Errol C. Barrow v. Guardian Insurance Company of Canada, 1993 ONICDRG 80

Ontario Insurance Commission

Neutral Citation: 1993 ONICDRG 80 File No.: A-006082

Between: Errol C. Barrow, Applicant and Guardian Insurance Company of Canada, Insurer

Decision on Preliminary Motion

Issues:

The Applicant, Errol Barrow, was struck by a motor vehicle on July 15, 1990. The Guardian Insurance Company of Canada insured the vehicle that hit him. Mr. Barrow applied for and received accident benefits from Guardian Insurance payable under the No-Fault Benefits Schedule (Ontario Regulation 672, enacted under the Insurance Act, R.S.O. 1990, c. I.8).

A dispute subsequently arose concerning Mr. Barrow's entitlement to no-fault benefits. Mr. Barrow applied for mediation, but the dispute apparently was not resolved. On March 16, 1992, Mr. Barrow brought an action in the Ontario Court (General Division) against two defendants. The Statement of Claim sets out his action in negligence against the owner and operator of the vehicle that struck him, and against Guardian Insurance for the payment of benefits under the No-Fault Benefits Schedule.

Mr. Barrow applied for mediation, once again, in August 1993, but the mediation did not resolve all of the issues in dispute. On November 8, 1993, Mr. Barrow applied for arbitration. Guardian Insurance takes the position that Mr. Barrow is not entitled to proceed with the arbitration because he has elected to apply to court.

The issue presented in this motion is:

Should an arbitration hearing be scheduled in response to Mr. Barrow's Application for Appointment of an Arbitrator, dated November 8, 1993?

Result:

Mr. Barrow is not entitled to proceed with this arbitration.

Motion:

The motion was held in North York, Ontario, on December 14, 1993, before me, David R. Draper, arbitrator.

Present at the motion:

Applicant: Errol Barrow Applicant's Representative: Jerome T. Albert, Barrister and Solicitor Insurer's Representative: Joan Takahashi, Barrister and Solicitor

Guardian Insurance filed the Affidavit of Mark G. Lichty, dated December 9, 1993, in support of its motion. In addition, the Arbitrator had the following documents from the Ontario Insurance Commission File #A-006082:

• Report of Mediator, dated November 10, 1993
• Application for Appointment of an Arbitrator, dated November 8, 1993
• Response by Insurer, dated December 9, 1993
• A photocopy of a letter, dated November 25, 1993, from Mr. Albert to Ms. Takahashi
• A letter, dated November 22, 1993, from Mr. Albert to the Ontario Insurance Commission
• A letter, dated November 22, 1993, from Ms. Takahashi to the Ontario Insurance Commission
• A letter, dated November 29, 1993, from Ms. Takahashi to the Ontario Insurance Commission
• A letter, dated December 13, 1993, from the Ontario Insurance Commission to Ms. Takahashi

Reasons for Decision:

The issue in this motion is whether Mr. Barrow is entitled to proceed with an arbitration when he has an outstanding court action against Guardian Insurance involving the same accident.

On July 15, 1990, Mr. Barrow was walking across a road and was struck by an automobile. Guardian Insurance insured the automobile that hit him. Mr. Barrow did not have his own automobile insurance and, therefore, he applied to Guardian Insurance for benefits under the No-Fault Benefits Schedule.

Guardian Insurance paid benefits to Mr. Barrow, but a dispute subsequently developed. Disputes about no-fault benefits are to be resolved according to sections 280 to 283 of the Insurance Act and the No-Fault Benefits Schedule. According to the Insurance Act, the first stage of the dispute resolution process is mediation. Neither party can proceed to arbitration or to court unless mediation has failed:

281 (2) No person may bring a proceeding in any court or refer a matter to arbitration unless mediation has first been sought and has failed.

Either party may refer "any matter in dispute" to a mediator:

280 (1) Either the insured person or the insurer may refer to a mediator any matter in dispute in respect of the insured person's entitlement to no-fault benefits or in respect of the amount of no-fault benefits to which the insured person is entitled.

At some point, Mr. Barrow applied for mediation. The Report of Mediator is not before me, but apparently the dispute was not resolved. After mediation has failed, the insured person has the choice of applying for arbitration or to court. No provision is made for the insurer to apply for arbitration and, therefore, its only option is to apply to court:

281 (1) If mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the matter to an arbitrator.

Mr. Barrow chose to apply to court. On March 16, 1992, he issued a Statement of Claim in the Ontario Court (General Division) against both Mr. Latorre, the owner and operator of the vehicle that hit him, and Guardian Insurance. I find that from the start, this claim involved Mr. Barrow's entitlement to supplementary medical and rehabilitation benefits under section 6 of the No-Fault Benefits Schedule, and also allegations that Guardian Insurance had not met its obligations under the Schedule.

The claim against Guardian Insurance was for "any amount that may be found due to the plaintiff as disability, medical and rehabilitation benefits, and interest, due under a policy of insurance issued by the defendant GUARDIAN INSURANCE COMPANY OF CANADA TO THE DEFENDANT AUSTIN LATORRE". Paragraph 10 of the Statement of Claim stated that Guardian Insurance had failed to pay the full medical, rehabilitation and loss of income benefits, plus interest, as required by the insurance policy.

Mr. Barrow's Statement of Claim was amended on July 14, 1992. It was suggested that this was in response to the failure of a second mediation, but that is not clear from the evidence before me.

Guardian Insurance filed a Statement of Defence and Counterclaim in the court action, dated August 4, 1992. In its Counterclaim, Guardian Insurance includes a claim for repayment of the medical, rehabilitation and care expenses that it has paid to Mr. Barrow. Mr. Barrow then filed a Jury Notice, dated August 20, 1992, and a Reply and Defence to Counterclaim, dated August 21, 1992.

The parties agree that Mr. Barrow has attended the Whiplash & Headache Clinic for quite some time and that Guardian Insurance initially paid its invoices in full. By November or December of 1992, however, the payment of the full amount of the invoices from the Whiplash & Headache Clinic had become an issue. During Mr. Barrow's examination for discovery on February 19, 1993, Mr. Albert asked if Guardian Insurance was going to pay an invoice from the Whiplash & Headache Clinic, dated December 28, 1992.

On June 6, 1993, Guardian Insurance issued an Assessment of Claim by Insurer, indicating that it was denying a portion of Mr. Barrow's claim for supplementary medical and rehabilitation benefits. The explanation given is as follows:

Whiplash & Headache Clinic Invoices #1909, 1910 and 1906 include medical supplies &/or nerve block charges that are not explained & not indicated in previous billings. We question whether these are reasonable expenses as per 2.4 of the policy.

Mr. Albert indicated that a further mediation failed on June 7, 1993 and that Mr. Barrow's Statement of Claim was amended on July 26, 1993 to include this dispute. The Statement of Claim now includes the following paragraphs:

10. Under the policy, and in particular Section B, there is due to the plaintiff benefits which require payments to insured persons for medical, rehabilitation, loss of income and interest upon late payments. The plaintiff is an insured person under the said policy. Benefits to which he is entitled thereunder have been incompletely paid and the defendant, GUARDIAN INSURANCE COMPANY OF CANADA, has failed and refused to pay these benefits in accordance with the terms of the policy. At this time the following benefits are outstanding:

(a) Weekly benefits are being paid at a rate which does not correspond to 80% of the weekly wage as reported by the "Ontario Automobile Insurance Employer's Confirmation of Income" statement dated January 17, 1991;

(b) Interest, at the policy rate of 2% monthly, on late payment of disability benefits and medical expenses, has not been paid as required;

(c) The said defendant has refused, without adequate explanation, to pay part of the plaintiff's medical expenses claim; and

(d) A plan for the long term care and the provision of weekly disability benefits for the plaintiff's lifetime has not yet been agreed to by the defendant, Guardian Insurance Company of Canada.

11. The plaintiff undertakes to provide, prior to trial, a bill of particulars with regard to the injury, disability and treatment, and as to the loss of income, medical, rehabilitation and other expenses.

On July 23, 1993, Mr. Albert prepared a pre-trial conference memorandum in the court action, which includes the following:

Mr. Barrow alleges that the Section "B" benefits have been improperly and inadequately paid and assessed. He further seeks a declaration that, due to his unemployability, he is entitled to payment of a weekly disability benefit for life, and to extended care and the provision of special facilities for persons suffering from severe brain damage. . .

Mr. Barrow intends to establish that the manner in which existing benefits have been paid was manipulated by Guardian Insurance improperly and unfairly. This caused him unneeded suffering and deprivation, especially during the 6 months or so he was in hospital and later when confined to a wheel chair. One unpaid supplier became so irate that he threatened to murder Mr. Barrow over a bill that Guardian had delayed the payment of. Mr. Barrow has claimed for damages for a breach of duty on the part of Guardian to deal fairly with his claim.

The plaintiff seeks payment of the weekly indemnity at a level consistent with the reports of the employer filed several times, and payment of interest on arrears and on numerous overdue accident benefit/disability payments.

In August 1993, Mr. Barrow again applied for mediation. Before the mediation was completed, a pre-trial conference took place in the court action on September 29, 1993. In its pre-trial conference memorandum, Guardian Insurance objected to Mr. Barrow's applications for mediation filed after the commencement of the court action:

The mediation applications filed since the commencement of litigation have been in large measure highly inappropriate. It is Guardian's view that where matters in dispute have been put before mediation once and mediation has failed, it is an abuse of process that further and continued mediation applications should be made. For example, an application was brought dated August 6, 1993, including numerous items which were the subject of previous mediation which was declared "failed" by reason of the failure of the plaintiff and his solicitor's attendance and furthermore, included certain medical expenses which were forwarded for payment on that very same date.

According to the Report of Mediator, dated November 10, 1993, numerous issues related to supplementary medical and rehabilitation benefits were discussed during the mediation. Some issues were resolved during the mediation, but a number were not, including the accounts of the Whiplash & Headache Clinic from April 28, 1993 to August 20, 1993.

On November 8, 1993, Mr. Barrow applied for arbitration. Some of the issues were subsequently resolved, but not the payment of the invoices from the Whiplash & Headache Clinic. Mr. Barrow's application for arbitration states, in part:

In the case of the accounts of the Whiplash & Headache Clinic the insurer has paid this supplier less than it was billed, saying in its assessment (which was not issued in good time, i.e. dated June 25, 1993 - services rendered and accounts tendered between November, 1992 and May, 1993) that the physician's accounts are unreasonable, but not saying how or why. The insured person cannot pay the clinic's account and does not know if the account is reasonable.

As stated above, the issue in this motion is whether Mr. Barrow is entitled to proceed with an arbitration when he has an outstanding court action against Guardian Insurance involving the same accident. It was submitted on behalf of Mr. Barrow that he has a statutory right to proceed to arbitration from a failed mediation.

In my opinion, the choice given to insured persons under the Insurance Act is to provide them with the option of arbitration as an alternative to court. The insurer cannot choose arbitration and, therefore, insured persons cannot be forced into arbitration. I do not believe, however, that the insured person has an absolute right to proceed in both forums, even if the issues significantly overlap.

In The Citadel General Assurance v. Amrik Singh Gogna and Raksha Gogna, unreported decision of the Ontario Court of Justice (General Division), dated September 16, 1992, the court was asked to determine whether an insurer's application to court should proceed in light of the insured person's subsequent application for arbitration. Justice MacDonald stayed the arbitration proceeding and allowed the court application to proceed, stating that multiple hearings are to be avoided, wherever possible. In order to decide which matter should proceed, she relied on the following considerations set out in Victoria Property and Investment Co. (Canada) Ltd. et al. v. Vatznau Management Ltd. et al. (1978) 1978 CanLII 1286 (ON HCJ), 8 C.P.C. 38 at 41:

(1) which action began first; (2) who has the chief burden of proof; (3) which is the most comprehensive in scope.

In this case, Guardian Insurance is not seeking to force Mr. Barrow into one forum or the other. Its position is that he should have to choose one forum to deal with the entire matter.

My difficulty with Mr. Barrow's position is that I am not persuaded that his arbitration involves a new matter that is distinct from the court proceeding. Rather, the payment of the invoices from the Whiplash & Headache Clinic appears to be a recent example of the ongoing dispute between Mr. Barrow and Guardian Insurance over the benefits that should be paid for medical and rehabilitation services.

Mr. Barrow's Statement of Claim is quite broadly drafted. He has asked the court to order that Guardian Insurance pay all of the benefits to which he is entitled under the No-Fault Benefits Schedule, including supplementary medical and rehabilitation expenses. He has specifically alleged that Guardian Insurance "has refused, without adequate explanation, to pay part of the plaintiff's medical expense claim". In addition, his claim asks the court to deal with his entitlement to ongoing benefits by asking for a declaration that he is "entitled to lifetime disability benefits under the policy".

The court action has proceeded through discoveries and a pre-trial conference, and is scheduled for trial on April 28, 1994. There does not appear to be any serious impediment to including all of the issues in the court proceeding. Ms. Takahashi stated that Guardian Insurance would not object. It is not obvious to me that the Statement of Claim would need to be amended, but if an amendment is required, Ms. Takahashi indicated that Guardian Insurance would consent.

I conclude that to allow Mr. Barrow to proceed with this arbitration would unduly duplicate the proceedings and, therefore, it should not proceed.

I also conclude that this is not an appropriate case in which to award expenses to Mr. Barrow under section 282(10) of the Insurance Act. In my view, Mr. Barrow was insisting on duplicitous proceedings which would have unnecessarily increased the overall costs of resolving the dispute.

The Insurer was put to the expense of bringing this successful motion. In accordance with the letter, dated December 13, 1993, from the Ontario Insurance Commission to Ms. Takahashi, the filing fee of $1,000 paid by Guardian Insurance in this arbitration will be refunded.

Order:

Mr. Barrow is not entitled to proceed with this arbitration.

December 23, 1993

David R. Draper Arbitrator