Neutral Citation: 2000 ONFSCDRS 94

FSCO A99-000078

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

KENNETH MULLEN

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Judith Killoran

Heard:

April 10, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Mr. Mullen did not appear and no one appeared on his behalf

Mr. William A. McClelland for Dominion of Canada General Insurance Company

Issues:

The Applicant, Kenneth Mullen, was injured in a motor vehicle accident on January 1, 1997. He applied for and received statutory accident benefits from Dominion of Canada General Insurance Company ("Dominion"), payable under the Schedule.¹ Dominion terminated weekly income replacement benefits on May 7, 1997. The parties were unable to resolve their disputes through mediation, and Mr. Mullen applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Insurance Act").

The issues in this hearing are:

1. Is Mr. Mullen entitled to receive a weekly income replacement benefit ("IRB") pursuant to section 4 of the Schedule?

2. What is the amount of weekly IRB that Mr. Mullen is entitled to receive pursuant to section 6 of the Schedule?

3. Is Mr. Mullen entitled to a special award pursuant to subsection 282(10) of the Insurance Act?

4. Is Dominion liable to pay Mr. Mullen's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

5. Is Mr. Mullen liable to pay Dominion's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

Result:

1. Mr. Mullen is not entitled to receive a weekly IRB pursuant to section 4 of the Schedule.

2. Mr. Mullen is not entitled to a special award pursuant to subsection 282(10) of the Insurance Act.

3. Dominion is not obliged to pay Mr. Mullen's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act.

4. Mr. Mullen must pay Dominion's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act.

EVIDENCE AND ANALYSIS:

Neither Mr. Mullen nor a representative attended the hearing to speak to the issues in dispute.

The arbitration hearing began on April 10, 2000 at 10:00 a.m. The hearing was delayed for one half-hour to wait for Mr. Mullen to appear. Mr. Mullen did not appear and no one appeared on his behalf. Mr. William McClelland appeared on behalf of Dominion.

On August 17, 1999, a Notice of Hearing was forwarded to Mr. Mullen informing him that an arbitration hearing would take place on April 10, 11 and 12, 2000. The Notice of Hearing included the following paragraph which reflects the provisions of subsection 7(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, as amended (the "SPPA") and Rule 34.5 of the Dispute Resolution Practice Code, Third Edition, April 15, 1997 (the "Code"):

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.

Case law at the Commission has established that an arbitrator does not have the authority to dismiss a case because the Applicant did not attend the hearing.² For that reason, I did not dismiss Mr. Mullen's application based only on his failure to appear. However, I was satisfied that every effort had been made to give proper notice to Mr. Mullen in accordance with the SPPA and the Code.

Mr. Mullen did not contact Dominion, Mr. McClelland or the Commission about his non-attendance at the hearing. In accordance with subsection 7(1) of the SPPA and Rule 34.5 of the Code, I proceeded with the hearing in Mr. Mullen's absence.

History of Proceedings:

Mr. Mullen was involved in an automobile accident on January 1, 1997. Dominion agreed to pay Mr. Mullen an IRB of $5.00 a week due to difficulties determining the amount of the IRB. At the time of the accident, Mr. Mullen was self-employed and as of the date of the pre-hearing on August 13, 1999, he had not yet determined the quantum of IRB he was seeking. At the pre-hearing, Mr. Mullen undertook to advise Dominion within 90 days of the amount of IRB sought, together with supporting documentation. Mr. Mullen did not comply with this undertaking.

Dominion had arranged an insurer's medical examination (IE) for May 7, 1997, which Mr. Mullen failed to attend. Dominion terminated the IRB relying upon Mr. Mullen's failure to attend. At the pre-hearing, Mr. Mullen undertook to attend an IE upon Dominion's undertaking to arrange for and pay transportation costs to and from the appointment.

Mr. Mullen attended an IE with an orthopaedic surgeon, Dr. Gordon Hunter, and a Functional Abilities Evaluation ("FAE") at WorkAble Centres Inc. on September 1, 1999.³ The FAE concluded that it could not determine if Mr. Mullen was physically disabled from performing his occupation as a result of the injuries sustained in the accident as only minimal testing was performed before he chose to terminate the assessment.

Mr. Mullen's entitlement to benefits claimed:

The onus is on Mr. Mullen to prove his claim for statutory accident benefits. As he did not appear at the hearing, no evidence was led to support his position that he is entitled to benefits. My findings about entitlement to benefits are restricted to the evidence led by Dominion.

Dominion called Ms. Susanne Young as its one witness. Ms. Young has worked as a Claims Service Representative with Dominion for six years. Ms. Young reviewed the statement she took from Mr. Mullen on January 21, 1997.

This statement referred to Mr. Mullen's 50 percent ownership of Kendale Innovation Inc., a partnership which specialized in design engineering of flower boxes for tombstones. Mr. Mullen also operated a sole proprietorship known as K. Mullen, which specialized in designing and building everything from snowplows to homes. As well, Mr. Mullen worked as a sub-contractor to other construction businesses. In his statement, Mr. Mullen claimed that before the accident he worked 50 to 55 hours a week. However, after the accident, he claimed he worked 8 or 9 hours a day and was able only to supervise. Therefore, he had to hire employees to do the work he did formerly.

In his statement, Mr. Mullen claimed that he experienced pain in his neck, shoulders, low back and hips together with persistent headaches. He stated that he had difficulty holding things in his right hand, which was often numb, and complained that his eyesight was very bad. Mr. Mullen claimed not only that he could not carry out the physical demands of his self-employment but also that he had difficulty dressing, bathing and cleaning his home. Although Mr. Mullen was in an earlier motor vehicle accident, he stated that the problems from that accident had resolved by the time of the January 1, 1997 accident.

Ms. Young reviewed a series of correspondence to Mr. Mullen dated January 24, 1997 and March 20, 1997, from the accountants, Hayes Smith & Associates, retained by Dominion in its attempts to obtain information necessary to calculate Mr. Mullen's IRB entitlement.⁴ On March 25, 1997, Ms. Young forwarded correspondence to Mr. Mullen requesting that Mr. Mullen arrange for the completion of an updated medical form and send the accountants those documents required to determine wage loss.⁵ The documents requested were never sent to the accountants.

Although Ms. Young received a Disability Certificate⁶ and a Health Practitioner's Certificate⁷from Mr. Mullen, she received no further medical documentation from January 30, 1997 onwards.

Ms. Young reviewed Mr. Mullen's income tax returns for 1996 and 1997.⁸ In 1996, Mr. Mullen declared self-employment income of $4,596.35. However, in 1997, Mr. Mullen declared self-employment income of $10,764.07. Based on these documents, Mr. Mullen's income appears to have increased after the motor vehicle accident of January 1, 1997.

On April 18, 1997, Dominion forwarded to Mr. Mullen a notice letter for an IE.⁹ Another letter of the same date was sent by Ms. Young¹⁰ not only advising about the details of the IE but confirming that she had not received any wage loss documentation nor had Mr. Mullen made himself available for an assessment by the occupational therapist.¹¹ The IE was scheduled for May 7, 1997 but Mr. Mullen failed to attend. As a result, Dominion terminated his benefits by way of correspondence of the same date¹² and a Notice of Stoppage of Benefits.¹³

Dominion hired Wood Investigations which conducted surveillance of Mr. Mullen in August 1999. On October 7, 1999, Mr. Mullen was served with the videotape.¹⁴ Ms. Young testified that Mr. Mullen's benefits were never reinstated because of the lack of medical and financial documentation and because the surveillance tape showed Mr. Mullen "working in some capacity".

No documentary or testamentary evidence was presented to substantiate Mr. Mullen's claim. Based on the evidence before me, I find that Dominion terminated Mr. Mullen's IRB properly, as required by subsection 42(8) of the Schedule. I also find that there was no medical or financial documentation to justify the reinstatement of Mr. Mullen's benefits. Therefore, Mr. Mullen is not entitled to a weekly IRB.

SPECIAL AWARD:

Mr. Mullen claimed a special award on the basis that Dominion unreasonably withheld payment of his IRB. However, I have dismissed Mr. Mullen's claim for an IRB. Therefore, it is not appropriate to consider a special award in these circumstances.

EXPENSES:

Mr. Mullen's Expenses:

Mr. Mullen claimed his expenses in this arbitration. Applicants have generally received their expenses, whether successful or not, unless the application was frivolous, vexatious or the applicant's conduct unreasonably prolonged the proceedings. In addition, arbitrators, in exercising their discretion to make an award of expenses, for applications filed after November 1, 1996, also consider the criteria set out in Rule 73 of the Code.

I find that Mr. Mullen's conduct has prolonged this proceeding. By consistently failing to comply with undertakings about productions and failing to appear at the arbitration hearing, Mr. Mullen caused unnecessary expense and delay. I decline to award Mr. Mullen his expenses. To do so, would be to undermine the legislative scheme for speedy and inexpensive dispute resolution and reward Mr. Mullen for the disrespect he has shown for the arbitration process.

Dominion's Expenses:

The Application for Arbitration in this matter was filed after amendments to the Insurance Act were passed in 1996. Subsection 282(11) of the Insurance Act was amended effective November 1, 1996 to allow an arbitrator to award expenses to either the insured person or the insurer. Rule 73 of the Code sets out criteria for the arbitrator's consideration when awarding expenses. In particular Rule 73.2(b) specifies that an arbitrator may consider any conduct of a party that "... tended to prolong, obstruct or hinder the proceeding I find that the conduct of Mr. Mullen has prolonged, obstructed and hindered the speedy resolution of this proceeding.

Dominion is accordingly entitled to its expenses of this arbitration hearing.

May 24, 2000

Judith Killoran Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 94

FSCO A99-000078

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

KENNETH MULLEN

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Mullen's claim for weekly income replacement benefits is dismissed.

2. Mr. Mullen's claim for a special award is dismissed.

3. Mr. Mullen is not entitled to his expenses of this arbitration hearing.

4. Mr. Mullen shall pay to Dominion its expenses of this arbitration hearing.

May 24, 2000

Judith Killoran Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.
2. 2See Hersi and American Home Assurance Company (FSCO A97-001405, February 9, 1999); Mustafa and Royal Insurance Company of Canada (FSCO A98-001161, March 30, 1999)
3. 3Exhibit 2, Tabs 5 and 6
4. 4Exhibit 1, Tabs 13 and 14
5. 5Exhibit 1, Tab 15
6. 6Exhibit 1, Tab 11
7. 7Exhibit 1, Tab 12
8. 8Exhibit 1, Tabs 1 and 2
9. 9Exhibit 1, Tabs 17
10. 10Exhibit 1, Tab 25
11. 11Exhibit 1, Tab 18 details attempts by the O.T. to meet with Mr. Mullen on January 24, February 7, 10, 17, 18, 20, 26
12. 12Exhibit 1, Tab 20
13. 13Exhibit 1, Tab 26
14. 14Exhibit 5