Ontario Insurance Commission
Neutral Citation: 1997 ONICDRG 223
OIC A96-000119
Between:
Edward Wilson Applicant
and
Wellington Insurance Company Insurer
Decision on a Preliminary Issue
Issues:
The Applicant, Edward Wilson, was injured in a motor vehicle accident on September 8, 1992. He applied for and received statutory accident benefits from Wellington Insurance Company ("Wellington"), payable under Ontario Regulation 672.1 Mr. Wilson received weekly income benefits in the amount of $47.80 from September 15, 1992 to November 5, 1992, when benefits were terminated. Mr. Wilson claims that he is entitled to weekly income benefits after November 5, 1992. He also claims that he is entitled to weekly income benefits in an amount greater than $47.80. The parties were unable to resolve their disputes through mediation and Mr. Wilson applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended ("the Act").
Wellington contends that Mr. Wilson is barred from proceeding to arbitration because he applied for arbitration more than two years after its refusal to pay these benefits.
The issue in this hearing is:
Is Mr. Wilson barred from proceeding to arbitration?
Result:
- Mr. Wilson is barred from proceeding to arbitration in respect of his entitlement to weekly income benefits after November 6, 1992. He may proceed to arbitration in respect of the amount of the weekly income benefit to which he was entitled.
Hearing:
The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on May 15, 1996, before me, Shemin Manji, Arbitrator. Mr. Wilson did not appear at the hearing and no one appeared on his behalf. After waiting a reasonable length of time, I proceeded with the hearing. Immediately following the hearing, because there was some evidence before me that Mr. Wilson had been suffering from a serious mental disorder in October 19952 and in case he had suffered a relapse, I wrote to Mr. Wilson advising him of what had occurred on May 15, 1996 and that I had reserved my decision. I also advised Mr. Wilson that under section 40.1 of the Dispute Resolution Practice Code I had discretion to reopen the hearing in exceptional or extraordinary circumstances at any time prior to making my decision.3 Mr. Wilson subsequently wrote to the Ontario Insurance Commission in October 1996. In his letter he advised that he did not appear at the hearing because he had been unable to find a suitable lawyer to represent him. He indicated that he would move that the hearing be reopened once he retained counsel.4 I delayed making my decision. However, despite numerous calls from the Ontario Insurance Commission subsequent to Mr. Wilson's letter of October 1996, he has taken no action to date. Accordingly, I am now issuing my decision.
Present at the Hearing:
Wellington's Representative: Danielle K. LiChong Barrister and Solicitor
Wellington's Officer: Brian Jarvis
Witness: Brian Jarvis
Exhibits:
The exhibits filed by Wellington and other documents on the record are listed in the Appendix.
Reasons for Decision:
I. Should the hearing proceed in Mr. Wilson's absence?
The hearing commenced as scheduled on May 15, 1996 at 10:00 a.m. Mr. Brian Jarvis attended on behalf of Wellington, represented by Ms. LiChong. Neither Mr. Wilson, nor anyone acting on his behalf attended.
Wellington opposed an adjournment of the proceeding. It submitted that I proceed in Mr. Wilson's absence with the hearing on the preliminary issue.
Section 7 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended and section 35.2 of the Dispute Resolution Practice Code (August 1995 Edition) give me the discretion to proceed with a hearing in a party's absence where I am satisfied that notice of the hearing has been given to the party. Section 35.2 of the Code states as follows:
35.2 Where a party does not attend at an oral hearing in accordance with the notice of an oral hearing, the arbitrator may proceed in the party's absence and the party is not entitled to any further notice in the proceeding.
Mr. Wilson attended at the pre-hearing discussion on March 20, 1996. At that time the hearing date was set with Mr. Wilson’s consent.
The Commission sent a formal Notice of Hearing to the parties dated March 21, 1996. The Notice confirmed that the arbitration hearing would be held on Wednesday, May 15, 1996, commencing at 10:00 a.m. at the offices of the Ontario Insurance Commission in North York. The Notice included the following paragraph:
You may attend this hearing in person and/or be represented. If you or your representative do not attend at the hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of the arbitration proceedings.
There is no indication in the arbitration file that Mr. Wilson did not receive the Notice of Hearing. The Notice of Hearing was not returned to the Commission. The Commission received no correspondence or telephone messages from Mr. Wilson requesting an adjournment of the hearing.5
Further, Ms. LiChong sent Mr. Wilson a letter dated March 25, 1996 in which she confirmed that Mr. Wilson had consented to have the time limitation issue addressed at the hearing on May 15, 1996 by way of a preliminary issue.6
Therefore, I was satisfied that Mr. Wilson had received notice that the arbitration hearing was scheduled for May 15, 1996 and that if he did not attend at the hearing on that day the arbitrator could proceed with the hearing in his absence.
Before exercising my discretion to proceed with the hearing, I asked a Commission caseworker to attempt to reach Mr. Wilson by telephone, but she was unsuccessful. After waiting for Mr. Wilson to appear for an hour, I decided to proceed with the hearing on the preliminary issue. Section 35.4 of the Code prevents me from making an arbitration order against Mr. Wilson simply because he did not attend or participate in the hearing.
II. Is Mr. Wilson barred from proceeding to arbitration in respect of his ongoing claim for weekly benefits?
Wellington takes the position that Mr. Wilson is barred from proceeding to arbitration because he failed to apply for arbitration within two years of Wellington's refusal to pay the benefits claimed in the application for arbitration. Wellington relies on section 281(5) of the Act.
Section 281(5) of the Act states as follows:
- (5) A proceeding in a court or an arbitration proceeding in respect of statutory accident 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 Statutory Accident Benefits Schedule7
Section 281(5) of the Act is reflected in section 26 of the Schedule. Section 26 of the Schedule states as follows:
26.-(1) A mediation proceeding under section 280 of the Insurance Act or an arbitration or court proceeding under section 281 of the Act in respect of benefits under this Regulation must be commenced within two years from the insurer’s refusal to pay the amount claimed in the application for statutory accident benefits or, if the person has attended school or accepted, or returned to, an occupation or employment, as permitted by section 16, within two years of the insurer's refusal to pay further benefits.
(2) Despite subsection (1), an arbitration or court proceeding under section 281 of the Insurance Act may be commenced within ninety days after the mediator reports to the parties under subsection 280(8) of the Act.
In order for there to have been a proper notice of refusal to pay benefits, there must be compliance with section 24(8) of the Schedule. Section 24(8) states as follows:
24.-(8) If the insurer refuses to pay an amount claimed in an application for statutory accident benefits, the insurer shall forthwith give written notice to the insured person giving reasons for the refusal.
Section 281(5) of the Act and sections 26 and 24(8) of the Schedule were considered by Senior Arbitrator Susan Naylor in Zeppieri and Royal Insurance Company of Canada (February 17, 1994), OIC A-005237. She concluded as follows:
to determine if the limitation period applies in a particular case, first, it is necessary to ask whether, and when, there was a written refusal to pay benefits; and second, whether the insurer may rely on the limitation period that runs from the date of the refusal. An insurer may be estopped from raising a limitation period against an insured person, in circumstances in which the insured person reasonably relies on the insurer's conduct, to the insured person's detriment.
the written notice of refusal must communicate to the insured person the insurer's refusal to pay a benefit and the reasons for the refusal clearly and unequivocally; and,
the onus is on the insurer to establish that the insured person received the proper notice.
I agree with this analysis.
In this case, therefore, I must determine whether, and when there was a proper notice of refusal and whether Wellington can rely on the limitation period that runs from the date of refusal.
Was there a proper notice of refusal? If so, when?
Following the accident, in September 1992, Wellington paid Mr. Wilson weekly income benefits until November 5, 1992. On November 10 and 12, 1992, Wellington spoke to Mr. Wilson's pre-accident employer and psychiatrist. Based on the information they provided, Wellington concluded that Mr. Wilson did not qualify for weekly income benefits. Wellington communicated its decision to terminate these benefits in a letter to Mr. Wilson dated November 17, 1992.8 The letter said:
This is further to our telephone conversation with your employer on November 10, 1992, and your psychiatrist, Dr. Faux, on November 12, 1992.
Mr. Ricci (Mr. Wilson's employer) advised (Wellington) that on the week of August 31, 1992, your doctor had called him and advised him that your medical condition prevented you from performing the essential duties of your employment. Therefore, September 4, 1992 was your last date of employment. As you well know, your motor vehicle accident was September 8, 1992, therefore, we feel that your motor vehicle accident was not the cause of your incapability of working.
Throughout our conversation with Dr. Faux, he confirmed that you were incapable of working even prior to your motor vehicle accident.
Please be advised that your cheque dated November 2, 1992 for the amount of $95.60 paying you for the period of October 24 through November 6, 1992, inclusive was our final disability cheque due to the above-noted loss.
If you disagree with our decision, please find enclosed Mediation forms which you must complete and send off to the Ontario Insurance Commission.
If you have any questions/concerns please do not hesitate to contact the undersigned so this may be resolved.
I am satisfied that this letter provided adequate notice of Wellington's decision to terminate weekly income benefits. While Wellington's refusal to pay further benefits could have been more clearly and directly articulated in the letter, the letter does convey this message and sets out the reasons why these benefits were terminated.
I did not receive any direct evidence that Wellington actually sent the letter of refusal to Mr. Wilson. Nor did I receive any direct evidence that Mr. Wilson actually received it. However, the evidence adduced by Wellington indicates that Wellington sent the letter and that Mr. Wilson received it by November 26, 19929 or at the latest by December 2, 1992. Wellington received a letter from Dr. Faux (Mr. Wilson's psychiatrist) dated November 26, 1992, in which Dr. Faux responded, apparently at Mr. Wilson's request, to some of the information in the letter of refusal upon which Wellington based its decision. Further, Mr. Brian Jarvis, a claims examiner at Wellington, testified that Mr. Wilson and the adjuster responsible for handling his claim at Wellington (Ms. Franca Reale) discussed Wellington’s decision to terminate benefits on December 2, 1992. At that time Mr. Wilson knew that his weekly benefits had been terminated and the reasons for termination.
In the Reply by the Applicant for Arbitration which Mr. Wilson filed with the Ontario Insurance Commission on February 26, 1996, Mr. Wilson responded to Wellington’s position that his application was not made within the limitation period as follows:
The elapsed time frame to file for arbitration was not, according to my records, apparent. The two year period ends, according to my calculation, on November 22, 1995. The application for arbitration was delivered shortly after Thursday November 16, 1995.
Because Mr. Wilson did not attend at the hearing, I have no explanation from him as to how, according to his calculation, the two year limitation period expired on November 22, 1995.
I find that, in November 1992, Wellington gave Mr. Wilson a proper notice of its refusal to pay ongoing weekly income benefits, in accordance with section 24(8) of the Schedule. Therefore, the two year limitation period began to run as of that date and expired in November 1994. Mr. Wilson’s application for arbitration is dated November 16, 1995.
Can Wellington rely on the limitation period?
Having decided that a proper notice of refusal was given in November 1992, I must determine if Wellington can rely on the limitation period running from that date.
There is no evidence that Mr. Wilson’s failure to commence the arbitration within the time limit set out in the legislation resulted from any action or information received by him from Wellington. In particular, there is no evidence that Wellington made a representation to Mr. Wilson that the time limit in section 281(5) of the Act or section 26 of the Schedule need not be met and now is attempting to establish that it does.
Mr. Jarvis testified that after the letter of refusal was sent to Mr. Wilson and until mediation (mediation was conducted between September 30, 1993 and November 22, 1993), Mr. Wilson and Ms. Reale, the adjuster at Wellington responsible for handling Mr. Wilson’s claim for benefits, had many discussions about Wellington’s decision. These discussions were followed up with further discussions with Mr. Wilson’s employer and psychiatrist. Wellington received reports from Dr. Faux dated December 10, 1992 and January 21, 1993.10 Mr. Jarvis testified that these discussions and reports did not result in Wellington changing its position in respect of Mr. Wilson’s eligibility to weekly income benefits. Mr. Jarvis also testified that during the course of Wellington’s discussions with Mr. Wilson, Wellington did not at any time lead Mr. Wilson to believe that it had reversed its decision of November 17, 1992. On the contrary, Wellington provided Mr. Wilson with additional mediation forms, at his request, so that he could apply for mediation to the Ontario Insurance Commission.
I accept Mr. Jarvis' testimony and I do not find that Wellington's review of Mr. Wilson's claim and consideration of further evidence after November 17, 1992 means that Wellington had rescinded it's decision to deny the benefits or that its refusal of benefits could only take place at the completion of that process. Wellington was only fulfilling its continuing obligation to Mr. Wilson. As was noted by Senior Arbitrator Naylor in Zeppieri:
Insurance companies are responsible for investigating new information provided after benefits are terminated and must fairly re-evaluate an applicant's claim in light of the new information provided. The re-evaluation of claims on an ongoing basis is integral to a system of periodic benefits, and is a continuing obligation owed to an applicant.
The fact that an insurance company reconsiders a prior decision to terminate benefits (as it must do) does not mean that a refusal of benefits only can take place at the completion of that process. To interpret the language of s. 281(5) in this manner would largely deprive it of meaning.
In conclusion, I find that Wellington can rely on the two year limitation period running from November 1992 and because Mr. Wilson did not commence arbitration proceedings until November 1995, he is barred from proceeding to arbitration in respect of his entitlement to weekly income benefits after November 5, 1992, pursuant to section 281(5) of the Act.
In his application for arbitration, Mr. Wilson also claimed that he was entitled to weekly income benefits in an amount greater than the amount he received i.e. $47.50. The letter of refusal of November 17, 1992 dealt with Mr. Wilson's entitlement to weekly benefits after November 5, 1992 but not the amount of the weekly benefit to which he was entitled. These are two separate issues. Further, at the hearing, Wellington did not adduce any evidence of its refusal to pay an amount greater than the amount received by Mr. Wilson. Therefore, I am unable to determine if, and when Mr. Wilson received Wellington’s refusal to pay weekly income benefits in an amount greater than $47.50, and whether he commenced the arbitration proceeding within two years from Wellington’s refusal. Accordingly, I find that Mr. Wilson is not barred from proceeding to arbitration in respect of the amount of the weekly income benefit to which he was entitled.
Order:
- Mr. Wilson is barred from proceeding to arbitration in respect of his entitlement to weekly income benefits after November 5, 1992. He may proceed to arbitration in respect of the amount of the weekly income benefit to which he was entitled.
Shemin Manji Arbitrator
Date
APPENDIX
Exhibits:
Exhibit 1: Application for Accident Benefits
Exhibit 2: Application for Appointment of a Mediator
Exhibit 3: Letter from Wellington to Mr. Wilson dated November 17, 1992
Exhibit 4: Letter from Dr. Peter J. Faux to the Canadian Imperial Bank of Commerce dated October 25, 1995
Exhibit 5: Letter to Wellington from Dr. Faux dated November 26, 1992
Exhibit 6: Report of Dr. Faux dated December 10, 1992
Exhibit 7: Report of Dr. Faux dated January 21, 1993
Other documents before the Arbitrator:
Report of Mediator dated November 23, 1993 Application for Arbitration dated November 16, 1995 Response to an Application for Arbitration dated February 5, 1996 Reply by the Applicant for Arbitration dated February 26, 1996 Notes of the pre-hearing Arbitrator of pre-hearing discussions on March 20, 1996 Notice of Hearing dated March 21, 1996 Letter from Ms. Danielle K. LiChong to Mr. Wilson dated March 25, 1996 Letter from Arbitrator Shemin Manji to Mr. Wilson dated May 21, 1996 Letter from Mr. Wilson to the Ontario Insurance Commission dated October 14, 1996 Ontario Insurance Commission Arbitration Chronology Report (by case administrator), dated February 23, 1996.
Footnotes
- Prior 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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
- Exhibit 4 - Letter from Dr. Peter J. Faux to the Canadian Imperial Bank of Commerce dated October 25, 1995.
- Letter from Arbitrator Shemin Manji to Mr. Wilson dated May 21, 1996 (copy to Ms. LiChong).
- Letter from Mr. Wilson to the Ontario Insurance Commission dated October 14, 1996
- I note that when Mr. Wilson wrote to the Commission on October 14, 1996, he did not say that he had not received the notice.
- A copy of this letter was sent to the Commission.
- This section was amended in form but not in substance as of November 1, 1996. I am referring to the provision as it read at the time of the hearing.
- Exhibit 3.
- Exhibit 5.
- Exhibits 6 and 7