Neutral Citation: 2003 ONFSCDRS 134
FSCO A03-000317
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
SACIKALA SIVALOGANATHAN
Applicant
and
LIBERTY MUTUAL INSURANCE COMPANY
Insurer
DECISION ON A MOTION FOR INTERIM BENEFITS
Before:
David Muir
Heard:
August 14, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
David S. Wilson for Mrs. Sivaloganathan
Deborah G. Neilson for Liberty Mutual Insurance Company
Issues:
The Applicant, Sacikala Sivaloganathan, was injured in a motor vehicle accident on April 3, 2001. She applied for and received statutory accident benefits from Liberty Mutual Insurance Company ("Liberty"), payable under the Schedule.1 Liberty terminated weekly income replacement benefits on October 28, 2002. The parties were unable to resolve their disputes through mediation, and Mrs. Sivaloganathan applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Mrs. Sivaloganathan has brought a motion, pursuant to section 67 of the Dispute Resolution Practice Code —Fourth Edition, for interim benefits to be paid to her pending the resolution of her dispute with Liberty.
Mrs. Sivaloganathan had initially sought the following relief:
An order requiring Liberty, if it continues to dispute the determination of a disability DAC assessment, to do so in accordance with sections 279 to 283 of the Insurance Act and, pending the resolution of the dispute, pay weekly income replacement benefits pursuant to section 37(5) of the Schedule, or,
An order that from and after October 29, 2002, Mrs. Sivaloganathan continued to be entitled to the receipt of income replacement benefits in accordance with the provisions of the Schedule.
An order that Liberty pay Mrs. Sivaloganathan a special award based on Liberty's failure to comply with the provisions of section 37(5) of the Schedule when it terminated the payment of income replacement benefits.
This matter first came on for hearing on June 16, 2003. On July 4, 2003, I released a preliminary decision which dealt with two issues raised by the parties in argument on the motion.
At the resumption of the motion hearing, the parties indicated that they had resolved some of the issues between them. In particular, counsel for Liberty indicated that it did not oppose the order that Mrs. Sivaloganathan was seeking - that is, an order for interim weekly income replacement benefits pending the resolution of the parties' disputes in the appropriate forum. Counsel for Mrs. Sivaloganathan also advised that she was consenting to the dismissal of the claim for a special award.
Additionally, the parties sought a formal ruling on Liberty's submission that an interim benefits order is not available where an insurer is already paying the benefits that are the subject matter of the motion, unless there is a full hearing of the merits. In this regard, Liberty relied on the appeal decision of Allstate Insurance Company of Canada and Pamela Simpson, (FSCO P01-00057, June 6, 2003).
The issues on this motion are:
Is Mrs. Sivaloganathan entitled to an order for interim income replacement benefits pursuant to section 279(4.1) of the Insurance Act pending the resolution of the parties' disputes in accordance with sections 279 to 283 of the Insurance Act and/or the relevant provisions of the Schedule?
Is Liberty required to pay a special award because it unreasonably withheld or delayed payment of a benefit, pursuant to subsection 282(10) of the Insurance Act?
Does the analysis of the Director's Delegate in Allstate Insurance Company of Canada and Pamela Simpson, (FSCO P01-00057, June 6, 2003) apply in these circumstances?
Result:
Liberty shall pay Mrs. Sivaloganathan interim income replacement benefits pursuant to section 279(4.1) of the Insurance Act pending the resolution of the parties' disputes in accordance with sections 279 to 283 of the Insurance Act and/or the relevant provisions of the Schedule.
On consent, the claim for a special award is dismissed for the conduct of Liberty to August 15, 2003.
The analysis of the Director's Delegate in Allstate Insurance Company of Canada and Pamela Simpson, (FSCO P01-00057, June 6, 2003) does not apply in these circumstances.
ANALYSIS:
Section 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter.
The matter proceeded largely on the basis of the material and submissions offered at the June 16, 2003 session. Mrs. Sivaloganathan presented affidavit evidence which was not challenged by Liberty. Liberty indicated that it relied upon its submissions made on June 16, 2003 and had no further submissions to make.
As discussed in my July 4, 2003 decision, Mrs. Sivaloganathan relies primarily upon Liberty's failure to comply with the provisions of the Schedule in the manner in which it terminated Mrs. Sivaloganathan's income replacement benefits on October 28, 2002. The question remains whether Mrs. Sivaloganathan is entitled to the order requested, and no longer opposed by Liberty.
I find that she is entitled to such an order based on the failure of Liberty to comply with the provisions of section 37 of the Schedule, and subject to my earlier determinations in this motion in the July 4th decision. My conclusions would have been different had I been required to determine the issue raised by Mrs. Sivaloganathan's second request - that she continued to be entitled to the receipt of income replacement benefits from and after October 29, 2002.
The material before me indicates, without contradiction, that Liberty has failed to comply with the provisions of section 37 of the Schedule in purporting to terminate her benefits as of October 28, 2002. I find, based on the analyses of the Arbitrator and Director's Delegate in the Sellathamby decisions,2 that I may make the requested order for interim benefits based on the failure to comply with the provisions of section 37 of the Schedule. I have evidence before me, unchallenged by Liberty, which supports the requested relief. If Liberty continues to dispute entitlement to income replacement benefits beyond October 28, 2002, and it has reserved its right to do so, it must do so in accordance with sections 279 to 283 of the Insurance Act; the relevant provisions of the Schedule; and the determinations I have made in the July 4th decision. Pending the resolution of the parties' dispute in the relevant forum, it must pay the benefits.
In coming to the conclusions that I have here and as recorded in the July 4th preliminary decision, I have accepted the argument of Mrs. Sivaloganathan that the reasons of Director's Delegate Makepeace in Simpson3 did not apply to the first order sought by Mrs. Sivaloganathan. The parties have asked that I record my reasons for coming to this conclusion. I will do so now.
In Simpson, the insurer, on the eve of the arbitration hearing, reinstated income replacement benefits and at the hearing did not oppose Ms. Simpson's position that she currently satisfied the test for entitlement to IRB's. Ms. Simpson requested an order establishing her entitlement to the benefit as of the date of the hearing. Over the objection of the insurer, the arbitrator granted the order. On appeal, the Director's Delegate found that an arbitrator lacks jurisdiction to make an order of entitlement based on an insurer's reinstatement of a benefit and in the absence of a hearing on the merits.
Liberty argued that the order sought by Mrs. Sivaloganathan was precisely what the Director's Delegate in Simpson held was not available without hearing the merits of the application. As I indicated to the parties on June 16th, I was inclined to accept Mrs. Sivaloganathan's argument that I could make such an order in the circumstances and the argument shifted to the impact of the Sellathamby decisions upon which Mrs. Sivaloganathan also relied. After hearing the parties submissions and reviewing the Sellathamby decisions, I indicated to them that there were two questions outstanding, which I dealt with in the July 4th decision.
Returning to the impact of the Simpson case, the issue as characterised by the Director's Delegate on appeal was whether an arbitrator could make an order for ongoing benefits based on a unilateral reinstatement of benefits. This is not the situation here. Mrs. Sivaloganathan does not rely upon the reinstatement of benefits by Liberty, but rather upon Liberty's failure to comply with the Schedule in purporting to terminate her benefits at the end of October 2002. The situation here is quite similar to that in the Sellathamby matter. In this case, as in Sellathamby, the requested order is based on a failure to comply with the provisions of section 37 of the Schedule governing the termination of the benefit in question.
As for the quantum of benefits that are payable, I was advised that the parties are still in discussion of that issue. Counsel for Mrs. Sivaloganathan advised that he thought it likely that he would accept the calculation of the benefit forthcoming from Liberty. In any case, I remain siesed of this matter should there be any need for a further order as to quantum.
EXPENSES:
The parties advised that the question of expenses to August 14, 2003 was resolved.
September 8, 2003
David Muir
Arbitrator
Date
Neutral Citation: 2003 ONFSCDRS 134
FSCO A03-000317
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
SACIKALA SIVALOGANATHAN
Applicant
and
LIBERTY MUTUAL 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:
Liberty Mutual Insurance Company shall pay Mrs. Sivaloganathan interim income replacement benefits pending the resolution of the parties' disputes, pursuant to sections 279 to 283 of the Insurance Act and the relevant provisions of the Schedule..
On consent, the claim for a special award is dismissed for the conduct of Liberty to August 15, 2003.
September 8, 2003
David Muir
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, 303/98, 114/00 and 482/01.
- Sellathamby and Allstate Insurance Company of Canada, (FSCO A01-000313, May 8, 2002); Sellathamby and Allstate Insurance Company of Canada, (FSCO P02-00009, December 17, 2002); For a discussion of these decisions as they apply to these circumstances, see my July 4, 2003 decision at pp. 5 and 6.
- Allstate Insurance Company of Canada and Pamela Simpson, (FSCO P01-00057, June 6, 2003).