Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 116

Variation/Revocation P01-00015

Applicant

and

Respondent

Before:

David R. Draper, Director of Arbitrations (A)

Appearances:

Juan Troncoso, in person

Bruce A. Keay (for Co-operators)

VARIATION/REVOCATION ORDER

Under section 284 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The application for variation/revocation is dismissed.
Juan Troncoso shall pay expenses to Co-operators General Insurance Company, fixed at $750.

July 31, 2001

David R. Draper Director of Arbitrations (A)

Date

REASONS FOR DECISION

I. NATURE OF THE APPLICATION

On March 13, 2001, I issued an appeal decision confirming the arbitrator’s order that Mr. Troncoso could not proceed with his claim for income replacement benefits (“IRBs”) because he was driving without a valid driver’s licence when the accident occurred. Mr. Troncoso asks that my order be varied or revoked.

II. BACKGROUND

The background is set out in the arbitration and appeal decisions. In summary, Mr. Troncoso was involved in an automobile accident on November 14, 1997. He claimed IRBs under the SABS-1996,¹ but none were paid. The dispute went to arbitration, with Mr. Troncoso claiming ongoing IRBs from the date of the accident. Co-operators General Insurance Company (“Co-operators”) raised a number of arguments in response. One was that the claim was precluded by s.30(1)(b), which provides as follows:

(1) The insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under section 20, 21 or 22 in respect of a person who was the driver of an automobile at the time of the accident,

(b) if the driver was driving the automobile without a valid driver’s licence;

By the time of the arbitration pre-hearing, Mr. Troncoso was represented by Mr. Carlos Castro, a paralegal. Interestingly, Mr. Troncoso has also worked as a paralegal, suggesting some familiarity with legal proceedings. At the pre-hearing, the issues in dispute were identified as Mr. Troncoso’s entitlement to IRBs, the proper amount of those benefits, interest on any outstanding amounts and arbitration expenses. However, before dealing with these issues, the parties agreed to a preliminary hearing based on written submissions to determine whether s.30(1)(b) applied to preclude the claim. They also agreed to a timetable, with Co-operators being given two weeks to file its submissions, and three weeks for Mr. Troncoso to respond.

Co-operators filed an affidavit, with documents attached, and its written submissions. Neither Mr. Castro nor Mr. Troncoso filed anything in response. As a result, the arbitrator made his decision without hearing from Mr. Troncoso. He found that Mr. Troncoso’s licence was suspended at the time of the accident and having no evidence that he was unaware of the suspension, concluded that s.30(1)(b) applied to preclude the claim for IRBs.

On appeal, Mr. Troncoso represented himself. Importantly, he did not challenge the arbitrator’s finding that his licence was suspended at the time of the accident. Nor did he claim he was unaware of the suspension. Instead, he objected to the fact that Co-operators did not raise this issue until after the mediation, and also argued that a licence suspension was not meant to result in the kind of severe consequence seen here.

On March 13, 2001, I issued my decision, dismissing Mr. Troncoso’s appeal and confirming the arbitrator’s order. My reasons are brief, with the relevant parts set out below:

As I understand it, Mr. Troncoso’s first objection is that Co-operators did not raise the exclusion issue until the mediation, more than a year after the accident. He contends this was unfair, compromising his ability to pursue other potential claims. The suggestion seems to be that he had no obligation to disclose that he was driving without authority unless he was specifically asked and, having responded to the claim without asking, Co-operators was precluded from raising the exclusion provision later. I do not agree. Claims for accident benefits must be made honestly and in good faith, with the insurer having an obligation to respond promptly and with the kind of utmost good faith befitting a first-party, no-fault system. In this case, there is simply no basis for concluding that Co-operators failed in its obligations, or that is estopped from relying on the exclusion provisions.

Mr. Troncoso also refers to a number of legislative provisions, arguing that they clearly establish that suspensions for non-payment of fines are not meant to invoke the kind of severe penalty seen here. The problem is that they have little bearing on his situation. For example, he points to the provisions dealing with excluded drivers and the insurer’s obligation to respond to third-party claims, arguing that he was not an excluded driver under Co-operators’ policy. However, that is not the issue. Co-operators is not contesting its obligation to respond to Mr. Troncoso’s claim and pay the benefits to which he is entitled under the SABS-1996. It is relying on the specific provision in s.30(1)(b) of the SABS-1996 that relieves it from paying IRBs to anyone who was driving without a valid driver’s licence. I note that this section relates only to weekly benefits, including IRBs. It does not prevent someone who is injured while driving without a valid licence from receiving other benefits, such as medical and rehabilitation benefits.

Similarly, Mr. Troncoso’s references to s.1(3) of the Compulsory Automobile Insurance Act and s.35 and s.48(9) of the Highway Traffic Act, as amended, are not relevant. Co-operators accepts that Mr. Troncoso is an insured person under its policy. Therefore, accident benefits are payable as set out in the SABS-1996. However, the SABS-1996 includes a specific exclusion or penalty for driving without a valid driver’s licence, as Mr. Troncoso was doing. It follows, as the arbitrator held, that Mr. Troncoso is precluded by s.30(1)(b) from receiving any IRBs in relation to this accident. As a result, the appeal is dismissed.

Mr. Troncoso now asks that my order be varied or revoked.

III. ANALYSIS

Arbitration and appeal orders can be varied or revoked in particular circumstances. According to s.284(3) of the Insurance Act, Mr. Troncoso must establish that:

there has been a material change in his circumstances;
evidence not available on the arbitration or appeal has now become available; or
there is an error in the order.

Mr. Troncoso does not claim any material change in his circumstances. Instead, he relies on the second and third grounds. Dealing first with his “new” evidence, he submits that I did not have crucial material that he submitted to the Financial Services Commission of Ontario on July 4, 1999. This date is after the Report of Mediator was issued, but before he applied for arbitration. As I understand it, Mr. Troncoso claims this material was sent to the Commission, apparently to the Legal Services Branch, in relation to a court proceeding, but was not part of the mediation. Co-operators disagrees, stating that it received this material in June 1999 from Mr. Troncoso, who later provided it to the Commission as part of the mediation process.

Whether or not Mr. Troncoso relied on this material at mediation, it is difficult to view it as “evidence not available on the arbitration or appeal.” As Co-operators submits, his own assertions establish that he has had this material since the summer of 1999. Nevertheless, for reasons that he has not explained, it was not filed as evidence at either level.

I am also not persuaded that the material affects the result. It reveals a history of coverage issues with Co-operators and another insurer. What is clear, however, is that on January 2, 1996, Mr. Troncoso was charged under the Compulsory Automobile Insurance Act with operating a motor vehicle without insurance. He was convicted of that offence on March 19, 1996, and a fine ($590 plus a $20 administrative fee) was imposed. He received a Notice of Fine and Due Date, advising him that non-payment could result in suspension of his driver’s licence or a refusal to renew his licence plate.

Mr. Troncoso did not pay the fine. On October 25, 1996, a Notice of Suspension of Driver’s Licence was sent by registered mail stating that his driver’s licence would be suspended effective November 13, 1996² for non-payment of the fine. Mr. Troncoso still did not pay the fine. Instead, he brought a motion under the Provincial Offences Act to extend the time for paying the fine.

On November 4, 1997, ten days before the accident, his request was rejected. He acknowledges receiving this notice on November 6, 1997, still more than a week before his accident.

As a result, the “new” material confirms that Mr. Troncoso’s licence was suspended on the date of the accident and strongly suggests that he was aware of the suspension – facts that he has not contested in his submissions. The legal consequence is that s.30(1)(b) of the SABS-1996 applies, precluding his claim for IRBs. While Mr. Troncoso may feel this penalty is too harsh, it is what the legislation provides.

Mr. Troncoso’s second argument is that there is an error in my order. At paragraph 3 of his reply submissions, he states:

The Applicant is applying for a Variation/Revocation on the basis that there was an error in the order which can be found in the arbitration proceedings. The provision pursuant to Section 31.1 of the Dispute Resolution Practice Code has been ignored which states that “Arbitrator may order that an arbitration application be divided into distinct issues and the Arbitrator may hear the issues separately.” Particularly in the issue for Accident Benefits when Co-operators explained the reason for denying eligibility for the benefit based on lack of co-operation made on February 27, 1998 and October 30, 1998.

This submission is difficult to follow. It seems to point to an error in the arbitration process, not in my appeal order. If I understand the submission at all, it relates to Co-operators’ failure to raise the licence suspension issue until after the mediation. That issue was addressed on appeal, as set out above. I find no basis for revisiting this issue in the context of an application for variation/revocation.

For these reasons, the application is dismissed.

IV. EXPENSES

Given the weakness of this application, Mr. Troncoso must bear some responsibility for Co-operators’ expenses, including its assessment of $500. I fix expenses at $750, all inclusive.