Annabel Antony v. RBC General Insurance Company, 2003 ONFSCDRS 79

Neutral Citation: 2003 ONFSCDRS 79
FSCO A02–000217

BETWEEN:

ANNABEL ANTONY

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

DECISION ON A SECOND PRELIMINARY ISSUE

Before: Lawrence Blackman

Heard: May 9, 2003, at the offices of the Financial Services Commission of Ontario in Toronto. Written materials and submissions were received on May 6 and 7, 2003.

Appearances: David S. Wilson for Ms. Antony
Lee Samis for RBC General Insurance Company

Issues:

The Applicant, Ms. Annabel Antony, submits that she was injured in a March 6, 2001 motor vehicle accident. Ms. Antony initially elected to receive from her first-party insurer, RBC General Insurance Company ("RBC"), weekly caregiver benefits payable pursuant to the Schedule.¹ RBC paid Ms. Antony weekly caregiver benefits of $250 from March 7 to August 11, 2001. Ms. Antony later sought to change her election to income replacement benefits ("IRBs"). RBC took the position that Ms. Antony's original election was valid and could not be changed.

The parties were unable to resolve their dispute through mediation and proceeded to arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. In his March 12, 2003 preliminary issue decision, Arbitrator Leitch determined that Ms. Antony's election of caregiver benefits was not valid and that Ms. Antony was entitled to claim IRBs from one week after the accident.

RBC appealed Arbitrator Leitch's decision. Director's Delegate Makepeace, by letter decision received by the parties April 30, 2003, rejected as premature RBC's appeal of this preliminary issued decision. RBC's request for a stay of proceedings was denied. The Director's Delegate remitted to the Arbitrator the final disposition of the arbitration, namely, Ms. Antony's right to re-elect, her entitlement to caregiver benefits or IRBs and any other outstanding issues. In her July 23, 2002 pre-hearing letter, Arbitrator Miller had set dates for the main hearing for May 26, 27, 28 and 29, 2003.

By letter dated April 25, 2003, RBC wrote Ms. Antony advising her that pursuant to section 42 of the Schedule they had arranged for her to attend the following insurer medical examinations ("IMEs") for the purpose of determining her IRB eligibility:

– a Functional Abilities Evaluation for April 28, 2003;

– Dr. Pendergast, a psychologist, for April 29, 2003; and,

– Dr. F. Lipson, a physiatrist, for April 30, 2003.

RBC indicated that they would provide transportation to and from the appointments.

By letter dated April 25, 2003, Mr. Wilson, counsel for the Applicant, wrote RBC that the appointments were inappropriate and unreasonable, and that his client would not be attending.

A resumption of the pre-hearing discussion herein was held on May 2, 2003 by telephone conference before Arbitrator Sapin. The issue of attendance at the IMEs was canvassed. A motion was scheduled at FSCO for Friday, May 7, 2003 to deal with this issue.

Accordingly, as set out in its motion record and as confirmed at the start of the motion, RBC seeks the following order:

That the arbitration hearing set to commence on May 26, 2003 be adjourned until the Applicant has complied with her requirements to attend three insurer medical examinations, pursuant to section 42 of the Schedule.

Result:

RBC’s adjournment request is denied. The arbitration hearing shall proceed, as scheduled, on May 26, 27, 28 and 29, 2003.

EVIDENCE AND ANALYSIS:

The Insurer's Position

The Insurer makes the following submissions:

– that in January 2002 it arranged for Ms. Antony to attend physiatric, psychiatric and functional abilities evaluations at Work Able Centres Inc. on February 13 and 15, 2002;

– that by letters dated February 5 and 13, 2002, Mr. Wilson thwarted those evaluations, indicating that his client would not attend as RBC’s notice was inadequate and that, in any event, RBC was not entitled to assess what counsel termed Ms. Antony’s "potential entitlement" to IRBs;

– that RBC was impeded from rearranging those IMEs until the end of April 2003 due to a combination of FSCO's process and Mr. Wilson's continued resistance to their efforts, and did so then only in desperation, "[t]his state of affairs [having] not been caused by any action or inaction of RBC;"

– that it was only upon receipt on April 30, 2003 of the Director's Delegate's letter that RBC knew the issues to be addressed at the May 26, 2003 hearing; that it was only by her decision that the IRB issue was "made relevant;"

– that RBC immediately took up Arbitrator Sapin’s offer to deal with any procedural matters resulting from the decisions of Arbitrator Leitch and Director's Delegate Makepeace, including any request for an adjournment;

– that the Applicant's present objections as to the reasonableness and necessity of the IMEs and the alleged failure of RBC to meet the requirements of section 42 of the Schedule take RBC unfairly by surprise, but that in any event, its notice was perfectly adequate;

– that an insurer is entitled to a psychiatric or psychological assessment even if there has not been such an evaluation by the applicant, and that Ms. Antony’s objections to the other appointments have no merit;

– that Ms. Antony has failed to give any reasonable excuse for not attending; she has merely stated that she will not be attending;

– that, in accordance with section 21 of the Statutory Powers Procedure Act, R.S.O., 1990 c. S. 22, an adjournment is now required in order to permit an adequate hearing to be held; that the hearing arbitrator will require the opinion evidence of the IMEs to render a fair decision;

– that the delay will amount only to a few weeks;

– that to refuse the adjournment would be contrary to the principle of due process; that RBC would be seriously prejudiced and it would be a gross imbalance and an injustice if it were forced to proceed to arbitration on the issue of IRB entitlement without, "affording RBC the opportunity to marshal any medical evidence with respect to the disability test for income replacement benefits" or independently assess that claim;

– that the Applicant would not attend these appointments no matter how perfect the notice or reasonably necessary the assessments; and,

– that this is simply a tactic of the Applicant; that she is trying to proceed to arbitration as the only party having medical reports which address the IRB issue.

The Applicant's Position

The Applicant’s submissions in response are as follows:

– the insurer has the onus of establishing that it has complied with the requirements of section 42 of the Schedule, specifically, that the appointments were reasonably necessary;

– that RBC’s IME requests in January 2002 were inadequate and that, in any event, in accordance with the decision in Borja and TTC Insurance Company Limited (FSCO A02-00449, April 3, 2003), an insured does not have to attend IMEs for "anticipated benefits;"

– that RBC’s notice in April 2003 was inadequate, that no effort was made to choose a time convenient for Ms. Antony and that neither the names of the FAE practitioners or their qualifications are detailed, this information being required to allow the Applicant to make an informed decision whether or not to attend;

– that there is no evidence before me justifying any of these assessments; regarding Dr. Pendergast, there are no psychological or psychiatric reports which the Applicant has served nor upon which she is relying; that as RBC terminated caregiver benefits simply on the basis of an occupational therapist report, it is questionable as to why far more extensive assessments are now required;

– that Ms. Antony has been without benefits since August 2001; that, as set out in her affidavit sworn May 6, 2003, she has throughout instructed her lawyer to act expeditiously; that her counsel objected to bifurcating this proceeding into separate hearings;

– that as set out in her affidavit, the delay to date has caused her considerable financial harm; that her counsel is not available for a hearing until June 21, 2004;

– that just because she refused to attend the IMEs in January 2002 does not mean her position was correct; that RBC has only itself to blame for the delay in bringing this motion; that RBC had many opportunities to have the IME issue dealt with, but failed to do so;

– that the IRB issue at this point is restricted to the first 104 weeks of disability, that is for the period up to on or about March 6, 2003, and hence the proposed IMEs are valueless. Analysis

By letter dated May 12, 2003, I provided the parties with my decision and brief reasons, promising more fulsome reasons by week’s end. The latter now follow.

General Approach

The Applicant provided me with a copy of my decision in M.S.D. and Citadel General Insurance Company (FSCO A01-001561, February 19, 2003) in which I stated that:

This motion involves two areas of inquiry. The first question is whether the proposed IMEs meet the prerequisites of section 42 of the Schedule. In that regard, the onus is on the insurer. If the insurer meets its onus, it is then for the applicant to establish that he or she has made himself or herself reasonably available for the examination(s). If the insured person has not, the question then arises as to the appropriate remedy.

This approach could hardly have taken RBC by surprise, given that its own brief, which it kindly filed on May 7, 2003, included Arbitrator Skinner's decision in Stanley and Pilot Insurance Company (FSCO A01-001482, November 13, 2002) which states that:

It is well established that the onus is on the Insurer to first demonstrate that the examinations are reasonable and necessary. If this is established, the onus shifts to Ms. Stanley to demonstrate that she had a reasonable excuse for not attending the examinations. If she offers a reasonable excuse, she will not be precluded from proceeding through the arbitration system in accordance with section 50 of the Schedule.

Were the requirements of section 42 met?

In this motion, no medical evidence whatsoever was placed before me. RBC did not dispute the Applicant’s submission that she has neither served nor is relying on any psychological or psychiatric medical report. No basis, particular to the medical condition of this specific insured, was provided for this particular assessment. I am not persuaded as to the reasonableness or necessity of a psychological assessment.

The Insurer has failed to specify the persons who will conduct the proposed FAE, as required by section 42 of the Schedule, nor has it confirmed that they are members of a health profession or persons with expertise in vocational rehabilitation. In addition, I have no evidence before me as to why an FAE is reasonably necessary in addition to an examination by a physiatrist.

If it is permissible for me to rely on documents previously filed with the Commission, it would appear that it is reasonable and necessary for the Applicant to see Dr. Lipson, a physiatrist, regarding what appears to be complaints of soft-tissue injuries involving her neck, shoulders and lower back. Nonetheless, I have concerns that RBC apparently made no effort to schedule the examinations for a time convenient for the Insured, contrary to subsection 42(4).

Of greater concern is the single statement in RBC's April 25, 2003 letter that "failure to attend these appointments may affect your entitlement to benefits unless notification is received by our office." The Schedule gives an insurer very significant remedies where its insured fails or refuses to submit to an IME, including, under paragraph 42(8)(b), that no benefit is payable for the period after giving notice of the IME and until the insured submits to the examination. Such critical and material consequences are hardly made clear in RBC’s letter.

I agree with the Applicant's submission of the applicability of the comments of the Supreme Court of Canada in Smith v. Co-operators General Insurance Company, 2002 SCC 30, [2002] S.C.J. No. 34, that "insurance law is, in many respects, geared towards protection of the consumer . . . [which] obliges the courts to impose bright-line boundaries between the permissible and the impermissible without undue solicitude for particular circumstances that might operate against claimants in certain cases."

In the circumstances of this case, the fact that Ms. Antony was represented by experienced counsel should not operate against the general obligation of the insurer to set out the consequences of non-attendance with sufficient specifics such that an insured can make an informed decision whether or not to attend. I find that RBC did not meet that obligation.

What remedy would RBC have been entitled to?

However, even had RBC persuaded me that the appointment it arranged with Dr. Lipson complied with the requirements of section 42 of the Schedule, I am not persuaded, in the circumstances of this case, that adjourning this hearing is an appropriate remedy (the question of reasonable excuse for not attending, other than lack of compliance by RBC with section 42, not having been raised by the Applicant).

The initial pre-hearing discussion in this matter was held on July 11, 2002. Arbitrator Miller subsequently wrote both counsel and their principals a letter dated July 23, 2002. The letter included an enclosure, Practice Note 9, which deals with adjournments. The introductory paragraph of the Practice Note states that:

The Commission has an obligation to conduct arbitrations efficiently and speedily. Parties are contacted and agree to pre-hearing and hearing dates well in advance of the dates set. Therefore, adjournments are granted only sparingly once dates have been set.

Under the heading "When will adjournments be granted?" the Practice Note states, in part:

[adjournments will be considered] for valid reasons relating to the hearing itself, such as an imminent settlement, or medical or other critical evidence that is UNAVOIDABLY delayed.

[emphasis in the original]

Under the heading "When will adjournments be refused?" the Practice Note states, in part:

[circumstances in which adjournments are refused include] where the parties have not made early arrangements to ensure availability of documents or the attendance of witnesses.

The heart of RBC's argument is that the Applicant's obstructionism and FSCO's procedures have resulted in the absence of an opportunity to have Ms. Antony's IRB claim independently medically assessed.

I do not agree.

From Arbitrator Leitch’s decision, I glean that RBC was first alerted to Ms. Antony’s IRB claim by Mr. Wilson's letter of June 19, 2001. Succinctly, Mr. Wilson indicated that if RBC did not confirm his client’s ability "at some point in the future" to claim IRBs should she be able to return to her caregiver duties but not her employment duties, he would commence proceedings to set aside the caregiver election.

RBC responded by letter dated July 11, 2001 indicating that Ms. Antony could not change her election. It also appears that it responded by setting up an IME with Rehability Occupational Therapy Inc., apparently solely to address caregiver benefit entitlement. Evidently, on the basis of this assessment, RBC terminated caregiver benefits.

Not surprisingly, RBC subsequently received notice of Ms. Antony's Application for Mediation. The mediator’s report issued January 2, 2002 notes, as alternative claims, the Applicant’s entitlement to IRBs and to caregiver benefits.

The decision of Arbitrator VanderBent in Bogic and AXA Insurance (Canada) (FSCO A96-001192, April 30, 1999), which RBC provided to me, sets out as the well-established principle that insurer medical examinations are "not limited to requests made before the termination of benefits." In my decision of Hart and Allstate Insurance Company of Canada (FSCO A98-000988, July 6, 2001), I stated that:

IMEs are not restricted to files where benefits are being paid. In my letter decision of Eddie and Kingsway General Insurance Company et al. (A96-014688, September 6, 1996), I followed the decision of Arbitrator Miller in Sherkat and Co-operators General Insurance Company (OIC A95-000101, April 12, 1996). I held that "[t]o interpret section 65 to disallow an insurers medical examination where benefits are not being paid would be manifestly unfair."

The issue in Eddie was which insurance company was responsible for paying accident benefits. If an IME can be reasonably necessary even though the applicable insurer has not yet been determined, even more so, an IME can be arranged to address an alternative weekly benefit claim made by an applicant, even though the applicable weekly benefit has not yet been determined. In Borja and TTC, the anticipated benefits for which an IME was sought were either irrelevant to Ms. Borja’s claim or were ones for which she would not be applying, namely non-earner and attendant care benefits. In this case, IRBs are hardly irrelevant and have been claimed for more than a year and a half.

Section 50 of the Schedule provided RBC with the remedy (had it requested an IME prior to mediation being accessed) of preventing Ms. Antony from commencing mediation if she failed to make herself reasonably available for an IME. According to the Report of Mediator, mediation was commenced November 1, 2001. Hence, RBC had more than a four month window of opportunity to avail itself of this potential remedy, had it requested an IME in a timely fashion (and presumably on a without prejudice basis regarding the election issue). RBC failed to do so.

RBC did, finally, request IMEs in January 2002. Mr. Wilson objected to those appointments in February 2002, partly on the basis that as RBC had denied the Applicant’s right to receive IRBs, it was not entitled to an assessment. No statutory provision or case was provided in support of that position.

Notwithstanding the apparent lack of any basis for the Applicant's position, RBC's response for more than a year, was silence.

Ms. Antony applied for arbitration at FSCO on February 8, 2002. Her Application for Arbitration specifically claims IRBs, and in the alternative, caregiver benefits.

RBC had an opportunity to raise the IME issue in its Response received by FSCO March 20, 2002. RBC failed to do so. Curiously, RBC responded "no" to the question in the Response as to whether since the conclusion of mediation the Applicant had been asked to attend an IME.

A pre-hearing discussion was arranged for July 11, 2002. The Notice of Pre-Hearing Discussion dated May 3, 2002, in accordance with Rule 33 of the Dispute Resolution Practice Code (Fourth Edition, May 31, 2001) (the "DRPC"), sets out as one of the purposes of the discussion identifying the issues for arbitration.

RBC had an opportunity at the pre-hearing to request that IME attendance be included as an issue. It failed to do so. The July 23, 2002 pre-hearing letter is silent as to any IME issue. I was not referred to any letter by RBC indicating that this issue had been omitted in error. Specifically set out as an arbitration issue was whether Ms. Antony was entitled to receive weekly IRBs in addition to or as an alternative to attendant care benefits. Caregiver benefit entitlement is not noted as an issue.

This proceeding, evidently over the objections of Mr. Wilson, was bifurcated so as to first have a determination of the validity of the caregiver election or, in the alternative, the right of Ms. Antony to re-elect. RBC had an opportunity to include the question of IME attendance at the preliminary issue hearing. RBC failed to do so.

The preliminary issue hearing concluded January 28, 2003. On March 12, 2003, Arbitrator Leitch rendered his decision, well under the DRPC's published time line of 60-85 days. Based on my experience at FSCO, I can reasonably surmise that Arbitrator Miller set the preliminary issue hearing for January 2003 and the main hearing for May 2003 specifically to allow enough time for the preliminary issue arbitrator to render his or her decision and for the parties to then be able to proceed to the main hearing, as scheduled, without delay.

However, RBC still had an opportunity to bring a motion, pursuant to section 67 of the DRPC regarding IME attendance. It failed to do so. Rather, upon receiving Arbitrator Leitch’s decision, it opted solely to appeal the preliminary issue decision, notwithstanding that Rule 50.2 of the DRPC provides that:

A party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless the Director orders otherwise.

RBC submits that on April 25, 2003, desperate because it had not yet heard from Director's Delegate Makepeace regarding its appeal, it finally had no choice but to request the IMEs.

I find that the Insurer’s desperation was not caused, as it submitted, by the alleged delay caused by Arbitrator Miller bifurcating the issues, Arbitrator Leitch rendering his decision, Director’s Delegate Makepeace providing her response, or ultimately, even by the position taken by the Applicant. Rather, I find that the situation in which RBC found itself was caused, in the final analysis, by its long-term and repeated failure to take advantage of the numerous and repeated opportunities which it had to have the IME issue addressed, and ultimately adjudicated in a timely fashion, namely:

– prior to or during the mediation process;

– in advance of or during the pre-hearing discussion;

– in advance of or during the preliminary issue hearing; and,

– immediately after Arbitrator Leitch’s decision was rendered.

Before having fully considered whether the requirements of section 42 had been met, I had initially reflected upon allowing the adjournment request on the following terms:

(a) that the hearing is adjourned to a date to be arranged for in or about the Fall of 2003;

(b) that RBC shall forthwith, in accordance with section 42 of the Schedule, arrange and provide Ms. Antony with notice of an insurer medical examination with Dr. Lipson at a time reasonably convenient to Ms. Antony, and in any event within a period such that his report would be available to the Applicant no later than August 1, 2003;

(c) that the adjournment is peremptory to RBC, excepting should Ms. Antony fail to make herself reasonably available for the medical appointment;

(d) that RBC shall pay:

(i) forthwith Ms. Antony's legal expenses of this motion, fixed at $750, inclusive of G.S.T.;

(ii) and, in any event of the cause, any further legal expenses of the Applicant thrown away, as assessed at or after the main arbitration hearing;

(e) that RBC shall, subject to Ms. Antony making herself reasonably available for the appointment with Dr. Lipson, pay the Applicant weekly income replacement benefits of $190 for a 26-week period or until the hearing is resumed, whichever is shorter, such funds to be set-off against any award for income replacement benefits which may be subsequently made in Ms. Antony’s favour;

(f) that RBC shall serve on Ms. Antony forthwith upon receipt, and in any event, no later than August 1, 2003, all reports generated from this insurer medical examination, together with all of Dr. Lipson's notes and records relating to Ms. Antony, including any correspondence with RBC or its counsel;

However, on further reflection, I question the extent to which FSCO is obliged in these circumstances to complicate, add expense to and delay this process to accommodate a party’s repeated failure to exercise its rights under the Schedule and under the DRPC.

The Insurer provided me with Arbitrator Skinner's decision in Stanley. The decision sets out the following considerations as to whether to grant an adjournment for an IME:

The timing of the insurer’s request - RBC’s request was made more than a year and a half after the issue arose and less than thirty days prior to the start of the hearing (Rule 39 of the DRPC not allowing reports, including expert reports, being served less than thirty days before the start of the hearing, except in "extraordinary circumstances"). I am unable to find that RBC's motion was made in a timely manner;
The possible prejudice to both parties - as stated in Practice Note 9, FSCO has an obligation to conduct arbitrations efficiently and speedily. This is enshrined in Rule 1 of the DRPC. I am persuaded, based on the Applicant's sworn affidavit, of the financial hardship to her of delaying this matter. I am not persuaded that the delay would be a matter of just a few weeks. Given that the IMEs have not been rescheduled, that time would be required to write and serve the report, and that a reasonable allowance should be given for counsel’s scheduling conflicts, I would expect a reasonably contemplated delay of approximately six months. I give no weight to the statement in Ms. Antony’s affidavit that her counsel is not available until June 21, 2004. The DRPC time lines state that oral arbitration hearing dates will be available within four to six months from the pre-hearing discussion. Excepting extraordinary circumstances, counsel's lack of availability for thirteen months should not become the other party’s problem.

I find that the prejudice RBC submits that it will suffer is ultimately of its own making, and should not outweigh the prejudice to the Applicant such as to allow this matter to be adjourned.

The number and nature of the previous insurer’s examinations/ the nature of the examinations being requested/ whether there is a reasonable nexus between the examinations requested and the applicant's injuries - RBC has not had an IME regarding IRBs. Documentation in the file supports a nexus between the injuries sustained and an appointment with Dr. Lipson. Nonetheless, as RBC fairly concedes, since the IRB period in question ends on or about March 6, 2003, there is a question as to what weight would be given to his retrospective report.

As indicated in my letter faxed May 12, 2003, there may be alternatives to an IME by which RBC might address the IRB issue, such as the medical examiner(s) who conducted the caregiver IME being allowed to address the IRB issue, or a possible paper review by a medical practitioner. However any decision as to the admissibility of such evidence (which would have to address the question of late notice) is solely within the jurisdiction of the hearing arbitrator, should such evidence even be proposed. My decision herein is not to any degree based on any expectation as to what alternative option might be proposed or what decision in this regard the hearing arbitrator may make.

I conclude, using the wording of Practice Note 9, that I am not persuaded that an adjournment is required as a result of critical evidence being unavoidably delayed. Rather, I find that RBC has failed to make early arrangements to ensure the Applicant’s attendance at an IME. To grant an adjournment in the circumstances of this case would be to encourage disregard for the rules presently in place and to create unnecessary and avoidable complication, delay and expense.

Accordingly, the Insurer’s adjournment request is denied. I am in agreement with Director’s Delegate Makepeace's conclusion in her recent letter, that "I am not inclined to allow this matter to be delayed any further."

EXPENSES:

The question of expenses of this motion is referred to the main hearing arbitrator.

May 16, 2003

Lawrence Blackman
Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 79
FSCO A02–000217

FINANCIAL SERVICES COMMISSION OF ONTARIO