Teresa Rano v. Commercial Union Assurance Company, 1999 ONFSCDRS 149

Financial Services Commission of Ontario

Neutral Citation: 1999 ONFSCDRS 149

FSCO A97-001056

BETWEEN:

TERESA RANO Applicant

and

COMMERCIAL UNION ASSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Dirk VanderBent

Heard: May 17, 1999, by motion record, written submissions, and oral argument.

Appearances: Ted Charney for Mrs. Rano Walter Scodeller for Commercial Union Assurance Company

Issues:

The Applicant, Teresa Rano, was injured in a motor vehicle accident on December 30, 1996. She applied for and received statutory accident benefits from Commercial Union Assurance Company ("Commercial Union"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mrs. Rano applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

1. Is Mrs. Rano permitted to withdraw her application for arbitration?

2. If permission is granted, is either party entitled to their expenses of this arbitration proceeding as a condition of the withdrawal?

Result:

1. Mrs. Rano is permitted to withdraw her Application for Arbitration.

2. Neither party is entitled to their expenses.

EVIDENCE AND ANALYSIS:

Facts:

The relevant facts are as follows. Mrs. Rano was involved in a motor vehicle accident on December 30, 1996. At that time, she was working as a driver delivering automotive parts for a parts dealership. She applied for and began receiving income replacement benefits. On January 27, 1997, Commercial Union received correspondence from Mrs. Rano's employer indicating that, as of November 30, 1996, Mrs. Rano drove her own vehicle when delivering parts. A dispute then arose respecting payment of housekeeping and acupuncture expenses. Mrs. Rano filed an Application for Arbitration with the Commission on June 9, 1997, requesting adjudication of her claims for these expenses.

Commercial Union subsequently terminated payment of Mrs. Rano's income replacement benefits in August1997, on the basis that she no longer satisfied the test for disability. A pre-hearing discussion was held on December 8, 1997, at which time Mrs. Rano's claim for income replacement benefits was added to the list of claims referred for adjudication. In April 1998, Commercial Union first raised a defence under subsection 30(2) of the Schedule, asserting that Mrs. Rano had intentionally failed to notify Commercial Union of a change in the risk material to the contract. Commercial Union maintains that Mrs. Rano never provided notification that she was using her vehicle in the course of her employment. Mrs. Rano opposed Commercial Union's request to add this claim for adjudication at the hearing. The issue was argued before me on October 8, 1998, and I granted Commercial Union's request to refer this issue for adjudication. At that time, Mrs. Rano's counsel argued that if the Insurer was successful in establishing that the exclusion under subsection 30(2) applied, Mrs. Rano would have no recourse but to claim relief from forfeiture pursuant to section 129 of the Insurance Act. Mrs. Rano's counsel indicated that she would be forced to withdraw her application for arbitration and commence a civil proceeding in order to obtain this relief, as an arbitrator does not have jurisdiction to grant relief from forfeiture. On December 30, 1998, Mrs. Rano issued an action in the Ontario Court (General Division), in which she named Commercial Union as a defendant, and requested that her claims for accident benefits be adjudicated by the court.

Analysis:

If Commercial Union is successful in establishing its defence, Mrs. Rano would be excluded from receiving weekly benefits, and housekeeping expenses, pursuant to subsection 30(2) of the Schedule. Mrs. Rano argues that the relief of forfeiture provision under section 129 of the Insurance Act can be applied, if it is found that it would be inequitable that she should be excluded from receiving benefits. Section 129 provides:

Relief from forfeiture

129. Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.

Mrs. Rano reiterates that she has no choice but to withdraw her application for arbitration and