Laurel E. Ross v. TTC Insurance Company Limited, 2002 ONFSCDRS 58

Neutral Citation: 2002 ONFSCDRS 58 FSCO A01-000064

BETWEEN:

LAUREL E. ROSS Applicant

and

TTC INSURANCE COMPANY LIMITED Insurer

DECISION ON A PRELIMINARY ISSUE No. 2

Before: Suesan Alves

Heard: Written submissions were received on April 25, 2002.

Appearances: Thomas G. Andrews for Ms. Ross Michael Atlas for TTC Insurance Company Limited

Issues:

Laurel Ross was injured on a streetcar on August 15, 1996. The TTC alleges that Ms. Ross cannot arbitrate the claims for medical benefits which she made before March 20, 1998, as they are out of time. Ms. Ross disagrees.

The preliminary issue is:

Is Ms. Ross prevented from proceeding to arbitration with her claims for supplementary medical and rehabilitation benefits up to March 20, 1998 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 supplementary medical benefits submitted to the TTC up to March 20, 1998.
If the parties are unable to agree on expenses of this preliminary issue hearing, that issue may now be addressed.

EVIDENCE AND ANALYSIS:

Background

On April 5, 2002, I issued a decision on preliminary issues in this case. In that decision, I concluded that Ms. Ross' claims for supplementary medical expenses which the TTC rejected after March 20, 1998 and her claims for income replacement benefits were not time barred.

Shortly before I issued that decision, the Supreme Court of Canada released the decision of Smith v. Co-operators Insurance Company 2002 SCC 30, [2002] S.C.J. No. 34. Since it appeared that the ruling in Smith could have some bearing on the question of whether Ms. Ross' claims for supplementary medical expenses before March 20, 1998 were time barred, I remained seized of that question and invited further submissions from counsel.

In a letter dated April 15, 2002, the TTC advised that it did not wish to make further submissions at this time. I received Ms. Ross' submissions on April 25, 2002. On April 30, 2002, the TTC confirmed that it did not wish to reply to the Applicant's submissions. Neither party sought to adduce further evidence.

This decision deals with the question of whether Ms. Ross' claims for supplementary medical expenses between the date of the accident up to March 20, 1998 are time barred.

The claim for medical expenses submitted before March 20, 1998

Laurel Ross was injured on a streetcar on August 15, 1996. Ms. Ross submitted claims for medical expenses to the TTC. Some were paid; others were rejected. The TTC submits that Ms. Ross' claims for medical and rehabilitation expenses which she submitted prior to March 20, 1998 are time barred. Ms. Ross disagrees.

The following facts are contained in two agreed statements of fact and accompanying exhibits:

The TTC arranged for Ms. Ross to be examined by Dr. Zeldin on April 28, 1997. On May 16, 1997, the TTC advised Ms. Ross that it would rely on Dr. Zeldin's opinion, that she did not require further treatment as a result of the injuries she sustained in the August 1996 accident. The TTC also informed Ms. Ross that it would not consider any further medical expenses beyond May 22, 1997, and, if she did submit an expense after this date, the TTC would dispute the claim and seek the opinion of a medical/rehabilitation DAC on whether future goods and services were reasonable and necessary.
On June 20, 1997, the TTC provided Ms. Ross with an Explanation of Assessment confirming the information supplied in the May 1997 letter. The TTC rejected Ms. Ross' claims for car rental and gas claims in the amount of $106.50 on the basis that there was no coverage for these claims under the Schedule. The TTC also rejected further similar transportation claims on September 15, 1997, and on September 24, 1997.
On September 15, 1997, Ms. Ross attended a DAC assessment with respect to her medical and rehabilitation expenses. The DAC assessors recommended some further limited treatment. On 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 and 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 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.
On November 28, 1997, Ms. Ross applied for mediation with respect to transportation to medical appointments.
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, a mediation was held about Ms. Ross' transportation and medical expenses and failed to resolve the dispute. Ms. Ross applied for arbitration of transportation expenses in the amount of $638.29 in January 2001.
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 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.

The TTC submits that Ms. Ross should have applied for mediation of the claims it rejected on October 7, 1997, by October 7, 1999. The TTC also submits that Ms. Ross should have applied for mediation of the claims it rejected on March 20, 1998 by March 20, 2000. The second mediation took place on June 20, 2000, and Ms. Ross applied for arbitration in January 2001.

The TTC submits that she applied for arbitration outside the two year time limit provided in section 281(5) of the Act and in section 72 of the Schedule, that these claims are time barred and must be dismissed.

Law:

The time limit provisions are contained in section 281(5) of the Insurance Act R.S.O. 1990, c.I.8 as amended, and in section 72 of the Schedule, being O. Reg. 776/93. 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." Section 72 also provides a two year time frame, however, persons who apply for mediation within two years of the date of the refusal may have a further period of 90 days from the date on which the mediator reports to the parties to apply for arbitration. 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.

Section 71 of the Schedule provides:

If an insurer refuses to pay a benefit that a person has applied for under Regulation or reduces the amount of a benefit that a person received under this Regulation, the insurer shall inform the person in writing of the procedure for resolving disputes relating to benefits under sections 279 to 283 of the Insurance Act.

In Smith v. Co-operators General Insurance Co., [ 2002 SCC 30, 2002], S.C.J. No. 34, the Supreme Court of Canada dealt with the question of whether the insurer in that case fulfilled its obligations under section 71 of the Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996.

The Court also dealt with the question of whether there was a valid refusal by the insurer which would cause the limitation period to begin to run in the absence of compliance with section 71 of the Schedule. Gonthier, J. writing for the majority stated:

In my opinion, the insurer is required under s. 71 to inform the person of the dispute resolution process contained in ss. 279 to 283 of the Insurance Act in straightforward and clear language, directed towards an unsophisticated person. At a minimum, this should include a description of the most important points of the process, such as the right to seek mediation, the right to arbitrate or litigate if mediation fails, that mediation must be attempted before resorting to arbitration or litigation and the relevant time limits that govern the entire process. Without this basic information, it cannot be said that a valid refusal has been given.

...Given that s. 71 of the SABS imposes a requirement to inform the claimant of the dispute resolution process as discussed above, and given that the respondent only informed the appellant of the first step of this process, a proper refusal cannot be said to have been given. Since a proper refusal was not given, and since the limitation period under s. 281(5) of the Insurance Act only begins to run upon a refusal, that limitation period was not triggered by the notice sent on May 8, 1996.

In Smith, the insurer argued that its notice of refusal was in a standard form prescribed by the Commissioner of Insurance (referred to as the Superintendent after July 1, 1998), namely, the Explanation of Assessment form. The Court held that the use of a prescribed form does not fulfil an insurer's obligations under s. 71. Gonthier, J. stated:

... the industry practice of using the form prescribed by the Commissioner cannot somehow be a substitute for conformity with s. 71 of the SABS. Section 71 clearly states that it is the insurer who "shall inform the person in writing" of the dispute resolution procedure. There is no indication that insurers are legally prevented from adding to the prescribed form so that it is in conformity with the legal requirements.

In the result, the Court allowed Ms. Smith's appeal with costs throughout.

In this case, I have reviewed the various letters and Explanation of Assessment forms which were filed. I find that none of them describes or provides full details of the dispute resolution process as required by section 71 of the Schedule. For the reasons given in Smith, I find that the TTC did not validly refuse these benefits, and the time limits for Ms. Ross to apply for mediation never began to run. I conclude that Ms. Ross' claims are not time barred and that she is not precluded from proceeding to arbitration with her claims for medical expenses up to March 20, 1998.

EXPENSES:

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

May 3, 2002

Suesan Alves Arbitrator

Date