Neutral Citation: 2002 ONFSCDRS 29

FSCO A00-000374

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MICHEL VEILLEUX

Applicant

and

ING HALIFAX INSURANCE COMPANY

Insurer

DECISION ON A SECOND PRELIMINARY ISSUE

Before:

Susan Sapin

Heard:

January 8, 2002, in Ottawa, Ontario.

Appearances:

Mr. Veilleux represented himself

Julie Parent for ING Halifax Insurance Company

Issues:

The Applicant, Michel Veilleux, was injured in a motor vehicle accident on July 16, 1996. He applied for statutory accident benefits from ING Halifax Insurance Company ("ING"), payable under the Schedule,¹ on May 17, 1999. ING argues that Mr. Veilleux is not entitled to benefits because he did not comply with the time limits set out in section 59 of the Schedule. The parties were unable to resolve their disputes through mediation, and Mr. Veilleux applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

ING raised a number of preliminary issues in this arbitration. In a decision issued December 20, 2001, I dealt with the first of these, and determined that Mr. Veilleux was mentally capable of proceeding with the arbitration without the benefit of a litigation guardian. The second preliminary issue, whether Mr. Veilleux was precluded from proceeding to arbitration because his application for arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act (the "Act") and subsection 72(1) of the Schedule, was withdrawn by the Insurer at the start of the hearing on January 8, 2002.

The preliminary issue remaining is:

Is Mr. Veilleux disentitled to benefits because he failed, without reasonable excuse, to notify the Insurer within 30 days after the circumstances that gave rise to the entitlement to benefits as required by subsections 59(1) and (4) of the Schedule?

Result:

Mr. Veilleux is not disentitled to benefits by reason of his failure to notify the Insurer of the circumstances that gave rise to the entitlement to benefits within 30 days, because he has a reasonable excuse within the meaning of subsection 59(4) of the Schedule.

Background:

Mr. Veilleux testified that he was injured when the truck he was driving was rear-ended during a rainstorm in Ottawa on July 16, 1996. In a statement obtained by the Insurer dated May 18, 1999,² Mr. Veilleux stated that he immediately felt a burning sensation in his mid and lower back, that his back became painful and swollen that night, and that he developed very sharp pain in his heels when walking or sitting and migraine headaches two or three times a week. Although he testified that he sought chiropractic treatment about a week after the accident from Dr. François Charbonneau, a letter from Dr. Charbonneau indicates he first saw Mr. Veilleux on September 5, 1996.³ Mr. Veilleux attended for approximately 50 to 60 visits between then and May 1999.

At the time of the accident, Mr. Veilleux worked for a company he owned jointly with his mother, selling, delivering and installing assistive medical devices such as home elevators and wheelchair lifts, which weighed from 250 to 1000 lbs. He testified that after the accident, his injuries prevented him from heavy lifting or using power tools necessary to deliver and install this equipment, even with the use of the hydraulic tailgate on his truck and the assistance of co-workers. He continued to work part time for approximately six months, concentrating on the office aspects of his job, handling sales calls, answering the phone, and arranging for the actual delivery and installation work to be done by others. Unable to continue, he wound up the company and has not returned to work since. Mr. Veilleux believes that he would have many opportunities to work in one of his family's companies were he not prevented from doing so by the injuries he attributes to the motor vehicle accident.

Mr. Veilleux is currently under the care of Dr. René Ducharme, a psychiatrist who diagnosed him with paranoid schizophrenia in the course of a hospital admission in June of 1999 and who continues to treat him with drug therapy. In a report dated October 14, 1999 and addressed to Colin Lyle, a solicitor, Dr. Ducharme expressed the opinion that Mr. Veilleux is totally and permanently disabled from any type of work due to this psychiatric illness.⁴

The dispute:

The parties disagree about when Mr. Veilleux first notified the Insurer of the accident and whether or not he has a reasonable excuse for not reporting it within 30 days. Mr. Veilleux claims that he first notified his insurance broker, Pigeon Roy, that he was suffering from injuries from the July 1996 motor vehicle accident in May 1997. ING maintains that Mr. Veilleux first notified it of the accident in March 1999, two years and eight months after the accident. Mr. Veilleux offered two reasons to explain the delay, firstly, that he did not become aware of the seriousness of his injuries until after the accident, and secondly, that he was "pretty sick at the time," by which I understand him to mean that he suffered from some of the effects of his illness, later diagnosed as schizophrenia, at some point after the accident.

The law

Section 59 of the Schedule provides as follows:

59.-(1) A person who wants to apply for benefits under this Regulation shall notify the insurer within 30 days after the circumstances that arose that gave rise to the entitlement to benefits, or as soon as practicable thereafter.

Subsections (2) and (3) go on to state that the insurer is required to promptly provide the person with application forms, which must in turn be submitted to the insurer within 90 days of receipt.

Subsection 59(4) states that

59.-(4) A failure to comply with a time limit set out in subsection (1) or (3) does not disentitle a person to benefits if the person has a reasonable excuse.

Many arbitrators have considered what constitutes a reasonable excuse, and a number of general principles have evolved.⁵ Bearing in mind that the legislation is remedial and as such requires a broad and liberal interpretation, one must balance the rights and interests of the parties in the context of the no-fault scheme, of which one goal is to encourage early and continuing cooperation between insured and insurer in rehabilitation. In Kuronen ⁶ Arbitrator Renahan adopted the approach used by the courts in considering whether to allow relief against notice periods in insurance cases, concluding that,

In my opinion, the reasonable excuse advanced by the claimant must be examined with regard to all the circumstances connected to the delay, including prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.

In Kaur,⁷ Director's Delegate Draper reiterated certain principles that apply to a consideration of what constitutes a reasonable excuse: ⁸

The onus is on the insured person to establish a "reasonable excuse."
Ignorance of the law alone is not a "reasonable excuse."
The test of "reasonable excuse" is both a subjective and objective test that should take account of both personal characteristics and a "reasonable person" standard.
In the absence of a reasonable excuse, the lack of prejudice to the insurer is not a sufficient basis for extending the 30-day time limit.

With these considerations in mind, I turn to the facts of this case.

Mr. Veilleux's evidence:

Mr. Veilleux testified but did not call any other witnesses. I accepted as evidence a statement obtained from Mr. Veilleux on May 18, 1999 by Eric Burgar, the independent adjuster who investigated the claim on behalf of ING.⁹ With the Insurer's consent, I also accepted documents that Mr.Veilleux had previously filed in the course of a mediation at the Commission.¹⁰

Mr. Veilleux testified that he did not at first consider making a claim against his Insurer because he thought he would recover from his injuries and return to work, as he had after receiving similar injuries in a work-related accident in 1988 and in a previous motor vehicle accident in 1992. He stated that he was "looking for a cure, not to make a claim." ¹¹He stated that he did not realize that his injuries were serious or permanent until he saw a specialist, Dr. Marc-André Beaulieu, a neurologist referred by his family physician at the time, Dr. Ron Neal.

Mr. Veilleux provided a letter from his chiropractor, Dr. Francois Charbonneau, dated May 7, 1997, and addressed to McMahon & McMahon, solicitors for his father.¹² The letter states that Mr. Veilleux first sought treatment from Dr. Charbonneau for low back pain and left leg sciatica on September 5, 1996, and notes the onset of pain eight years previously. The July 1996 accident is not mentioned. Mr. Veilleux testified that he gave this letter to his insurance broker, Daniel Pigeon, that he met with him on three separate occasions, that he told him he had a lot of problems with his back and had stopped working, and that he was waiting for an appointment with a specialist. He stated that the broker said nothing. Mr. Veilleux stated that he did not receive any legal advice from his father's law firm because he understood that this would have been a conflict of interest, as his father was also an owner of the company, and that he did not seek legal advice again until "after I put in my claim in 1999."

Mr. Veilleux testified that he did not report the accident to the insurance company at the time it occurred because his mother felt it was cheaper to fix the truck themselves (one of the family companies being a body shop) than to involve the Insurer and face a raise in premiums.

The account contained in Mr. Veilleux's May 18, 1999 statement to the Insurer differs somewhat from his testimony on certain points. In it he states that he first reported the accident to the broker, Pigeon Roy, "about a month after the accident in the form of a letter to my broker from my chiropractor which I hand-delivered personally to Daniel Pigeon or his brother. I gave a copy of this letter to the company's lawyer Ray McMahon...I had spoken to Mr. Pigeon (Daniel or Jean) once before delivering the letter. I told him I want to start something as I had serious injuries from the car accident..." The statement goes on to state that Mr. Veilleux spoke to Mrs. Clarke, Ms. Bergeron and Ms. Leblanc at Halifax "over the years since 1996. Nothing happened about a claim until the Insurance Commission became involved in early 1999."

Ms. Patricia Bergeron, a senior claims field representative in ING's Casualty Unit with 15 years' experience, testified on behalf of ING. She testified that ING first became aware of the claim on March 1999, when Mr. Veilleux telephoned Luke O'Byrne, a unit manager at ING. The claim was assigned to the Casualty Unit, which contracted an independent adjuster, Eric Burgar, from Cunningham Lindsay, to investigate whether there was a claim or not. Mr. Burgar took a statement from Mr. Veilleux, obtained medical records from all of his treating physicians as far back as 1979, and obtained insurer's examinations (IEs) and expert reports from an orthopaedic surgeon, a psychologist and a physiatrist.¹³ Ms. Bergeron testified that, based on the information obtained, ING concluded that the injuries were pre-existing and not related to the motor vehicle accident, and denied the claim on that basis. I am satisfied that, despite the lateness of the claim, ING, to its credit, conducted a thorough investigation.

Ms. Bergeron testified that ING also investigated the late reporting of the claim itself, and obtained a written statement from the broker, Jean Pigeon, to the effect that he had never heard of the claim prior to being notified of it by ING in May 1999.¹⁴

The Insurer relies on Mr. Pigeon's statement to support its position that Mr. Veilleux has not met his onus, on a balance of probabilities, of establishing that he notified the Insurer of the accident prior to March 1999. At best, I find that Mr. Veilleux's testimony establishes only that he himself believed he had notified the Insurer, through its broker, at an earlier date, but, even at that, it is not clear when that earlier date was, or whether Mr. Veilleux spoke with Jean or his brother Dan.

I have no reason to question Ms. Bergeron's testimony. I prefer her evidence over that of Mr. Veilleux because it is more reliable, and I find that ING was first notified of the claim in March of 1999.

There are further factual inconsistencies in Mr. Veilleux's testimony. For example, Mr. Veilleux' statement that Dr. Neal was his family doctor at the time of the accident is contradicted in a letter from Dr. Neal addressed "to whom it may concern" dated May 1, 1998, stating that he became Mr.Veilleux's family physician in June of 1997.¹⁵

Also, Mr. Veilleux's claim that he provided Dr. Charbonneau's letter to the broker shortly after the accident cannot possibly be correct, given that the letter was dated May 1997, and I heard no evidence that the date on the letter was wrong. Furthermore, it cannot be considered evidence of notice, as it contains no reference to the July 1996 accident.

Finally, Mr. Veilleux first consulted Dr. Marc André Beaulieu, a neurologist, in February 1996, before the accident and not afterwards, as he maintains.¹⁶ In addition, it was not in fact Dr. Beaulieu, as Mr. Veilleux believes, who first caused Mr.Veilleux to realize the seriousness of his back condition. Dr. Beaulieu's last consultation report to Dr. Ron Neal, the family doctor, dated August 25, 1998 states that tests up to that point revealed nothing more serious than a mild scoliosis and degenerative loss of disc signal at L5-S1 which required further investigation. Mr. Veilleux did not pursue further EMG and nerve conduction studies arranged for him because he wished to seek a second opinion from another specialist.¹⁷ It was actually Dr. Neal who stated that Mr. Veilleux should avoid heavy lifting so as not to aggravate his underlying back problem in May 1998, although he did feel that Mr. Veilleux could work at a job operating heavy machinery at that time.¹⁸

These factual inconsistencies disclose a difficulty that runs throughout the evidence presented in this case, namely, the reliability of statements made by Mr. Veilleux. Clearly, his recollection of events, dates, times and places is not always accurate.¹⁹ This is partly understandable, given that by his own estimate he has seen "29 doctors over the years," and his medical history is lengthy.²⁰Although these inaccuracies affect the reliability of Mr. Veilleux's evidence on such factual matters as when notice was actually given, I find they do not affect Mr. Veilleux's credibility in the matter of his subjective beliefs, which is a key factor in determining whether the excuses he has presented for the delay in notifying the Insurer are reasonable. I find that the factual inaccuracies in Mr. Veilleux's testimony manifest more a mixture of genuine confusion and a wish to have the facts accord with a very strong subjective belief that his current troubles were caused by his 1996 accident, than a deliberate intention to mislead. I find these to be departures from rational thinking that result from his psychiatric illness, and that he suffered from these symptoms in the years leading up to the accident.

The objective evidence before me supports this conclusion. It is clear from the long history of tests and visits to doctors that Mr. Veilleux persistently sought the advice of medical professionals for relief of his ongoing symptoms of back and leg pain and burning and numbness in both feet many years before the July 1996 accident, as well as afterwards, and that the results of these investigations often proved negative.

Both Dr. Ducharme and Dr. Reesor noted that the preoccupation with and exaggeration of minor physical symptoms that prompted Mr. Veilleux's continuous search for a cure or explanation in fact appears to be a feature of his mental illness.²¹ When Dr. Ducharme arrived at the diagnosis of schizophrenia during Mr. Veilleux's June to July, 1999 hospital admission, he noted that his patient likely suffered symptoms for three or four years previous; in other words, certainly at the time of the July 1996 motor vehicle accident, and possibly earlier.

Dr. Reesor also noted that the extensive medical review conducted by him revealed that Mr. Veilleux demonstrated irrational behaviour even prior to July 1996. He opined that "psychotic disorder and /or personality features" were psychological conditions that predated the July 1996 accident. Dr. Beaulieu noted an episode on October 3, 1996 when Mr. Veilleux barged into his office without an appointment, insisting that he read x-rays that he had brought with him, and delaying the appointments of other patients. Three family doctors have refused to continue to provide services to Mr. Veilleux over the years, including Dr. G. Michael on November 22, 1996 and Dr. Neal on May 13, 1999.²²

Dr. Jack Klein, a psychiatrist who examined Mr. Veilleux at ING's request in September, 2001, reached similar conclusions:

Based on the medical evidence, I agree with Dr. Ducharme that Mr. Veilleux's schizophrenia likely consisted of a prodromal or incipient phase in the mid 1990's, followed by the development of frank paranoid psychotic symptoms sometime in late 1998 or early 1999. In my opinion, Mr. Veilleux's account of a dramatic change in his life subsequent to physical impairment sustained in the July 1996 motor vehicle accident is not borne out by the medical evidence, even when excluding the independent evaluations he has undergone. Rather, it would appear that Mr. Veilleux has reconstructed events in such a way to attribute his low level of functioning over the past several years to the 1996 motor vehicle accident. As previously mentioned, in my view another prominent issue is that of Mr. Veilleux's lack of insight, leading to a tendency towards external blame or attribution of chronic difficulties onto external sources. I am in agreement with Dr. Ducharme regarding Mr. Veilleux being occupationally disabled on the basis of paranoid schizophrenia.

The medical evidence of untreated symptoms of psychiatric illness at least as far back as the mid-1990s provides a context for Mr. Veilleux's assertion that his focus after the accident was more on his quest for a cure than on pursuing a claim against ING. I find that the possible impact of the accident on his back condition, which predated the accident and for which he had been trying to find an explanation or cure for some time, simply did not register with Mr. Veilleux at the time, and that it was only afterwards that he began to attribute his ongoing symptoms to the accident. As noted by Dr. Klein, this behaviour is a key feature of his psychiatric illness. I find it to be outside the realm of objective rational behaviour. Under normal circumstances, as the Insurer rightly argued, the fact that a person was initially unaware that he had been seriously injured in an accident would be insufficient of itself to constitute a reasonable excuse, particularly when weighed against the prejudice to an insurer.

The medical evidence, however, persuades me that we are not dealing with normal circumstances in this case. I find there is sufficient evidence to indicate that Mr. Veilleux cannot be held to the standard of a reasonable person with respect to the reporting of the accident to the Insurer. In this particular case, the unique nature of the psychiatric illness with which he has been diagnosed, and the documented evidence of precursor symptoms as early as the mid-1990s, are themselves sufficient to constitute a reasonable excuse for his failure to notify the Insurer of the accident until two years and eight months after it occurred.

This conclusion that mental illness may constitute a reasonable excuse sufficient to obtain relief against the limitation period set out in section 59 of the Schedule is supported by the approach adopted in the courts with respect to section 47 of the Limitations Act, R.S.O. 1990, c. L.15 which allows the running of time established by a limitation period to be postponed if the plaintiff is under a legal disability.²³

Section 47 provides as follows:

Where a person entitled to bring an action mentioned in section 45 or 46 is at the time the cause of action accrues a minor, mental defective, mental incompetent or of unsound mind, the period within which the action may be brought shall be reckoned from the date when such a person became of full age or of sound mind.²⁴

As the categories of disability specified in the section are not defined in the [Limitations] Act, and, at the time of Justice Borins' decision no Canadian authority had defined those terms within the context of section 47, Justice Borins turned to Lord Denning's interpretation of the words "unsound mind" in a similar case involving a limitation period,²⁵ where Lord Denning stated, "...it seems to me in this statute a person is "of unsound mind" when he is, by reason of mental illness, incapable of managing his affairs in relation to the accident as a reasonable man would do."

Borins stated that, in his view,

Lord Denning's interpretation of "unsound mind" in comparable English legislation should be applied in interpreting "unsound mind" in s. 47 of the Limitations Act. It accords with the approach derived from Novak²⁶ to guide the court in interpreting a provision like s. 47, intended to extend the running of a limitation period where the prospective plaintiff is under a disability. It takes a purposive approach, which best furthers the goals of the legislation by according fairness to the prospective plaintiff in the context of the circumstances in which the plaintiff finds himself or herself. Thus, applying Kirby, a person is of unsound mind within the meaning of s. 47 when he or she, by reason of mental illness, is incapable of managing his or her affairs as a reasonable person would do in relation to the incident, or event, which entitles the person to bring an action.

In Bisoukis, Justice Borins found that, although the fact that a person such as Mrs. Bisoukis, who was severely depressed, was able to function on a day-to-day basis and make decisions required in daily life may have some evidentiary value, this was not determinative of that person's capacity to manage her affairs in relation to the accident, and that it was an error to equate the two.

I find that this reasoning applies equally to the case before me, and in particular to the Insurer's argument that Mr. Veilleux was not an unsophisticated claimant, because, having been involved in a worker's compensation claim, and represented himself in his own divorce proceedings, he ought to have known to report his claim as soon as possible. It is not possible to tell, from the evidence presented, whether Mr. Veilleux initiated these proceedings, or represented himself in a rational manner, as opposed, for example, to being a hapless participant. I find that the fact that he was "not unsophisticated" and was able to participate in these proceedings, and in other aspects of his life, does not mean that he was able to pursue any course of action, including an accident benefits claim against ING, rationally or reasonably from the mid-1990s on.

In arriving at my decision I am also mindful that both Dr. Michael and Dr. Neal, Mr. Veilleux's family doctors before and after the July 1996 accident, stated that they never treated him for injuries sustained in an automobile accident, though it is clear they treated him for ongoing back and other complaints.²⁷ In ordinary circumstances, this lack of corroborating evidence might lead to an inference that perhaps the accident was not reported because there were in fact no serious consequences to report. However, again, I find this lack of evidence is explained by the unique circumstances of this case.

With respect to the issues of balancing hardship to the Applicant against prejudice to the Insurer, I find that the balance weighs in favour of Mr. Veilleux. From the time he closed his business approximately six months after the accident, Mr. Veilleux has relied on his family and social assistance to support himself, a situation unlikely to change. A lack of disposable income is a factor in his restricted lifestyle and may prevent him from continuing with the community college courses in which he does well and which he appears motivated to continue. I find that Mr. Veilleux suffers considerable hardship.

Although I am sympathetic to Ms. Bergeron's testimony that ING has been prejudiced by the late claim because it had no opportunity to intervene early to provide rehabilitation, investigate the claim in a timely manner or limit its potential exposure, I do not find the prejudice to the Insurer to outweigh the hardship to Mr. Veilleux in this case. Dr. Reesor noted in his report that there was evidence that Mr. Veilleux was not a person to comply with treatment or to follow medical advice in any event, a point supported by the fact that three family physicians withdrew their services for that reason. In addition, ING's thorough investigation, with Mr. Veilleux's cooperation, has yielded an extensive historical record which includes information adverse to Mr. Veilleux's case. The objective evidence contained in the comprehensive medical brief speaks for itself. As Mr. Veilleux said of his case, "I have nothing to hide. It's all in there."

I find, therefore, that Mr. Veilleux has provided a reasonable excuse for failing to notify the Insurer of the accident within 30 days of its occurrence, and is neither disentitled from receiving benefits on that ground nor precluded from proceeding to arbitration.

EXPENSES:

I exercise my discretion to award Mr. Veilleux his expenses, if any, incurred in this preliminary issue hearing.

February 5, 2002

Susan Sapin Arbitrator

Date