Fasihudden Syed v. Allstate Insurance Company of Canada, 2003 ONFSCDRS 18

Neutral Citation: 2003 ONFSCDRS 18 FSCO A02-000461

BETWEEN:

FASIHUDDEN SYED Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Susan Sapin

Heard: February 5, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Mark DeWitt for Mr. Syed Frank Benedetto for Allstate Insurance Company of Canada

Issues:

The Applicant, Fasihudden Syed, was injured in a motor vehicle accident on January 18, 2001. He did not, however, submit an application for statutory accident benefits to Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule,¹ until October 15, 2001, nine months later. Allstate has refused to pay for expenses of $8,066.61 that Mr. Syed incurred for physiotherapy, chiropractic and massage treatments at the Centre City Health Recovery Clinic, on the basis that Mr. Syed did not notify it of his intention to claim benefits within the 30-day time limit prescribed by the Schedule. The parties were unable to resolve their disputes through mediation, and Mr. Syed applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Is Mr. Syed precluded from proceeding to arbitration under subsection 51(a) of the Schedule because he has no reasonable explanation for providing late notice of his intention to apply for a benefit, contrary to subsections 31(1) and 32(1) Schedule?

Result:

Mr. Syed is precluded from proceeding to arbitration because he has no reasonable explanation for providing late notice of his intention to apply for a benefit, contrary to subsections 31(1) and 32(2) of the Schedule.

EVIDENCE AND ANALYSIS:

Preliminary matters

Mr. Syed did not appear at the hearing. His representative, Mr. DeWitt, advised that he had attempted to contact Mr. Syed without success. He advised that the address provided to the Commission as Mr. Syed's is correct. The Commission file indicates that Notice of Hearing of the Preliminary Issue was sent to Mr. Syed at the address provided. Arbitrator Bayefsky's September 26, 2002 pre-hearing letter indicates that Mr. Syed attended the pre-hearing held the same day at the offices of the Commission, at which time the parties chose the date for today's preliminary hearing. Mr. Syed did not at any time request the Commission to provide an interpreter for the hearing, and I have not been advised that any language difficulties required one. I am satisfied that Mr. Syed was provided with reasonable notice of the hearing as required by subsection 6(3) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, including notice that in his absence I may dispose of the case without further notice to him.

The law

Sections 31 and 32 of the Schedule set out the procedures for claiming statutory accident benefits. Prompt action is required of both the insured person and the insurer. Subsection 32(1) provides:

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

The circumstances that gave rise to the entitlement to the benefit usually means, as in this case, the accident.

Subsection 32(2) sets out the insurer's obligations once it has been notified that the insured person intends to apply for benefits. The insurer is required to provide the person with the appropriate application forms, a written explanation of the benefits available, information to assist the person in applying for benefits, and information about possible elections with respect to the various types of weekly benefits available. These obligations do not arise unless the insured person advises the insurer that he or she intends to claim benefits, which normally occurs when the person advises that he was injured in the accident.

Once the insured person receives the forms, subsection 32(3) provides that the person "shall submit an application for the benefit to the insurer within 30 days after receiving the application forms."

These provisions, although mandatory, are not absolute. Subsection 31(1) does stipulate that "A person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation."

Mr. Syed's explanation is that he waited nine months to advise Allstate of a claim for benefits because of an innate fear of medical professionals. The onus is on him to establish that this is a "reasonable explanation." I find that Mr. Syed has not met this onus, for the reasons set out below.

Factual background

As Mr. Syed was not present to testify at the hearing, I relied on documentary evidence, including a statutory declaration provided by Mr. Syed, statements taken from him by Allstate, various correspondence, and the testimony of Mr. Douglas Morgan, a Senior Claims Consultant with Allstate. Mr. Morgan did not adjust Mr. Syed's claim, but reviewed it when Allstate received Mr. Syed's Application for Arbitration, in his capacity as Allstate's consultant for files that proceed to litigation.

Mr. Morgan has handled motor vehicle accident claims for Allstate for 25 years. I found him to be a knowledgeable and credible witness. His testimony was factual, uncontroversial, and helpful in interpreting the documentary evidence provided and in understanding Allstate's claims handling procedures. His evidence remained unchallenged by cross-examination, and I accept it as truthful and accurate.

I find the following background facts to be relevant and accurate. On January 18, 2001, Mr. Syed was rear-ended by another vehicle on Derry Road in Mississauga. He filled out a "Self Reporting Collision Report" at the Collision Reporting Centre in Milton; an investigator at the Centre estimated the damage to his vehicle at $500.²

Mr. Syed forwarded the Collision Report to Allstate, which received it on January 23, 2001. Mr. Syed told Allstate's telephone claims adjuster that he was not injured in the accident. Mr. Syed returned to work.

"Claim Screen Notes" from Allstate's file indicate that Mr. Syed reported a second accident on February 22, 2001, and that he had reported two previous accidents on September 25 and November 24, 2000. Mr. Morgan advised that Mr. Syed did not apply for statutory accident benefits in respect of the previous accidents, but that a claim file has been opened for the February 22, 2001 accident.³

Allstate next heard from Mr. Syed on October 17, 2001, when his representative, Mr. Vladislav Simkhaev of VBSK Monolith & Associates, Accident Benefits Specialists ("VBSK"), faxed to Allstate a completed Application for Accident Benefits (OCF 1/59) form and a covering letter stating in part:

Due to the seriousness of my client's injuries you are to deal with this firm directly and not with our client.

Should you require a statement and/or any other information, please advise so that arrangements can be made for you to meet with my client at our office.⁴

On the application form, Mr. Syed described his injuries as pain in the head, neck, shoulders, upper, mid and lower back and chest; severe headaches, dizziness, sleeping problems, depression and fear of driving. The form indicates he was employed and working.

Allstate sent Mr. Syed and VBSK two Explanation of Benefits forms dated October 19 and 29, 2001, which explained that Mr. Syed was not entitled to income replacement benefits because he was still working, and that Allstate would not pay for medical benefits for the following reasons:

Please note that application for accident benefits submitted to us 9 months post accident, we require a reasonable explanation as to why you did not comply with Section 32(1) and notify us about your injuries within 30 days after date of accident. In addition, we also noted that you were involved in a subsequent accident, on Feb 22, 01, where damages to your vehicle are three times as much as this accident, please advise if you are seeking any type of treatment as a result of the subsequent accident.⁵

Mr. Walter Vaskevich of VBSK applied for mediation as Mr. Syed's representative, identifying his relationship to the insured person as "Clinical Director." The Report of Mediator dated December 7, 2001 indicates that the parties were unable to resolve the issue of the $3,400 treatment plan and incurred treatment of $4,666.61 up to that point, and that Mr. Syed agreed to provide Allstate with a statutory declaration and an explanation for the late reporting of entitlement to benefits.

Allstate assigned Crawford Adjusters Canada, an independent adjuster, to investigate the claim. Crawford wrote to VBSK on December 19, 2001, expressing Allstate's concern at the late reporting of Mr. Syed's injuries, and requesting a meeting as quickly as possible to obtain a detailed statement.

Arrangements were made to interview Mr. Syed at his representative's office, although not without delay on their part, and Allstate eventually obtained a statement from him on January 28, 2002.⁶

In his January 28 statement, Mr. Syed explained that he did not have ongoing significant pain or discomfort until 15 days after the accident, that he took Tylenol to deal with the pain, that he was able to work even with the pain, and that he had missed about 20 work days due to injuries suffered in the accident. He stated that he had not seen a doctor up to that point, although he had a family doctor since coming to Canada five years before, because he did not like to go to the doctor and he did not have time. As he did not get better, his son took him to VBSK and "Boris" told him to go for physiotherapy at the "City Clinic."⁷ He attended until December 2001 and felt much better so he stopped. He considered himself to be 70% better.

Mr. Syed also stated that he had never been in any automobile accidents before, and that this wife was working.

Allstate maintained its refusal to pay for Mr. Syed's medical treatment and Mr. Syed applied for arbitration. At the pre-hearing on September 26, 2002, Mr. Syed provided Allstate with a statutory declaration, witnessed by his representative Mark DeWitt, purporting to explain the nine-month delay in notifying Allstate of his intention to claim benefits. The explanation offered is as follows:

That I did not forward an application for accident benefits . . . to the insurer until October 17, 2001, as I have an innate fear of medical professionals and had attempted, from the date of the accident until October 2001 to self medicate with Tylenol in the hope that the injuries and discomfort would abate.

That I realized in October 2001 that my discomfort was not subsiding by itself and I decided to seek professional assistance.

Allstate argues that not only is this not a reasonable explanation in and of itself, it is not consistent with previous explanations offered by Mr. Syed, and is not credible.

What constitutes a reasonable explanation has been the subject of numerous arbitration awards. One often-cited test is from the Kuronen decision,⁸ which dealt with similar language in the 1990 Schedule:

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.

A particularly thorough and helpful discussion is to be found in the Carruthers decision.⁹ I adopt Arbitrator Evans' reasoning in that decision, in particular the following principles:

the difference between excuse and explanation is too minimal to have any practical effect (hence jurisprudence under previous Schedules applies);
there must first be an excuse/explanation before the balancing of prejudices outlined in Kuronen is considered;
an explanation for late notice requires an applicant to account for his behaviour;
the applicant must explain why the insurer received the late notice; the arbitrator can then excuse the late notice if the notice was reasonable [final emphasis added].
An applicant has a responsibility to take an interest in the advancement of his or her own case and cannot simply leave everything to the agent.

I also agree with the principles Arbitrator Evans quoted from the Director's Delegate in the Kaur appeal:¹⁰

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. [italics added]

To these criteria I would add one that is self-evident - that an explanation must first be credible, i.e., worthy of belief, before one can consider whether it is reasonable. In other words, the explanation offered must be the real, genuine or truthful reason for the delay.

In Mr. Syed's case, I am unable to determine if the explanation offered in the statutory declaration, that Mr. Syed suffers an "innate fear" of medical professionals and that he simply hoped his injuries would go away on their own, is the real reason he delayed notifying Allstate that he was injured in the accident. This explanation contradicts other explanations purportedly made by Mr. Syed, such as his June 28 statement that he did not like doctors and did not have time to go, and a statement he made to Christine Lang, a kinesiologist, in the course of a Functional Abilities Evaluation she conducted on his behalf on November 26, 2001. Ms. Lang's report indicates that she asked Mr. Syed directly why he waited so long to seek medical attention. She records his reply as "he stated that he attempted to avoid this as he is the sole supporter of his family and he was afraid of being unable to provide for his family." Mr. Syed also told Ms. Lang that he had not been in any previous accidents, a statement contradicted by evidence at the hearing.

Given the inconsistencies in the evidence offered on Mr. Syed's behalf, and the fact that he did not attend to explain them, I find that Mr. Syed has not met the onus upon him to establish that he has an explanation for the delay.

Even if I were to accept the explanation offered in the statutory declaration at face value, I am unable to determine if it is reasonable in Mr. Syed's circumstances, on either an objective or subjective standard. This is because there was very little objective evidence before me that explains why, in the circumstances of this particular case, a fear of medical professionals should result in a nine-month delay in reporting an injury to an insurer, or why, once he was represented, it should take Mr. Syed a further 11 months to provide the purported explanation. I find therefore, on the evidence before me, that Mr. Syed has not met his onus to provide a reasonable explanation for his delay in notifying Allstate that he was injured in the accident and intended to claim benefits.

Finally, in my view, a fear of medical professionals and a hope that purportedly "serious injuries" (according to Mr. Syed's representative) would subside on their own, might in some circumstances very well be reasonable explanations for failing to seek treatment, but it does not follow that these are reasonable explanations for failing to notify an insurer of injuries arising from a motor vehicle accident.

I find that Mr. Syed has offered no explanation to excuse his late notification, and consequently he is precluded from proceeding to arbitration under section 50(a) of the Schedule.

EXPENSES:

The issue of expenses may now be spoken to.

February 14, 2003

Susan Sapin Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 18 FSCO A02-000461

FINANCIAL SERVICES COMMISSION OF ONTARIO