Neutral Citation: 1994 ONICDRG 113
File No. A-007573
ONTARIO INSURANCE COMMISSION
BETWEEN:
FRANCINE E. ALEXANDER
Applicant
and
CONSTITUTION INSURANCE COMPANY OF CANADA
Insurer
DECISION ON PRELIMINARY ISSUE
Issues:
The Applicant, Francine E. Alexander, was injured in a motor vehicle accident on September 12, 1991. She applied for and received statutory accident benefits from Constitution Insurance Company of Canada ("Constitution"), payable under Ontario Regulation 6721. Weekly benefits were terminated by Constitution on November 7, 1992. Ms. Alexander seeks reinstatement of weekly benefits after November 7, 1992. She also seeks a determination as to whether she is entitled to weekly benefits under section 12 or section 13 of the Schedule. Ms. Alexander is not seeking a determination concerning the amount of weekly benefits payable. The parties were unable to resolve their disputes through mediation and Ms. Alexander applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act").
Following the pre-hearing conference held on April 14, 1994, the parties were not able to agree on what issues should be included in the arbitration. Constitution seeks to include the issue of repayment of portions of the weekly benefits paid to Ms. Alexander. Constitution takes the position that any Canada Pension Plan Early Retirement benefit and Old Age Pension benefit (Widow's Pension benefit) payments received by Ms. Alexander after September 19, 1991, are deductible from her weekly benefits and seeks repayment of benefits overpaid. Constitution also seeks to include the issue of the amount of the weekly benefit Ms. Alexander should receive, specifically the deductibility of Canada Pension Plan benefits and Old Age Pension benefits, after benefits were terminated.
Ms. Alexander objects to the inclusion of these issues in the arbitration.
The preliminary issue is:
What issues should be included in the arbitration?
Result:
Constitution is precluded from raising the issue of repayment of portions of the weekly benefits paid to Ms. Alexander during the period September 19, 1991 to November 7, 1992. Constitution is also precluded from raising the issue of the amount of the weekly income benefit Ms. Alexander should receive under section 12 or 13 of the Schedule after November 7, 1992.
Hearing:
The preliminary issue was dealt with by way of written submissions following pre-hearing conferences held on April 14, 1994, and October 7, 1994. I received written submissions dated September 16, 1994, and October 12, 1994, from Ms. Philippa G. Samworth, on behalf of Constitution. I received written submissions, dated October 21, 1994, from Kenneth Arenson, on behalf of Ms. Alexander.
Authorities referred to by the parties are listed in Appendix A.
Reasons for Decision:
a) Background Facts and Issues:
Ms. Alexander was involved in a motor vehicle accident on September 12, 1991. She was not employed at the time of the accident and she was not employed or self-employed for 180 days in the twelve-month period before the accident. She had worked as a real estate salesperson prior to the summer of 1990, and claimed that she was on a temporary lay-off.
Ms. Alexander received weekly benefits, under section 13 of the Schedule, from September 19, 1991 to November 7, 1992, when benefits were terminated. Ms. Alexander disputed the termination of benefits. She also claimed that because she was on a temporary lay-off at the time of the accident, she was entitled to receive benefits under section 12, rather than section 13 of the Schedule.
Ms. Alexander applied for mediation. The Report of Mediator, issued January 12, 1994, indicates that issues in respect of Ms. Alexander's entitlement to weekly benefits after November 7, 1992, and her entitlement to weekly income benefits under section 12 of the Schedule were discussed but not resolved.
Ms. Alexander submitted an Application for Appointment of an Arbitrator, dated January 20, 1994, in respect of both the issues dealt with in mediation. Ms. Alexander did not seek a determination concerning the amount of the weekly benefit payable to her by Constitution.
After filing its Response by Insurer dated February 21, 1994, and prior to the pre-hearing conference on April 14, 1994, Constitution advised Ms. Alexander that it would be raising the issue of the proper amount of weekly income benefits. Constitution advised Ms. Alexander that it was taking the position that any Canada Pension Plan benefit and Old Age Pension benefit payments received by Ms. Alexander after September 19, 1991, were deductible from her weekly benefits and it would be seeking repayment of benefits overpaid.
At the pre-hearing conference on April 14, 1994, the parties agreed that the following issues are to be determined in this arbitration:
(1) Should Ms. Alexander's entitlement to weekly benefits be determined under section 12 (Income Benefit) or section 13 (Benefit if No Income) of the Schedule?
(2) Is Ms. Alexander entitled to weekly benefits after November 7, 1992?
(3) Is Ms. Alexander entitled to interest on any overdue benefits?
Constitution sought to include in the arbitration the issue of repayment of portions of the weekly benefits paid to Ms. Alexander. Constitution's claim for repayment relates to the amount of the weekly benefit Ms. Alexander should have received from September 19, 1991 to November 7, 1992. Constitution also sought to include the issue of the amount of the weekly benefit Ms. Alexander should receive after November 7, 1992. Ms. Alexander objected to the inclusion of these issues.
After the pre-hearing conference, Constitution referred these issues to mediation. The Report of Mediator, issued on July 26, 1994, indicates that these issues were not resolved.
By way of a letter dated September 19, 1994, to the Ontario Insurance Commission, Constitution renewed its motion for an order stating that it was entitled to raise these issues at the arbitration scheduled for December 5, 6 and 7, 1994.
Findings:
An arbitrator's jurisdiction to determine issues between the parties is limited by sections 281(1), 281(2) and 282(3) of the Act, which provide:
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.
(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.
282.-(3) The arbitrator shall determine all issues in dispute and such other issues as the parties may agree.
[emphasis added]
Under the Act, only an insured person may refer a "matter" to arbitration. Whether an arbitrator can deal with issues other than those raised by the insured person in the Application for Appointment of an Arbitrator depends on the scope of "the matter" that the insured person has referred to arbitration, and, in the absence of agreement between the parties, the scope of the "issues in dispute" in the case.
In Peter Kotsiakos and State Farm Mutual Automobile Insurance Company, July 26, 1994, OIC File No. A-002354 (under appeal), I considered the meaning that should be given to the words "matter" and "issues in dispute". In that decision, I followed the reasoning of the Director of Arbitrations in Rosa DeCicco and State Farm Mutual Automobile Insurance Company, appeal decision dated February 21, 1992, OIC File No. P-000277. In DeCicco, the Director of Arbitrations did not define "matter". Rather, she stated that it was up to the arbitrator called upon to determine "the matter" to define that matter and, in each case, determine the scope of the arbitration. The Director suggested, however, that once "the matter" is defined by the arbitrator, any questions or concerns that naturally or consequentially flow from "the matter" comprise the "issues in dispute".
Based on my reading of sections 281 and 282 of the Act and the Director's decision in DeCicco, I concluded in Kotsiakos that an arbitrator cannot expand the scope of the arbitration to include a question or concern unrelated to the matter referred by the insured person to arbitration. If the question or concern is directly related to the matter or naturally or consequentially flows from the matter, then it is properly an "issue in dispute."
Nothing in this case persuades me to depart from the reasoning and approach that I adopted in Kotsiakos.
In this case, I find that the matters referred to arbitration by Ms. Alexander are her entitlement to receive weekly income benefits under section 12 rather than section 13 of the Schedule, and her ongoing entitlement to weekly benefits after November 7, 1992.
Constitution submits that the issues it seeks to include in the arbitration directly flow from the matters referred to arbitration by Ms. Alexander.
In Kotsiakos, in determining whether the insurer's issue naturally or consequentially flowed from the matter the applicant had referred to arbitration, I considered the nature of the arbitrator's inquiry and the type of evidence which might be led by the parties. I take the same approach in this case.
In order to determine whether Ms. Alexander is entitled to weekly income benefits under section 12 or section 13, the arbitrator must decide whether Ms. Alexander meets the qualifications set out in subsection (2) or (3) of section 12. Specifically, in this case, the arbitrator must decide whether Ms. Alexander was on a "temporary lay-off" at the time of the accident. The parties will likely make argument on the meaning of the words "temporary lay-off" and lead evidence about the circumstances under which Ms. Alexander left her occupation or employment prior to the accident.
In order to determine Ms. Alexander's ongoing entitlement to weekly benefits, the arbitrator will have to decide whether, after November 7, 1992, as a result of the accident, she suffers substantial inability to perform her essential tasks. The parties will likely lead medical evidence on this issue, and evidence about her essential tasks.
On the other hand, the arbitrator's inquiry regarding the issues that Constitution seeks to add to this arbitration will require evidence in respect of any payments for loss of income received by or available to Ms. Alexander. The arbitrator will determine whether Canada Pension Plan Early Retirement benefit and Old Age Pension benefit (Widow's Pension benefit) payments constitute "...payments for loss of income". If they do, the arbitrator will determine the amount of the weekly benefit Ms. Alexander is entitled to, after deducting the amounts received or available from 80 per cent of her gross weekly income from her occupation or employment, if section 12 of the Schedule applies, or from $185.00, if section 13 of the Schedule applies.
These inquiries are quite different. In order to determine the matters referred to arbitration by Ms. Alexander, the arbitrator will not need to determine the amount of the weekly benefit to which Ms. Alexander is entitled. Accordingly, I find that the issues that Constitution seeks to add to the arbitration do not directly affect or naturally or consequentially flow from the matters referred to arbitration by Ms. Alexander.
I conclude that Constitution is precluded from raising the issue of repayment of portions of the weekly benefits paid to Ms. Alexander during the period September 19, 1991 to November 7, 1992. Constitution is also precluded from raising the issue of the amount of the weekly income benefit Ms. Alexander should receive under section 12 or 13 of the Schedule after November 7, 1992. The arbitrator will make no determination as to the amount of the weekly benefit payable to Ms. Alexander after September 19, 1991.
Order:
- The issues to be determined in this arbitration are:
(1) Should Ms. Alexander's entitlement to weekly benefits be determined under section 12 (Income Benefit) or section 13 (Benefit if No Income) of the Schedule?
(2) Is Ms. Alexander entitled to weekly benefits after November 7, 1992?
(3) Is Ms. Alexander entitled to interest on any overdue benefits?
November 25, 1994
Shemin Mani
Arbitrator
Date
APPENDIX A
Authorities referred to:
Insurance Act, R.S.O 1990, c. I.8, sections 281 and 282, as amended by the Insurance Statute Law Amendment Act, 1993, S.O. 1993, c. 10.
Elizabeth Aladejebi and State Farm Mutual Automobile Insurance Company, September 27, 1994, OIC File No. A-005933;
Comfort Ayertey and Toronto Transit Commission (Markel Insurance Company of Canada), April 5, 1994, OIC File No. A-004077;
Rosa DeCicco and State Farm Mutual Automobile Insurance Company, December 18, 1991, OIC File No. A-000277;
Rosa DeCicco and State Farm Mutual Automobile Insurance Company, February 21, 1992, OIC File No. P-000277 (appeal);
Peter Kotsiakos and State Farm Mutual Automobile Insurance Company, July 26, 1994, OIC File No. A-002354 (under appeal);
Lorenzo Rescigno and State Farm Mutual Automobile Insurance Company, September 26, 1994, OIC File No. A-008268 (under appeal).