at the rate of 2 per cent per month.
The Applicant is not entitled to a special award.
The Applicant is entitled to his expenses incurred in respect of the arbitration proceeding.
November 15, 1993
Frederika M. Rotter Senior Arbitrator
Date