Neutral Citation: 1994 ONICDRG 69
File No. A-000330
ONTARIO INSURANCE COMMISSION
BETWEEN:
ALIREZA FAKHRI
Applicant
and
COACHMAN INSURANCE COMPANY
Insurer
DECISION on PRELIMINARY ISSUE
Issues:
The applicant, Alireza Fakhri, was injured in a motor vehicle accident on December 8, 1990. He applied for and received statutory accident benefits from the insurer, payable under Ontario Regulation 672.1 Weekly income benefits were terminated by the insurer on July 27, 1991. The parties were unable to resolve their disputes through mediation and the applicant applied for arbitration under the Insurance Act.
The applicant's Application for Appointment of an Arbitrator is dated December 1, 1993. The insurer contends that the applicant is precluded from applying for arbitration because more than two years have passed from the date when weekly benefits were terminated.
The issues in this hearing on a preliminary issue are:
Is Mr. Fakhri entitled to proceed to an arbitration hearing in this case?
Is Mr. Fakhri entitled to his expenses incurred in the hearing?
Is Mr. Fakhri obliged to reimburse the insurer for its expenses in the hearing, to the maximum of $1,000?
Result:
Mr. Fakhri is not entitled to proceed to arbitration.
Mr. Fakhri is entitled to his expenses incurred in the hearing.
Mr. Fakhri is not obliged to reimburse the insurer for its expenses in the hearing.
Hearing:
The hearing was held in North York, Ontario, on February 22, 1994, before me, Nancy Makepeace, arbitrator. The parties were given until March 11, 1994 to make written submissions about the Report of Mediator dated March 18, 1993. The insurer made submissions, dated March 7, 1994. No submissions were received from the applicant.
Present at the Hearing:
Applicant:
Alireza Fakhri
Insurer's
Stephen Malach
Representative:
Barrister and Solicitor
Witnesses:
Mr. Fakhri, the applicant
Altor Shields, the applicant's former counsel
Mr. Bijan Moayedi, an interpreter in the Farsi language, assisted Mr. Fakhri.
Exhibits and other documents on the record are listed in an Appendix to this decision.
Evidence:
The following facts were not in dispute between the parties:
The applicant, Alireza Fakhri, was injured in a motor vehicle accident on December 8, 1990.
The insurer paid weekly income benefits of $284.06 between December 15, 1990 and July 27, 1991, when benefits were terminated on the basis of the July 12, 1991 report of Dr. Ernest J. White, orthopaedic surgeon, who had examined Mr. Fakhri at the insurer's request.
The applicant applied for appointment of a mediator. The Report of Mediator, dated September 10, 1991, indicates that mediation was conducted between June 27 and August 30, 1991. Mr. Shields represented Mr. Fakhri. Issues remaining in dispute were weekly income benefits and transportation expenses to and from treatment.
An additional Report of Mediator, dated November 27, 1991 (Exhibit 1), indicates that mediation was conducted in October and November 1991. Mr. Fakhri represented himself. A procedural agreement was reached concerning provision of medical reports to the insurer. Weekly income benefits were not discussed.
Mr. Fakhri's Application for Appointment of an Arbitrator (Exhibit 3) is dated December 1, 1993. The application indicates that weekly income benefits were the only issue.
In his oral testimony at the hearing, Mr. Fakhri admitted there had been a delay between July 27, 1991, when weekly income benefits were terminated, and December 1, 1993, when he applied for appointment of an arbitrator. He explained that he did not apply for appointment of an arbitrator with respect to weekly income benefits immediately after mediation failed because someone from Mr. Shields' firm advised him to wait and deal with all the issues at one time. In the summer of 1992, Mr. Fakhri testified that he went to the insurer's office and attempted to negotiate a settlement of the claim with Mr. Adam, Claims Manager. He spoke to another lawyer, a William D. Gray, but Mr. Gray would not represent him because he was unable to pay a retainer.
Mr. Fakhri testified that he had attended one or more mediations after the two mediations conducted in 1991, and that Mr. Ferreira had told him he would receive weekly benefits as a result of mediation. However, he received only medical benefits. A copy of the Report of Mediator, dated March 18, 1993 (Exhibit 3), was provided by the Registrar's Office, at my request. This Report indicates that Mr. Fakhri was represented by Rick Ferreira of Premier Treatment & Health Management Centre, and the only issue dealt with was treatment provided by Premier. Weekly income benefits were not discussed.
Finally, Mr. Fakhri testified that on December 1, 1993, Mr. Shields advised him he could still proceed to arbitration. However, Mr. Shields would not represent him because he could not pay a retainer. On the same day, he visited the offices of the Commission and completed an Application for Appointment of an Arbitrator form.
Mr. Fakhri stated that he seeks weekly benefits for two months after they were terminated at the end of July 1991.
On behalf of the insurer, Mr. Malach introduced into evidence the sworn affidavit of Shafik Daudji, Claims Examiner, dated February 3, 1994 (Exhibit 2). Attached to the affidavit are two letters sent by Ms. Daudji. The first letter, dated August 1, 1991 (Exhibit A to the affidavit), is addressed to Mr. Shields. In this letter, Ms. Daudji advises that the insurer has received the July 12, 1991 report of Dr. Ernest J. White, and that "accordingly it would seem Mr. Fakhri would not be entitled to further disability benefits." In the second letter (Exhibit B to the affidavit), dated October 8, 1991 and addressed to Mr. Fakhri, Ms. Daudji states that the insurer has received Dr. Mitchell's report of his examination carried out on September 19, 1991, which "concurs with" Dr. White's report that Mr. Fakhri is able to return to work as a taxi driver. Ms. Daudji confirms an October 21, 1991 appointment with Dr. White. Mr. Fakhri admitted receiving both letters.
After Mr. Fakhri completed his testimony, Mr. Malach called Mr. Shields to testify about his dealings with Mr. Fakhri. Mr. Shields testified that in the short time available, he had reviewed the firm's computer file on Mr. Fakhri, but had not been able to review the paper file, which was in storage. The computer file contains outgoing correspondence, but no incoming correspondence. He testified that he had had carriage of the file. He last acted for Mr. Fakhri with respect to weekly benefits in mid-September 1991. He resumed carriage of the file in October or November of 1991 on another matter. After mediation, he sent a letter indicating that the firm would not act for him. This letter, dated September 16 or 17, 1991, is the last correspondence on file from the firm. Mr. Shields testified that he had not advised Mr. Fakhri in 1992 or 1993.
Reasons:
Subsection 281(5) of the Insurance Act states:
A proceeding in a court or arbitration proceeding in respect of no-fault benefits must be commenced within two years after the insurer's refusal to pay the benefit claimed or within such longer period as may be provided in the No-Fault Benefits Schedule [now the Statutory Accident Benefits Schedule - Accidents before January 1, 1994].
On behalf of the insurer, Mr. Malach relied on the case of Nazrur Rahman and Co-operators General Insurance Company, Commission File No. A-000854, dated December 21, 1993, in which Arbitrator K. Julaine Palmer considered whether section 129 of the Insurance Act or section 42.3 of the Dispute Resolution Practice Code confer any discretion in an arbitrator to extend the time limit set out in subsection 281(5). Arbitrator Palmer concluded that neither provision gives an arbitrator discretion to extend the time limit set out in subsection 281(5) of the Insurance Act.
I do not find it necessary to decide whether I have discretion to relieve against the time limit set out in subsection 281(5). Even if I have discretion to extend the two-year time limit, I am not satisfied that I should exercise it in Mr. Fakhri's favour in this case.
Mr. Fakhri admitted in his oral testimony that weekly benefits were terminated in July 1991, and that he had received Ms. Daudji's August 1 and October 8, 1991 letters, explaining the insurer's reasons for terminating benefits. He admitted to receiving Dr. White's report. He admitted that he knew no application for arbitration had been filed on his behalf after weekly benefits were terminated. I do not accept Mr. Fakhri's evidence that he delayed applying for arbitration on the advice of Mr. Shields, or someone from his firm. I am not satisfied that any action of Mr. Shields, Mr. Ferreira or Mr. Gray adequately explains a delay of more than two years. I place no significance on the November 27, 1991 and March 18, 1993 reports of mediator, which do not deal with weekly income benefits. Although Mr. Fakhri appeared to be somewhat confused about the difference between mediation and arbitration, and may have been confused about the issues dealt with at the three mediations in which he participated, I am not satisfied that this adequately explains his delay in applying for arbitration.
In response to Mr. Malach's submissions, Mr. Fakhri stated that he had received a letter from the Commission telling him that he could proceed and that someone at the Commission had told him he could do so. He pointed out that the Commission had accepted his $50 application fee. The correspondence referred to is apparently the standard form letter, dated December 3, 1993, which is routinely sent acknowledging receipt of the application fee and application for appointment of an arbitrator. I accept that the Commission's process with regard to such preliminary issues may have been confusing to Mr. Fakhri. However, by December 1993, more than two years had already passed since the insurer terminated benefits in July 1991. There was no allegation in this case that Mr. Fakhri delayed his application in reliance on any representation of the Commission.
Expenses and Insurer's Filing Fee:
Mr. Fakhri claims his expenses incurred in the proceeding. On behalf of the insurer, Mr. Malach submitted that Mr. Fakhri should not be awarded his expenses, but should be ordered to pay the insurer's expenses, to the $1,000 maximum, on the basis that the application was frivolous, vexatious or an abuse of process.
An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
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 maximum amounts are set out in Schedule 1 to the Dispute Resolution Practice Code and in Ontario Regulation 664 (R.R.O. 1990), Dispute Resolution Expenses.
The Insurance Act was amended as of January 1, 1994, to include the following provision:
282(11.2) If the insured person commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process, the arbitrator may award an amount to be paid by the insured person to the insurer that does not exceed the amount assessed against the insurer in respect of the arbitration under section 14.
Regulations created under section 14 of the Act (Ontario Regulation 220/91) provide that the insurer shall be assessed the sum of $1,000 as a fee for filing a Response by Insurer.
I find it appropriate in this case to award the applicant his expenses incurred in the proceeding. Given that he was unrepresented, his expenses are likely to be limited to the $50 application fee. He may have been under some confusion about how the time limit operates, and there may have been some confusion caused by the Commission accepting his application for appointment of an arbitrator. I am not satisfied that the application was frivolous, vexatious or an abuse of process. Moreover, I heard no submissions about the applicability of subsection 282(11.2) to a proceeding which was commenced before the subsection came into effect.
Finally, Mr. Malach noted in his submissions that he had been assured that the Commission would reimburse the insurer for its $1,000 filing fee if the insurer prevailed on the preliminary issue. In all the circumstances, I do not find this an appropriate case in which to exercise my discretion to order the applicant to reimburse the insurer for its expenses in the proceeding.
Order:
Mr. Fakhri is not entitled to proceed to arbitration.
Mr. Fakhri is entitled to his expenses incurred in the hearing.
Mr. Fakhri is not obliged to reimburse the insurer for its expenses in the hearing.
Nancy Makepeace
Arbitrator
Date
APPENDIX - THE RECORD
The following exhibits were entered into evidence:
Exhibit 1:
Report of Mediator, dated November 27, 1991
Exhibit 2:
Affidavit of Shafik Daudji, claims examiner, dated February 3, 1994, with Exhibits A and B attached
Exhibit 3:
Report of Mediator, dated March 18, 1993
Exhibit 4:
Application for Appointment of an Arbitrator, dated December 1, 1993
Other documents which formed part of the record were:
Report of Mediator, dated September 10, 1991
Response by Insurer, dated January 14, 1994
Letter of pre-hearing arbitrator, dated December 31, 1993