Neutral Citation: 2002 ONFSCDRS 54

FSCO A01-000064

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LAUREL E. ROSS

Applicant

and

TTC INSURANCE COMPANY LIMITED

Insurer

DECISION ON PRELIMINARY ISSUES

Before:

Suesan Alves

Heard:

By telephone conference call on September 10 and 14, 2001

Appearances:

Thomas G. Andrews for Ms. Ross

Michael Atlas for TTC Insurance Company Limited

Issues:

The TTC alleges that Ms. Ross cannot arbitrate her claims for medical benefits and income replacement benefits, ("IRBs") as they are time barred. Ms. Ross disagrees. The TTC withdrew its further allegation that Ms. Ross was prevented from receiving IRBs and loss of earning capacity benefits, ("LECBs") under section 58(3)(a) of the Schedule.

The preliminary issues are:

Is Ms. Ross prevented from proceeding to arbitration with her claims for income replacement benefits because she commenced an arbitration proceeding after the time limit provided in section 281(5) of the Act and section 72 of the Schedule?
Is Ms. Ross prevented from proceeding to arbitration with her claims for supplementary medical and rehabilitation benefits because she commenced an arbitration proceeding after the time limit provided in section 281(5) of the Act and section 72 of the Schedule?

Result:

Ms. Ross may proceed to arbitration with her claim for income replacement benefits from December 5, 1997. Ms. Ross may also proceed to arbitration with her claims for supplementary medical benefits submitted to the TTC after March 20, 1998.
I remain seized of the question of whether Ms. Ross may proceed to arbitration with her claims for supplementary medical benefits up to March 20, 1988, pending further submissions from the parties.
If the parties are unable to agree on expenses of this hearing, that issue may now be addressed.

EVIDENCE AND ANALYSIS:

The following facts are contained in agreed statements of facts and exhibits filed by the parties.

Laurel Ross was injured on a streetcar on August 15, 1996.
At the time of the accident she was employed at Artsmarketing Services Inc. as the client services co-ordinator earning approximately $700 per week.
Ms. Ross telephoned the TTC the day after the accident, to advise of her claim. More formal notice of the claim came in a letter from her then lawyer, Barry Trembetzky, dated October 28, 1996.
Ms. Ross submitted an application for statutory accident benefits on January 28, 1997, along with a health practitioner's certificate and employer's confirmation of income. As of that date, she had missed only two full days from her employment and seven partial days due to therapy and rehabilitation. These absences from work were covered by her employer through a sick leave plan. In her application for statutory accident benefits, Ms. Ross stated that as of the day after the accident, her injuries prevented her from performing the essential tasks of her employment. According to the health practitioner's certificate, Ms. Ross could not return to her normal daily activities, although she had returned to modified work. Her need to continue to work while recovering was identified by her health practitioner as a factor affecting her recovery. The employer's confirmation of income indicates Ms. Ross was absent for an extended period of time, namely: "lost 2 full days plus 7 partial days and with therapy and rehabilitation more are expected." The form confirms the absences were covered by a sick leave plan, and that no further sick days were available.
In Part 10 of the application for accident benefits, Ms. Ross indicates that her injuries prevented her from performing the essential tasks of her employment from August 16, 1996. In Part 4 of the application for accident benefits, Ms. Ross states: I have used up the sick time that is available to me, and my employer will not extend more for rehabilitation purposes. Please advise on how to put in a claim for lost income because of time lost for rehabilitation." No list of dates or times missed from work was submitted at that time.
On January 30, 1997, the TTC denied all benefits stating "Accident unconfirmed, policy will not respond to claim."
On February 6, 1997, Ms. Ross was interviewed by the TTC and gave full details of how the accident happened.
Ms. Ross met with the TTC again on March 10, 1997 at which time she discussed her claim. In particular, she again raised the issue of whether there is any coverage for missed time due to rehabilitation. Ms. Ross was informed that occasional absences from work do not amount to a substantial inability to perform essential tasks of her employment in accordance with the Statutory Accident Benefits Schedule. Ms. Ross accepted this advice and presented no claim for income replacement benefits for lost time due to medical appointments at that time. She arranged to receive treatment outside of business hours or when this was not feasible, made up missed hours through overtime.
On April 7, 1997, the TTC, after confirming the accident, provided Ms. Ross with another Explanation of Assessment Form and paid the sum of $501.42 for medical and other expenses. With respect to weekly benefits, the form re-confirmed the advice given to Ms. Ross that "You must suffer a substantial inability to perform the essential tasks of your employment. This is not related to lost time for re-hab."
On May 8, 1997, and June 20, 1997, the TTC paid the sums of $332 and $101 respectively for medical and rehabilitation expenses. By letter dated May 16, 1997, the TTC advised Ms. Ross that no further medical expenses beyond May 22, 1997 would be considered. On June 20, 1997, the TTC provided Ms. Ross with an Explanation of Assessment by Insurance Company confirming the information supplied in the May 16, 1997 letter.
On September 15, 1997, the TTC arranged for Ms. Ross to attend a DAC assessment with respect to her medical and rehabilitation expenses. The DAC assessment recommended some further limited treatment. At the same time, the TTC refused to pay for transportation expenses because, in its opinion, expenses regarding the car rental and gas are not covered under the Schedule.
On September 24, 1997, the TTC paid $952 for medical and rehabilitation expenses, but expressly refused to pay for car rental and gasoline expenses as in its opinion they are not covered under the Schedule.
By letter dated October 7, 1997, the TTC paid Ms. Ross $397.60 for expenses incurred up to September 15, 1997. The TTC also advised Ms. Ross that all expenses incurred beyond September 15, 1997 were in dispute along with the previous car rental/gas expenditures.
On October 23, 1997, the TTC advised Ms. Ross that it would not reconsider its position with respect to the transportation claim.
On November 28, 1997, Ms. Ross applied for mediation with respect to transportation to medical appointments.
On December 5, 1997, Ms. Ross' employment with Artsmarketing was terminated. She alleges that the termination was due to increased symptoms related to the accident.
On December 17, 1997, Ms. Ross provided the TTC with an up-to-date expense report and sought payment of medical and rehabilitation expenses. By letter dated December 23, 1997, the TTC advised Ms. Ross that it was not prepared to alter its position regarding medical and rehabilitation expenses, as set out in the letter of September 15, 1997. On January 14, 1998, the mediation was held with respect to transportation and medical expenses and it failed.
On March 20, 1998, by letter, the TTC refused all treatment beyond that recommended by the DAC. This information had been confirmed orally to Ms. Ross at the mediation on January 14, 1998.
On April 18, 2000, Ms. Ross' new lawyers at Borden & Elliott formally advised the TTC that a claim would be made for loss of income related to Ms. Ross' inability to work commencing after December 5, 1997.
Mr. Atlas of the TTC denied liability for this new claim for income replacement benefits by way of a letter dated May 9, 2000.
On June 22, 2000, Borden & Elliot filed for mediation on the loss of income issue and for medical and transportation expenses unpaid by the TTC. This mediation was held on October 20, 2000 and failed.
On January 16, 2001, Borden & Elliot filed for arbitration on the income replacement benefits, medical and transportation expenses.

Law:

The TTC submits that Ms. Ross' claims for IRBs and supplementary medical expenses are time barred. The relevant legislation is section 281(5) of the Insurance Act and section 72 of the Schedule.

Section 281(5) of the Insurance Act, R.S.O. 1990, c.I.8 provides:

(5) 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 72 of the Schedule, being O. Reg. 776/93 provides:

72.—(1) A mediation proceeding under section 280 of the Insurance Act or an arbitration or court proceeding under section 281 of the Act in respect of a benefit under this Regulation shall be commenced within two years from the insurer's refusal to pay the amount claimed or, if the person has engaged in an employment as permitted by section 14 or has returned to elementary, secondary or post-secondary education as permitted by section 17, within two years of the insurer's refusal to pay further benefits.

(2) Despite subsection (1), an arbitration or court proceeding under section 281 of the Insurance Act may be commenced within ninety days after the mediator reports to the parties under subsection 280 (8) of the Act.

The applicable period of time in this case is the later of two years from the date of the refusal, or within 90 days after the mediator reports to the parties, as provided in section 72(2) of the Schedule.

The claim for IRBs

Ms. Ross completed an application for statutory accident benefits and submitted it to the TTC. The TTC alleges that it refused Ms. Ross' claim for IRBs on two occasions: once on January 30, 1997, and again on April 7, 1997. Ms. Ross disagrees. For the reasons which follow, I find that Ms. Ross is not prevented from proceeding to arbitration with respect to her claim for income replacement benefits.

January 1997 Explanation of Assessment Form

The TTC submits that it refused Ms. Ross IRBs on January 30, 1997, when it provided her with an Explanation of Assessment Form which stated: "Accident unconfirmed. Consequently, policy will not respond to claim." The TTC submits that since Ms. Ross applied for mediation in relation to her claim for IRBs on June 22, 2000, and applied for arbitration on October 20, 2000, neither step was taken within the two year time frame. The TTC submits that Ms. Ross' claim is time barred.

In Talany and Royal Insurance Company of Canada, Arbitrator Seife held that: "The purported notice of refusal itself must state, clearly and unequivocally, and in a simple straightforward fashion, the fact that the Insurer refuses to pay the benefit in question, and the reasons for the refusal."¹ I agree with Arbitrator Seife that this is the appropriate test.

Reasons are necessary because they provide the insured person with the basis for the denial. In Turner and State Farm Mutual Automobile Insurance Company, (FSCO P00-00046 February 1, 2002), Director's Delegate Makepeace stated : "Absent clear written notice, an insured person may well be aware that benefits have been refused without understanding the reasons for the refusal. The reasons requirement also reinforces the insurer's obligation to adjust claims fairly based on all the available evidence." The insured person can then decide whether to provide additional information or documentation to substantiate a claim, provide case law, accept the basis of the denial, apply for mediation, or make some other response that he or she views as appropriate.

I accept that the TTC refused Ms. Ross' benefits in January 1997. The basis of the refusal was that the TTC was not persuaded that there had been an accident. However, subsequent investigation persuaded the TTC that Ms. Ross had indeed been injured in an accident involving a TTC streetcar. The TTC went on to pay some of Ms. Ross' claims for supplementary medical benefits, and to dispute others.

In my view, once the TTC acknowledged that there had been an accident, the basis of the January 30, 1997 refusal was at an end. There would be no reason for Ms. Ross to dispute that refusal once she became aware that the TTC accepted that she had been injured in an accident on a TTC streetcar. For these reasons, I am not persuaded that the TTC can rely on the January 30, 1997 refusal.

April 1997 Explanation of Assessment Form

The TTC submits that Ms. Ross asserted a claim for income replacement benefits when she submitted an application for accident benefits with an employer's confirmation of income, a health practitioner's certificate and an addendum. The TTC further submits that it formally denied Ms. Ross' claim for IRBs in an Explanation of Assessment dated April 8, 1997.

Ms. Ross disagrees. She submits that she completed the application for statutory accident benefits as she was required to. She further submits that she made an inquiry for advice in the addendum, she sustained no loss, and that the TTC cannot gratuitously deny a claim which she never made.

The application process for statutory accident benefits

Under section 59 of the Schedule, a person who wishes to claim statutory accident benefits as a result of an accident, must notify the insurer of a claim. The insurer is then obliged to provide an accident benefits application package, a written explanation of the benefits available under the Regulation, and written information to assist the person in applying for benefits.

The accident benefits application package consists of five forms. The OCF-1, or the Application for Accident Benefits, is completed in all cases when a person is applying for benefits for the first time as a result of an accident. The insurer identifies which of the remaining four forms it requires the applicant for benefits to complete and submit. The remaining four forms are the OCF-2, the employer's confirmation of income; the OCF-3, the health practitioner's certificate; the OCF-5, permission to disclose health information; and the OCF-12, the activities of daily living form.

According to the instruction sheet which accompanies the application package: "After the insurance company reviews your complete application package, you will be contacted about the benefits you are entitled to receive.

If your insurance company needs any additional information in order to process your application, they will contact you." At the bottom of the sheet, a warning in a text box states: Incomplete or incorrect information may result in your application being denied.

After an insurer receives the completed application, the onus is on the insurer to identify and assess the benefits claimed based upon the information provided in the completed application for statutory accident benefits. It follows that there may be cases where it can be difficult to identify whether a person who submits a completed form has filled in a portion of the form because he or she wishes to assert a claim for a particular benefit, because he or she wishes to submit a complete application which complies with the instruction sheet, or because he or she wishes to comply with the insurer's request and instructions.

In this case, Ms. Ross completed the OCF-1, the Application for Accident Benefits, the OCF-2, or Employer's Confirmation of Income, and the Health Practitioner's Certificate, the OCF-3 to the TTC. The TTC submits that this is the essence of a claim for IRBs.

I find the submission of the above forms by Ms. Ross to the TTC is consistent with compliance with the general instructions contained in the cover sheet of the accident benefit package. I find it is also consistent with the instructions in the OCFs-1, 2 and 3. The OCF-1 states: "A separate form must be completed for each person who is applying for accident benefits. Complete ALL sections. Your application may be denied if information is incomplete or incorrect. Please print clearly." The Employer's Confirmation of Income instructs: "If your insurance company asks you to complete this form, fill in Part 1: Application Information and Part 2: What Salary Information is Needed. Give the form to your employer or former employer(s)." Similarly, the Health Practitioner's Certificate instructs: "If your insurance company asks you to complete this form, fill out Part 1: Applicant information and give the form to your health practitioner..."

There is no memo or covering letter setting out which of the forms the TTC asked Ms. Ross to complete. However, I find that the TTC asked Ms. Ross to complete and submit each of the OCFs by inserting its name and mailing address on each form, in the upper left hand corner box, headed "Return this form to:"

I find at the time she submitted her application, Ms. Ross' primary interest was to claim reimbursement for various supplementary medical and rehabilitation expenses. At that time Ms. Ross was receiving the full amount of her salary from her employer while performing modified work. The amount of her IRB would have been zero. I find it unlikely in these circumstances —where she had no loss, and nothing to gain from making an application for an IRB— that Ms. Ross was asserting a claim for an IRB. However, the information she submitted would permit the TTC to assess the claim and set reserves. For these reasons, I accept Ms. Ross' submission that she completed and submitted these forms because she was required to do so, and reject the TTC's submission that Ms. Ross asserted a claim for an IRB in January 1997 simply by sending in the completed OCFs-1, 2 and 3 to the TTC.

The content of the OCFs 1 and 2 would likely cause an insurer to question whether Ms. Ross suffered a substantial inability to perform the essential tasks of her employment, and therefore met the qualifications for entitlement to an IRB under section 7(1)1. of the Schedule. On the application for accident benefits, Ms. Ross stated that her injuries prevented her from performing the essential tasks of her current employment from the day after the accident. Her health practitioner's certificate, completed by Dr. J. R. Pampee, stated that she could not return to normal daily activities, "has returned to modified work, but work affected by [not legible]." Dr. Pampee noted she was: "Not able to function at work, physical work [not legible]; and emotional strain is affecting [not legible]" under the section of the form dealing with medical restrictions.

However, based on the evidence before me, I am not persuaded that the TTC understood that Ms. Ross was making a claim for IRBs in April 1997, when it issued the Explanation of Assessment. The TTC met with Ms. Ross in March 1997 to discuss her claim. The parties agree that at the meeting, Ms. Ross again raised the issue of whether coverage was available for missed time due to rehabilitation. During the March 1997 meeting, the TTC told Ms. Ross that occasional absences from work did not amount to a substantial inability to perform essential tasks of her employment in accordance with the requirements of the Schedule. The April 1997 Explanation of Assessment confirmed this advice. In the context of these meetings, I find that the TTC and Ms. Ross were discussing whether she could be reimbursed for time which she anticipated taking off work for treatment purposes, and where that claim could fit in relation to the benefits provided under the Schedule.

Had the TTC viewed this as a claim for IRBs in April 1997, I find it probable that in the course of adjusting the claim, it would have arranged to have Ms. Ross examined by a health practitioner of its own choice, under section 65 of the Schedule, to determine her entitlement to this benefit. This is particularly the case where some eight months had elapsed between the date of the accident, and the Explanation of Assessment.² Alternatively, if the TTC had been persuaded that Ms. Ross met the qualifications for an IRB, it should have assessed her claim on the merits, indicating that she was eligible for an IRB benefit, however no amount was payable because her earnings exceeded the amount of any IRB. Based on the evidence before me, I find the TTC took neither step.

Ms. Ross submitted her query as an addendum to the Employer's Confirmation of Income. Part 4: Benefits and Other Income. In the addendum, Ms. Ross stated: "Sick time: I have used up the sick time that is available to me, and my employer will not extend more for rehabilitation purposes. Please advise me on how to put in a claim for lost income because of time lost for rehabilitation." I find this was a query for advice as to how she could assert a claim in respect of claims which she anticipated, but which had not as yet crystallized.³

The TTC responded to Ms. Ross' query with words which suggest that it did not view this as a claim for IRBs. It stated: "You must suffer a substantial inability to perform the essential tasks of your employment. This is not related to lost time for re-hab." Given the stated reasons for denying coverage— that time lost for rehabilitation is not related to a claim for an IRB— I find the TTC cannot assert that this denial should now be characterized as a refusal of an IRB.

Given the TTC's position, I find that this statement ought not to have been characterized as a refusal of any specific type of benefit under the Schedule. Instead, it should have placed its reasons under the "Other" category of the Explanation of Assessment. Based on the TTC's words and conduct, I conclude the TTC did not view Ms. Ross' query as a claim for an IRB in April 1997.

Ms. Ross accepted the TTC's interpretation and presented no claim for lost time due to her medical appointments. Instead, with the co-operation of her health practitioners and her employer, she arranged to receive treatment outside of business hours or to make up missed hours. Ms. Ross' employer modified her work and continued to pay her regular salary. I find she avoided incurring the loss for which she might otherwise have asserted a claim, had she not accepted that coverage was not available under the Schedule.

I find no evidence the claim crystallized. The refusal as framed by the TTC would allow either party to seek mediation and adjudication of a legal issue as to whether such coverage existed under the Schedule. However, under section 72 of the Schedule, in order to trigger the commencement of the limitation period, there must be a refusal of an amount claimed. In Ms. Ross' case she sustained no loss, nor did she submit a list of absences or lost wages.

The claims and denial process contemplates that a claim is crystallized, submitted by the insured person, and that only after there has been a clear and unequivocal written denial does the limitation period begin to run. I find that an insurer cannot gratuitously deny a claim which has not been submitted. I find no evidence that Ms. Ross claimed an amount which would cause the limitation period to begin to run. It would be invidious if the TTC were allowed to characterize it as a refusal which triggers the running of a limitation period.

In Zeppieri and Royal Insurance Company of Canada (OIC File A-005237, February 17, 1994), Arbitrator Naylor held that in order to determine whether the limitation period applies in the circumstances of a case, "First, it is necessary to ask whether, and when, there was a refusal to pay benefits; and second, whether the insurer may rely on a limitation period that runs from the date of the refusal."⁴

Implicit in the two-step process formulated in Zeppieri, is that there must first have been a claim which has crystallized, that is to say become definite, a claim which has been submitted, and properly denied. Only then does the clock start ticking. For these reasons, I reject the TTC's submission that the Explanation of Assessment issued by the TTC on April 1997, is properly characterized as a refusal which triggered the commencement of the limitation period.

I find Ms. Ross' submitted a claim for IRBs only after her employment was terminated on December 5, 1997. I find she first submitted that claim to the TTC on April 18, 1998. I find that the TTC refused this IRB claim by letter dated May 9, 2000. Ms. Ross applied for mediation with respect to this claim on June 22, 2000. The mediation was conducted on October 20, 2000 and failed. On January 16, 2001 she filed an application for arbitration with respect to her claim for income replacement benefits. I find both the mediation and arbitration applications were commenced within the two year time period set out in section 281(5) of the Insurance Act, and conclude that Ms. Ross is not precluded from arbitrating her claim for income replacement benefits. Ms. Ross may therefore proceed to arbitration with her claim for an IRB, from December 5, 1997.

On the first day of the hearing, I invited submissions from counsel in relation to the Ontario Court of Appeal decision of Haldenby v. Dominion of Canada General Insurance Co. 2001 CanLII 16603 (ON CA), [2001 O.J. No. 3317], August 17, 2001. That case dealt with the question of whether section 26(1) of the earlier Schedule provided two limitation periods. Given my factual finding, that Ms. Ross made only one claim for income replacement benefits which she asserted in 2000, I find the Haldenby case does not apply to Ms. Ross' claim for IRBs.

The claims for supplementary medical benefits

Ms. Ross submitted a number of claims for supplementary medical benefits to the TTC at various points in time. Some were accepted and paid, while others were denied. The question of whether the time limit began to run regarding the supplementary medical benefit claims submitted up to March 20, 1998, may be affected by the case of Smith v. Cooperators, 2002 SCC 30, [2002] S.C.J. No. 34, a decision of the Supreme Court of Canada released on March 28, 2002. I invite further submissions from counsel with respect to this issue. The TTC's submissions are due by April 15, 2002. Ms. Ross' submissions are due by April 22, 2002, and any reply from the TTC is due by April 25, 2002. The time frames are short in view of the arbitration hearing dates which have been scheduled. I remain seized of this question. If the parties resolve this aspect of the matter they should so advise in writing.

I will, however, address the blanket denial of Ms. Ross' claims, as it affects her claims for supplementary medical benefits which she asserted following March 28, 2002. The TTC arranged a medical and rehabilitation DAC, and asked it to provide an opinion as to whether further rehabilitation treatments were reasonable and necessary. The DAC recommended a week of supervised physiotherapy which would emphasize instruction for a home exercise and fitness program.

In a letter dated March 20, 1998, the TTC refused all treatment beyond that recommended by the DAC. This information had been confirmed orally to Ms. Ross at the mediation on January 14, 1998. I find a blanket refusal of future claims for supplementary medical benefits problematic. As noted earlier, the claims process and the scheme of the Schedule contemplate the submission of a claim and its denial; not a refusal in advance. This Schedule provides for supplementary medical and rehabilitation benefits in the amount of a million dollars during the lifetime of an insured person. Various types of benefits are provided under section 36 (1) (a) through (h) of the Schedule. These include medical, surgical, dental, optometric, hospital, nursing, ambulance, audiometric and speech language pathology services; chiropractic, psychological, occupational therapy, physiotherapy, medication, prescription eyewear, dentures and other dental devices, hearing aids and wheelchairs. At various points in a claim one or more of these services will be appropriate. Some persons require ongoing treatment; others will have flare-ups during their lifetime.

The refusal in advance may be a convenient and cost efficient strategy from the insurer's perspective, and may permit it to "cap" its claim. However, this approach dishonours the entitlement of the insured person to benefits which are provided under the policy. It may also permit an insurer to evade its obligations to pay a benefit pending resolution of a dispute. I find this approach inappropriate in a statutory benefit scheme which provides for ongoing entitlement to benefits. It is not an approach which is sanctioned by the Schedule.

The process set out in this Schedule is that the insurer may accept a claim when presented by the insured person. The insurer may ask the insured person to provide a certificate stating that the expense is reasonable and necessary and required for his or her treatment. The insurer may accept the certificate and pay the expense. If it is not persuaded by the certificate, it can seek an opinion from a DAC as to whether the expense is reasonable and necessary for the insured person's treatment.

The DAC is entitled to conduct reasonable physical, psychological and mental examinations. Pending receipt of the DAC report, the insurer is obliged to pay the benefit claimed, subject to certain limitations set out in the Schedule. Under section 39(10) of the Schedule, the DAC must issue a report that includes a statement as to whether in the opinion of the assessors the expense claimed is reasonable and necessary for the insured person's treatment and rehabilitation, and recommendations relating to the future provision of goods and services. The obligation of the insurer to pay the benefit pending resolution of the dispute is tied to the expense being reasonable and necessary for the insured person's rehabilitation.

Section 39(11) deals with the effect of the DAC's opinion pending resolution of the dispute. It provides:

(11) Subject to the determination of a dispute relating to the expense in accordance with sections 279 to 283 of the Insurance Act,

(a) if the report of the assessment states that, in the opinion of the person or persons who conducted the assessment, an expense is reasonable and necessary for the insured person's treatment, the insurer shall pay for the expense;

(b) if the report of the assessment does not state that, in the opinion of the person or persons who conducted the assessment, an expense is reasonable and necessary for the insured person's treatment, the insurer is not required to pay for the expense unless clause (c) applies; and

(c) if the assessment was conducted in respect of an expense under clause 36(1)(b) or (c) that was incurred within twelve weeks after the accident, the insurer shall pay for the expense.[emphasis added]

Thus, a DAC's opinion regarding future treatment may be of persuasive value; however it is not binding on either party, pending resolution of the dispute. I find that an insurer cannot shelter under the opinion of a medical and rehabilitation DAC, by seeking its opinion on the question of "whether further rehabilitation treatments were reasonable and necessary." I find that under the Schedule, an insurer remains obliged to respond to ongoing claims which may be presented for supplementary medical and rehabilitation benefits even after it seeks and receives an opinion from a DAC that no further treatment is reasonable and necessary.

For these reasons, I reject an approach which permits benefits to be denied in advance. I conclude that Ms. Ross' medical and rehabilitation claims submitted after March 20, 1998 were not properly refused by the TTC. Accordingly, Ms. Ross is not prevented from arbitrating her claims for medical and rehabilitation benefits after March 20, 1998.

The TTC submits that Ms. Ross' supplementary medical claims should be treated as one category of claim. Once any supplementary medical benefit is denied, all are denied. It submits that if this were not the case, there is no point in having a limitation period.

Section 281 (5) of the Act states that an arbitration 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'" If the words "refusal to pay the benefit claimed" were read in isolation, then the TTC's submission would be correct. However, section 72 of the Schedule states that a mediation or arbitration "shall be commenced within two years from the insurer's refusal to pay the amount claimed."

Arbitrators have considered the relationship between the provisions of section 281(5) of the Act and the provisions of the Schedule which address time limits. In Coates-Boyce and Zurich Insurance Company, (OIC A-951333, January 13, 1997), Arbitrator Allen concluded: "the benefit claimed" refers to the type or category of benefit rather than the amount of benefit.

In Garisto and Halifax Insurance Company, (FSCO A97-001481 September 17, 1998), Arbitrator Makepeace noted that the provisions were not free of ambiguity. She held that while "the benefit" in section 281(5) of the Act "refers to the type or category of benefit (weekly income benefits, in this case), "the benefit claimed" means a certain amount of a given benefit." I agree with these reasons. Each discrete amount of a given benefit may be accepted or refused by an insurer. Thus the statutory scheme contemplates an insurer responding to discrete claims.

The approach which the TTC submits is appropriate would lead an insurer to deny more that an insured person claims. As discussed above, this approach is not sanctioned by this legislative scheme. Indeed, the TTC's submission is contrary to the approach it took in responding to Ms. Ross' claims for supplementary medical benefits. The treatment expenses and the transportation expenses Ms. Ross claimed are both supplementary medical benefits. Although the TTC denied coverage with respect to transportation expenses of the nature claimed by Ms. Ross, it went on to pay her treatment expenses.

The TTC submits that the Court of Appeal's decision in Haldenby v. Dominion of Canada General Insurance Co 2001 CanLII 16603 (ON CA), [2001] O.J. No. 3317, August 17, 2001, is applicable to the circumstances of this case. I disagree. Haldenby was decided under the Schedule which preceded the one which governs Ms. Ross' case, and deals with the particular circumstances created by the interpretation of section 26(1) and the provisions of the Schedule which deal with weekly benefits.

For these reasons I reject the TTC's submission that a denial of one supplementary medical benefit means that the entire category of supplementary medical benefits has been refused. I conclude that Ms. Ross may proceed to arbitration with her claims for supplementary medical benefits which she claimed after March 20, 1998.

Expenses

If the parties are unable to agree on expenses of this preliminary issue hearing, that issue may now be addressed.

April 5, 2002

Suesan Alves Arbitrator

Date