Neutral Citation: 2001 ONFSCDRS 82
FSCO A00-000447
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ROSE BURT
Applicant
and
DOMINION OF CANADA GENERAL INSURANCE COMPANY
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
William J. Renahan
Heard:
May 24, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto
Appearances:
Jeremy Solomon for Ms. Burt
Meg Kawasaki for Dominion of Canada General Insurance Company
Issues:
The Applicant, Rose Burt, was injured in a motor vehicle accident on September 20, 1997. She applied for statutory accident benefits from Dominion of Canada General Insurance Company ("Dominion"), payable under the Schedule.1 By letter dated December 22, 1997, Dominion sent Ms. Burt a notice that it would not pay weekly income replacement benefit beyond January 10, 1998. The parties were unable to resolve their disputes through mediation, and Ms. Burt applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The preliminary issue is:
- Is Ms. Burt precluded from proceeding to arbitration because her application for mediation was filed beyond the two-year limitation period set out in subsection 281(5) of the Act and subsection 51(1) of the Schedule?
Result:
- Ms. Burt commenced her application for mediation within the limitation period and may proceed to arbitration.
EVIDENCE AND ISSUE:
The limitation period for commencing an arbitration proceeding is set out in subsection 281(5) of the Insurance Act as follows:
A proceeding in a court or an arbitration proceeding in respect of statutory accident benefits must be commenced within two years after the insurer's refusal to pay the benefit claimed or within such longer period as may be provided in the Statutory Accident Benefits Schedule. R.S.O. 1990, c. I.8, s. 281 (5); 1993, c.10, s. 1.
Section 51 of the Schedule modifies this period as follows:
(1) A mediation proceeding or evaluation under section 280 or 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer's refusal to pay the amount claimed.
(2) Despite subsection (1), a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Insurance Act may be commenced within 90 days after the mediator reports to the parties under subsection 280 (8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later.
The parties agree that by letter dated December 22, 1997, Dominion advised Ms. Burt that the income replacement benefit would terminate effective January 10, 1998. Ms. Burt filed her application for mediation on December 31, 1999 and filed her application for arbitration within 90 days of the report of the mediator. The parties disagree as to when Ms. Burt received the notice of termination.
The narrow issue in this case is when does the limitation period start to run. The question is what is the insurer's refusal to pay the amount [or benefit] claimed. The possible dates are: (1) the date on the letter which expresses the insurer's intent to stop paying benefits; (2) the date the insured receives notice of the insurer's intent to stop paying benefits; and (3) the date the insurer stops paying benefits.
ANALYSIS:
I disagree with those decisions which state that the limitation period starts to run from the date of the stoppage letter. A limitation period cannot start in circumstances where the claimant has no knowledge that it has started until some days later. I also disagree with those cases which state that the limitation period starts to run when the claimant learns that the insurer will no longer pay benefits. This theory imposes an obligation on the insurer to personally serve notice of stoppage. Otherwise, every claim that appears to be more than two years after stoppage would involve an evidentiary dispute as to when the insured received notice of stoppage. In the absence of statutory provisions providing for alternate service of such notices, I do not accept that an arbitrator can decide what is sufficient alternate service.
The appeals office of this tribunal has dealt with the issue of when the limitation period starts to run under the two previous Schedules. In Zeppieri v. Royal Insurance Company of Canada, (OIC A-005237, February 17, 1994) Arbitrator Naylor dealt with a claim under the 1990 Schedule.2 She held that the insurer's refusal to pay the amount claimed occurs when the insurer stops paying benefits. Once that date is determined, the next issue is whether the usual principles of estoppel apply to prevent the insurer from relying on the limitation period. This decision was upheld on appeal by Director Sachs.3 Director's Delegate Draper dealt with a claim under the 1994 Schedule.4 In Francis v. Allstate Insurance Company, (FSCO P99-00014, June 11, 1999) he held that, except in the case where the insured receives weekly benefits pending a disability assessment at a Designated Assessment Centre ("DAC"), "the clock starts on the date the insurer decides to stop paying, as authorized by s. 64(3)" and that "[T]he refusal comes when the insurer is authorized under the section [section 64] to stop paying benefits and confirms its decision to do so." "This can be on or after the date specified in its s. 64(2) notice." I interpret this as the date specified in the notice, or, if the insurer continues payments beyond that date, the date the insurer stops paying benefits.
The stoppage provisions under the 1996 Schedule are similar to those under the 1994 Schedule. Subsection 37(1) of the 1996 Schedule requires the insurer to give notice of its decision to stop paying and subsection 37(2) provides that the insurer shall specify in the notice a date for stopping the benefit. The insurer is authorized to stop paying further benefits after this date, unless the insured elects under paragraph 37(3)(c) that he or she requires a disability assessment at a DAC. As is the case under the 1994 Schedule, which employs similar stoppage provisions, the insured does not have a cause of action before this date because he or she is receiving benefits or is entitled to receive benefits. As is the case under the 1994 Schedule, unless the insurer continues to pay benefits beyond the stoppage date in the notice, it is the date in the stoppage notice which is the date of the insurer's refusal to pay the amount claimed. It is the date at which the two-year limitation period starts to run.
The date of stoppage which Dominion specified in its letter was January 10, 1998. Accordingly, the application for mediation filed on December 31, 1999 was filed within the two-year limitation period.
I heard evidence on when Ms. Burt received the letter of stoppage in support of arguments that the limitation period started to run on the date she received notice. For the sake of completeness, I now deal with that evidence.
Findings on when Ms. Burt received the notice of stoppage:
Ms. Susan Young was the claims representative who dealt with Ms. Burt's claim. She does not work for Dominion now and although she reviewed the file the morning of the hearing at Dominion's offices, she did not bring the file with her. She explained that Dominion could not calculate an income replacement benefit for Ms. Burt because Ms. Burt was self-employed and did not provide Dominion with sufficient information to calculate a benefit. She explained that although Ms. Burt may have been entitled to an income replacement benefit from September 27, 1997 to January 10, 1998, Dominion did not pay a benefit for this period because Ms. Burt did not supply the information which would allow it to calculate a benefit. Ms. Young explained that Dominion decided on the basis of an insurer's medical examination conducted in November 1997 that Ms. Burt could return to work and that, even if the amount of the benefit could be calculated, Ms. Burt was not entitled to a benefit after January 10, 1998.
Ms. Young wrote the stoppage letter on December 22, 1997, typed the address on an envelope and placed the letter in a bin for external mail. She testified that during the normal course of business, someone else would have taken the bin to the mail room where someone else would seal and stamp it and deliver it to a Canada Post outlet in the building. Mr. Solomon argued that this evidence was unreliable because Ms. Young had no first hand knowledge of what happened to the mail and that someone involved in the mail system should have given evidence. I disagree.
Ms. Young had a good understanding of what happened to the mail and the fact that she did not personally deal with the mail until someone delivered it to Canada Post does not make her testimony unreliable. I find that the stoppage letter was mailed on Monday, December 22, 1997.
Ms. Burt's husband testified about his practice in picking up the mail and about his telephone conversation with Ms. Young. Mr. Burt is self-employed providing transportation to people with special needs. He operates the business out of the family home. Canada Post does not deliver to residences in his area and he picks up his mail at a post office. I accept his detailed evidence and that of his wife that he picked up his mail every day at the post office after noon.
Ms. Young did not take any time off during the 1997 Christmas holiday season other than the statutory holidays. Her notes indicate that Mr. Burt called her on Friday, January 2, 1998 because he was angry about the stoppage letter. She could not recall the time of the previous telephone communication. She knew that she did not speak to the Burts for the rest of 1998.
Mr. and Ms. Burt testified that the holiday season was peaceful and uneventful until they received the stoppage letter. Ms. Burt said she received it in the new year. Mr. Burt testified that they received the letter in the week following New Year's day and that he called Ms. Young the same day. He told her he thought it was ludicrous that Dominion could give notice that it planned to terminate a benefit which it had never paid.
During this telephone conversation, Mr. Burt asked Ms. Young to fax him a copy of the medical/rehabilitation DAC report. Mr. Burt received only the first page of the faxed report and called Ms. Young back the same day to tell her. Dominion submits that it is significant that during this telephone conversation Mr. Burt told Ms. Young not to bother with the fax and that he would check his mail for the DAC report. Dominion argued that this is evidence that Mr. Burt had not gone to the post office on January 2, 1998 when he spoke to Ms. Young and that therefore he must have received the stoppage letter before January 2, 1999. I do not agree. Mr. Burt's statement is equally consistent with him checking the mail over the next few days.
Ms. Young said she did not know if mail delivery took longer during the Christmas period. Mr. Burt said that in his experience mail delivery took longer during the Christmas period. Mr. Burt's testimony is reasonable and I accept it.
I find it likely that Ms. Burt received the notice of stoppage on January 2, 1998 when Mr. Burt returned from his daily trip to the post office. I find that Mr. Burt was angry at what he thought was a contradictory statement in the letter and phoned Ms. Young that same day.
Accordingly, if the two-year limitation period starts to run from the date the refusal to pay the benefit claimed is communicated to the insured, the application for mediation was filed in time.
EXPENSES:
Expenses of this hearing of a preliminary issue are in the discretion of the hearing arbitrator.
May 31, 2001
William J. Renahan Arbitrator
Date
Neutral Citation: 2001 ONFSCDRS 82
FSCO A00-000447
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ROSE BURT
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:
- Rose Burt commenced her application for mediation within the limitation period and may proceed to arbitration.
May 31, 2001
William J. Renahan Arbitrator
Date
Footnotes
- The 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.
- Ontario Regulation 672/90, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994.
- (OIC P-005237, December 22, 1994)
- Ontario Regulation 776/93 as amended, Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996.