Neutral Citation: 2001 ONFSCDRS 152
FSCO A00-000366
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
FARAJ SALIBA
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
and
PROGRESSIVE CASUALTY INSURANCE COMPANY OF CANADA
Insurer
DECISION ON INTEREST
Before:
K. Julaine Palmer
Heard:
September 21, 2001, by teleconference
Appearances:
David B. Hayward for Mr. Saliba
Meredith Jackson Donohue for Allstate Insurance Company of Canada
Pamela A. Brownlee for Progressive Casualty Insurance Company of Canada
Issues:
Mr. Faraj Saliba was injured in motor vehicle accidents on January 28 and May 3, 1992. In a decision dated March 7, 2001, I dealt with his claims for statutory accident benefits under the Schedule.1 I made the following order, while reserving on the issue of expenses:
- Allstate and Progressive shall pay Mr. Saliba $153,410 for home renovations, plus GST on all non-exempt goods and services, less any monies already advanced on this account, plus $13,631, plus GST, for the services of Adapt-Able Design as project managers, plus interest.
The parties have since resolved the matter of the expenses of the arbitration. The only outstanding issue between them relates to the order for interest.
The issue in this further hearing is:
- From what date should the interest awarded to Mr. Saliba run?
Result:
- Allstate and Progressive should pay Mr. Saliba interest on $32,041 plus applicable GST from December 9, 1999 to the date they discharged their obligations under the order of March 7, 2001.
EVIDENCE AND ANALYSIS:
The 1990 Schedule contains provisions dealing with interest at section 24, pertinent subsections of which are reproduced below. In the case of Part II claims for supplementary medical, rehabilitation and care benefits, an insurer is allowed up to 30 days to examine the claims before interest begins to accrue.
24.- (1) Amounts payable under Parts II, III and V are overdue if not mailed or otherwise delivered by the insurer within thirty days after it has received a completed application for statutory accident benefits. (...)
(4) The insurer will pay interest on overdue payments from the date they become overdue at the rate of 2 per cent per month. (...)
(8) If the insurer refuses to pay an amount claimed in an application for statutory accident benefits, the insurer shall forthwith give written notice to the insured person giving the reasons for the refusal.
The facts of this case as they unfolded do not lend themselves to a straightforward analysis of the interest payable under section 24 of the Schedule.
Mr. Saliba submitted that concerted efforts were being made to find alternative housing for him in the autumn of 1999. He submitted that interest should run from December 9, 1999, when Allstate's adjuster clarified its position with respect to what it was willing to pay for renovations to accommodate Mr. Saliba's disabilities. Allstate and Progressive, however, say that the "application for payment" dates from only August 30, 2000, when they received the first quotation on the cost of the renovations to the Maple Avenue home.
Mr. Saliba submitted a brief of authorities on this issue including both court and arbitration decisions.2 Although these cases discuss the issue of interest, none was exactly comparable to the situation in Mr. Saliba's case.
In my view, the fair resolution of this issue involves a number of considerations. Mr. Saliba needed a permanent solution to his housing situation after his discharge from McMaster-Chedoke Hospital in May 1998. Allstate made its position clear as to what it felt it was obliged to pay in December 1999. The insurers did not advance any money toward the long-term solution until April 2000. They advanced further funds in November 2000. Mr. Saliba completed the transaction to purchase his home in July 2000 and since then has been paying interest on his mortgage. The first stage of the renovations was completed in the fall of 2000. The arbitration hearing on the housing claim was heard in January 2001 and a decision released in March 2001. A balance was found to be owing to Mr. Saliba.
I find that the letter from Allstate's adjuster on December 9, 1999, is tantamount to the refusal to pay contemplated by subsection 24(8). Interest could notionally be said to have accrued on the full $167,041 plus applicable GST awarded to Mr. Saliba from the date the payment became overdue to the date payment was made in accordance with the March 7, 2001 decision, less any prepayments advanced, as of the dates advanced. However, my order of March 7, 2001 contemplated interest on the outstanding balance of the renovations or roughly $32,041 plus applicable GST only. The insurers should pay this interest from December 9, 1999. I do not accept their submissions that the interest on the outstanding balance should run only from August 30, 2000, when they received Mr. Bahdi's quote for the cost of the renovations. I do not accept their submissions that this was the true date of the application contemplated by section 24.
By December 1999, the insurers had identified that they were liable for a sum to renovate a home for Mr. Saliba. If they had wished to disentangle themselves from the process of finding and renovating a home, they could have paid the sum they believed they were liable for to Mr. Saliba at that time or paid it into court under the provisions of section 271 of the Insurance Act. In my view, it is a fair resolution of the interest issue if they pay two percent per month on the $32,041 plus applicable GST from December 9, 1999 to the date they discharged their obligations under my order of March 7, 2001.
October 22, 2001
K. Julaine Palmer
Arbitrator
Date
Neutral Citation: 2001 ONFSCDRS 152
FSCO A00-000366
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
FARAJ SALIBA
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
and
PROGRESSIVE CASUALTY INSURANCE COMPANY OF CANADA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Allstate Insurance Company of Canada and Progressive Casualty Insurance Company of Canada shall pay Mr. Saliba interest at two percent per month on $32,041 plus applicable GST from December 9, 1999 to the date they discharged their obligations under my order of March 7, 2001.
October 22, 2001
K. Julaine Palmer
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
- MacDonald et al. v. Travelers Indemnity Co. of Canada, (1987) 1987 CanLII 4062 (ON HCJ), 60 O.R. (2d) 385, Migliore v. Co-operators Insurance Association, (1987) 1987 CanLII 4391 (ON HCJ), 61 O.R. (2d) 449; Monachino v. Liberty Mutual Fire Insurance Company, [1997] O.J. No. 3575, affirmed on appeal (2000), 2000 CanLII 5686 (ON CA), 47 O.R.(3d) 481; Rodriguez v. Allstate Insurance Co., [1995] O.J. No. 529; Placken v. Canadian Surety Co., (1990), 47 C.C.L.I. 268; Smith (Committee of) v. Wawanesa Mutual Insurance Company, (1997) 1998 CanLII 18861 (ON CTGD), 42 O.R. (3d) 441; Quarrington and Jevco Insurance Company, (FSCO A-010804, July 17, 1995).