Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 229

Appeal P99-00027

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MANKESHWAR KURICHH

Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Ravinder Sawhney (for Mankeshwar Kurichh)

Joanna M. Chadwick (for Allstate Insurance Company of Canada)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is dismissed and the arbitration order dated May 6, 1999 is confirmed.

2. No appeal expenses are payable.

November 26, 1999

David R. Draper Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mankeshwar Kurichh was injured in an automobile accident on June 29, 1991. Therefore, his entitlement to accident benefits is determined under the Statutory Accident Benefits Schedule—Accidents Before January 1, 1994 ("the Schedule")¹

Allstate Insurance Company of Canada ("Allstate") paid weekly income benefits until June 30, 1994—the 156-week mark. At that point, it stopped paying on the basis that Mr. Kurichh did not meet the stricter, post-156 week test in s.12(5)(b) of the Schedule. This issue went to mediation, with the Report of Mediator signed on September 23, 1996. Mr. Kurichh did not apply for arbitration until November 1997. He claimed, however, that he did not receive the Report of Mediator until September 1997, after his lawyer attempted to continue what he believed was an ongoing mediation.

The arbitrator rejected Mr. Kurichh's arguments, concluding that his claim for weekly income benefits was time-barred. On appeal, Mr. Kurichh submits that:

• the arbitrator's actions raise a reasonable apprehension of bias, making the decision a nullity; and

• there was insufficient evidence to establish that Mr. Kurichh or his lawyer received the Report of Mediator and, therefore, the arbitrator erred in holding that the time limit expired 90 days after the date of the report.

Although the arbitration decision did not finally determine all of the issues in dispute, the parties agreed that the appeal should be decided first.

The parties were unable to agree on some aspects of the appeal record. Because this was a contentious issue, the appeal record is set out in Appendix A.

II. BIAS

Mr. Kurichh's main argument on appeal is that the arbitrator's actions raise a reasonable apprehension of bias. His principal complaint is that his lawyer was not allowed to make written submissions. He also contends that after refusing to allow written submissions, the arbitrator rushed to release his decision, demonstrating "mala fides.' Finally, he claims that the arbitrator's bias is revealed by comments he made during the hearing. For reasons that follow, I find little merit in these allegations.

The issues in dispute were identified at the pre-hearing discussion held on May 20, 1998. Both parties were represented by counsel—Mr. Kurichh by Mr. Sawhney and Allstate by Ms. Chadwick. Mr. Sawhney presented a number of claims, including ongoing weekly income benefits from June 29, 1994, and expenses for physiotherapy, transportation, housekeeping, snow removal and cooking. Allstate took the position that the claim for weekly income benefits was out-of-time. There was no issue, however, about Mr. Kurichh's right to proceed to arbitration on the other claims.

A preliminary hearing was scheduled for April 26, 1999, to deal with the time limits issue, with the main arbitration hearing to take place on August 9-12, 1999. This was confirmed by letter to both counsel and their clients. The 11-month delay between the pre-hearing and the preliminary hearing is unfortunate, but I have no reason to believe it was due to anything other than a lack of earlier, mutually available dates.

The preliminary hearing went ahead on April 26, 1999, as scheduled. The only issue was whether Mr. Kurichh was entitled to proceed to arbitration on his claim for weekly income benefits. There were two witnesses: Mr. Hisham Fahmy, Allstate's Senior Staff Claims Representative, and Mr. Kurichh.

There is no suggestion that Mr. Kurichh raised any concerns about the arbitrator's impartiality during the hearing. Nor was there any request to make written submissions. Instead, the hearing proceeded as usual—the parties presented their evidence, made oral submissions and the arbitrator reserved his decision. At that point, the hearing was over, subject to the arbitrator's discretion under Rule 39.1 of the Dispute Resolution Practice Code ("the Practice Code") to reopen it before issuing his decision.

On April 27, 1999, the day after the hearing, Mr. Sawhney faxed a letter to the Registrar stating:

Pursuant to a hearing held in the above matter, yesterday at the Commission, this is to notify the Commission, by a further faxed copy to Arbitrator Hale, that I will be making written submissions by May 11, 1999. Further to Mr. Hale's intimations that it will be about the end of May before the decision would be written, this time framework seems reasonable. Should he be dissatisfied with the date, I will be pleased to accommodate to the best of my ability. I will not be in the office till Tuesday, May 4, 1999.

Ms. Chadwick responded two days later. She argued that the hearing ended on April 26, 1999 and, therefore, no further submissions should be allowed.²

By fax dated April 30, 1999, the arbitrator advised counsel as follows:

. . . Please be advised that the hearing of the preliminary issue in this matter was completed on Monday, April 26, 1999. I will not, accordingly, be accepting any further submissions from either counsel in this matter. There is nothing in Mr. Sawhney's letter of April 27, 1999 which would persuade me that I am required to accept any further submissions from either party.

The decision will be forwarded to you when it has been completed. I trust this meets with your satisfaction.

The arbitrator issued his decision six days later, on May 6, 1999, concluding that Mr. Kurichh could not proceed to arbitration on his claim for weekly income benefits. That same afternoon, the Commission received a fax from Mr. Sawhney to the Director of Arbitrations, making an application under s.282(12) of the Insurance Act to replace the arbitrator due to bias. Allstate opposed the application and on May 10, 1999, the Director of Arbitrations refused to appoint a new arbitrator because the decision had already been released. Instead, she referred Mr. Sawhney to the appeal provisions in the Practice Code.

The first question is whether the arbitrator's refusal to allow written submissions amounts to bias. In my opinion, it does not. Put simply, Mr. Sawhney had no right to demand an opportunity to make written submissions after the hearing concluded. His letter was properly treated as a request under Rule 39 of the Practice Code to reopen the hearing. Allstate opposed the request, requiring the arbitrator had to exercise the broad discretion provided by Rule 39. He was not persuaded by Mr. Sawhney's letter that additional submissions were needed and, therefore, refused the request. In my view, this decision was well within his authority and consistent with previous arbitration decisions holding that the power to reopen hearings should be exercised sparingly.³

Mr. Kurichh's objection seems to be that the arbitrator's decision not to reopen the hearing reflects a bias against his position. It must be remembered, however, that the hearing was over. The arbitrator was entitled to have views about the case and to consider them in evaluating whether additional submissions would be helpful. I am satisfied that is what happened here, and find no reason to interfere with the decision.

I also find no evidence to support Mr. Kurichh's contention that the arbitrator rushed his decision to avoid a ruling by the Director on the issue of bias. Mr. Sawhney's letter, dated May 6, 1999, was the first notice of any challenge. It was sent to the Director, not the arbitrator, and was received by the Commission by fax at 3:13 p.m. The arbitrator's decision was signed on May 6, 1999. Even assuming that the arbitrator became aware of Mr. Sawhney's letter, it is unlikely that he drafted and signed his twelve-page decision that afternoon. In the circumstances, I am not prepared to question the arbitrator's actions or criticize him for issuing his decision promptly.

Finally, Mr. Kurichh claims the arbitrator's bias is confirmed by comments made during the arbitration hearing. In particular, he points to an excerpt from the transcript, highlighted in italics below, from the cross-examination of Mr. Fahmy, Allstate's claims representative. I agree with Allstate, however, that the arbitrator's comments must be considered in context.

At the arbitration hearing, Allstate presented its case first because it had the onus of establishing that Mr. Kurichh's claim for weekly income benefits was out-of-time. Its position was straightforward. Weekly income benefits were terminated effective June 30, 1994. Therefore, the two-year time limit for applying for arbitration ran from that date. However, s.26 of the Schedule extends the period, allowing an application for arbitration within 90 days of the mediator's report to the parties. The Report of Mediator, dated September 23, 1996, is a final report, offering no suggestion that the mediation was to resume at a later date. Transportation expenses are listed under the hearing, "Issues Resolved," stating as follows:

Mr. Mankeshwar Kurichh and Allstate Insurance Company agree as follows:

1. as of September 13, 1996, there are no issues in dispute with respect to transportation expenses, under section 6 of the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, that the parties wish to mediate at this time; and

2. Mr. Kurichh will submit to Allstate a claim for transportation expenses.

As I understand the position advanced at the arbitration hearing by Mr. Sawhney, he claimed that neither he nor Mr. Kurichh received the Report of Mediator until September 1997, nearly a year after the telephone mediation took place. However, he was not expecting a report because it was his understanding that the mediation had been put on hold to allow him to document Mr. Kurichh's claim for transportation expenses. It was not until the summer of 1997, nine months later, when he sent the documentation to Allstate and the mediator, that he learned Allstate was taking the position that the mediation was completed in September 1996.⁴ When he finally received the Report of Mediator in early September 1997, he applied for arbitration within 90 days.

At the arbitration hearing, Allstate presented a letter from Mr. Guy Jones, Acting Senior Arbitrator, that was accepted into evidence without objection. The letter is a response to an inquiry from Ms. Chadwick, and states as follows:

I now have had an opportunity to look into this matter, and can advise you that the report of the mediator was mailed out to the parties on September 23, 1996. If you require any further information in this regard, please advise.

Neither party asked Arbitrator Jones for any further information or asked him to testify at the arbitration hearing.

Allstate's only witness at the arbitration hearing was Mr. Fahmy, its claims adjuster. During his examination-in-chief, Mr. Fahmy testified that the mediation concluded on September 23, 1996, without resolution. On cross-examination, Mr. Sawhney attempted to get Mr. Fahmy to acknowledge that transportation expenses remained an outstanding issue. Mr. Fahmy explained that, as set out in the Report of Mediator, transportation expenses were not in dispute because Mr. Kurichh had not yet submitted a claim. According to Mr. Fahmy, they were an outstanding issue only in the sense that Allstate agreed to respond to Mr. Kurichh's claim when he made it.⁵

The transcript then records a discussion about the relevance of a second mediation.⁶ In the course of that discussion, Mr. Sawhney referred to the letters he wrote to the mediator, dated June 27, 1997 and August 21, 1997, setting out his understanding that the mediator remained open to allow him to document and submit Mr. Kurichh's claim for transportation expenses. Ms. Chadwick objected to the letters being accepted as evidence. She argued that the Report of Mediator establishes that the mediation was completed in September 1996 and, therefore, Mr. Kurichh's letters asserting something different were self-serving documents that should not be admitted. This led to the following exchange, including the comments to which Mr. Kurichh objects:

MR. ARBITRATOR: These letters will be given whatever weight they should be given, and, I mean, recognize they are self-serving in nature, and I understand what they're being designed to do. I mean, it's pretty transparent. I mean, I'll admit them and allow the questions to be asked of these documents, and give them whatever weight I feel they merit.

MR. SAWHNEY: Also, from a practical point of view, I have no other way of showing that I acted with the mediator, with the commissions, and a response from the commission where not adequate. There is no other way I can prove that, unless we have the mediator up for cross-examination, which I think at this point is not necessary. But if it is necessary, then I will ask for that. If there is no other way for this issue to be examined, then there is no other way I can address it, except asking the commission if they have a response to my letter, that was sent by the commission in response. There was no response by the commission to my letter of June 27th.

MR. ARBITRATOR: You're not asking for one.

MR. SAWHNEY: Right. But I'm saying if there was - - I'm sorry.

MR. ARBITRATOR: You didn 't ask for a response.

MR. SAWNEY: I 'm continuing the mediation in the letter, and I 'm saying there was no written response by the mediator to either of those two letters.

MR. ARBITRATOR: But you didn't ask for one. You didn't say, "Now tell me what you want me to do next. " You know, you 're saying, "Here are these things, here are these documents, I'm filing them now,nine, ten months later. I mean, what do you want our office to do? What did you expect the mediator to do? Send back and say, "Gee, thank you very much. That's wonderful. I'm pleased to see these.I don't want to get into an argument about this, but ---

MR. SAWNEY: All I 'm saying is I was not given a copy of the mediator's report, and this is the only reason.

MS. CHADWICK: I object to you giving evidence, Mr. Sawhney.

MR. ARBITRATOR: That’s evidence and, again, your going to have to put your evidence in through a witness. You can't give your evidence. You're here as a counsel.

MR. SAWHNEY: That’s fine. I guess my point is I’m not trying to give evidence. I'm saying that there is no record, in the commission’s files, of any response of the mediator to my letters. If it's your position, as the arbitrator, that she ought not to have responded, then so be it. I mean, I am not challenging that.

MR. ARBITRATOR: You can lead whatever evidence you want, I mean, as far as what you told the mediator. You're within your rights to do that, but please continue with your questions of this witness. I 'm not sure where we are here.

In my view, this exchange reflects a persistent problem throughout this arbitration with the blurring of evidence and submissions. The arguments presented on behalf of Mr. Kurichh were based largely on the steps taken by Mr. Sawhney and his understanding of the situation. However, Mr. Sawhney appeared at the hearing as counsel, not a witness. This made it awkward for him to present the case without injecting his own evidence.

As a central example, Mr. Sawhney presented his letters to the mediator as evidence of his understanding that the mediation remained open for him to gather and file documentation relating to Mr. Kurichh’s transportation claim. Mr. Sawhney used the letters to explain why he was not surprised when he did not receive a report from the mediator, a fact he also claimed was established by the letters. However, Mr. Kurichh’s evidence was different. When Mr. Sawhney asked him about the mediator's report, he testified that he was wondering why he did not get a copy and was becoming impatient.⁷

In the exchange set out above, the arbitrator rejects Allstate's argument that Mr. Sawhney's letters should be excluded. He agrees to accept them as part of the record⁸ and assess their weight along with the other evidence. Not content with this ruling, Mr. Sawhney went on to explain why he needed to rely on the letters, stating that he received no response from the Commission. With the advantage of hindsight, the arbitrator could have stated that he made his ruling and asked Mr. Sawhney to continue with his cross-examination of Mr. Fahmy. However, I am not persuaded that his comments suggest bias. He clearly had reservations about the letters, but that does not mean he was unwilling to consider the evidence. As he states at the end of the excerpt, Mr. Sawhney was free to lead whatever evidence he wanted when Allstate finished presenting its case.

Mr. Kurichh points to one other comment that, in his submission, shows the arbitrator's bias. During Mr. Sawhney's cross-examination of Mr. Kurichh, Ms. Chadwick objected to questions about medical care, arguing that Mr. Kurichh's medical care was not relevant to the time limits issue. This led to a rather lengthy discussion between counsel and the arbitrator. On the sixth page of the transcript of this discussion, the arbitrator says, apparently to Mr. Sawhney:

The fact that he was seeing an occupational therapist or not seeing an occupational therapist, doesn't have anything to do with your IRB claim.⁹

In his written submissions, Mr. Kurichh argues that the arbitrator "in his biased view fails to see a connection between therapy definitionally designed to return a disabled individual to work and the wage loss that is directly affected by this therapy." His position, as I understand it, is that by involving an occupational therapist, Allstate must have been keeping the weekly income benefits issue open. In my view, that does not follow. While there obviously is some relationship between weekly income benefits and rehabilitation benefits, they are separate benefits with different tests of entitlement. The arbitrator found, supported by the evidence, that Allstate consistently took the position that Mr. Kurichh was able to return to work and, therefore, was not entitled to any additional weekly income benefits. Allstate continued to deal with his rehabilitation needs, as it was required to do, but this did not affect its position on weekly income benefits.

In any event, the arbitrator did not prevent Mr. Sawhney from asking the question about occupational therapy that prompted Ms. Chadwick’s objection. Three transcript pages later, he rules in Mr. Kurichh’s favour, at least in part:

MR. ARBITRATOR: If you're asking the question to assist him in triggering his memory about what discussions were going on, pertaining to the weekly benefit claim, that’s fine.

MR. SAWHNEY: That's all I was doing.

MR. ARBITRATOR: Ask that question. Don’t ask about this other business that doesn’t pertain to this issue.¹⁰

The arbitrator then allowed Mr. Sawhney to ask questions about other medical appointments despite Ms. Chadwick’s objections. In the circumstances, I find no basis for Mr. Kurichh’s complaint. Further, after reviewing the entire transcript, I agree with Allstate that the arbitrator conducted the hearing fairly. He was not unduly interventionist, involving himself only to deal with objections raised by counsel and other appropriate matters.

Consequently, I reject Mr. Kurichh’s claim that the arbitrator’s decision cannot stand due to actual bias or the reasonable apprehension of bias.

B. Insufficient evidence

Mr. Kurichh also challenges the arbitrator's conclusion that his claim for weekly income benefits is time-barred. For reasons that follow, I am not persuaded that the arbitrator erred.

Subsection 281(5) of the Insurance Act states that an arbitration proceeding must be commenced within two years of the insurer's refusal to pay the benefits claimed, or within such longer period as may be provided in the Schedule. The Schedule adjusts the time limit in recognition that mediation is a mandatory first step in the process:

26. (1) A mediation proceeding under section 280 of the Insurance Act in respect of benefits under this Schedule must be commenced within two years from the insurer's refusal to pay the amount claimed in the application for statutory accident 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.

Section 280 of the Insurance Act contemplates that mediation will be conducted promptly, subject to time limits established in the regulations. According to Regulation 664 of R.R.O. 1990, the mediator is required to complete his or her work within 60 days after the application for mediation is filed. However, the Insurance Act allows some flexibility. The parties can agree to extend the time for completing the mediation.¹¹ This is set out in more detail in the Practice Code¹²:

19.1 Mediation will be completed within 60 days of the Application for Mediation being filed.

19.2 Despite Rule 19.1 and subject to Rule 21.1(a), the parties may agree to extend the 60-day time limit even if the initial time limit has expired.

19.3 Where the parties have agreed to extend the time for the completion of a mediation, the parties must:

(a) inform the mediator of the extension; and

(b) confirm the extension in writing to the mediator.

The mediator’s role is to enquire into the issues in dispute and attempt to effect a settlement of as many issues as possible within the time allowed for the mediation.¹³ According to the legislation, the mediation has failed when the mediator gives notice of his or her opinion that the mediation will fail, or when the prescribed time (or agreed upon extension) has expired and no settlement has been reached.¹⁴ If mediation fails, the mediator is to "prepare and give to the parties a report setting out the insurer's last offer and the mediator's description of the issues that remain in dispute."¹⁵

The parties agree that the onus was on Allstate to prove that Mr. Kurichh’s application for arbitration was out-of-time. Mr. Kurichh submits, however, that the arbitrator erred in deciding the issue on the normal civil standard—a balance of probabilities. In his submission, the courts have recognized a higher standard in similar cases.

In support of his argument, Mr. Kurichh cites the decisions in Collee v. Kyriacou (1996), 1996 CanLII 8245 (ON CTGD), 31 O.R. (3d) 558 (Ont. Gen. Div.) and Chrappa v. Ohm et al. (1996), 29 O.R. (3d) 22 (Ont. Gen. Div.). The problem is that these decisions involve a significantly different issue—whether the plaintiff’s entitlement to future accident benefits should be deducted from his or her damages. In both cases, the Court held that future accident benefits should not be taken into account unless entitlement is established at a higher standard, either "substantial possibility' or "beyond dispute." While it makes sense that someone's damages should not be reduced by his or her future entitlement to accident benefits unless that entitlement is reasonably certain, I agree with Allstate that this has little to do with the issue presented here. As a result, I find no error in the standard applied by the arbitrator.

Allstate's case was strong. It established that Mr. Kurichh's weekly income benefits were terminated effective June 30, 1994. The Report of Mediator is dated September 23, 1996, and the letter from Arbitrator Jones states that it was mailed to the parties on that date. Therefore, unless Mr. Kurichh could show some reason why the time period should not run, the deadline for applying for arbitration would be December 23, 1996, eleven months before he filed his application. At the arbitration hearing, Mr. Kurichh made three arguments in response:

1. The termination was not clear and unequivocal.

2. Allstate is estopped from relying on the time limit because its actions led him to believe that all of the issues remained open and, therefore, the time limit was not an issue.

3. He did not receive the Report of Mediator until September 1997 and, therefore, was entitled to apply within 90 days of receiving it, which he did.

1. Clear and unequivocal refusal

Previous decisions have established that the time limit only runs from a clear and unequivocal refusal. However, the arbitrator found that Allstate's letter to Mr. Kurichh's former lawyer, dated June 27, 1994, and the accompanying Assessment by Insurer left no doubt that the payment of weekly income benefits would end effective June 30, 1994. Further, he found that the actions of Mr. Kurichh and his lawyer demonstrated their understanding of the situation. The record provides clear support for this finding and, therefore, I find no basis for intervening.

2. Estoppel

The arbitrator also rejected Mr. Kurichh's contention that Allstate was estopped from relying on the time limit. His decision was based on his acceptance of Mr. Fahmy's evidence that he never indicated to Mr. Kurichh that Allstate was considering the reinstatement of his weekly income benefits. Contrary to Mr. Kurichh's position, the arbitrator found that Mr. Fahmy consistently took the position that the payment of weekly income benefits beyond 156 weeks was "not an issue" with Allstate.

Because Mr. Kurichh applied for arbitration after November 1, 1996, his appeal is governed by the 1996 amendments to the Insurance Act, limiting appeals to questions of law.¹⁶ He claims, however, that the arbitrator erred in law in failing to appreciate the significance of the continued involvement of an occupational therapist. In Mr. Kurichh's submission:

This occupational therapist’s purpose, it can be reasonably inferred, would be to explore the potential of adjusting the weekly income benefits upon work tryouts with the workstation, an acknowledgement the adjuster made grudgingly at the hearing . . . The issue of weekly income benefits very much remained alive, after payments were cut off in June of 1994.

Despite Mr. Kurichh's arguments to the contrary, I find that the arbitrator followed the approach taken in many previous decisions.¹⁷ Insurers can and should be able deal with the insured person's claims for other types of benefits and to consider any new information that becomes available without compromising their position on weekly income benefits. The arbitrator found that is what happened here. His factual findings are supported by the evidence and, therefore, I am not prepared to second-guess them.

Further, like too much of Mr. Kurichh's written submissions, the recitation of the evidence is inaccurate. Mr. Fahmy did not acknowledge that the occupational therapist was engaged to assess Mr. Kurichh's ability to work, or that weekly income benefits would be paid if he was unable to work. Instead, Mr. Fahmy testified that Allstate never varied from its position that Mr. Kurichh was capable of working, although it was attempting to follow Dr. Agapitos' recommendation that he have a home work station. The role of the occupational therapist was to help set up the work station, but according to Mr. Fahmy, Mr. Kurichh was uncooperative.¹⁸

For these reasons, I find no error in the arbitrator's refusal to link the involvement of the occupational therapist and Mr. Kurichh's entitlement to weekly income benefits.

There is also a question about the timeliness of Mr. Kurichh's application for mediation. Allstate did not raise this issue during mediation, but did at the arbitration hearing. It argued that Mr. Kurichh's application for mediation was out-of-time because it was filed more than two years after Allstate's refusal to pay further weekly income benefits. The arbitrator's findings support this conclusion. He found that the time limit started running on June 30, 1994, the date of the refusal, and that the application for mediation was filed on July 9, 1996, just over two years later. However, the arbitrator focussed on the primary issue—the timeliness of the application for arbitration. Having concluded that the arbitration was out-of-time, the arbitrator did not find it necessary to decide on the timeliness of the mediation.

On appeal, Mr. Kurichh claims that by not raising the time limits issue at the mediation, Allstate led him to believe they had waived it and that all issues were still open. I find no evidence to support this argument. Mr. Kurichh's testimony does not include any suggestion that the timing of his arbitration application was based on any reliance on Allstate's failure to raise a limitations defence at mediation. At most, Allstate's silence did not alert Mr. Kurichh to the limitation period. However, as the arbitrator points out, Mr. Kurichh was represented by counsel from May 10, 1996, at the latest, who was responsible for protecting his interests.

3. Report of Mediator

The arbitrator rejected Mr. Kurichh’s contention that neither he nor Mr. Sawhney received the Report of Mediator until September 1997, nearly a year after the mediator signed it. He found on a balance of probabilities that Mr. Kurichh and/or Mr. Sawhney received it in late September 1996 and, accordingly, the 90-day extension for applying for arbitration ran from the date of the report—September 23, 1996.

Mr. Kurichh claims the arbitrator erred in placing the onus on him to prove non-receipt. In his submission, the onus was on the Commission to prove that he received the Report of Mediator because it was the party asserting that proper notice was provided. It is difficult to see how the onus can be on the Commission—a non-party. However, the Commission has obligations. According to Rule 22.3 of the Practice Code, the Commission "will provide a copy of the Report of Mediator to the parties." While no method is specified for providing the report, Rule 7 allows service of documents, presumably a stricter requirement, to be done by regular mail, with service deemed to have taken place on the fifth day after the day on which the document was mailed.

After Mr. Kurichh applied for arbitration, Ms. Chadwick wrote to the Commission for information on what was done in this case. As discussed above, Acting Senior Arbitrator Jones responded, stating that the Report of Mediator was mailed to the parties on September 23, 1996. Allstate relied on this letter, which was accepted as an exhibit without objection from Mr. Kurichh. Other than denying that he received it, Mr. Kurichh did nothing to challenge Arbitrator Jones' evidence that it was mailed in September 1996. In the circumstances, I find no error in the arbitrator’s reliance on the letter.

In reaching his decision, the arbitrator also considered the sequence of events. He clearly was troubled by the length of time between the mediation and any follow-up by Mr. Kurichh. At page 11 of the decision, he states:

In my view, counsel was under a positive obligation to make the necessary inquiries as to the whereabouts of the Report of Mediator following the mediation of September 23, 1996 within a reasonable time, if had not been received by either him or his client. I further find that counsel was also obliged to take such other steps as would have been necessary to satisfy himself that the mediation was, in fact, not concluded on September 23, 1996 in order to protect the interests of his client. I find that no such efforts were made until Mr. Sawhney wrote to the Mediator on June 27, 1997, some nine months after the conclusion of the mediation.

In my view, these comments are justified. Although the Insurance Act and Practice Code allow the parties to extend the 60-day mediation period on consent, the extension is to be confirmed in writing. Further, there is a strong suggestion that the extension must be for a specific period.¹⁹The rules simply do not contemplate the kind of long-term, open-ended extension claimed by Mr. Kurichh.

4. Additional argument on appeal - "rolling time limit"

Mr. Kurichh also argues that the arbitrator failed to appreciate "the undisputed law that weekly disability benefit claims are renewed every week throughout the continuation of the disability and are not subject to a blanket statute of limitations." That, however, is not the law. According to s.281(5) of the Insurance Act, the time limit runs from the insurer's refusal to pay the benefits claimed. In Kirkham v. State Farm,²⁰ the Divisional Court held that s.281(5) is clear and unambiguous; the insured person must commence his or her proceeding within two years after the insurer's refusal to pay, or the claim is time-barred. In this case, Mr. Kurichh applied for arbitration more than two years after Allstate's refusal to pay further weekly income benefits, and more than 90 days after the date of the Report of Mediator. Following Kirkham, his claim for weekly income benefits is out-of-time.

IV. APPEAL EXPENSES

The appeal record and the submissions of counsel convince me that at least some of the problems in this case involve genuine confusion about the dispute resolution process. While Allstate should not be required to pay Mr. Kurichh's expenses, I am not persuaded that Mr. Kurichh should be ordered to pay Allstate's expenses or an assessment under s.282(11.2) of the Insurance Act. Therefore, the parties will bear their own expenses.

November 26, 1999

David R. Draper Director's Delegate

Date

APPENDIX A

Rule 53.1 of the Dispute Resolution Practice Code states the appeal record "includes the Notice of Appeal, the Response to Appeal, the Reply by the Appellant, the written submissions of the parties, and the record of the arbitration hearing, including all arbitration exhibits and, if it is filed, the transcript of the arbitration hearing." After hearing submissions from counsel for each party, I held that the appeal record consists of:

• Report of Mediator dated September 23, 1996

• Application for Arbitration, undated but date-stamped by the Commission on November 19, 1997

• Response to an Application for Arbitration dated February 19, 1998

• Pre-hearing letter dated May 27, 1998

• Arbitration exhibits:

Exhibit 1 - Insurer’s claim diary from May 17, 1994 to November 26, 1996

Exhibit 2 - Correspondence between Mr. Kurichh’s lawyers and Allstate from May 12, 1994 to July 10, 1997

Exhibit 3 - Correspondence, dated April 15, 1998, from Mr. M. Guy Jones, Senior Arbitrator/A, to Allstate’s lawyer

• Arbitration decision dated May 6, 1999

• Transcript of the arbitration hearing

• Appeal exhibits:

Exhibit 1 - Correspondence, dated June 27, 1997, from Mr. Kurichh’s lawyer to the mediator, including enclosure (16 pages)

Exhibit 2 - Correspondence, dated August 21, 1997 from Mr. Kurichh’s lawyer to the mediator

Exhibit 3 - Correspondence, dated July 10, 1997, from Allstate to Mr. Kurichh’s lawyer

Exhibit 4 - Correspondence, dated September 25, 1997, from Allstate to the mediator

Exhibit 5 - Correspondence, dated April 27, 1999, from Mr. Kurichh’s lawyer to the Registrar, Financial Services Commission of Ontario

Exhibit 6 - Correspondence, dated April 29, 1999, from Allstate’s lawyer to the Financial Services Commission of Ontario

Exhibit 7 - Correspondence, dated April 30, 1999, from the arbitrator to counsel for Mr. Kurichh and Allstate

Exhibit 8 - Correspondence, dated May 6, 1999, from Mr. Kurichh’s lawyer to the Director of Arbitrations

Exhibit 9 - Correspondence, dated May 7, 1999, from Allstate's lawyer to the Director of Arbitrations

Exhibit 10 - Correspondence, dated May 10, 1999, from the Director of Arbitrations to counsel for Mr. Kurichh and Allstate

Footnotes

1. 1Reg. 672 of R.R.O. 1990, as amended.
2. 2On appeal, Allstate specifically denies Mr. Sawhney's assertion that the decision was not to be released until the end of May. It claims the arbitrator said it would be released in one to two weeks. The transcript does not include final submissions or the arbitrator's concluding comments to the parties, so it does not support or refute either version.
3. 3Panasy and Commercial Union Assurance Company, (OIC A96-000314, September 9, 1997); Cheetham and Pilot Insurance Company, (OIC A-008036, June 28, 1996); Tran and Pilot Insurance Company, (OIC A-005207, February 23, 1994).
4. 4See letter from Mr. Sawhney to the mediator, dated June 27, 1997 (Appeal exhibit 1) and letter from Mr. Fahmy to Mr. Sawhney, dated July 10, 1997 (Appeal exhibit 3).
5. 5Arbitration transcript, Volume 1, pp. 55-61. I also note that Mr. Fahmy's testimony is consistent with his response to Mr. Kurichh's claim for transportation expenses, dated July 10, 1997. He agreed to pay some of the expenses, advising Mr. Sawhney that if he disagreed, he would need to apply for new mediation. (Arbitration exhibit 2).
6. 6Arbitration transcript, Volume 1, pp. 61-68.
7. 7Arbitration transcript, Volume 2, p.24.
8. 8The arbitration decision states that the letters were part of the record, although not tendered as evidence. The arbitrator clearly considered them in reaching his decision. On appeal, the letters were marked as exhibits.
9. 9Arbitration transcript, Volume 2, p.16.
10. 10Arbitration transcript, Volume 2, p.19.
11. 11Insurance Act, s.280(5).
12. 12The August 1995 version of the Practice Code was in effect at the time of this mediation.
13. 13Insurance Act, s.280(4).
14. 14Insurance Act, s.280(7).
15. 15Insurance Act, s.280(8).
16. 16Insurance Act, s.283(1).
17. 17For example, see Fournier and Zurich Insurance Company, (OIC A96-001341, September xx, 1997); Wilson and Wellington Insurance Company, (OIC A96-000119, May 16, 1997); Derman and State Farm Mutual Automobile Insurance Company, (OIC P-009521, January 29, 1997); Velduizen and Coseco Insurance Company, (OIC A-015549, October 12, 1995); and Zeppieri and Royal Insurance Company of Canada, (OIC A-005237, February 17, 1994), upheld on appeal, (OIC P-005237, December 22, 1994).
18. 18Arbitration transcript, Volume 1, pp. 44-50.
19. 19Insurance Act, s.280(7); Practice Code, Rule 21.1.
20. 20Unreported decision, dated March 31, 1998, dismissing the application for judicial review of the appeal decision in Kirkham and State Farm Mutual Automobile Insurance Company, (P96-00069, January 27, 1997). Leave to appeal to the Court of Appeal denied, July 9, 1998.