Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2003 ONFSCDRS 110

Appeal P02-00012

Appellant

and

Respondent

Before:

Stewart M. McMahon

Representatives:

Todd J. McCarthy for Allstate

No one appearing for Mr. Pereira

Hearing Date:

Appeal disposed of on the record with written submissions from the Appellant

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed.

July 21, 2003

Stewart M. McMahon Director’s Delegate

Date

Following an accident on September 18, 1998, Mr. Pereira was treated at Integrated Health Recovery (“IHR”). Clarica Insurance Company (“Clarica”), which provided supplementary medical coverage pursuant to an employment-related insurance policy, paid for a portion of the treatment. Allstate Insurance Company of Canada (“Allstate”), which provided statutory accident benefits coverage, also paid a portion of the treatment pursuant to the SABS-1996.¹ Mr. Pereira filed an Application for Arbitration seeking payment of the balance.

The Arbitrator was asked to deal with three issues. One: was the length and type of treatment reasonable and necessary? She found that it was. Two: were the per-session fees charged by IHR reasonable? The Arbitrator found that they were reasonable. Three: what, if any, additional amounts were reasonably available from Clarica? This issue was important because Allstate’s coverage is excess to Clarica’s coverage, and Allstate would only be responsible for expenses that were not “reasonably available” from Clarica. The Arbitrator preferred Mr. Pereira’s evidence regarding what Clarica had paid, and found that no more payments were reasonably available. Allstate appeals the ruling on the third issue.

Mr. Pereira also claimed a special award pursuant to s. 282(10) of the Insurance Act. The Arbitrator ordered Allstate to pay a special award of $250. Allstate appeals this ruling.

Pursuant to s. 283(1) of the Insurance Act, appeals are limited to questions of law. Allstate framed its arguments on the collateral coverage issue as questions of law, but for the reasons that follow, I find that they are no more than disagreements with the Arbitrator’s findings of fact. In addition, Allstate’s submissions ignore a significant portion of the evidence on which the Arbitrator based her findings. This ground of appeal is dismissed.

Similarly, Allstate’s submissions on the special award issue simply ignore important factors considered by the Arbitrator. Its submissions also suggest that the Arbitrator disregarded factors that were favourable to Allstate’s position. It is abundantly clear on the face of the decision that the Arbitrator considered the relevant factors. This ground of appeal is dismissed.

A. The Collateral Benefits Issue

The Arbitrator started this portion of her reasons with a review of the applicable statutory provisions and a discussion of onus. Mr. Pereira submitted that if Allstate claimed a credit for additional collateral benefits, it should prove that these benefits were reasonably available. Allstate argued that the onus was on Mr. Pereira to prove that he had secured all of the reasonably available benefits from the collateral insurer.

The Arbitrator concluded that the “legal onus is on Mr. Pereira to prove, on a preponderance of probabilities, that any amount is owing from Allstate. . . . The onus is not on Allstate to show how much was reasonably available from the collateral insurer.” [emphasis included in original] She then went on to state that in general this would not impose a heavy burden on the applicant. The Arbitrator stated that in ordinary circumstances, the insured person can fulfill this obligation by submitting the account to the collateral insurer, and then submitting the account, together with the collateral insurer’s “response” to the accident benefits insurer, with a demand for the shortfall. On appeal, Allstate has not taken issue with this statement of the law, which largely favours its position.

In this case, determining what was paid by Clarica was complicated by a number of factors, including the following: Clarica paid for services other than those at issue in this hearing; some of the payments made by Clarica to Mr. Pereira were not forwarded to IHR in a timely fashion; some of the payments made by Clarica came well after the treatment was provided; Clarica was not the original underwriter of the collateral policy; not all of Clarica’s records were available; and neither Mr. Pereira nor IHR provided Allstate with timely advice concerning the payments from Clarica.

Mr. Pereira testified about the benefits he received from Clarica. He also filed a number of “Explanation of Benefits” forms that were sent to him by Clarica, which corroborated his testimony. Allstate was not satisfied with this evidence, and summonsed a representative from Clarica. Mr. Macdonald responded to the summons. He brought to the hearing a one page computer printout that showed Clarica had paid considerably more than Mr. Pereira had acknowledged in his testimony. The hearing was adjourned to allow Mr. Macdonald to search for the source documents. Unfortunately, he was not able to secure these documents. Mr. Pereira was called in reply, and acknowledged that he had located another cheque from Clarica that he had not yet forwarded to IHR.

The Arbitrator was not convinced that the information contained in the printout was an accurate record of what Clarica paid with respect to the services rendered by IHR. The Arbitrator was satisfied that Mr. Macdonald was impartial and had tried to assist the tribunal, but found his evidence to be “scanty and uninformed.” In an earlier part of the reasons, when the Arbitrator was introducing this evidence, she stated that “Clarica’s evidence is not crystal clear as to what amounts were paid, when, for what treatment.” In contrast, she found Mr. Pereira’s evidence credible and noted that it was substantiated by the documents he produced. The Arbitrator stated “where Mr. Macdonald’s evidence differs with that of Mr. Pereira, I prefer Mr. Pereira’s evidence on this point.” In short, the Arbitrator found that what was “reasonably available” from Clarica coincided with what Mr. Pereira acknowledged he had received.²

On appeal, Allstate takes the position that the Arbitrator erred in applying the law to the facts of the case. Its review of the applicable facts is limited to two paragraphs. It quotes the Arbitrator’s finding that Clarica’s evidence is not “crystal clear.” The submissions then identify Mr. Macdonald, acknowledge the difficulties he had in obtaining information, and conclude by citing the Arbitrator’s summary of the information in the computer printout.

The core of Allstate’ argument is found in the following paragraph, which reads:

It is submitted that the evidence (exhibit 25) clearly showed that Mr. Pereira had collateral benefits in the amount of $2,517.30 available to him. The Arbitrator erred in applying a standard of ‘crystal clearness’, when the standard is ‘reasonably available’ as set out in section 60(2) of the S.A.B.S.-1996.”

Exhibit 25 is the computer printout I referred to earlier in these reasons.

Allstate’s review of the applicable evidence is misleading. Its argument proceeds on the basis that the only evidence before the Arbitrator came from Mr. Macdonald. To make matters worse, it fails to acknowledge that the Arbitrator found his evidence wanting, and had made an explicit finding that she preferred Mr. Pereira’s evidence. The Arbitrator canvassed the applicable evidence, and made findings of fact that were open to her on that evidence. She then applied the law appropriately. I do not see any error of law.

Allstate’s argument that the Arbitrator misapplied the standard of proof is also ill-founded. The Arbitrator repeatedly stated that as part of proving that benefits were payable by Allstate, Mr. Pereira had the onus of establishing what was “reasonably available” from Clairca. She was satisfied that he met this burden. Her statement that Clarica’s evidence was not “crystal clear” was a comment on the value of that evidence, not a comment on the burden of proof.

This ground of appeal is dismissed.

B. The Special Award Issue

An arbitrator is obliged by s. 282(10) of the Insurance Act to impose a special award in the event she finds that the insurer unreasonably withheld or delayed benefits.

The Arbitrator listed the following factors that she found supported the imposition of a special award:

A DAC report stated that Mr. Pereira needed additional treatment, and by implication, found the past treatment reasonable and necessary;
A physician who assessed Mr. Pereira at Allstate’s behest stated he needed another two or three weeks of treatment;
Allstate received some information about the benefits received from Clarica in the fall of 1999, but did not make a payment until the fall of 2000, without an adequate explanation for the delay.

She then acknowledged that neither Mr. Peirara nor IHR had been diligent about making sure Allstate had accurate information about the benefits paid by Clarica, and that Mr. Pereira had been careless in remitting payments from Clarica to IHR. Weighing all these factors, she ordered Allstate to pay a special award of $250, which represented a modest percentage of the maximum special award available in this case.

Allstate’s submissions focus on the fact that it did not have a complete picture of what was paid by Clarica until the arbitration hearing and on Mr. Pereira’s lack of diligence in forwarding funds on to IHR. These are both valid points. However, it is clear that the Arbitrator considered them, but concluded they did not completely excuse Allstate’s failure to make any payment in the year following receipt of the preliminary information about what Clarica had paid. This conclusion was available to her on the evidence. This ground of appeal is dismissed.

III. EXPENSES

This was a very weak appeal. In ordinary circumstances, I would have awarded Mr. Pereira his expenses. However, Mr. Pereira’s counsel did not respond to the Notice of Appeal. When Mr. Pereira was advised of this, he asked for an opportunity to retain new counsel, but ultimately chose not to participate. In short, Mr. Pereira did not incur any expenses in relation to the appeal.