Neutral Citation: 2001 ONFSCDRS 107

FSCO A01-000176

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANK MIZZI

Applicant

and

YORK FIRE & CASUALTY INSURANCE COMPANY

Insurer

DECISION ON A MOTION FOR INTERIM BENEFITS

Before:

Joyce Miller

Heard:

By telephone conference call on June 21, 2001

Appearances:

Robert W. Garcia for Mr. Mizzi

Casey Van Moorlehem for York Fire & Casualty Insurance Company

Issues:

The Applicant, Frank Mizzi, was injured in a motor vehicle accident on November 6, 1998. He applied for and received statutory accident benefits from York Fire & Casualty Insurance Company ("York Fire"), payable under the Schedule.¹ York terminated weekly income replacement benefits on June 21, 1999. The parties were unable to resolve their disputes through mediation, and Mr. Mizzi applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Mr. Mizzi has brought a motion pursuant to section 65 of the Dispute Resolution Practice Code — Third Edition for interim benefits to be paid to him pending the resolution of his dispute with York.

The issues on this motion are:

1. Is Mr. Mizzi entitled to interim benefits pursuant to subsection 279(4.1) of the Insurance Act?

2. Is Mr. Mizzi entitled to an interim special award pursuant to subsection 282(10) of the Insurance Act?

Mr. Mizzi also claims interest on any amounts owing and his expenses incurred on this motion.

Result:

1. Mr. Mizzi is not entitled to interim benefits.

2. Mr. Mizzi is not entitled to an interim special award.

3. The issue of expenses is deferred to the discretion of the hearing arbitrator.

Principles and Criteria for Making an Interim Order:

Subsection 279(4.1) of the Insurance Act gives arbitrators the authority to make interim orders pending the final order in any matter. Section 279(4.1) provides that:

The Director and every arbitrator may make interim orders pending the final order in any matter before the Director or arbitrator.

Subsection 279(4.1) of the Act is a discretionary provision. Arbitrator Manji, in Ioannidis and Canadian General Insurance Group,² reviewed the principles and criteria for making interim orders. They are as follows:

• Generally an insured person's entitlement to benefits is to be determined after a full hearing of all of the evidence.³

• Novel or difficult questions of law should be dealt with in a full hearing and not within an interlocutory proceeding.⁴

• Interim benefits are not to be awarded on a routine basis, but only in certain unusual circumstances.⁵

• An interim order, by its very nature, is intended to cover a short period of time between the making of the order and the final order.⁶

• An application for an interim order must be heard in a summary fashion and the order made expeditiously. At the arbitration hearing, after a full hearing of all of the evidence, the arbitrator may well come to the conclusion that a substantially different order should be made.⁷

• An interim order is subject to the final order and an arbitrator may order interim benefits be repaid.⁸

Arbitrator Manji further held that Subsection 279(4.1) of the Act does not change the onus of proof. The onus of proof remains the insured person's.⁹ She also outlined three criteria that arbitrators' have identified in exercising the discretion in subsection 279(4.1) of the Act. These are:

1The merits of the case for entitlement.

There has been a divergence of opinions among arbitrators as to the standard of proof that the insured person must meet in order to be entitled to an interim order for payment of benefits.

Some arbitration decisions have held that an interim order will normally be granted only where the insured person presents a "convincing case" for entitlement.¹⁰

Others have held that an interim order for payment of benefits is appropriate where the applicant has established a prima facie case for entitlement to benefits.¹¹

[In the Cripps case, the arbitrator held] that in the context of a motion for an interim order for payment of benefits, the term "primafacie" is ambiguous, and does not sufficiently address the standard of proof required for making an interim order. The decision held that, at the very least, a persuasive case for the interim order must be made. The arbitrator hearing the application must have a very positive view of the merits of the case for benefits. The standard of proof should be somewhat higher than at a hearing. On all the material presented the arbitrator should find it not only reasonable, but also very probable, that an applicant will be found to be entitled to the benefits sought.¹²

In Malabanan and Canadian General Insurance Company (July 26, 1996), OIC A96-00084, I concluded that in order to be entitled to an interim order for payment of benefits, an insured person must establish a prima facie case, i.e., the insured person must produce evidence, which if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement. For the reasons that I gave in that decision, I still believe that that is the appropriate test.

2The existence of an element of necessity or urgency,¹³ or

3A blatant disregard by the insurer of the Schedule or Act.¹⁴

I agree with these principles and Arbitrator Manji's conclusion that the applicant must establish a prima facie case to be entitled to an interim order for payment of benefits.

Submissions:

Mr. Mizzi's Submissions:

Mr. Mizzi submits that as a result of his car accident on November 6, 1998 he sustained the following injuries: a soft tissue injury to his neck, shoulders and back, a rotator cuff tear to his left shoulder, a possible closed head injury and emotional and psychological trauma.

Mr. Mizzi submits that as a result of these injuries sustained in the car accident he suffered and continues to suffer a substantial inability to perform the essential tasks of his pre-accident employment. This inability he submits is supported by the Disability DAC report of Link with Work, dated June 13, 2000.

Mr. Mizzi submits that York Fire breached the requirements of section 37 of the Schedule to continue to pay him income replacement benefits after his benefits were terminated and he had requested a DAC. As well, Mr. Mizzi submits that York Fire breached the requirements of section 37 by failing to reinstate his benefits after the DAC report concluded that Mr. Mizzi was substantially disabled from performing the essential tasks of his employment.

Mr. Mizzi submits that as a result of the accident he has been unable to work at his computer business and has no money to pay for rent or food and is forced to apply for social assistance.

York Fire's Submissions:

York Fire presented lengthy, substantial and very detailed submissions and evidence. Briefly summarized, York Fire submits that it did not breach the requirement of section 37 by not paying Mr. Mizzi income replacement benefits after he requested a DAC. York Fire submits that Mr. Mizzi failed to request a DAC within the 14 days required by section 37¹⁵ and then delayed going to a DAC for ten months by not providing the request forms and documents that are required by the DAC process. Moreover, York Fire submits the DAC report, in concluding that Mr. Mizzi was disabled from performing the essential tasks of his pre-accident employment, relied on a job description on a position that Mr. Mizzi had not worked at since 1994. The DAC report specifically notes that the physical demands of this job were reviewed with Mr. Mizzi. York Fire submits that although it had paid Mr. Mizzi approximately 12 weeks of income replacement benefits, the evidence shows that Mr. Mizzi was not employed at the time of the accident and is not entitled to income replacement benefits. In support of its submission, York Fire presented evidence, which included Mr. Mizzi's application for benefits and his statement to an independent adjuster,¹⁶ wherein Mr. Mizzi states that he was unemployed at the time of the accident. As well, York Fire submitted that the medical evidence did not support Mr. Mizzi's submission that he suffered a rotator cuff tear to his left shoulder as a result of the accident.

FINDINGS:

In deciding whether an applicant is entitled to interim benefits, a breach of section 37 of the Schedule ¹⁷is only one factor to be considered in determining an applicant's entitlement to interim benefits.¹⁸ The applicant must first meet the threshold prima facie test for entitlement to benefits and establish the urgency of his or her claim.¹⁹ For the following reasons, I find that Mr. Mizzi has not discharged his burden.

First, I find it is not readily apparent that there was a violation of section 37. Based on the evidence before me, I am not prepared to accept that the Insurer was in default of its obligations under section 37. I agree with York Fire's submission that where an applicant has not requested a DAC within the required 14 days and has delayed attending a DAC for almost a year, then the insurer is not required to pay weekly income replacement benefits.

Second, I find that Mr. Mizzi has not presented sufficient objective evidence to support his submission that he was employed at the time of the accident. Even if he was working at the time of the accident, I am not persuaded by the evidence that Mr. Mizzi has established a prima facie case that he is entitled to income replacement benefits. More specifically, I find that York Fire has raised issues of Mr. Mizzi's credibility that should be dealt with after a full hearing of all of the evidence. Accordingly, I find that Mr. Mizzi is not entitled to an interim order for payment of weekly income replacement benefits.

Interim Special Award:

Pursuant to subsection 282(10) of the Act, a special award is based on "the amount to which the person was entitled at the time of the award..." Since Mr. Mizzi did not succeed in his motion for interim weekly income replacement benefits, I need not consider whether he is entitled to a special award under the Act.

EXPENSES:

The question of expenses is deferred to the hearing arbitrator.

July 17, 2001

Joyce Miller Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 107

FSCO A01-000176

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANK MIZZI

Applicant

and

YORK FIRE & CASUALTY 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. Mizzi is not entitled to interim benefits.

2. The issue of expenses is deferred to the hearing arbitrator.

July 17, 2001

Joyce Miller Arbitrator

Date

APPENDIX A

Refusal or Stoppage of Income Replacement, Non-Earner or Caregiver Benefit

37. (1) If the insurer determines that a person is not entitled or is no longer entitled to receive an income replacement, non-earner or caregiver benefit, the insurer shall give the person notice of its determination, with reasons,

(a) within 14 days after receiving an application for the benefit; or

(b) if the insurer has been paying the benefit to the person, no later than the date the next payment of the benefit is due.

(2) If notice is given under clause (1) (b), the insurer shall specify in the notice a date for stopping the benefit and the insurer may stop payment of the benefit in accordance with the notice.

(3) If notice is given under clause (1) (b) for the reason that the person no longer suffers from the disability in respect of which the benefit was paid,

(a) the date specified under subsection (2) shall be at least 14 days after the person receives the notice;

(b) the notice under clause (1) (b) shall inform the person that he or she has the right to require an assessment in accordance with section 43 by giving the insurer written notice before the date specified under subsection (2); and

(c) despite subsection (2), the insurer shall not stop payment of the benefit if, within 14 days after receiving the notice under clause (1) (b), the person gives the insurer written notice that he or she requires an assessment in accordance with section 43.

(4) If the person gives the insurer written notice under clause (3) (c) that he or she requires an assessment and the report from the designated assessment centre states that the person no longer suffers from the disability in respect of which the benefit was paid, the insurer may stop paying the benefit after it has provided the person with notice of its reasons for stopping payment.

(5) If the person gives the insurer written notice under clause (3) (c) that he or she requires an assessment and the report from the designated assessment centre states that the person continues to suffer from the disability in respect of which the benefit is paid, the insurer may dispute the obligation to pay the benefit in accordance with sections 279 to 283 of the Insurance Act, and, pending the resolution of the dispute, the insurer shall pay the benefit.

(6) Nothing in this section prevents a person from disputing a stoppage in the payment of a benefit in accordance with sections 279 to 283 of the Insurance Act and section 50 of this Regulation and, if it is finally determined that payment of the benefit should not have been stopped, the insurer shall,

(a) resume payment of the benefit; and

(b) pay any amounts under the benefit that were not paid.

I am presently not working. Employment Insurance ran out a couple of months ago. I was a Logistics Supervisor at Canadian Tire in Orangeville, Ontario ... I was laid off since March of 1998... I remain unemployed.

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. 2Ioannidis and Canadian General Insurance Group (OIC A97-001551, December 21, 1997)
3. 3Gomez and Pilot Insurance Company (May 10, 1995), OIC A-013080 and Cripps and AXA Insurance (Canada) (August 8, 1997), OIC A-013360.
4. 4Malabanan and Canadian General Insurance Company (July 26, 1996), OIC A96-00084 and Harkness and Economical Mutual Insurance Company (December 10, 1996), OIC A96-001420.
5. 5Gomez, supra, Cobby et al. and Non-Marine Underwriters, Members of Lloyd's London, England (October 13, 1995), OIC A-014259, A-014260 and A-014261, Malabanan, supra, note 4 and Cripps, supra, note 3.
6. 6Malabanan, supra, note 4
7. 7Malabanan, supra, note 4, and Cripps, supra, note 3
8. 8Malabanan, supra, note 4 and Cripps, supra, note 3
9. 9Gomez, supra, note 3, Cobby et al, supra, note 5, and Harkness, supra., note 4
10. 10Gomez, supra, and Cobby et al, supra, note 5
11. 11Osbourne and Allstate Insurance Company of Canada and York Fire & Casualty Insurance Company (November 18, 1994), OIC A-009110; Lucas and Dominion of Canada General Insurance Company (March 23, 1995), OIC A-009670; Cobby et al, supra, note 5; Malabanan, supra, note 4; and Harkness, supra, note 4.
12. 12Cripps, supra, note 3
13. 13Osbourne, supra; note 11, Lucas, supra, note 11, Malabanan, supra, note 4; Harkness, supra, note 4; and Cripps, supra, note 3.
14. 14In Sweete and Jevco Insurance Company (October 24, 1996), OIC A96-000614, the arbitrator relied, in part, on the insurer's violation of its obligations under section 64 of the Schedule to make an interim order for payment of benefits.
15. 15Mr. Mizzi had requested a DAC assessment on August 5, 1999
16. 16The Statement taken on November 19, 1998 states:
17. 17Appendix A
18. 18See the case of Harkness and Economical Mutual Insurance Company (December 10, 1999, OIC A96-000614). Although this case dealt with the previous legislation the section 64 relied upon is substantially the same as section 37 of the present legislation.
19. 19Ibid