Bernard Power v. General Accident Assurance Company of Canada, 1996 ONICDRG 5

Ontario Insurance Commission

Neutral Citation: 1996 ONICDRG 5

File No.: A-014947

Between:

Bernard Power, Applicant

and

General Accident Assurance Company of Canada, Insurer

Decision on a Preliminary Issue

Issues

The Applicant, Bernard Power, was injured in a motor vehicle accident on July 14, 1992. He applied for and received statutory accident benefits from General Accident Assurance Company of Canada ("General Accident"), payable under Ontario Regulation 672.¹ On December 3, 1993, Mr. Power signed a Release for his benefits in exchange for a lump sum from General Accident. Subsequently, he sought further benefits. General Accident denied them. The parties were unable to resolve their dispute through mediation and Mr. Power applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

General Accident claims that all the matters in dispute were settled, and therefore the Applicant cannot proceed to arbitration. Mr. Power denies a settlement was reached. The preliminary issue to be determined is:

Did the parties settle their disputes when Mr. Power signed the Release?

Mr. Power also claims his expenses incurred in the hearing.

Result

1. The matters in dispute between the parties were settled. Accordingly, Mr. Power cannot refer these matters to an arbitrator for determination.

2. Mr. Power is entitled to his expenses incurred in respect of the preliminary hearing.

Hearing

The hearing was held in Oshawa, Ontario, on October 12, 1995, before me, David Evans, arbitrator.

Present at the Hearing:

Applicant: Bernard Power

Applicant's Representative: Lawrence A. Berg Barrister and Solicitor

Insurer's Representative: Gregory P. Heckel Barrister and Solicitor

Insurer's Officer: Maureen Power

Witnesses:

1. Bernard Power
2. Maureen Power

The Exhibits are set out in Schedule A.

Evidence and Findings

General Accident alleges that Mr. Power entered into a binding settlement of his claims for statutory accident benefits on December 3, 1993. If the parties reached a binding settlement, then Mr. Power cannot proceed to arbitration. The Insurance Act provides that any restriction on a party's right to mediate, litigate, arbitrate, appeal or apply to vary an order is void except where the restriction forms part of a settlement.²

Background

Bernard Power, born January 9, 1929, was injured in a motor vehicle accident on July 14, 1992. As a result of his injuries, he was not able to continue working at Dowty Aerospace in Ajax. His Insurer, General Accident, started paying him weekly income benefits of $588.80 pursuant to section 12 of the Schedule, in addition to providing other benefits such as physiotherapy.

Mr. Power dealt with Maureen Power of Crawford & Company Insurance. Late in November 1993 she contacted him to settle the file. On December 3, 1993, Mr. Power signed a Release.³ It shows that, in consideration of the payment of $9,500 by General Accident, Mr. Power released his claims for weekly disability benefits and supplementary medical, rehabilitation and care benefits against General Accident.

Mr. Power admitted that he read and signed the Release, and that he understood it was supposed to represent the end of the matter. However, he testified that he signed the Release on the understanding that his benefits would have stopped in any event on January 9, 1994, when he reached retirement age. When he later heard of a 75-year-old man who was still receiving weekly income benefits well past retirement age, he realized he might have been entitled to more benefits. He claims that, had he been told that benefits continued as long as he was not able to return to work, he would not have signed the Release. It is essentially on that basis that he now seeks to set aside the Release.

Evidence

I found both witnesses to be sympathetic. However, Ms. Power had the benefit of notes she made contemporaneously with the events, whereas Mr. Power admitted that he had problems with times and dates.

Mr. Power testified that he had a Grade 13 equivalent education and a good understanding of English. He brought his skills with him to Dowty, where he had started working around 1982. His job, which he described as one of the best in Canada, involved the fabrication and assembly of helicopter systems. He testified that there was no retirement age at Dowty, so he could have continued to work past age 65.

Mr. Power testified he was contacted by Maureen Power a few months before he turned 65, and they arranged to meet at his house. Mr. Power testified that when Ms. Power arrived she produced a cheque already made out for $9,500, which covered payments to age 65 plus an additional amount for retraining. Mr. Power testified that Ms. Power told him the benefits would terminate at age 65.

Ms. Power testified that she had two meetings with Mr. Power, with a telephone conversation between the meetings. She testified that at the first meeting they discussed a settlement figure, that a few days later she telephoned to confirm a figure, and that on December 3, 1993, they had their second meeting, where Mr. Power signed the Release.

I find this chronology more likely than the one Mr. Power remembered.

Ms. Power testified that their first settlement meeting was at Mr. Power's home on November 24, 1993.

Ms. Power freely admitted that she initiated the meeting to settle the file. Her understanding of Mr. Power's condition was that he continued to be entitled to his weekly income benefits as a result of his medical problems. She did not have a cheque with her, but they did discuss figures. She testified she was sitting with Mr. Power at his dining room table when she calculated benefits based on an arbitrary figure of a further 16 weeks of payments totalling $9,420.80.

Ms. Power testified that, other than requesting that she try for more money, Mr. Power did not object to the figure proposed. According to Ms. Power, Mr. Power himself brought up the fact that he was eligible to retire in January 1994. She testified that, although Mr. Power's doctors talked about light modified work, Mr. Power objected to being retrained at his age.

Ms. Power testified that she called Mr. Power on November 29, advised him that she had received a further cheque for benefits through to November 20, and said she had authority to settle for a lump sum of $9,500. He said he was ready to sign. She explained to him that this was a final Release, that there could be no further claims, and that the $9,500 was based on rounding up 16 weeks of benefits.

Ms. Power testified that she delivered the cheques on December 3, 1993. Her notes indicate that she explained the final Release to Mr. Power. She did not give him a copy of the Release.

In his testimony, Mr. Power denied that Ms. Power had reviewed the Release with him, although he did confirm that he read and signed the Release. He also did not remember ever getting or seeing Exhibit 2, the final Assessment of Claim form. Ms. Power testified that she believed she had provided the Assessment of Claim form, as her file had a copy of it. She normally gives insureds the form, but she had no note of having enclosed it in her correspondence to Mr. Power.

In the Assessment of Claim form, under heading 3, "Assessment of Claim(s)" on page one, the box "Claim Accepted in Entirety" is ticked off under the subheading "Weekly Income Benefits," whereas the boxes "Not Applicable" are ticked off under all the other subheadings, including "Supplementary Medical Rehabilitation Benefits." Counsel for Mr. Power suggested that the Assessment of Claim form was therefore ambiguous, as the Release included supplementary medical and rehabilitation benefits, while only the weekly income benefits were accepted" in the Assessment of Claim form. I do not find this ambiguity, if such it is, particularly relevant. Mr. Power admitted he read and understood the Release, which released all his claims against General Accident. In any event, Mr. Power claims that he never received this form. If this is true, it means that he could never have been affected by any ambiguity.

Ms. Power denied telling Mr. Power that his benefits terminated at age 65. In cross-examination, she testified that she told Mr. Power he would receive benefits as long as he was substantially unable to perform the essential tasks of his employment at the time of the accident. She admitted she did not specifically mention entitlement after age 65, maximum entitlement, or an end date to Mr. Power's entitlement.

I accept that Ms. Power did not tell Mr. Power that his benefits would end at age 65. Mr. Power may have become confused because of discussions the two had had earlier that year. Ms. Power testified that a few months earlier, they had discussed CPP disability benefits, and she had advised him that any CPP disability benefits he received would stop at age 65. With reference to legal advice, Mr. Power and Ms. Power agree that the name of a solicitor came up at their last meeting. Mr. Power denied that he had discussed the issue of settling the weekly income benefits with the solicitor. Whether or not he did, I find that Mr. Power had the opportunity to seek legal advice if he required it.

The Law

Counsel did not cite any cases to me. I have listed the cases I have reviewed in writing this decision in Appendix "B."

I agree with the following statement by Arbitrator Manji in Giles⁴ with respect to signed agreements:

Where a document such as Exhibit 1 [a release] is signed, it meets a prima facie assumption that an agreement exists and that the document contains its terms. A person who signs a document is ordinarily held to have manifested agreement to its contents. This is not to say that in every case a person is bound by the document he or she has signed. He or she may be relieved on the grounds of duress, unconscionability, mistake, or other vitiating factor.⁵

I also refer to the statement of Arbitrator Palmer in Tuzin⁶ that as a general rule:

It is not the role of an arbitrator to go behind a settlement which has been achieved between competent parties, in cases where there has been no fraud, mistake, misrepresentation, undue influence, or other vitiating factor.

I heard no evidence to suggest that Mr. Power was not competent at the time he signed the Release. He stated himself he knew what the Release meant when he signed it. No one alleges fraud. I have found that there was no misrepresentation by Ms. Power.

Neither was this a case where undue influence was brought to bear. This is not a situation where an insured signed a release after hours of intense negotiation, and shortly thereafter had second thoughts. Mr. Power and Ms. Power had a meeting where a figure was discussed. Several days later, Ms. Power telephoned to confirm the figure, and again several days passed before they met for a last time to sign the Release. Mr. Power had a considerable amount of time to consider the offer, so in effect a "cooling-off" period was built into these negotiations. I have found that Mr. Power had the opportunity to seek legal advice if he required it. Mr. Power cashed the cheque and took no steps to challenge the settlement for some six months.

I find that the terms of the agreement itself were clear and the parties understood them, unlike the situations in Aggarwal, David or Mouriopoulos.⁷ Mr. Berg submitted that Ms. Power had the obligation to point out the differences between what was being offered and what Mr. Power was potentially giving up — that he was possibly entitled to a further $50,000 or $60,000 in benefits. It is true that insurers now must provide written notices setting out, for instance, a description of the benefits available to an insured person, the impact of the settlement on the benefits, and an estimate of the commuted value of the benefits where there is a lump sum settlement.⁸ However, that was not the law at the time this agreement was signed.

Mr. Power has not convinced me that he believed his benefits terminated when he turned age 65. Why would an insurer be interested in settling a file if the weekly income benefits were to terminate in approximately a month? Mr. Power had already indicated he was not interested in retraining, so there would be no reason for the Insurer to pay any amounts towards retraining, or for Mr. Power to believe that such benefits would be forthcoming.

I conclude that there is no vitiating factor to set aside the settlement. This is, rather, a case which "simply involves one party having second thoughts," such as in Kowaliw and Abedi.⁹

I find that Mr. Power entered into a final and binding settlement of his claims on December 3, 1993. Accordingly, he may not proceed to arbitration in this matter.

I exercise my jurisdiction to award Mr. Power his costs of this preliminary hearing.

Order

1. Mr. Power cannot refer these matters to an arbitrator for determination.

2. Mr. Power is entitled to his expenses incurred in respect of the preliminary hearing.

January 10, 1996

David Evans Arbitrator

Date

APPENDIX A

EXHIBITS

Exhibit 1 Release signed by Mr. Power dated December 3, 1993

Exhibit 2 Assessment of Claim by Insurer form completed by Maureen Power and dated December 3, 1993

Exhibit 3 Letter from Maureen Power of Crawford and Company addressed to Mr. Power dated August 14, 1995

Exhibit 4 Letter dated August 18, 1995, addressed to Maureen Power from Lawrence A. Berg

Exhibit 5 Letter dated August 25, 1995, addressed to Lawrence A. Berg from Maureen Power

Exhibit 6 Letter dated September 1, 1995, addressed to Maureen Power from Lawrence A. Berg

Exhibit 7 Medical Report from Dr. R. Saplys dated May 26, 1993

Exhibit 8 Letter from Maureen Power to Bernard Power dated July 5, 1993

Exhibit 9 Letter from N. Cameron Murkar of Polak, McKay & Hawkshaw to Maureen Power dated June 29, 1994

Exhibit 10 Letter from Colleen McCormick, claims examiner with General Accident to N. Cameron Murkar

Exhibit 11 Resume of Maureen Power

Exhibit 12 Medical Report from Dr. M. Indech dated April 13, 1995

APPENDIX B

Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705

Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621

Rosie Buch and Pilot Insurance Company, November 7, 1994, OIC File No. A-005546

Samuel David and Simcoe & Erie General Insurance Company, July 15, 1994, OIC File No.A-006399

Linda M. Giles and State Farm Mutual Automobile Insurance Company, September 28, 1995, OIC File No. A-008560

Wictoria Kowaliw and Wawanesa Mutual Insurance Company, November 18, 1994, OIC File No. A-007153

Nikolaos Mouriopoulos and the Citadel General Assurance Company, March 23, 1993, OIC File No. A-002166

Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596

APPENDIX C

[The pre-printed parts are in bold, and the additions are in italics.]

POLICY #: APD 4390830

RELEASE AND DISCHARGE

In consideration of the sum of NINE THOUSAND FIVE HUNDRED dollars, ($ 9,500.00) paid to me/us or on my/our behalf by THE GENERAL ACCIDENT ASSURANCE COMPANY OF CANADA, and to which I/we direct to be paid as follows:

TO: BERNARD POWER

I/we so hereby remise, release and forever discharge the said Company from all manner of actions, causes of action, claims and demands whatsoever which I/we have against the said Company for Ontario Automobile Policy (O.P.F. 1), Part B — Accident Benefits, Section(s) 2.22 to 2.25 (Weekly Disability Benefits) and Section(s) 2.4 to 2.14 (Supplementary Medical, Rehabilitation and Care Benefits), under Policy No. APD 4390830 as a consequence of injuries sustained in an accident which occurred on or about the 14 day of July 1992 at or near BAYLY & HARWOOD AVE, AJAX, ONT.

I/we have read this release and understand that it is a full and final release of all claims and rights, including without limiting the generality of the foregoing, the right to mediate, arbitrate or litigate as defined in Section 242 of the Insurance Act, R.S.O. 1980, c.218, as amended by the Insurance Statute Law Amendment Act, S.O. 1990, c.2.

I/we further understand that this release pertains to all injuries and claims arising as a consequence of the said accident, past, present and future, and whether such injuries and claims are known or unknown at the present time.

In witness whereof, I/we have hereunder set my/our hand(s) and seal(s) this 3rd day of DECEMBER 1993.

Maureen Power

Bernard Power

WITNESS

SIGNED

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule —Accidents Before January 1, 1994. In this decision, the term Schedule" will be used to refer to Regulation 672.
2. 2R.S.O. 1990, c.I.8, as amended, section 279(2)
3. 3Exhibit 1, reproduced in Appendix C.
4. 4Linda M. Giles and State Farm Mutual Automobile Insurance Company, September 28, 1995, OIC File No. A-008560
5. 5G.H.L. Fridman Q.C. in The Law of Contract in Canada, 3rd ed. (1994), at page 457.
6. 6Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596
7. 7Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621; Samuel David and Simcoe & Erie General Insurance Company, July 15, 1994, OIC File No. A-006399; Nikolaos Mouriopoulos and The Citadel General Assurance Company, March 23, 1993, OIC File No. A-002166
8. 8Section 9.1 of O.Reg. 664, entitled SETTLEMENTS — STATUTORY ACCIDENT BENEFITS, was added by s.7 of O.Reg. 780/93, effective January 1, 1994.
9. 9Wictoria Kowaliw and Wawanesa Mutual Insurance Company, November 18, 1994, OIC File No. A-007153; Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705