Neutral Citation: 1996 ONICDRG 62
ONTARIO INSURANCE COMMISSION
BETWEEN:
Louis Branchaud
Applicant
and
Co-operators General Insurance Company
Insurer
DECISION ON A PRELIMINARY ISSUE
The Applicant, Louis Branchaud, was injured in a motor vehicle accident on May 4, 1991. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 672.1 Subsequent to signing a full and final release, the Applicant sought further benefits which were denied by the Insurer. The parties were unable to resolve their dispute through mediation, and the Applicant applied for arbitration under the Insurance Act R.S.O. 1990, c. I. 8, as amended.
Result:
- The Applicant is precluded from proceeding with the Arbitration until such time as a court of competent jurisdiction sets aside the agreement entered into by the parties on March 17, 1993.
Hearing:
The hearing was held in Ottawa, Ontario, on January 25, 1996 and in North York, Ontario on February 2, 1996, before me, Stewart M. McMahon.
Present at the Hearing:
Applicant:
Louis Branchaud
Applicant's
Linda Hanson
Representative:
Barrister and Solicitor
Insurer's
Ivan Luxenberg
Representative:
Barrister and Solicitor
Insurer's
Hugh McDonald
Officer:
Witnesses:
The following witnesses testified: Mr. Louis Branchaud, Mr. Paul Gagnon, and Mr. Jim Orr.
Exhibits:
14 exhibits were filed they are listed in Schedule "A" to these reasons.
On March 17, 1993 Mr. Branchaud met with two representatives of the Insurer, at which time the parties agreed to resolve the question of Mr. Branchaud's entitlement to all past and future benefits, by the payment of a lump sum. In furtherance of that settlement, Mr. Branchaud executed a release, and the Insurer paid the agreed upon amount. On December 6, 1993, Mr. Branchaud filed for mediation with respect to his entitlement to further benefits. Mediation failed, and on May 4, 1995 Mr. Branchaud's counsel filed an Application for Arbitration. The Insurer, in it's response raised the agreement reached on March 17, 1993 as a complete bar to Mr. Branchaud's application for further benefits. The Insurer also raised a limitation defence, arguing that the Applicant was precluded from proceeding because he had failed to commence arbitration proceedings with two years from the date of the impugned agreement.
As a result of the pre-hearing discussions held in this matter, the parties agreed to pose two preliminary questions for determination by the Commission. The questions were framed as follows:
Is the agreement reached by the parties on March 17, 1993 a binding settlement, thereby precluding the Applicant from proceeding with the Arbitration?
Is the Applicant precluded from proceeding to arbitration on the basis that he failed to commence arbitration proceedings within two years after the Insurer's refusal to pay the benefit claimed?
During the course of Mr. Branchaud's evidence, it became apparent to me that all of the elements necessary to constitute a binding agreement were present. Mr. Branchaud's counsel confirmed during argument that the constituent elements of a contract were present. Counsel took the position, that while there was an agreement, it ought to be set aside on the grounds that Mr. Branchaud had been induced to enter into the agreement on the basis of a misrepresentation as to his entitlement to benefits beyond 156 weeks, or alternatively that it ought to be set aside on the grounds that it was unconscionable, and had been obtained by undue influence.
Counsel for the Insurer took the position that on the evidence submitted there was no basis for a finding of misrepresentation, nor evidence to support a finding of undue influence or unconscionability.
On February 3, 1996, I arranged a telephone conference call with counsel, to express my concern that I did not have the authority to order the relief being sought. Counsel for Mr. Branchaud provided written submissions on the point, by letter dated Friday, February 23, 1996. Counsel for the Insurer did not file written submissions, indicating that he was content to rely upon the Applicant's submissions. However he submitted during the course of the conference call, that if I found that I did not have jurisdiction to entertain the request to set aside the agreement, I ought to dismiss the application for benefits.
It is trite to state that an Arbitrator has no inherent jurisdiction, and that his or her power to decide must be found in the enabling statute. In this case the enabling statute is the Insurance Act R.S.O. 1990 cI 8 as amended. Section 279(1) of the Act states:
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.
Section 282(2) provides:
The director shall ensure that an arbitrator is appointed promptly,
and Section 282(3) provides:
The arbitrator shall determine all issues in dispute and such other issues as the parties may agree.
Section 20(2), the so-called privative clause, provides:
A person referred to in subsection (1) has exclusive jurisdiction to exercise the powers conferred upon him or her under this Act and to determine all questions of fact or law that arise in any proceeding before him or her and, unless an appeal is provided under this Act, his or her decision thereon is final and conclusive for all purposes.
While it is true that section 282(3) provides that the arbitrator shall determine all issues in dispute, it can not be forgotten that only those disputes encompassed by section 279 come within the arbitrator's jurisdiction. Accordingly only those issues in dispute concerning the "Insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits." are properly before the arbitrator.
Insurers frequently raise as a defence to an insured person's claim, the allegation that the parties entered into a "settlement" whereby the insured waived any further entitlement to benefits. Arbitrators have consistently entertained such a defence and undertaken an inquiry into whether or not such an agreement was entered into. I am of the view that such an inquiry and finding is ancillary to, and by implication a natural extension of the Arbitrator's authority to consider the insured person's entitlement to statutory benefits. It is in my view, a legal defence to the claim no different than a limitation defence, which must be considered by the arbitrator.
What I am being asked to do in this case is a wholly different matter. The Applicant acknowledges that an agreement exists, and by implication acknowledges that the Insurer has a complete defence to his claim for benefits. In the face of this bar, the Applicant appears before me, asking that I set that agreement aside. In my view the issue of whether the agreement ought to be set aside is not ancillary to the issue of the insured person's entitlement to benefits. The inquiry is not related to the schedule of benefits in any direct fashion. Setting aside the agreement is more akin to a pre-condition to making any further application for benefits.
In addition to being unrelated to the determination of an insured person's entitlement to benefits, the nature of the relief being sought is rooted in equity. Equity has long remained the domain of the courts. While it is possible that equitable principals may be applied in a proceeding before an administrative tribunal where such principals are necessary to determine questions properly within the tribunals jurisdiction, I do not think that a tribunal can otherwise expand its jurisdiction to grant equitable relief as a matter of course. The principals governing equitable relief are beyond the ambit of this tribunal's specialized expertise, and are better left to the courts which have broad experience in dealing with such matters.
I turn briefly now to the Insurer's argument that the claim is statute-barred by the operation of section 279(5) of the Insurance Act and section 26(1) of the Schedule, which in general terms provide that the insured person must make application within two years of the insurer's refusal to pay further benefits. The Insurer argues that I ought to treat the agreement reached on March 17, 1993 as a refusal to pay any further benefits, and that accordingly any application brought beyond the second anniversary of that agreement would be statute barred. In this case the Application for benefits was filed on May 4, 1995 which was well beyond the second anniversary of the impugned agreement.
I am of the view that this limitation argument is pre-mature. As stated above the application to set aside the agreement is not founded upon the Insurance Act or the Schedule, it is founded in equity. In the context of an application to the courts to set aside the agreement, counsel may wish to consider available defences, such as laches. If and only if the agreement is set aside, and the Commission is considering the application for benefits, does any limitation defence provided by the Act and Schedule apply.
Finally, I consider the Insurer's submission that in the event I find that I have no jurisdiction to set aside the agreement, I ought to dismiss the within Application. In my view, until such time as a court of competent jurisdiction sets aside the agreement, this Commission has no jurisdiction to deal with Mr. Branchaud's application. Accordingly, the Applicant is precluded from proceeding with the within Application until such time as he obtains a order of a court of competent jurisdiction, setting aside the agreement entered into by the parties on March 17, 1993.
Order:
- The Applicant is precluded from proceeding with the within Application until such time as he obtains a order of a court of competent jurisdiction, setting aside the agreement entered into by the parties on March 17, 1993.
April 26, 1996
Stewart M. McMahon Arbitrator
Date