Neutral Citation: 1998 ONFSCDRS 5

FSC0 A97-001567

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ANNETTE S. BARR

Applicant

and

CANADIAN SURETY COMPANY

Insurer

DECISION on a PRELIMINARY ISSUE

Issue:

Annette Barr was injured in a motor vehicle accident on January 16, 1993. She applied for statutory accident benefits from Canadian Surety Company ("Canadian Surety"), payable under Ontario Regulation 672¹ on October 5, 1994. Canadian Surety paid some travel expenses but has refused Ms. Barr's claim for weekly income benefits because she applied for benefits long after the accident. The parties were unable to resolve their disputes through mediation and Ms. Barr applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

1. Does the application of section 22 of the Schedule invalidate Ms. Barr's claims for benefits and prevent her from proceeding to arbitration on the issues raised herein? Does Ms. Barr have a "reasonable excuse" for failing to apply for statutory accident benefits within the time set out in section 22 of the Schedule?

Result:

1. Ms. Barr does not have a "reasonable excuse" for failing to apply for statutory accident benefits within the time limits set out in section 22 of the Schedule. She cannot proceed to arbitration.

Hearing:

The hearing on the preliminary issue was held in Belleville on June 22, 1998, before me, K. Julaine Palmer, Arbitrator.

Present at the Hearing:

Applicant:

Annette S. Barr

Ms. Barr's

John Farant

Representative:

Barrister and Solicitor

Canadian Surety's

Deborah G. Neilson

Representative:

Barrister and Solicitor

Canadian Surety's

Iain Convery

Officer:

Staff Adjuster

Witnesses:

Annette Barr

Iain Convery

The parties filed 15 exhibits at the hearing on the preliminary issue

Evidence and Findings:

Background

Annette Barr, now age 32, was injured in a single vehicle accident on the evening of Saturday, January 16, 1993. At the time of the accident, Ms. Barr was driving her husband, Joe's, four-wheel drive "Jimmy" on a slippery road. Mr. Barr's "Jimmy" was insured by a company that is not a party to this arbitration. At the time of the accident, Ms. Barr, herself, also owned a motor vehicle, insured by Canadian Surety. This accident was reported to Joe Barr's insurance company soon after the accident, but it was not reported to Canadian Surety until September 13, 1994, that is almost 20 months after the accident occurred. There is no dispute between the parties that, according to the provisions of section 268(2)1.i of the Insurance Act, Canadian Surety is liable to pay statutory accident benefits to Ms. Barr.

Ms. Barr attended at the emergency department of Kingston General Hospital on Sunday morning, the day after the accident. The emergency physician recorded that her primary complaints were of a stiff neck and some low back pain. No investigation was performed at the hospital except a urine test which showed no abnormalities. She was discharged with a diagnosis of soft tissue injuries and advised to apply ice to the affected areas and seek follow-up only as needed. Five days after the accident, on January 21, 1993, Ms. Barr saw her family doctor, Dr. J.A. Chandu-Lall. He ordered x-rays of her cervical and dorsal spine, taken that same day. Dr. Chandu-Lall recorded that since the accident Ms. Barr had been suffering "neck and shoulder pain, particularly when she sits for a long time." He diagnosed a "muscle strain cervical group" and prescribed a collar and medication.

Ms. Barr continued to work after the accident, at her job as a licenced insurance broker, selling general insurance, including automobile insurance. She had been licenced as an insurance broker since 1988. In a statement she gave to Canadian Surety in October 1994, Ms. Barr stated that she returned to work on Monday, January 15, 1993. She

had problems the next day [Tuesday] and I didn't go to work.... I struggled back the next day and the days after. By January 21st, I was still having problems so I went to Dr. Chandu-Lall, my family doctor. ... I went to work and took the medication until I had a reaction to it January 28th. I went home early that day. ... I took off the next day. Then I returned to work and never saw a doctor or had treatment for the problems I was continuing to have in my neck and back. I occasionally used the collar. I took no medicine. I just got along with the pain.

The Agreed Statement of Fact discloses what happened next:

8. On June 8, 1993 the insured had a confrontation with another worker in her office and thereafter did not return to work. She was diagnosed with an acute stress disorder by her family physician, Dr. Chandu-Lall, who initially recommended that the claimant take three weeks off from work and later recommended that she take three to six months off of work.

Ms. Barr applied for disability benefits through a workplace group carrier in the summer of 1993 which advised her at the end of August 1993 that it would pay no benefits, because she had not satisfied the policy's elimination period. Ms. Barr applied for and received Unemployment Insurance (UI) sick benefits until September 18, 1993, when her doctor cleared her to return to work. Ms. Barr's former job was no longer available to her and, accordingly Ms. Barr applied for regular UI benefits, which she received until July 1994.

In February 1994, Ms. Barr's doctor referred her to a physiatrist, Dr. Charles Johnson. He advised her that her psychological and physical problems could be related to the motor vehicle accident of January 1993. Dr. Johnson referred Ms. Barr to a chiropractor, Dr. Wright, who treated her from February 21 to June 21, 1994. Ms. Barr paid for Dr. Wright's treatment from her own pocket, totalling $118 for eight treatments. In August 1994, Ms. Barr was referred to the Columbia Rehabilitation Centre, which she attended for one year.

Ms. Barr notified her husband's insurance company in late August or early September 1994 of her intention to claim accident benefits. That company made arrangements for a rehabilitation assessment for her and "in September or October of 1994 advised the claimant that they were denying her coverage on the basis that she had insurance with Canadian Surety." Canadian Surety first received notice of the accident of January 16, 1993 on September 13, 1994. Ms. Barr submitted an application for accident benefits, dated October 5, 1994 which Canadian Surety received shortly thereafter.

The Law

Section 22 of the Schedule applies in this case. It provides

22(1)—The insured person or the person otherwise entitled to make a claim shall,

(a) give initial notice of a claim to the insurer, in writing, within thirty days from the date of the accident or as soon as practicable thereafter, and

(b) furnish to the insurer within ninety days of the giving of the notice under clause (a) a completed application for statutory accident benefits respecting the accident and the resulting loss.

(2) A failure to comply with a time limit set out in subsection (1) does not invalidate a claim if the claimant has a reasonable excuse and so long as there is compliance within two years of the accident.

Applicant's Submissions

Ms. Barr submits that she was not aware of the "full extent of her injuries" until late January 1996 when a rheumatologist, Dr. T. Anastassiades, reported in a consultation note to Dr. Johnson as follows:

My impression is that we are now looking at chronic pain syndrome that was presumably set off by the MVA. She has developed I think some element of secondary fibromyalgia. The treatment for this is really going to be difficult.

Ms. Barr submits that Canadian Surety has suffered no prejudice by the delay in her application for accident benefits. Ms. Barr says that although Canadian Surety opened a claim file in September 1994, no notice was given to Ms. Barr that it would rely on the provisions of section 22 until late in 1997 or early in 1998.

Ms. Barr submitted that I should follow the decision in Kuronen and Allstate Insurance Company (December 29, 1995), OIC A-951897.² In that case, Arbitrator William Renahan considered Mr. Kuronen to have advanced a reasonable excuse for failing to comply with the time limits. The analysis and reasoning in the case is complicated, but one consideration was that Mr. Kuronen did not know of his entitlement to accident benefits. Ms. Barr does not claim lack of knowledge; in fact, she was a registered insurance broker at the time, selling automobile insurance policies, including statutory accident benefits, and receiving reports of accidents from insured persons. In Mr. Kuronen's case, he received a number of significant injuries, immediately apparent after the accident, and spent 11 days in hospital. Ms. Barr, on the other hand, claims she "was not aware of the full extent of her injuries" until about January 1996, when a diagnosis was received from Dr. Anastassiades.

Ms. Barr relies on the case of Grant v. British Pacific Insurance Company, [1990] I.L.R. 1-1225, a decision of the Nova Scotia Supreme Court. In that case, in 1974, Mr. Grant claimed, under a travel and pedestrian accident policy, for loss of sight in one eye. He said that the driver's door of his car had swung back and the rounded corner of the glass window had struck him with quite a sharp blow to his right eye. His eye watered and became bloodshot and he realized he could not see out of it, but believed the loss of sight was temporary. About two weeks after the accident he saw an ophthalmologist and had treatment in hospital. While in hospital Mr. Grant recalled that he had an insurance policy, but he did not send in the notice of claim indicating loss of sight in one eye until almost three months after the accident, after the first follow-up appointment with the ophthalmologist. Judge Glube found that the late filing was reasonable, within the meaning of the statutory conditions of that policy, "because he did not believe that he was blind in his right eye until that time." In the end result, however, Judge Glube found that the loss of sight did not result from the blow caused by the car door and Mr. Grant did not recover under the policy.

Canadian Surety's Submissions

Canadian Surety submitted that Ms. Barr has failed to fulfill her obligations under section 22 of the Schedule with respect to both notice of a claim and an application for statutory accident benefits. It says she has provided no reasonable excuse for her failure to comply with these time limits. It also submits that the legal doctrine of estoppel does not prevent it from relying on section 22 of the Schedule nor has Canadian Surety waived any of its rights under the Schedule.

Analysis:

The Grant case can be distinguished from the case at arbitration for a number of reasons. Most importantly, Mr. Grant reported his accident to the insurer about three months after it happened, after treatment in hospital, just after his first follow-up visit with his ophthalmologist. In contrast, Ms. Barr did not report the accident until almost 20 months had passed. She had received treatment early on after the accident, at a hospital and from her family doctor, then 12 months later from a physiatrist, and a chiropractor, but still she did not report it. I find this is a significant difference in time.

In order to rely on the provisions of section 22(2), Ms. Barr has to give evidence of an excuse. Her excuse is, "I didn't know it was so serious. I did not know the full extent of my injuries."³

In an early arbitration case, I considered the same issue in the case of Steele and Zurich Insurance Company (December 3, 1992) OIC A92-001024. In that case Ms. Steele delayed 12 months to apply for benefits. I found she had a reasonable excuse for eight of the 12 months: she was caring for her sick mother; coping with her own injuries; her doctor's Form 4 contained errors and there was a delay in getting another; there was a fire; and her car gave out. Ms. Steele had no reasonable excuse for the remaining four-month delay, but I found Zurich estopped from relying on it, because of certain conduct by the Insurer.

Ms. Barr's excuse is of a different order or type. In effect she says I had an accident; I had some injuries that I did not consider too serious; I got some treatment; I kept working; I kept having problems; I saw more doctors and 20 months after the accident I decided I should let the insurance company know about it. Ms. Barr went to a hospital emergency department after the accident, she saw her family doctor, had x-rays and took medication. She continued to work, except for a few odd days, within a couple of weeks of the accident. She said she had pain, but took no medication and no treatment for it. Six months later, she was involved in a confrontation with a co-worker and took time off. Her doctor told her to return to work three months later, but her job no longer exists. She went on UI benefits. In the interim, she tried to obtain benefits through a disability insurance policy from her work. She did not offer these or any other circumstances of her life as an excuse, she offers only the lack of awareness of the full extent of her injuries.

The onus to prove a reasonable excuse is on Ms. Barr. Ms. Barr did not notify any motor vehicle insurer about her continuing problems even once she was referred to a specialist in physical medicine and rehabilitation in February 1994. She has not explained this to my satisfaction. Is it reasonable that she did not think her injuries were that serious when she was referred by her family doctor to a specialist to give an opinion about her ongoing difficulties? It is clear from the February 1994 report of this specialist, Dr. Charles Johnson, that there was some discussion of her accident with him in January 1993. However, Dr. Johnson states in a consultation note that "she was quite well until about two weeks ago."

She can't say that she has had a lot of pain since the accident but she feels that there has been more difficulty with both regions [neck, etc.] since before the accident. She had been working in an office job and now is doing a significant amount of physical work.

At Dr. Johnson's recommendation, Ms. Barr took a course of chiropractic treatment in early 1994. She paid for it herself. I do not have the records of that treatment with Dr. Wright, except a summary of Ms. Barr's account. I find she paid for the eight treatments herself—$118 in total — from her own pocket, despite the fact that she knew that statutory accident benefits cover such expenses. She did not explain this.

Ms. Barr is a high school graduate, with one year of college education. She had spent about five years as a registered insurance broker at the time of the accident. Ms. Barr has not explained any reluctance to report the accident of January 16, 1993 to Canadian Surety. What was holding her back? Did she have a reason to refrain from notifying Canadian Surety even if she did not anticipate anything but trivial expenses to arise from treatment following the accident? Did she expect reporting to Canadian Surety would affect her insurance premium? She has not told me this; instead she has told me she did not notify the insurer, because she did not know how serious her injury was.

The test of a reasonable excuse is a subjective/objective test, that is, what would a reasonable person standing in Ms. Barr's shoes have done? This test takes into account the personal characteristics of Ms. Barr, like the fact she was an insurance broker, but also measures her actions against those of the reasonable person.

It has not been suggested that Ms. Barr sustained any injury in the accident that was hidden or undiscoverable. The medical evidence Ms. Barr has provided on this preliminary issue hearing may provide some links between her injuries in the accident and her present condition. That is not for me to determine here. Suffice it to say that, unlike Mr. Kuronen's case or Mr. Grant's case, Ms. Barr does not have an obvious injury like a broken leg or a blind eye. However, she felt pain from her injuries and sought treatment soon after the accident. Within 13 months of the accident she had been referred to a specialist to benefit from his opinion and expertise. Still she did not notify the insurer until another seven months had passed.

If an insured person delays giving notice of a claim to an insurer, without reasonable excuse, the insured person does so at his or her peril. It is unreasonable for an insured person to become the arbiter of when it is (finally) appropriate or worthwhile to notify the insurer. The time limits of section 22 exist for many good reasons. Without reasonable excuse, they should be observed.

In these circumstances, I do not think Ms. Barr has proven she has a reasonable excuse. Although Arbitrator Shemin Manji's case in Singh and Dominion of Canada General Insurance Company (October 3, 1997), OIC A96-000272, was very different on its facts, I agree with Arbitrator Manji's conclusion. She was not satisfied that the claimant had an excuse for the delay. She felt she would be going outside the provisions of the Schedule (in that case, Bill 164), if she were to find, in the absence of an excuse, that the claimant's claim was nevertheless valid because of a lack of prejudice to the insurer and hardship to the claimant. That interpretation would deprive the word "excuse" of meaning. Arbitrator Manji wrote: "It is trite law that no legislation should be interpreted to leave parts of it meaningless." I agree.

Expenses:

I heard no argument about expenses. If the parties cannot agree on this issue, we will resume the prehearing by teleconference for submissions on expenses.

Order:

1. Ms. Barr cannot proceed to arbitration. The arbitration is dismissed.

July 16, 1998

K. Julaine Palmer

Arbitrator

Date

Schedule

Authorities Considered:

Elfeki and Non-Marine Underwriters, Members of Lloyd's, London, England (July 14, 1997), OIC A-006987

Grant v. British Pacific Insurance Co., 1980 CanLII 4397 (NS SC), [1980] I.L.R. 1-1225 (N.S.S.C.)

Kuronen and Allstate Insurance Company (December 29, 1995), OIC A-951897, affirmed on appeal (January 31, 1997), OIC -96-000026

Offeh and Allstate Insurance Company (July 3, 1996), OIC P-006494

Robertson and Royal Insurance Company (July 11, 1996), OIC A96-000361

Singh and Dominion of Canada General Insurance Company (October 3, 1997), OIC A96-000272

Tran and Guarantee Company of North America (March 20, 1998), OIC A96-00272

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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Affirmed on appeal (January 31, 1997), OIC P96-000026. For a list of other Authorities Considered, see the Schedule to these reasons.
3. 3I heard no argument from the parties about the "reasonable discoverability rule" as in M(K) v. M(H), 1992 CanLII 31 (SCC), [1992] 3 SCR 6.