Neutral Citation: 1995 ONICDRG 7
File No. A-006615
ONTARIO INSURANCE COMMISSION
BETWEEN:
MARIA GRANIC
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
DECISION ON PRELIMINARY ISSUE
Issues:
The Applicant, Maria Granic, was injured in a motor vehicle accident on January 14, 1991. She sustained multiple injuries in the accident. Mrs. Granic applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under Ontario Regulation 6721. Weekly income benefits were initially terminated on November 27, 1992. In September 1993, Mrs. Granic applied for mediation in respect of her ongoing entitlement to weekly income benefits after November 27, 1992. The mediation was conducted on November 3, 1993. Mediation failed.
As a result of further negotiations, on November 18, 1993, Allstate agreed to pay weekly income benefits to the Applicant to January 14, 1994. Weekly income benefits beyond 156 weeks were denied. Mrs. Granic applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
At the pre-hearing conference, held on September 12, 1994, Allstate notified Mrs. Granic that it had made arrangements for her to undergo a psychological assessment with a clinical psychologist, Dr. Sergio Bacal, Ph.D., C.Psych., on November 8, 1994. Allstate advised that it was requiring Mrs. Granic to attend for this examination pursuant to subsection 23(2) of the Schedule.
Mrs. Granic refused to attend. Allstate moved for an order compelling her to do so.
The issues before me are:
Is Allstate entitled to require that Mrs. Granic attend for the examination with Dr. Bacal, pursuant to subsection 23(2) of the Schedule?
If Allstate is entitled to require that Mrs. Granic attend for the examination, do I have the authority to compel Mrs. Granic to attend for the examination?
Result:
Allstate is entitled to require that Mrs. Granic attend for the examination with Dr. Bacal.
I do not have the authority to compel Mrs. Granic to attend for the examination.
Hearing:
The preliminary issue was dealt with by way of written submissions following the pre-hearing conference. I received written submissions dated September 22, 1994, from Mr. Ian D. Kirby, on behalf of Allstate, and written submissions dated October 4, 1994, from Mr. Frank G. Csathy on behalf of Mrs. Granic.
The documents filed by Allstate, in support of its motion, are listed in Appendix A to this decision. The cases or authorities considered are listed in Appendix B.
Reasons for Decision:
I issued a brief decision on October 19, 1994, with reasons to follow. These are the reasons:
1. Is Allstate entitled to require that Mrs. Granic attend for the examination with Dr. Bacal, pursuant to subsection 23(2) of the Schedule?
In this case, it is not disputed that the proposed examination with Dr. Bacal relates to Mrs. Granic's entitlement to weekly income benefits; that Mrs. Granic has been given reasonable notice of the appointment with Dr. Bacal; and, that Dr. Bacal is a qualified psychological advisor. The issues in dispute are as follows:
(a) Does subsection 23(2) of the Schedule remain available to the insurer after the issue of entitlement to weekly benefits has been mediated?
(b) If yes, in this case, is the examination by Dr. Bacal reasonably required by Allstate, pursuant to subsection 23(2) of the Schedule?
Subsection 23(2) of the Schedule provides as follows:
In respect of claims under Part IV, the insurer may, on reasonable notice, require an examination of the insured person by a qualified medical practitioner, psychological advisor or chiropractor as often as it reasonably requires, and require an autopsy of a deceased insured person in accordance with the law relating to autopsies.
Mrs. Granic argued that the right of an insurer to require an examination pursuant to subsection 23(2) of the Schedule expires once the issue of entitlement to weekly benefits has been mediated. Mrs. Granic submitted that this argument is supported by the fact that the only consequence, under the Schedule, for the failure of an insured person to attend on an examination required by an insurer under subsection 23(2) of the Schedule is that he or she may not commence a mediation proceeding (section 25).
Mrs. Granic submitted that the examination pursuant to subsection 23(2) is one which is required as part of the proof which an insured person must provide to substantiate a claim. It is a part of the claim-making process, not a part of the arbitration process. It is this distinction upon which she relies in her contention that she is not required to attend at the scheduled psychological examination.
I agree that subsection 23(2) of the Schedule is part of the claim-making and adjustment process. However, it is my view that subsection 23(2) of the Schedule is available to an insurer where an applicant is asserting an ongoing claim for weekly benefits after the date of the mediation, for the purposes of assessing the applicant's ongoing claim. Neither subsection 23(2) nor section 25 of the Schedule restrict the right of an insurer to require an examination, as suggested by Mrs. Granic.
The result of the construction of subsection 23(2) of the Schedule proposed by Mrs. Granic, would be inequitable. One of the critical elements of proof of a claim for weekly benefits under the Schedule is the medical evidence. In addition to the requirement that a claimant furnish medical certificates to the insurer, the Schedule, in subsection 23(2), gives the insurer the right to have the claimant examined by a physician, psychological advisor or chiropractor of its choice, so that it can assess the merits of the claim from its own perspective. An insurer could be seriously prejudiced if it proceeded to arbitration in respect of an ongoing claim for weekly benefits after the date of mediation without having had an opportunity to independently assess it. The applicant's evidence and the opinions of the doctors selected by the applicant to support his or her ongoing claim would not be subjected to the best test and would to a large extent go unchallenged.
In this case, I find that subsection 23(2) of the Schedule remains available to Allstate because the proposed examination is in order to assess Mrs. Granic's ongoing claim for weekly income benefits for a period in excess of 156 weeks.
I note that after I made my decision in this case, Arbitrator David Draper issued a decision wherein he considered whether an examination may be required, pursuant to subsection 23(2) of the Schedule, after the termination of weekly benefits and after mediation has been held (Kevin Hanna and Royal Insurance Company of Canada, December 2, 1994, OIC File No. A-005409). The Hanna decision was not available at the time that I made my decision in this case and I did not rely on it in interpreting subsection 23(2) of the Schedule; however, I take comfort in the fact that my interpretation of subsection 23(2) is consistent with that of Arbitrator Draper in Hanna.
Mrs. Granic also argued that the examination is not reasonably required because Allstate had notice of the non-physical components to her disability well before the mediation. Mrs. Granic submitted that the report of Dr. Edwin P. Urovitz, dated August 20, 1993, refers to psychological features of her disability. Allstate's decision to terminate Mrs. Granic's weekly income benefits was based upon available medical evidence.
I disagree with Mrs. Granic's argument that the examination is not reasonably required. The examination of Mrs. Granic by Dr. Bacal is reasonably required, in my view, for the following reasons.
First of all, Mrs. Granic is relying upon her psychological injuries in support of her ongoing claim for weekly income benefits after January 14, 1994. Subsequent to January 14, 1994, she submitted, to Allstate, two reports, in support of her ongoing claim for weekly income benefits. Both reports, one by Dr. A. Kachooie, a physiatrist, and one by Mr. Robert Katz, a rehabilitation specialist, place her psychological condition, after January 14, 1994, in issue. Dr. Kachooie strongly recommended a psychological examination.
The examination by Dr. Bacal may be of assistance to Allstate in determining the extent to which Mrs. Granic's ongoing disability, after January 14, 1994, is psychological in origin and whether it is related to the accident.
Secondly, there are no alternative resources in the form of a report from a psychologist or psychiatrist that would assist Allstate in assessing Mrs. Granic's psychological disability, if any, after January 14, 1994.
Thirdly, the only examination of Mrs. Granic by a medical practitioner of Allstate's choice, i.e., Dr. Urovitz, was conducted in November 1992. Mrs. Granic is advancing an ongoing claim for weekly income benefits beyond 156 weeks. Accordingly, the test applicable to her ongoing entitlement to weekly income benefits after January 14, 1994 is different from that applicable when Dr. Urovitz performed his assessment of Mrs. Granic.
In conclusion, I find that Allstate is entitled to require that Mrs. Granic attend for the examination with Dr. Bacal.
2. Do I have the authority to compel Mrs. Granic to attend for the examination?
Having found that Allstate is entitled to require that Mrs. Granic attend for the examination with Dr. Bacal, I must now consider whether I have the authority to compel her to attend for the examination.
As an arbitrator, I have no inherent jurisdiction. I may only exercise powers which have been granted to me by statute, either expressly or by necessary implication.
Allstate submitted that every arbitrator has jurisdiction to determine issues before him or her by order under subsection 279(4) of the Insurance Act.
Subsection 279(4) of the Insurance Act provides as follows:
279.- (4) The Director and every arbitrator shall determine issues before them by order and may make an order subject to such conditions as are set out in the order.
While subsection 279(4) of the Insurance Act, when read in isolation, appears to give an arbitrator the authority to make an order in respect of any issue before him or her, its scope is limited by subsection 279(1):
279.-(1) Disputes in respect of any insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled shall be resolved in accordance with sections 280 to 283 and the Statutory Accident Benefits Schedule.
Subsection 279(4) of the Insurance Act, in my view, does not give an arbitrator a general authority to make orders in respect of any issue raised by the parties. When read in conjunction with subsection 279(1), subsection 279(4) of the Insurance Act requires an arbitrator to decide, by order, disputes in respect of an insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits in accordance with sections 280 to 283, and the Schedule.
Allstate also submitted that I have authority to compel Mrs. Granic to attend for the examination pursuant to subsection 23(2) of the Schedule (supra), subsection 17(1)(a)(vi) and section 42.5 of the Dispute Resolution Practice Code (the "Code"). The rules for practice and procedure set out in the Code are made by the Director of Arbitrations pursuant to section 21 of the Insurance Act. Section 21 of the Insurance Act, subsection 17(1)(a)(vi) and section 42.5 of the Code provide as follows:
Insurance Act:
- Subject to the procedures and time limits for the conduct of arbitrations set out in the regulations, the Director may make rules for the practice and procedure to be observed for a proceeding before him or her or before an arbitrator.
Code:
- Pre-Hearing Discussion
17.1(a) The Director may require the parties to participate in a pre-hearing discussion for the purpose of, (vi) dealing with any other matter which may arise.
- General
42.5 Where matters are not provided for in this Code, the practice shall be determined by analogy to them.
The provisions of the Code are procedural rules. In my view, they cannot and do not confer jurisdiction.
I find that none of the sections relied on by Allstate in the Insurance Act or the Schedule, including subsection 23(2) of the Schedule, expressly give me the authority or jurisdiction to make an order compelling an applicant to attend an examination reasonably required by an insurer under subsection 23(2) of the Schedule. Since there is no express provision in the Insurance Act or the Schedule granting me the authority or jurisdiction to make such an order, the authority or jurisdiction, if it exists, must be present by necessary implication.
The doctrine of jurisdiction by necessary implication is well established and the circumstances under which it can be applied are most clearly set out in the decision of the Federal Court of Appeal in Reference Re National Energy Board Act (1986), 1986 CanLII 4033 (FCA), 19 Admin. L.R. 301 (F.C.A.). In Reference Re National Energy Board Act, the Federal Court of Appeal, at page 314, indicated that the doctrine of jurisdiction by necessary implication can be applied only if:
the implied jurisdiction is required as a matter of practical necessity to permit the agency to accomplish its mandate; and
the question of the implied jurisdiction to perform an act is not one which Parliament or the Legislatures have expressly addressed in other legislation.
An arbitrator's mandate is to determine disputes in respect of an insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. I see no practical necessity for an arbitrator to have the authority to compel an applicant to attend an examination pursuant to subsection 23(2) of the Schedule in order to accomplish his or her mandate.
The Schedule, in section 25, spells out the consequence for the failure of an insured person to attend an examination pursuant to subsection 23(2), i.e., that the person cannot commence a mediation. Where an applicant is asserting an ongoing claim for weekly benefits after mediation, the failure of the insured person to attend an examination pursuant to subsection 23(2) of the Schedule may preclude the insured person from proceeding to arbitration [Edward J. Opatowski and Wawanesa Mutual Insurance, September 22, 1992, OIC File No. A-000381]. Further, where an arbitrator requires medical assistance to better enable him or her to determine a question of fact in an arbitration, subsection 282(5) of the Insurance Act provides that the arbitrator has the discretion to make a referral, through the Director of Arbitrations, to the medical and rehabilitation advisory panel appointed under section 10 of the Insurance Act.
Additionally, the Ontario Legislature has expressly provided courts and other administrative tribunals in Ontario, for example, the Workers' Compensation Appeals Tribunal, with the express authority to order medical examinations of a party to a proceeding [see section 105 of the Courts of Justice Act, R.S.O. 1990, Chap. C. 43, as amended; Rule 33 of the Rules of Civil Procedure, R.R.0. 1990, Reg. 194, as amended; and subsection 23(2) of the Workers' Compensation Act, R.S.O. 1990, Chap. W. 11, as amended]. If the Legislature had intended that an arbitrator have the authority to compel an insured person to attend an examination required by an insurer pursuant to subsection 23(2) of the Schedule, it could have incorporated into the Insurance Act an express statutory power akin to that granted to the Workers' Compensation Appeals Tribunal in the Workers' Compensation Act or the Court in the Courts of Justice Act.
Therefore, I conclude that I do not have authority to compel an insured person to attend an examination pursuant to subsection 23(2) of the Schedule by necessary implication.
Having determined that such authority has not been expressly granted to me by statute or by necessary implication, in this case, I am unable to make the order requested, i.e., an order compelling Mrs. Granic to attend for the examination with Dr. Bacal.
Order:
Allstate is entitled to require that Mrs. Granic attend for the examination with Dr. Bacal.
I do not have the authority to compel Mrs. Granic to attend for the examination.
January 30, 1995
Shemin Manji
Arbitrator
Date
APPENDIX A
The following documents were filed by Allstate:
A. Report dated June 10, 1993 of Dr. Shih
B. Report dated November 27, 1992 of Dr. Urovitz
C. Letter dated August 9, 1993 to Dr. Urovitz from Allstate
D. Report dated August 20, 1993 of Dr. Urovitz
E. Letter dated November 26, 1993 to Mr. Csathy from Allstate
F. Report dated February 8, 1994 of Dr. Kachooie
G. Report dated August 17, 1994 of Mr. Robert D. Katz
APPENDIX B — AUTHORITIES
Cases considered:
Edward J. Opatowski and Wawanesa Mutual Insurance, September 22, 1992, OIC File No. A-000381
Rajendra Ramjeet and State Farm Mutual Automobile Insurance Company, December 23, 1993, OIC File No. A-004685
Patricia Scott and Toronto Transit Commission (Markel Insurance), September 4, 1992, OIC File No. A-001116
Maria Mercedes Tandazo and Allstate Insurance Company of Canada, January 24, 1994, OIC File NO. A-003532
Reference Re National Energy Board Act (1986), 1986 CanLII 4033 (FCA), 19 Admin. L.R. 301 (F.C.A.)