Neutral Citation: 2003 ONFSCDRS 92

FSCO A02-000482

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

CATHERINE HORVATH

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION

*Minor error corrected on June 26, 2003 in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedure Act.

Before:

David Leitch

Heard:

April 14, 15 and 16, 2003, in St. Catharines, Ontario.

Appearances:

Chris Richard for Ms. Horvath

Meredith J. Donohue for Allstate Insurance Company of Canada

Issues:

On June 15, 1999, the Applicant, Catherine Horvath, then a 39 year-old mother and housewife, was walking in a parking lot when she was struck by a motor vehicle. She applied for statutory accident benefits¹ from Allstate Insurance Company of Canada ("Allstate"), the insurer of her family vehicle, in June 2000. Allstate received her Application for Accident Benefits in October 2000. Disputes developed between the parties which they were unable to resolve through mediation. In April 2002, the Financial Services Commission of Ontario ("the Commission) received Ms. Horvath's Application for Arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in dispute are:

1. Is Ms. Horvath disentitled to statutory accident benefits because she failed, without reasonable explanation, to notify Allstate of the accident within 30 days pursuant to sections 32(1) and 31(1) of the Schedule?

2. Is Ms. Horvath disentitled to statutory accident benefits because she failed, without reasonable explanation, to submit her Application for Accident Benefits to Allstate within 30 days of receiving the form from Allstate pursuant to sections 32(3) and 31(1) of the Schedule?

3. Is Ms. Horvath entitled to the payment of housekeeping expenses, and interest, as a result of the accident, pursuant to sections 22 and 46 of the Schedule?

4. Is Ms. Horvath entitled to the treatment recommended by Dr. Jordan in his second treatment plan pursuant to section 14 of the Schedule?

5. Is Ms. Horvath entitled to the payment of $865 and interest pursuant to an agreement made at mediation to resolve certain disputes and pursuant to section 46 of the Schedule?

Results:

1. Ms. Horvath provided a reasonable explanation for her failure to notify Allstate of the accident within 30 days.

2. Ms. Horvath is not disentitled to statutory accident benefits by reason of the time limit imposed by section 32(3).

3. Ms. Horvath is entitled to the payment of housekeeping expenses in the amount of $6,165, plus interest under section 46 from October 15, 2002.

4. Ms. Horvath is entitled to five additional treatment sessions with Dr. Jordan at Allstate's expense.

5. Ms. Horvath is entitled to the payment of $865 pursuant to the agreement made at mediation, plus interest under section 46 from one week after the date of mediation.

Pertinent Legislative Provisions:

PART X

PROCEDURES FOR CLAIMING BENEFITS

FAILURE TO COMPLY WITH TIME LIMITS

31. (1) 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.

(2) Subsection (1) does not apply to the time limits set out in section 51.

NOTICE AND APPLICATION FOR BENEFITS

32.(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.

(2) The insurer shall promptly provide the person with,

(a) the appropriate application forms;

(b) a written explanation of the benefits available under this Regulation;

(c) information to assist the person in applying for benefits; and

(d) information on any possible elections relating to income replacement, non-earner and caregiver benefits.

(3) The person shall submit an application for the benefit to the insurer within 30 days after receiving the application forms.

(4) If a person is required by an insurer to submit an additional application in respect of a benefit that the person is receiving or may be eligible to receive, the person shall submit the additional application to the insurer within 30 days after receiving the additional application forms from the insurer.

HOUSEKEEPING AND HOME MAINTENANCE

22.(1) The insurer shall pay for reasonable and necessary additional expenses incurred by or on behalf of an insured person as a result of an accident for housekeeping and home maintenance services if, as a result of the accident, the insured person sustains an impairment that results in a substantial inability to perform the housekeeping and home maintenance services that he or she normally performed before the accident.

(2) The amount payable under this section shall not exceed $100 per week.

Issue 1: late notice of the accident

Mr. Richard acknowledged that Ms. Horvath had failed to notify Allstate of the accident within the time limit set out in section 32(1). Relying on section 31(1), he argued that she had a reasonable explanation for this failure. She was, he submitted, unaware that she was covered under Allstate's policy. He characterized her lack of awareness as understandable since "it would take a thorough explanation of the insurance policy to be aware of this coverage."

As I read the decisions in Kuronen and Allstate Insurance Company of Canada,² Liberty Mutual Insurance Company and Kaur,³ Carruthers and Royal & SunAlliance Insurance Company of Canada,⁴ and Syed and Allstate Insurance Company of Canada,⁵ the following principles govern the interpretation of the words "reasonable explanation" in section 31(1) of the Schedule:

• An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.

• The onus is on the insured person to establish a "reasonable explanation."

• Ignorance of the law alone is not a "reasonable explanation."

• The test of "reasonable explanation" is both a subjective and objective test that should take account of both personal characteristics and a "reasonable person" standard.

• The lack of prejudice to the insurer does not make an explanation automatically reasonable.

• An assessment of reasonableness includes a balancing of 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. the credibility of the explanation

Ms. Horvath testified that on June 15, 1999, she was walking to her own vehicle in a shopping mall parking lot when a black, GMC "Jimmy truck" backed into the left side of her body, causing her to fall to the ground. The vehicle which struck her left the scene immediately and Ms. Horvath was unable to see its licence plate number. She stood up, walked to her own vehicle and drove it home. She testified that she needed to return home with the vehicle so that her husband could drive it to work. She admitted that she did not notify either security in the shopping mall or the police. Ms. Horvath testified that because she was a pedestrian at the time of the accident, she did not think there was any reason to call the insurer of her family vehicle, Allstate. Likewise, Ms. Horvath did not ask Allstate to pay for her initial treatment. She testified that she did not think that the accident "had anything to do with my insurance company."

Ms. Horvath testified that despite her initial treatment, she continued to experience throbbing, left-sided hip pain which, rather than improving, got worse. She stated that when she realized that she was not getting better, she decided to try to find the driver who had hit her so that she could make a claim. In the spring of 2000, she spoke to a friend of hers who was a police dispatcher and to her friend's husband who was a police officer. They told her that she did not have enough information to find the driver who had hit her but to file a claim with her own insurer. Ms. Horvath reiterated that until receiving this advice, she did not think that she had a claim against her own insurer. After receiving this advice, she contacted her local adjuster who gave her the telephone number to report a claim to Allstate. In addition to reporting the claim by telephone, Ms. Horvath sent Allstate a registered letter dated June 8, 2000.⁶ Ms. Horvath did not, however, notify the police of the accident.

Ms. Donohue questioned the credibility of Ms. Horvath's testimony. She argued that the explanation Ms. Horvath provided at the hearing differed from the explanation she provided to Allstate shortly after reporting the accident. Ms. Donohue also relied upon Ms. Horvath's failure to notify the police of her accident.

In a recorded and transcribed telephone interview on June 12, 2000, Ms. Horvath was asked why she had not advised Allstate of her accident. Her answer made no reference to any previous misapprehension about Allstate's coverage. Instead, she referred to the fact that she had not made the recovery from her injuries that she had expected, suggesting that it was only the ongoing nature of her problems which prompted her to file a claim with Allstate.⁷

In a written and signed statement she provided to Allstate on July 21, 2000, Ms. Horvath was asked "what prompted you to notify your insurance company when you did?" Again, her answer referred only to the prolonged nature of her problems: "My dr. kept telling me I was going to be o.k, then the summer went by, then the winter...I kept asking my dr., when could I go back to work..." When further asked "who advised you to contact the insurance company?", Ms. Horvath answered: "Nobody told me to call. I just thought it had gone on for so long and I don't know the situation with me going back to work. If they will hire because so much time has past. When I first went to see my family dr., he didn't know my rights. Shouldn't her insurance company be liable if she hadn't drove away[?]" On the other hand, when asked to "describe the vehicle that hit you", Ms. Horvath responded: "It was a black, newer vehicle. All I caught was the back corner as it was driving away. I saw a GMC sign and a tire. The back window was tinted. That's [all?] I know. I called a friend of mine who is a police officer at dispatch and she said I didn't have enough information, but to file a police report and contact insurance."⁸

While I acknowledge the apparent inconsistencies, I find that Ms. Horvath's statements to Allstate can be reconciled with her evidence at the hearing. It is obviously true that despite Allstate's specific questions, Ms. Horvath did not always refer to any previous misapprehension about Allstate's coverage. I nevertheless find that her answers to other questions confirm that until she spoke to a police officer, she believed that the responsible insurer was the insurer of the vehicle which hit her. In addition, I find no reason to doubt Ms. Horvath's statements and evidence that she only decided to pursue the matter when she realized that she was not recovering from her injuries. In my view, such an attitude would be consistent with a belief that unless the responsible insurer could be identified, there would be no point in pursuing the matter anyway. I accept Ms. Horvath's evidence that when she finally approached the police officer, she did so in order to try to identify the insurer of the vehicle which hit her. I find that until that point, she was unaware that she could file a claim against her own insurer, Allstate. I also accept Ms. Horvath's evidence that she did not file a police report because a police officer had already told her that she did not have enough information. In short, I find Ms. Horvath's explanation credible or worthy of belief and I turn to the assessment of its reasonableness in accordance with the other principles set out above.

b. ignorance of the law

Should Ms. Horvath's lack of awareness that her accident was covered under Allstate's policy be characterized, not as a reasonable explanation, but as mere ignorance of the law? In my view, the principle that ignorance of the law is not a reasonable explanation must recognize a distinction between laws governing conduct and laws governing liability. An insured person is not legally entitled to be ignorant of laws governing conduct because, like all citizens, he/she is required to know and obey such laws. An insured person is not, on the other hand, legally required to know anything about laws governing liability. An insured person might well be better off knowing about such laws and might even alter his/her conduct as a result. Nevertheless, he/she is perfectly entitled to remain ignorant of such laws because they do not govern his/her conduct. It follows, in my view, that an explanation which relies upon an insured person's ignorance of a law governing liability cannot, for that reason alone, be unreasonable. Since Ms. Horvath's explanation clearly relies upon her ignorance of a law governing liability, namely the law requiring Allstate to provide coverage in the circumstances of her accident, I find that her explanation cannot be rejected for that reason alone. Its reasonableness must, therefore, be determined in accordance with the other principles mentioned at the outset. I turn next to the principle that the reasonableness of an explanation is to be assessed on the basis of both subjective personal characteristics and objective "reasonable person" standards.

c. subjective/objective tests

Dealing first with Ms. Horvath's subjective personal characteristics, I have already found that her explanation was worthy of belief. It is implicit in that finding there was nothing in the evidence regarding Ms. Horvath's background, education, experience or other personal characteristics which made it difficult for me to believe that she was genuinely ignorant of Allstate's coverage. While there was evidence that she had been involved in at least one previous motor vehicle accident in 1997, she was not a pedestrian victim in that accident.

Applying the objective part of this principle, I am not persuaded that a "reasonable person" would have been aware of this form of insurance coverage. Motor vehicle accidents may frequently involve pedestrian victims but the unusual feature of this accident was that Ms. Horvath was unable to identify the vehicle that hit her.⁹ It could perhaps still be suggested that a reasonable person would have made more enquiries than Ms. Horvath did about where she might file a claim. However, I accept that Ms. Horvath was discouraged from making such enquiries by the combination of her lack of information about the vehicle that hit her and her expectation that she would recover from her injuries. I note that when she realized that she was not recovering from her injuries, she made the appropriate enquiries. Viewed with the benefit of hindsight, it is clear that Ms. Horvath did not choose the wisest course of conduct. Viewed without the benefit of hindsight, I find that her conduct satisfies the "reasonable person" standard. I turn then to the last principle involving the balancing of prejudice, hardship and equities.

d. balancing of prejudice, hardship, equities

It is clear that if Ms. Horvath had submitted a claim in relation to housekeeping expenses in a more timely manner, Allstate would have been entitled to order an in-home assessment of the need for such services. Indeed, as will be noted below, I received evidence that Allstate would have ordered such an assessment. On the other hand, it is also clear that Ms. Horvath would endure some hardship if I were to rely upon the notice requirement to reject all her claims for statutory accident benefits. The problem is to first quantify and then balance Allstate's prejudice versus Ms. Horvath's hardship. In my view, the better approach is to simply answer what I consider to be the fundamental question posed by this principle: is it equitable, in the circumstances of this case, to relieve against the consequences of the failure to comply with the time limit imposed by section 32(1)?

I find that it would be inequitable, in the circumstances of this case, not to relieve against the consequences of Ms. Horvath's failure to comply with the time limit imposed by section 32(1). To my mind, a refusal to relieve the time limit in these circumstances would amount to a decision to visit hardship upon Ms. Horvath for not knowing something which the law did not require her to know. In my opinion, this would be an inequitable result.

Based on all of the above-mentioned governing principles, I conclude that Ms. Horvath has discharged the onus on her under section 31(1) to establish that she had a reasonable explanation for her failure to comply with the time limit imposed by section 32(1). She is not, therefore, disentitled to statutory accident benefits by reason of that time limit.

Issue 2: late submission of the Application for Benefits

a. background facts and findings

By letter dated June 12, 2000, Allstate sent Ms. Horvath an "Accident Benefits Application Package" (the "Package") consisting of explanatory notes and the following forms: Application for Accident Benefits, Employer's Confirmation of Income, Disability Certificate, Permission to Disclose Health Information, Activities of Normal Life and Treatment Plan. The letter stated: "Please make sure the completed application is returned within 30 days upon your receipt of this letter."¹⁰ The cover page of the Package stated: "This Application for Accident Benefits form must be returned within 30 days after receiving the package. If you are unable to return it within 30 days, submit it to your insurance company anyway and explain why you were not able to complete it within 30 days." In addition, the Package enclosed a document entitled "Guideline for Statutory Accident Benefits Applications, the Claims Process and the Mediation Process (Bill 59)" which listed "Claimants' Responsibilities." The first of these responsibilities was described in the following terms: "Complete all forms promptly. The SABS require that applications for accident benefits be submitted within 30 days of receiving the forms from the insurer."¹¹ However, neither Allstate's letter nor the Package referred specifically to section 32 or section 31 of the Schedule or otherwise indicated what the possible consequences might be if the Application was not returned within the 30 day period.

According to the evidence of Mr. Douglas Morgan, a senior staff claims consultant at Allstate, the letter of June 12, 2000 to Ms. Horvath "would have" also enclosed an eleven-page Insurance Bureau of Canada pamphlet (the "IBC pamphlet") entitled "What you need to know about Accident Benefits Coverage..."¹² Mr. Morgan further testified that the person who interviewed Ms. Horvath over the telephone on June 12, 2000 "would have also given her a 'two-minute blurb' about available benefits and time frames." Mr. Morgan stated that his evidence was based on his knowledge of how Allstate employees were instructed to handle new claims at the relevant time. He acknowledged that he was not actually there to observe what documents were placed in the envelope to Ms. Horvath and that Allstate did not provide a pre-authorized "script" or text for the telephone "blurb." This is important because the only enclosure referred to in Allstate's letter of June 12, 2000 is the "application package." Moreover, while I find that Ms. Horvath must have received the Package, because she eventually completed and returned portions of it to Allstate, I note that Ms. Horvath refused to admit that she received the IBC pamphlet. I further note that the only portion of the June 12, 2000 telephone interview that was recorded was the portion during which Ms. Horvath answered questions put by the Allstate employee, as previously referred to.¹³

In my view, this evidence does not support either a finding that Ms. Horvath received the IBC pamphlet or a finding that she received any particular piece of information from Allstate through the telephone "blurb." In any event, I note that, like the Package, the cover page of the IBC pamphlet referred only to the 30 day time limit for returning the application forms; it did not indicate the possible consequences of non-compliance with this time limit.

Two days later, on June 14, 2000, Allstate sent Ms. Horvath a non-waiver letter. This letter made no reference to section 32 or section 31 of the Schedule or to any specific reason why Allstate might deny coverage of her claim. It simply indicated that Allstate was "reserving our right to later disclaim any obligation under the policy and to set-up the defense [sic] of non-coverage under this policy."¹⁴ I accept Ms. Horvath's uncontradicted evidence that she did not understand this letter and that she did not seek legal advice in relation to her dealings with Allstate until sometime in November 2000.

As previously noted, on July 21, 2000, Ms. Horvath provided a written statement. This statement was taken by an independent adjuster hired by Allstate. The adjuster's notes provide no indication that the time limit imposed by section 32(1) was discussed.¹⁵

On August 31, 2000, the adjuster handling the file at that time entered a log note stating: "insd has not formally applied for benefits yet and unk if she will pursue...so I called her and she said her forms are ready and she will send same out next week." Again, the adjuster's notes provide no indication that the time limit imposed by section 32(1) was discussed.¹⁶

On September 26, 2000, Allstate received a treatment plan from Mel Perera, a physiotherapist at Welland Physiotherapy Centre, recommending treatment for relief of pain in the lumbar spine and left hip.¹⁷

The new Allstate adjuster handling the file by that time, Ms. Helen Thompson, acknowledged receipt of this treatment plan in a letter to Ms. Horvath dated October 6, 2000. The letter informed Ms. Horvath: "... we cannot consider payment for this treatment until we receive the completed application form for accident benefits."¹⁸ The letter went on to quote/paraphrase sections 32(1) and 32(3). A review of Allstate's file, in particular the adjuster's note of August 31, 2000, would have confirmed that Ms. Horvath had received "her forms" from Allstate more than 30 days before October 6, 2000. Notwithstanding this, Ms. Thompson's letter of that date did not refer to section 31 of the Schedule, did not state that Ms. Horvath's application was already out of time and did not ask her to provide an explanation for her failure to comply with the time limit set out in section 32(3). Nor did Ms. Thompson's letter indicate that Allstate's future handling of Ms. Horvath's file would be subject to its right to raise a limitation defence under section 32(3).

According to Allstate's date-stamps, it received the following completed forms from Ms. Horvath on October 19, 2000: Application for Accident Benefits, Activities of Normal Life, and Permissions to Disclose Health Information. These forms were all dated July 31, 2000 and Ms. Horvath testified that she sent them right after she completed them. A Disability Certificate completed by Ms. Horvath's family doctor, Dr. S.S. Lawrence,¹⁹ was also included in the package received by Allstate on October 19, 2000.²⁰

In his cross-examination of Mr. Morgan, Mr. Richard appeared to suggest that due to problems with mail delivery by Canada Post or within Allstate itself, Allstate may have actually received these forms earlier than October 19, 2000 but not date-stamped until then. Mr. Morgan's answers to Mr. Richard's questions provided no foundation for this possible, but improbable, theory. In my view, it is far more likely that Ms. Horvath received these forms in mid-June 2000, soon after they were mailed out, that she did not complete them until July 31, 2000 and that, despite her conversation with an Allstate adjuster on August 31, 2000, she continued to delay until mid-October 2000 before mailing the forms back to Allstate without providing any explanation for the delay. Moreover, Ms. Horvath's evidence at the hearing provided no explanation, reasonable or otherwise, for this, or for any, delay on her part in returning the forms to Allstate. There was certainly no suggestion that Ms. Horvath would have had any problem reading the material provided by Allstate. She demonstrated her capacity to read at the hearing.

Accordingly, I find that Ms. Horvath returned the application forms to Allstate more than 30 days after she received them without providing a reasonable explanation. However, as I indicated I would do during the submissions part of the hearing, I turn next to the issue of Allstate's obligations to inform Ms. Horvath under section 32(2)(c).

b. Allstate's obligation to inform Ms. Horvath under section 32(2)(c)

In my opinion, Allstate cannot rely upon the time limit imposed by section 32(3) without first establishing that it discharged its own obligation under section 32(2)(c) of the Schedule, in particular, the words: "The insurer shall promptly provide the person with... information to assist the person in applying for benefits." In my view, these words must be interpreted and applied in light of the Supreme Court of Canada's recent decision in the case of Smith v. Co-operators General Insurance Co.²¹

The issue in the Smith case was whether, in refusing a benefit, the Insurer had complied with its obligation under section 71 of the 1993 Schedule to also "inform the [insured] person in writing of the procedure for resolving disputes relating to benefits under sections 279 to 283 of the Insurance Act." Compliance with section 71 would have triggered the start of the limitation period imposed by section 281(5) of the Insurance Act which, in turn, would have defeated Ms. Smith's claim for benefits. The Ontario Court of Appeal held that the Insurer was only obliged to inform Ms. Smith of her right to refer a dispute to mediation, the first step in the dispute resolution procedure. Since it had done that and since the Mediator's Report had informed Ms. Smith of the limitation period, the Court of Appeal ruled that Co-operators was entitled to assert the limitation period defence. The Supreme Court of Canada reversed this decision, holding that Co-operators was not entitled to rely upon the limitation period because it had not discharged its own obligation to provide complete information about the dispute resolution process. Gonthier J. for the majority made the following comments at paragraphs 11, 12 and 14:

There is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance. The Court of Appeal was unanimous on this point and the respondent does not contest it. In Insurance Law in Canada (loose-leaf ed.), Professor Craig Brown observed, "In one way or another, much of insurance law has as an objective the protection of customers" (p. 1-5). I note in this vein s. 279(2) of the Insurance Act which provides that any restriction on a party's right to mediate, arbitrate, litigate, or appeal is void, except as provided in the regulations. True to that purpose of consumer protection, no refusal under s. 71 of the SABS can be said to have been given by an insurer if there has not been adequate compliance with that section.

Borins J.A. was correct in observing that s. 71 is clear and unambiguous. The legislature clearly intended to place an obligation on the insurer to inform the claimant of the dispute resolution process under ss. 279 to 283 of the Insurance Act. The section does not refer only to s. 280(1), which gives the insured the right to refer the dispute to mediation. It refers to the whole process. In fact, having no indication that there is anything beyond mediation would tend to create a misguided sense of discouragement in the claimant.

...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 to 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.

The Smith decision clearly establishes that consumer protection is a main objective of automobile insurance law, that this objective is of particular importance in cases involving an insurer's obligation to inform the insured person and that the realization of this objective requires the insurer to provide the insured person with complete and accessible information. Nevertheless, these principles were confirmed by the Court in the context of the insurer's obligation under section 71 to inform the insured person about the dispute resolution process. As I see it, my task in the present case is to apply these principles in the context of the insurer's obligation under section 32(2)(c) to provide "information to assist the person in applying for benefits."

I begin by observing that just as sections 279 to 283 of the Insurance Act govern the dispute resolution process, so Part X of the Schedule governs the process for claiming benefits. The dispute resolution process imposes limitation periods and the process for claiming benefits imposes time limits. I see no reason why the consumer protection principles confirmed in Smith should apply to the limitation periods imposed by the dispute resolution process but not to the time limits imposed by the process for claiming benefits. In each case, the insured person's claim may be rejected or dismissed, not on its merits, but because it is out of time. It may appear that Part X already provides a greater measure of consumer protection by allowing the insured person to present a reasonable explanation for his/her failure to comply with time limits imposed by the process for claiming benefits. However, it should not be forgotten that an insured person can also seek relief from forfeiture under the Insurance Act where he/she has failed to comply with the limitation period imposed by section 281 of that statute. Indeed, in the Kuronen case referred to earlier, the arbitrator observed:

In my view, the considerations that apply to a court relieving against forfeiture for failure to comply with a time limit should equally apply to the issue of whether a claimant has a reasonable excuse for failing to comply with the section 22(1)(a) time limit [the time limit for notifying the insurer of an accident under a previous Schedule]. Both issues concern the reasons for an insured's failure to comply with a time limit in a notice provision and whether the insured should be relieved of the consequences of his failure to comply.

Further, just as section 71 was interpreted by the Supreme Court to include an obligation to provide information about time limits, I see no reason why the words "information to assist the person in applying for benefits" in section 32(2)(c) should not be interpreted to include information about time limits. In my view, the goal in both cases is the same: to protect consumers by ensuring that they are provided with information which will assist them to avoid having their claims rejected or dismissed, not on their merits, but because they are out of time.

But what information must the insurer provide an insured person about a time limit? Is it sufficient for the insurer to inform the insured person that he/she must do a required thing within a required time limit? Or must the insurer also inform the insured person of the potential consequences if he/she fails to do the required thing within the required time limit?

As I understand the Smith decision, the goal of consumer protection is promoted by requiring insurers to provide "basic information" outlining the "most important points of the process" using "straightforward and clear language, directed towards an unsophisticated person." There is no doubt that the time limit imposed by section 32(3) is one of the most important points or parts of the process for claiming benefits. In my view, basic information about this time limit includes information about the potential consequences of failing to either comply with it or to provide a reasonable explanation for non-compliance. Without this information, insured persons may think that the only consequence of their own delay will be delay in receiving benefits. As I read the principles enunciated in the Smith case, section 32(2)(c) should be interpreted in a way which protects consumers by requiring insurers to inform insured persons of the far more serious potential consequences of their failure to comply with section 32(3).

In the present case, there can be no doubt that Allstate made Ms. Horvath at least partially aware of the time limit imposed by section 32(3) from the outset. The written materials Ms. Horvath received from Allstate in June 2000 clearly informed her that she was required to return the forms within 30 days of receiving them. In the cover sheet of the Package, Ms. Horvath was also informed that if she could not complete the forms within the time limit, she should return them anyway and explain why she was not able to complete them within 30 days. Despite this, Ms. Horvath not only failed to return the forms within 30 days, she also failed to provide any explanation for this delay, either at the time or at the hearing.

Nevertheless, there is no evidence before me that, at any point prior to receiving her application forms on October 19, 2000, Allstate informed Ms. Horvath of the potential consequences of her failure to comply with section 32(3) or to provide a reasonable explanation for her non-compliance. Nor is there any evidence that Ms. Horvath was, or should have been, made aware of these consequences by someone other than Allstate. In this regard, I acknowledge that the Package supplied to Ms. Horvath by Allstate also failed to inform her of the potential consequences of non-compliance with section 32(2). However, the fact that this Package may have been in a form approved by the Superintendent pursuant to section 69 of the Schedule does nothing to help Allstate. At paragraph 19 of the Smith case, Gonthier J. observed:

...the industry practice of using the form prescribed by the Commissioner [now the Superintendent] 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 insured 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.

Similarly, Allstate cannot rely upon the Package as a substitute for conformity with its obligations as an insurer under section 32(2)(c) of the Schedule. Moreover, since section 32(2)(c) does not require that information be given in writing, there was nothing to prevent Allstate from orally providing additional information not provided in writing by the Package.²²

Accordingly, I find that Allstate did not discharge its obligation under section 32(2)(c) to inform Ms. Horvath of the potential consequences of her failure to comply with the time limit imposed by section 32(3) or to provide a reasonable explanation for non-compliance. I conclude that Allstate is not, therefore, entitled to rely upon that time limit to defeat Ms. Horvath's claims for statutory accident benefits.

In the event that I have misapprehended or misapplied the principles governing the interpretation of the words "reasonable explanation" in section 31(1) or the words "information to assist the person in applying for benefits" in section 32(2)(c), I turn next to Mr. Richard's estoppel argument.

Issues 1 and 2: the estoppel argument

a. background facts and findings

My analysis of this argument must begin by setting out a skeletal description of what I consider to be the relevant dealings between the parties after October 19, 2000.

By letter dated October 25, 2000, Ms. Thompson acknowledged receipt of Ms. Horvath's applications forms, commented on some of her claims and requested information to substantiate others.²³ Allstate received its first letter from Ms. Horvath's legal representative on November 30, 2000. It requested Allstate to refer its denial of the physiotherapy treatment recommended by Mel Perera to a medical-rehabilitation designated assessment centre (a "MedRehab DAC").²⁴ On December 12, 2000, Ms. Horvath was examined at Allstate's request by an orthopaedic surgeon, Dr. Eric R. Blackman. His opinion, received by Allstate on December 27, 2000, was that Ms. Horvath was not suffering from any physical impairment as a result of the accident.²⁵ This opinion was conveyed to Ms. Horvath by Ms. Thompson in a letter dated January 2, 2001.²⁶ In a second letter dated February 2, 2001 to Allstate, Ms. Horvath's legal representative indicated that Ms. Horvath was claiming housekeeping benefits.²⁷ At some point in the spring of 2001, Allstate received a treatment plan dated April 9, 2001 from Dr. David L. Jordan, a clinical psychologist, recommending sixteen treatment sessions for depression and anxiety.²⁸ Allstate denied this treatment and referred Ms. Horvath to a MedRehab DAC. The same MedRehab DAC also considered the treatment plan submitted by the physiotherapist, Mel Perera, in September 2000. The MedRehab DAC issued a report dated July 23, 2001 stating that the treatment recommended by Dr. Jordan was reasonable and necessary, that the treatment plan submitted by Mel Perera was not reasonable and necessary and recommending additional treatment in the form of a three-month gym membership and instruction.²⁹ In a letter to Ms. Horvath dated September 24, 2001, Ms. Thompson indicated that Allstate would pay for treatment in accordance with the MedRehab DAC report.³⁰ At some point between August and October 2001, the parties participated in a mediation arranged by the Commission. The Mediator's Report identified Ms. Horvath's claim for housekeeping benefits as the only unresolved issue.³¹ Ms. Horvath's Application for Arbitration of that issue was dated April 2, 2002.

The evidence in relation to these events is consistent with a finding that between October 19, 2000 and early May 2002, Allstate said nothing to Ms. Horvath or to her legal representative about her failure to comply with time limits. Indeed, on cross-examination, Mr. Morgan candidly admitted that, after referring to section 32 in her letter of October 6, 2000, Ms. Thompson simply "missed the late filing issue and carried on as though it were an ordinary claim." She did not, he acknowledged, consider section 32 in denying Dr. Jordan's treatment plan but rather denied this treatment on the sole ground that it was not reasonable and necessary. It is also clear that when the MedRehab DAC reported that Dr. Jordan's treatment was reasonable and necessary, Allstate agreed to pay for it. Mr. Morgan testified that it was only when he reviewed the file on April 23, 2002, after receiving Ms. Horvath's Application for Arbitration, that he noticed Ms. Thompson's oversight and took steps to ensure that section 32 was referred to in Allstate's Response to Ms. Horvath's Application for Arbitration dated April 29, 2002. I, therefore, find that Allstate's silence about time limits thus lasted from October 19, 2000, when it received her application forms, to sometime in early May 2002 when Ms. Horvath or her legal representative received Allstate's Response to her Application for Arbitration.

However, Allstate's Response only referred specifically to Ms. Horvath's failure to notify Allstate of the accident within 30 days, that is, her failure to comply with the time limit imposed by section 32(1). Evidence in relation to the interaction between the parties after May 2002 confirms that Allstate continued to maintain its silence on the subject of Ms. Horvath's failure to return her application forms within 30 days, that is, her failure to comply with the time limit imposed by section 32(3). Again, a skeletal description of the relevant dealings between the parties is required.

Allstate received a second treatment plan from Dr. Jordan dated July 10, 2002.³² In a letter to Ms. Horvath on July 15, 2002, Allstate denied this further treatment and referred Ms. Horvath to a second MedRehab DAC.³³ At the pre-hearing arranged by the Commission on July 15, 2002, Ms. Horvath's claim for housekeeping benefits was again identified as the substantive issue in dispute. The pre-hearing letter also stated: "Allstate raised as a preliminary issue that as the claim for housekeeping expenses had been neither submitted by Ms. Horvath nor denied by Allstate, the arbitrator does not have jurisdiction to conduct a hearing on this issue." There was no reference in the pre-hearing letter to any section 32 time limit defences.³⁴ The second MedRehab DAC issued a report dated October 18, 2002 stating that further treatment by Dr. Jordan was not reasonable or necessary.³⁵ The Commission's file indicates that on February 18, 2003, Ms. Donohue delivered a letter to Ms. Horvath's legal representative indicating that she had been instructed "to argue a Section 32 defence ... based on your client's late report to the company."³⁶ Like Allstate's Response to the Application for Arbitration, this letter only confirmed Allstate's intention to rely upon section 32(1). On March 3, 2003, Mr. Morgan wrote to Ms. Horvath's legal representative asking for an explanation of her failure to comply with section 32( 1 ).³⁷ The Commission's file contains a letter dated April 8, 2003 from Ms. Horvath's legal representative to Ms. Donohue outlining the substantive issues to be arbitrated at the hearing the next week, namely, Ms. Horvath's claim for housekeeping benefits, the denial of Dr. Jordan's second treatment plan dated July 10, 2002 and Ms. Horvath's right to payment of $865 pursuant to an agreement made at mediation. Finally, the Commission's file also contains Mr. Morgan's letter dated April 9, 2003 to Ms. Horvath's legal representative. This letter, written a few days before the hearing commenced, contained the first indication by Allstate that it intended to rely upon Ms. Horvath's failure to return her application forms in a timely manner. The last paragraph read as follows:

It is Allstate's position that your client has failed to provide a reasonable explanation as to why the application was submitted beyond the 90 [sic] day requirement and is not eligible to claim. All previous payments were made in error and not a waiver of our right to rely on this defense [sic].

b. Allstate's non-waiver letter

In my view, Allstate's non-waiver letter of June 14, 2000³⁸ is a complete answer to the estoppel argument insofar as that argument seeks to deprive Allstate of its section 32(1) time limit defence. While this letter did not specifically refer to a section 32(1) time limit defence, it clearly preserved Allstate's right to argue any defence in existence on June 14, 2000.

I acknowledge that a non-waiver letter is sometimes referred to as a "non-waiver agreement."³⁹ As already indicated, I also accept Ms. Horvath's evidence that she did not understand, much less agree with, Allstate's letter. Nevertheless, just as waiver involves the abandonment of rights without an exchange of contractual consideration,⁴⁰ non-waiver involves the preservation of rights, not an exchange of contractual consideration. In my view, the only important question is whether Ms. Horvath received the letter. She acknowledged that she did. She could then have discussed this letter with her legal representative, not so that she could reject or accept it, but so that she could understand it better.

The non-waiver letter did not, however, preserve defences which Allstate acquired after it was written on June 14, 2000. It is not, therefore, an answer to the estoppel argument insofar as that argument seeks to deprive Allstate of its section 32(3) time limit defence.

c. representation through silence and detrimental reliance

Limitation periods serve the purposes identified by the Supreme Court of Canada in M.(K). v. M.(H.): 1) certainty - the need for a finite process, 2) evidentiary considerations - to avoid relying on stale evidence, and 3) diligence - claims must be brought in a timely fashion.⁴¹ These purposes are equally important to the proper functioning of the dispute resolution process.⁴²

However, it has also been confirmed that an arbitrator has authority to apply equitable doctrines such as estoppel and laches in the ordinary exercise of his or her statutory jurisdiction.⁴³ For that reason, I note that while the M.(K). v. M. (H.) decision is most often referred to in connection with the purposes of limitation periods, it also contains and endorses the following explanation of laches:

... the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material...Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.⁴⁴

It is apparent that estoppel, laches and waiver are interrelated concepts of equity, all developed in the process of finding just solutions to the problems created when a party with rights is said to have led another party against whom those rights operate into believing that the rights would not be asserted. As far as I am aware, there is no reason to believe that these concepts do not apply to cases where the rights in question relate to time limits stipulated by the Schedule. In such cases, however, the purposes and procedures of the Schedule must also be considered. This was confirmed by an Arbitrator, now a Director's Delegate, in the case of York and Zurich Insurance Company when she wrote:

The Commission's reluctance to find waiver or estoppel in silence or a course of conduct relates to the remedial objectives of the accident benefits scheme, which is intended to encourage ongoing communication between an insured person and his or her first-party insurer, resulting in prompt payment of ongoing periodic benefits by insurers, and in early resolution of disputes.⁴⁵

Still, it is my opinion that estoppel through silence arguments do not always or automatically conflict with the purposes or procedures of the Schedule. On the contrary, since silence is the opposite of communication, acceptance of estoppel through silence arguments can help to "encourage ongoing communication between an insured person and his or her first-party insurer."

In the present case, there was nothing to justify Allstate's failure to communicate its section 32(3) time limit defence from the outset, in October 2000, when it received Ms. Horvath's application forms well after the 30-day time limit. This was not a case where, as the Director's Delegate put it in St. Louis and Allstate Insurance Company of Canada,⁴⁶ "the insurer is seeking to expand upon the initial reasons for denying a benefit, as its understanding of the claim, or the information available to it develops." Moreover, it would have been entirely consistent with the purposes and procedures of the dispute resolution process for Allstate to have referred the issue of Ms. Horvath's non-compliance with section 32(3) to mediation under section 280(1) of the Insurance Act. Indeed, while the point was not raised or argued, there is no indication that this issue was ever the subject of a failed mediation. Instead, Allstate did not raise this issue until the eve of the hearing, three and a half years later. In my view, this conduct was not in keeping with the purposes or procedures of the dispute resolution process. I find instead that this conduct constituted a representation through silence that Allstate would not assert a section 32(3) time limit defence.

Notwithstanding this finding, it is clear that Allstate's silence does not give rise to estoppel unless it constituted a representation which Ms. Horvath relied upon to her detriment.⁴⁷ Allstate indicated at the hearing that it made no claim for repayment of benefits paid on Ms. Horvath's behalf. This left Mr. Richard to make the following argument, as I understood it: Allstate's failure to raise its section 32(3) time limit defence led to Ms. Horvath's coming under Dr. Jordan's care at Allstate's expense; if I were to now accept Allstate's section 32(3) defence, Ms. Horvath would be required to find a different, OHIP-funded service provider to replace Dr. Jordan; had Ms. Horvath not been misled by Allstate's silence about its section 32(3) defence, she would not have come under Dr. Jordan's care and she would not now be facing the necessity of having to change doctors; a change of doctors at this stage would be detrimental to her continued care.

I reject every aspect of this argument. First, it is not clear that Ms. Horvath would have not come under Dr. Jordan's care had Allstate raised its section 32(3) defence in a more timely way. Despite my earlier comments, I acknowledge that Allstate might still have been required to pay for such treatment in accordance with the dispute resolution process, pending the disposition of its section 32(3) defence. Second, this argument overlooks the fact that Allstate had other grounds upon which it could contest its liability to pay for Dr. Jordan's treatment, namely, the reasonableness and necessity of such treatment. Ms. Horvath could have never been under any illusion about this because Allstate did, in fact, deny the reasonableness and necessity of Dr. Jordan's first treatment plan, before she even started to receive treatment from him. Allstate also denied the reasonableness and necessity of Dr. Jordan's second treatment plan. In other words, while Allstate's silence about its section 32(3) time limit defence may have misled Ms. Horvath about Allstate's intention to rely upon that defence, this silence did not constitute a representation that Allstate would continue to pay for Dr. Jordan's treatment indefinitely. Third, there is no cogent evidence to support Mr. Richard's contention that a change of doctors at any stage would have been or would be detrimental to Ms. Horvath's continued care.

In conclusion, assuming that I have misapprehended or misapplied the principles governing the interpretation of the words "reasonable explanation" in section 31(1) or the words "information to assist the person in applying for benefits" in section 32(2)(c), I reject the argument that Allstate was estopped from relying upon its section 32(3) defence.

Issue 3: the claim for housekeeping benefits

a. delay in submitting the claim

Mr. Morgan testified that Allstate did not receive appropriate application forms in relation to Ms. Horvath's claim for housekeeping benefits until July 15, 2002⁴⁸ and, further, that Allstate did not receive documents completed by the persons who allegedly supplied housekeeping services to Ms. Horvath⁴⁹ until September 26, 2002. Mr. Morgan stated that until it received these forms and documents from Ms. Horvath's legal representative, Allstate was not aware that Ms. Horvath had "incurred" housekeeping expenses within the meaning of section 22 of the Schedule. He acknowledged that Ms. Horvath's Application for Accident Benefits, received on October 19, 2000, did indicate that she was experiencing problems with "housework - cooking, washing."⁵⁰ However, he noted that this form did not indicate that Ms. Horvath was incurring housekeeping expenses. Mr. Morgan further acknowledged that the February 2, 2001 letter to Allstate from Ms. Horvath's legal representative also referred to Ms. Horvath's claim for housekeeping expenses⁵¹ but he denied the statement contained in that letter that Ms. Horvath had already "submitted" such a claim. He maintained that without some indication that Ms. Horvath had incurred housekeeping expenses or entered into a promise to pay for housekeeping services, no such claim had yet been submitted to Allstate. Finally, Mr. Morgan testified that had Ms. Horvath submitted a claim in relation to incurred housekeeping expenses in a more timely manner, Allstate would have ordered an in-home assessment by an occupational therapist with a view to providing Ms. Horvath with appropriate rehabilitation services and assistive devices.

Relying upon this evidence for her third argument based on delay, Ms. Donohue argued that Allstate was prejudiced by Ms. Horvath's failure to submit proof of incurred housekeeping expenses in a timely manner. In addition to the resulting loss of opportunities for early rehabilitation, Ms. Donohue referred to the evidentiary problems created by the late submission of such proof. I agree that these are important concerns for the efficient and fair operation of the dispute resolution process. I do not agree they are the only, or even the first, concerns of importance in the present case. In my view, the first concern must be whether Allstate provided Ms. Horvath with the information and forms described in sections 32(2)(a), (b) and (c) of the Schedule.

Based on the evidence before me, I find that Allstate never explained in writing to Ms. Horvath that housekeeping benefits were "available under this Regulation" in accordance with its obligation under 32(2)(b). Mr. Morgan agreed that neither the Package in general nor the Application for Accident Benefits form in particular said anything about the availability of housekeeping benefits. The Package also did not provide blank copies of the appropriate form for claiming housekeeping benefits, the Application for Expenses form OCF-6. The IBC pamphlet did indicate that "the reasonable cost of housekeeping and home maintenance" was recoverable as an "other expenses benefit." Ms. Horvath may have also been told about the availability of housekeeping benefits during the two-minute telephone "blurb" mentioned above. However, as I have previously held, the evidence does not support either a finding that Ms. Horvath received the IBC pamphlet or a finding that she received any particular piece of information from Allstate through the telephone "blurb." In any event, section 32(2)(b) required the explanation to be in writing.

I further find that Allstate never informed Ms. Horvath that her claim for housekeeping benefits would have to be supported by some indication that she had incurred housekeeping expenses or entered into a promise to pay for housekeeping services. The point for present purposes is not to find fault with Allstate's interpretation of section 22: that interpretation was not authoritatively rejected by a Director's Delegate until a few weeks before the hearing in the case of Zurich North America Canada and Stargratt.⁵² The point is simply that Allstate's interpretation of section 22 was information which would have assisted Ms. Horvath in applying for housekeeping benefits. It follows, in my view, that this information should have been provided to Ms. Horvath in accordance with Allstate's obligation under section 32(2)(c).

Finally, I find, on a balance of probabilities, that Allstate never provided Ms. Horvath with the "appropriate application forms" for claiming housekeeping expenses, the OCF-6 forms, in accordance with its obligation under section 32(2)(a). I acknowledge that Ms. Horvath herself was unsure whether she obtained these forms from her legal representative or Allstate. Still, Mr. Morgan's evidence, which included a thorough review of Allstate's handling of the file, did not suggest that these forms were ever sent to Ms. Horvath by Allstate. His evidence was far more consistent with a finding that Allstate never sent the forms to Ms. Horvath because it was not until Allstate actually received the forms in July 2002 that it was provided with any indication that Ms. Horvath had incurred housekeeping expenses or entered into a promise to pay for housekeeping services.

Nonetheless, Allstate was aware from the outset, in June 2000, that Ms. Horvath claimed to be getting help with housework as a result of the accident. The transcript of Allstate's telephone interview with Ms. Horvath on June 12, 2000 contained the following questions and responses:

Q. Now have you had anybody come into the house or have you been able to take care of the housework and child caring duties?

A. Um, yeah, basically that’s been, that’s been pretty much taken care of. I 've had some friends come but, I haven't paid anybody else out of my home...

Q. And you had mentioned that you had some friends come in to do your housework

A. Yep.

Q. But you haven't had to pay anybody.

A No I haven't had to pay anybody to do that.⁵³

Similarly, despite the fact that the Application for Accident Benefits form asked Ms. Horvath no questions about her ability to do housework, she provided such information in Part 7 of the form, dealing with caregiver benefits. This is where, as previously indicated, Ms. Horvath wrote that she was experiencing problems with "housework - cooking, washing." In the Activities of Normal Life form, Ms. Horvath further indicated that she needed help with, or could not do, the following: sweeping, dusting, vacuuming, bedmaking, bathrooms, washing floors, oven, refrigerator, garbage removal, washing/drying, ironing and sewing. The Disability Certificate completed by Dr. Lawrence also indicated that Ms. Horvath suffered from impairments which substantially prevented her from performing pre-accident housekeeping, including sweeping, vacuuming and washing floors.⁵⁴ As previously noted, Allstate received all this material on October 19, 2000.

In dealing with Allstate's obligations under section 32(2), I refer to the Director's Delegate's decision in the recent case of Carruthers and Royal & SunAlliance Insurance Company of Canada. The issue in that case was whether the claimant had notified the insurer of his intention to claim statutory accident benefits. It was found that the claimant's letter to the insurer only indicated his intention to commence an action for damages, not to claim statutory accident benefits. In the course of his reasons, the Director's Delegate made the following comments of importance for the present case.

The message of s. 32, in my view, is that insurers should facilitate applications for accident benefits. When they are contacted by someone seeking accident benefits, they must provide the application package. They should not attempt to screen claims at this stage, or deflect them to another insurer. However, the person must do something to trigger the insurer's obligation to send the application package. Using the words of s. 32(1), there must be something to alert the insurer to the fact that he or she is "a person who wants to apply for a benefit under this Regulation."⁵⁵

Allstate's receipt of Ms. Horvath's Application for Accident Benefits on October 19, 2000 was clear confirmation that Ms. Horvath was indeed a person "who want[ed] to apply for a benefit under this Regulation." There is no issue about that in the present case as there was in the Carruthers case. The issue in the present case, as I see it, is whether Allstate's handling of Ms. Horvath's file had the effect, if not the intent, of screening out her claim for housekeeping benefits. I find that it did. Allstate was aware from the outset that Ms. Horvath claimed to be getting help doing housework as a result of the accident. Ms. Horvath's application forms and Dr. Lawrence's Disability Certificate confirmed the continuing nature of these problems. Despite this, Allstate never informed Ms. Horvath that housekeeping benefits were available, never informed her that a claim for housekeeping benefits would have to be supported by some indication that she had incurred housekeeping expenses or entered into a promise to pay for housekeeping services and never sent her the appropriate form for making a claim for housekeeping expenses. I find that Allstate was required by sections 32(2)(a), (b) and (c) to do each of these things. I further find that its failure to do them contributed to the very delay about which it now complains.

Should I nevertheless find that Ms. Horvath's failure to submit a timely and properly supported claim for housekeeping benefits is attributable, not to Allstate's failures to provide the information and forms required by sections 32(2)(a), (b) and (c), but to the failure of Ms. Horvath's legal representative to advise her how to submit a properly supported claim for housekeeping expenses?

Based on the evidence before me, it would certainly appear that Ms. Horvath's legal representative failed to advise her how to submit a properly supported claim for housekeeping expenses. The legal representative's letter of February 2, 2001 simply claimed $100 per week without indicating what housekeeping services were provided to Ms. Horvath or by whom. Ms. Horvath's legal representative did, however, keep the housekeeping claim alive through mediation later in 2001 and through Ms. Horvath's Application for Arbitration in April 2002. There can, therefore, be no estoppel or laches argument made against the claim itself.

Nor, in my view, should Ms. Horvath's claim for housekeeping benefits be rejected on the ground that her legal representative failed to have her complete and submit the OCF-6 forms until July 15, 2002. This reasoning was rejected by the Arbitrator (but not dealt with by the Director's Delegate) in the Carruthers case referred to earlier.⁵⁶ In that case, the Insurer had not provided the insured person with an Application for Accident Benefits but nevertheless argued that it was "ludicrous to suggest that [the insured person's] law firm...could not find an Application for Accident Benefits form until 18 months after the motor vehicle accident."

The Arbitrator followed the Director's Delegate's decision in Kuchiak and Wawanesa Mutual Insurance Company which held: "The Schedule mandates that information be forwarded to applicants for benefits. It does not create an exception for applicants who are represented by counsel."⁵⁷ The Arbitrator in Carruthers also held that since the Insurer had never sent the application forms required by section 32(2), the time limit imposed by section 32(3) had never commenced. For the same reason, Allstate could not, in the present case, rely upon the time limit created by section 32(4).

In sum, I reject Allstate's argument that Ms. Horvath's claim for housekeeping benefits should be dismissed by reason of its late submission.

b. medical evidence in relation to causation and disability

Ms. Horvath is only entitled to housekeeping benefits under section 22 for a maximum period of two years after the accident and only if she establishes that, as a result of the accident, she sustained an impairment which rendered her substantially unable to perform the housekeeping tasks she normally performed before the accident. This eligibility test requires me to consider medical issues related to causation and disability.

As previously mentioned, the Disability Certificate completed by Dr. Lawrence indicated that Ms. Horvath suffered from impairments which substantially prevented her from performing pre-accident housekeeping tasks, including sweeping, vacuuming and floor washing.⁵⁸ In addition to Dr. Lawrence's Disability Certificate, Allstate received a report from Dr. Lawrence dated September 18, 2000. Since almost everything in Dr. Lawrence's report is relevant to the issues of causation and disability, I set out its contents below:

I initially attended Ms. Horvath on August 9, 1999, at my office. She stated that she had been hit by a car which was backing up while she was walking in the parking lot of the Seaway Mall, Welland, Ontario. She stated that at the time of the accident she had bruising over the left flank and hip. She stated that she had delayed presenting for medical attention as she believed that her injuries were bruises which she felt would resolve with time. Unfortunately, her pain had not improved and was increasing. In addition, she was developing stiffness in her lower back and left hip area. As you will note from her records she already had a pre-existing history of low back and bilateral hip pain. She stated that this had been greatly aggravated by the injury during the afore mentioned accident. On examination, she was found to be tender over the soft tissues of the left lumbo-sacral and hip regions. Range of motion was greatly reduced in both areas. It was my feeling that she had sustained a contusion of the lower back and left hip. I also felt that she was developing a bursitis of the left hip. As a result, she was refered for physiotherapy with Antoine Swampili, Welland, Ontario.

It is my feeling the afore mentioned injuries have disabled her with respect to her regular occupation as well as house keeping and care giving activities. She is only capable of sitting for approximately 5 to 10 minutes at a time. She is only capable of standing for approximately 10 to 15 minutes. She is not capable of any bending or lifting. She is unable to twist or turn her torso. This prevents her from performing her regular occupation. As far as her activities of daily living are concerned she is not capable of vacuuming, washing floors, cleaning windows, or the bathroom. As she was capable of performing all of these activities previous to the accident I can only assume that her not being able to do so now is directly related to the injuries she sustained.

Ms. Horvath had been refered by myself for an orthopedic consult with Dr. J. Song, Welland, Ontario prior to the accident. She was subsequently refered back to him for a follow-up. She was refered as the pain and stiffness were not improving with her course of physiotherapy. She is intolerant to non-steroidal anti-inflammatories and as a result none have been prescribed.⁵⁹

Dr. Lawrence's clinical notes from late 1996 to June 2001 were also put into evidence.⁶⁰ In my view, they support the following findings:

1. Ms. Horvath was seen on June 16 in respect of another motor vehicle accident on March 22, 1997; as a result of this accident, Ms. Horvath complained of left hip pain; Dr. Lawrence's diagnoses of the injuries sustained in this accident included bursitis of the left hip; Dr. Lawrence noted that Ms. Horvath was able to do the following household tasks: dusting, vacuuming, dish-washing and small bag garbage removal; he noted that Ms. Horvath was unable to do the following household tasks: sweeping, window washing, bathroom cleaning, laundry, bed-making, changing bed sheets, large bag garbage removal and ironing.

2. When Ms. Horvath was next seen on September 16, 1997, she did not continue to complain of the limitations noted on June 16, 1997.

3. Ms. Horvath was seen by Dr. Lawrence 13 times between August 9, 1999, when she was first examined after the accident of June 15, 1999, and June 7, 2001; on each occasion, Dr. Lawrence referred to her continuing left hip pain or bursitis, sometimes describing it as a "chronic" condition.

4. On February 9, 2001, Dr. Lawrence noted that Ms. Horvath was able to do the following household tasks: dusting, bed-making, small bag garbage removal and laundry; he noted that Ms. Horvath was unable to do the following household tasks: window washing, floor washing, vacuuming, changing bed sheets, bathroom cleaning, large bag garbage removal and ironing.

As indicated by Dr. Lawrence in his report of September 18, 2000, he had referred Ms. Horvath to Dr. John Song, an orthopaedic surgeon, both before and after the accident of June 15, 1999. Dr. Song's first report back to Dr. Lawrence, dated March 19, 1999, suggested that Ms. Horvath was suffering from acetabular dysplasia. According to Dr. Song's report, Ms. Horvath described the symptoms related to this condition as follows:

This 40 year old woman has had pain in both hips on and off for many years. This has been getting worse over the past few months. It gives her trouble sleeping, and she thinks it is responsible for her legs collapsing when she is going up and down the stairs. The pain is in the groin and goes up to her back and down to her knees. She doesn't have any low back pain otherwise. She says that when she was two years old she was treated in Europe with an operation for hip dysplasia. Following the operation she was in braces for about two years and since then she has been able to walk, but she has had episodic symptoms. She is unable to sit or stand for too long because of the pain and she can't take very many medications because of her sensitivities and she is being investigated for possible Crohn's disease.⁶¹

Since Dr. Song thought that Ms. Horvath's acetabular dysplasia might be surgically corrected, he referred her to a surgeon with experience in this procedure, Dr. Christopher Whately. However, Dr. Whately's consultation record indicated that he was reluctant to pursue surgery.⁶² This consultation record appears to have been dictated on June 20, 1999 but, according to Dr. Song's next report back to Dr. Lawrence, dated January 24, 2000,⁶³ Ms. Horvath actually saw Dr. Whately about two weeks before the accident of June 15, 1999. At that point, Ms. Horvath described her symptoms to Dr. Whately as follows:

Catherine Horvath is a 40-year-old homemaker and mother of three children, ages 13, 12 and 10 who I saw through the request of Dr. Song regarding bilateral hip discomfort that she has had off and on for years. She describes discomfort in the buttocks with occasional low back [pain] and may radiate down as low as the knees but not below them. She occasionally gets a sensation as if the legs will give out on her. She also has occasional night discomfort. She is able to walk for at least an hour but finds that she is tired after walking this distance. For the previous three months, her symptoms have worsened although she says she has had similar symptoms all her life. When she was 2 years old she was treated in Europe with an operation for what sounds like dysplasia and ended up in braces for a couple of years.⁶⁴

Dr. Song's report of January 24, 2000 was based on an examination that day. It described the June 15, 1999 accident as "an insult to her pre-existing arthritis" which "likely will resolve with time." However, it also contained the following statement:

...this trouble has evolved into a chronic pain type of injury. She has been in physiotherapy since August and she has been unable to work at her job, which is a sit down job. The pain is lateral to her hip, buttock and up her back as well. She can't take very much medication, because of her G.I. symptoms.⁶⁵

In response to a request from Allstate, Dr. Song wrote a third report dated September 25, 2000.⁶⁶ This report contained the following sentence: "I don't believe this condition causes her to be disabled from working or completing her homecare and child care tasks." It is clear that the "condition" Dr. Song was referring to was Ms. Horvath's post-accident condition, but his report also makes it clear that he had not examined Ms. Horvath since January 24, 2000.

As mentioned earlier, Ms. Horvath was examined at Allstate's request by Dr. Blackman on December 12, 2000. Dr. Blackman reviewed the reports referred to above and other medical records, provided a chronology of her treatment, listed her complaints and conducted an examination. He concluded, among other things, that Ms. Horvath was not suffering from any physical impairment that would prevent her from performing her pre-accident housekeeping activities. Dr. Blackman acknowledged that Ms. Horvath suffered the pain she described but he made no comment about whether she had developed a chronic pain condition.⁶⁷

Dr. Lawrence was called as a witness at the hearing. He testified that the pain resulting from the accident was located in the left trochanter area, whereas the pain resulting from Ms. Horvath's dysplasia was bilateral in the groin area. He also testified that, in his medical opinion, Ms. Horvath's limitations were the result of the accident of June 15, 1999 and consistent with her medical condition.

The medical evidence, taken as a whole, clearly establishes that Ms. Horvath had significant hip problems prior to her accident of June 15, 1999. Dr. Lawrence's notes appear to support Ms. Horvath's testimony that she had recovered from the accident of March 1997, but the reports of Drs. Song and Whately indicate that her long-standing dysplasia symptoms were actually getting worse in the months leading up to the accident. Nevertheless, Ms. Horvath's testimony that she was still capable of performing her household duties prior to the accident was not seriously challenged. Nor, therefore, can Dr. Lawrence's opinions be challenged because they are built on that assumption.

I accept the opinion of both Dr. Lawrence and Dr. Song that the injuries Ms. Horvath sustained on June 15, 1999 evolved into a chronic pain condition. Dr. Blackman's report cannot be read as contradicting this opinion because it was simply silent on the question. Ms. Horvath's pre-accident dysplasia may, of course, have contributed in some way to the evolution of her chronic pain condition. Still, as I understand the opinions of Dr. Lawrence and Dr. Song, the accident of June 15, 1999 also contributed in a material way to her chronic pain condition. I also infer from comments made by both Dr. Lawrence and Dr. Song that Ms. Horvath's ability to cope with her chronic pain was compromised by her drug allergies.

I do not accept Dr. Song's opinion of September 25, 2000 that Ms. Horvath's post-accident condition did not prevent her from "completing her homecare and child care tasks." This opinion was not based on a contemporaneous examination. Dr. Song's most recent examination of Ms. Horvath had taken place on January 24, 2000. At that point, he observed that she was "unable to work at her job, which is a sit down job." I acknowledge that Dr. Song also speculated that Ms. Horvath's condition would "resolve with time." Still, he could not have known whether or not her condition had resolved by September 25, 2000 without conducting another examination. If the condition which prevented Ms. Horvath from returning to her sit-down job had not resolved, this condition would have likely also prevented Ms. Horvath from returning to her housework tasks.

It was only Dr. Lawrence who examined Ms. Horvath regularly during the relevant period. His notes confirm that her chronic hip pain condition continued unabated. I accept his opinion that Ms. Horvath's problems doing housework after the accident were both the result of the accident and consistent with her chronic hip condition.

I nevertheless acknowledge that Dr. Lawrence's evidence does not support every aspect of Ms. Horvath's claim for housekeeping benefits. In particular, his report of September 18, 2000 did not state that Ms. Horvath was unable to do laundry and his clinical note of February 9, 2001 indicated that she was able to do laundry. I cannot simply assume that these were errors or oversights in the preparation of Dr. Lawrence's report and note. Dr. Lawrence was not asked, as a witness, if there were any corrections he wanted to make to his report or note. Moreover, as will soon become apparent, Dr. Lawrence's evidence did not address each and every household task which Ms. Horvath claimed to have done before the accident.

I might regard this as a reason to doubt Ms. Horvath's testimony that she unable to do laundry and the other household tasks not specifically mentioned by Dr. Lawrence. Alternatively, I might find that Ms. Horvath's condition, as described by Dr. Lawrence, prevented her from doing laundry and the other household tasks not specifically mentioned by him just as it prevented her from doing the household tasks specifically mentioned by him. However, the final determination of these additional aspects of Ms. Horvath's claim should, in my view, be made in the light of all the evidence, not just the medical evidence. I turn now to the non-medical evidence in relation to housekeeping tasks and services.

c. non-medical evidence in relation to housekeeping tasks and services

Ms. Horvath was (and still is) a stay-at-home mother who lived during the relevant period with her husband and three teenage sons in a house with two bathrooms, a kitchen, three bedrooms, a living room, a dining room, a family room, a partially finished recreation room and a laundry room in the basement. I accept her testimony that before the accident of June 15, 1999, she was able to and did perform the following housekeeping tasks:

1. dusting, vacuuming and washing windows, walls and curtains in the following rooms: the bedrooms, the living room, the family room, the dining room and the recreation room; frequency varied with the room and the task, some tasks being done "every couple of days" others only seasonally.

2. making and changing bedsheets.

3. cleaning the following: both bathrooms, the kitchen and the laundry room; walls, windows and blinds washed with less frequency than floors, counters, appliances and fixtures.

4. laundry, every day, sometimes three loads a day.

Ms. Horvath testified that as a result of the accident, she was in too much pain to do housework and that she informed her good friend Rosanne Berardi that she needed help. It was Ms. Horvath's testimony that within a week of the accident, Ms. Berardi started to come to the Horvaths' house five to ten hours a week in order to do vacuuming and dusting, make and change beds, wash floors, clean the bathrooms and do laundry. Ms. Horvath testified that Ms. Berardi and Ms. Horvath's sister, Josie Faccini, took turns helping her in this way, each spending about five to ten hours a week, until June 2001. She agreed that she never told Ms. Berardi or Ms. Faccini that she would pay them for their services. She testified that she could not remember when she became aware of her right to claim housekeeping benefits as a result of the accident but thought it was when she spoke to her legal representative in November 2000. At some point, she testified, she was informed by her legal representative that Allstate required "something on paper." As a result, she, Ms. Berardi and Ms. Faccini prepared the documents eventually submitted to Allstate in support of her claim for housekeeping benefits.⁶⁸ Ms. Horvath admitted that no records were kept of the dates and hours Ms. Berardi and Ms. Faccini performed housework in her home.

Ms. Horvath was asked on both examination-in-chief and cross-examination about what she said or did not say on various occasions about her need for help with housework. Dr. Blackman's report, for example, stated only that "her husband and children help out" with housework.⁶⁹ Ms. Horvath insisted in chief that she had told Dr. Blackman that she was also getting help from friends. Ms. Horvath insisted on cross-examination that she had done no laundry in the two years after the accident. This was obviously contrary to what she had apparently told Dr. Lawrence though I note that she was not specifically confronted with, or asked to explain, the inconsistency.⁷⁰ Dr. Song's report of January 24, 2000 said nothing about Ms. Horvath's problems doing housework. On cross-examination, Ms. Horvath thought she had "probably told him" about these problems. In her statement of July 21, 2000, Ms. Horvath had affirmed that "my children do the vacuuming, my family has pitched in quite a bit."⁷¹ On cross-examination, Ms. Horvath explained that she considered Ms. Berardi and Ms. Faccini to be included in the word "family." The reports of the first MedRehab DAC in July 2001 included the following observations: "Ms. Horvath also acknowledged that she must rely on her children and husband to complete the more taxing chores, such as mopping and vacuuming"⁷² and "she is able to do some light dusting and vacuums her bedroom, but her husband and boys do all the rest of the indoor and outdoor housework."⁷³ Ms. Horvath agreed on cross-examination that she had not told the DAC assessors about her sister and her friend doing housework for her.

I certainly agree that these inconsistencies are damaging to Ms. Horvath's own credibility. Still, as previously indicated, Ms. Horvath did tell Allstate in June 2000 that she was relying upon friends for help with housework. In any event, Ms. Horvath's entitlement to housekeeping benefits also relies, in large measure, on the evidence of Ms. Berardi and Ms. Faccini.

Ms. Berardi testified that she learned that Ms. Horvath was in pain as a result of a motor vehicle accident "two or four weeks" after the accident happened. She testified that she first started to help Ms. Horvath with laundry sometime after Ms. Horvath's children went back to school. She stated that she went on to do vacuuming and dusting in the bedrooms, dining room, family room (which she called the living room), and living room (which she called the formal living room), cleaned the bathrooms and kitchen, made and changed beds and, in the spring of 2001, washed windows. She acknowledged that the documents submitted to Allstate were prepared after the fact and that they were inaccurate as to when she started to help Ms. Horvath. She testified that she did not help Ms. Horvath in July or August 1999, as the documents indicated, but only started to help in September 1999. However, in a written statement made and signed just before the hearing, Ms. Berardi indicated that she started to help Ms. Horvath in July 1999. The statement went on to provide the following explanation of how the documents provided to Allstate came into being:

When I started working for her, I did so to help her. I was there to help a friend whether or not there was any pay or compensation. To this date I've not been paid anything for my help. Catherine said she wanted to pay me... when she was paid by the insurance company. She had suggested that she would pay me $100 /week & I agreed that was reasonable. That was based strictly on the fact that it was an easy number...

About a year ago, Catherine's lawyer requested thru [sic] Catherine that I provide receipts. The lawyer said that they would only require 2 years worth of receipts, so I provided that. I never kept record or track of hours worked nor days worked.⁷⁴

In the same statement, Ms. Berardi estimated that she initially spent about 24 hours a week doing housework for Ms. Horvath but that, due to her own obligations, she was required to cut her hours back to six to twelve hours a week "about two years ago", that is, in about March 2001. Ms. Berardi's statement also indicated that she continues to provide that amount of assistance to Ms. Horvath, long after the expiry of the two year period for which any housekeeping benefits might be recoverable.

Ms. Faccini testified that she helped her sister most after the death of their mother in February 2001. She testified that she did laundry, dusting and vacuuming in the bedrooms, the living room and the family room, made and changed bedsheets and cleaned the bathrooms and the kitchen. She acknowledged that she kept no schedule of her hours but estimated that she did eight to ten hours of housework per week in the period from February to June 2001. She testified that the documents submitted to Allstate claimed $100 per week simply because that was what she, Ms. Berardi and Ms. Horvath believed would be "allotted" to Ms. Horvath for housekeeping. expenses. She agreed that money was never discussed at the outset. She stated that she helped her sister because her sister needed the help.

I accept Ms. Berardi's and Ms. Faccini's evidence that they performed household tasks for Ms. Horvath. While they clearly stand to benefit from the allowance of Ms. Horvath's claim for housekeeping benefits, I am not persuaded that they simply fabricated their evidence. On the contrary, despite their participation in the creation of the documents submitted to Allstate, they both freely admitted at the hearing that these documents could not be regarded as records of their time spent. In my view, the absence of such records is explained by three things, none of which reflects poorly upon the credibility of Ms. Berardi and Ms. Faccini: first, their own original unselfish desire to help Ms. Horvath without expectation of payment; second, Allstate's failure to properly inform Ms. Horvath of her potential entitlement to housekeeping benefits and, third, Ms. Horvath's legal representative's failure to substantiate her client's housekeeping claim in a more timely manner.

I acknowledge certain inconsistencies in the evidence of Ms. Horvath, Ms. Berardi and Ms. Faccini. Ms. Horvath testified that Ms. Berardi started to provide household services within a week of the accident on June 15, 1999. Ms. Berardi's written statement indicated that she started in July 1999 though her oral testimony was that she started in September 1999. There were also significant differences in their estimates of the number of hours per week Ms. Berardi and Ms. Faccini spent doing housework for Ms. Horvath. However, I regard these inconsistencies as a reflection of the lack of contemporaneous records, not as a reflection of any desire to deceive.

In sum, despite Ms. Horvath's lack of consistency in telling others about her need for help with housework, particularly with laundry, I find that Ms. Berardi and Ms. Faccini performed the household tasks which Ms. Horvath normally performed before the accident, as listed above. Having regard to the physical nature of all of these tasks, I am also satisfied that Ms. Horvath's chronic pain condition prevented her from doing all of her pre-accident tasks, including laundry, not just the tasks specifically referred to in Dr. Lawrence's report and note.

d. reasonable and necessary expenses

As previously mentioned, it is now clear that Ms. Horvath is entitled to recover housekeeping expenses even though they were provided by her family or friend without a promise or expectation of payment. It is also clear that Allstate should have explained to Ms. Horvath that she could claim for services received from her sister and friend and should have invited her to provide particulars of the services provided.⁷⁵ But the fact remains that Ms. Berardi and Ms. Faccini did not keep records of their time spent. How then to resolve the issue of the amount of the reasonable and necessary expenses to which Ms. Horvath is entitled? In answering this question, I am guided by the following observation of the Director's Delegate in the Zurich North America Canada and Stargratt decision:

Insurers are entitled to require documentation of caregiver and attendant care [or housekeeping] services claimed, and they have reason to ask more questions when family members provide the services. Although detailed contemporaneous record-keeping is ideal, evidentiary requirements should be tailored to the informal context.⁷⁶

Having regard to the conflicting evidence about when Ms. Berardi started to help Ms. Horvath with her housework, I find that Ms. Horvath is entitled to recover housekeeping expenses for 100 of the 104 weeks between June 15, 1999 and June 15, 2001. Having regard to the conflicting evidence about the number of hours per week Ms. Berardi and Ms. Faccini spent doing housework for Ms. Horvath, I find that Ms. Horvath is entitled to recover expenses for nine hours of housekeeping services per week. Nine hours is mid-way between both the six to twelve hour estimate of Ms. Berardi for the period after March 2001 and the eight to ten hour estimate of Ms. Faccini. It is also in line with Ms. Horvath's own estimate of five to ten hours for both Ms. Berardi and Ms. Faccini. These housekeeping benefits will be payable at the rate of $6.85 per hour, the minimum wage during the relevant period. The total amount payable by Allstate to Ms. Horvath is, therefore, $6,165, plus interest payable under section 46. However, given the late submission of documents supporting Ms. Horvath's claim for housekeeping expenses, I find that this amount only became overdue on October 15, 2002.

Issue 4: treatment recommended by Dr. Jordan

The first MedReb DAC report expressed the opinion that Dr. Jordan's first treatment plan, calling for sixteen treatment sessions, was reasonable and necessary. The second MedReb DAC report expressed the opinion that Dr. Jordan's second treatment plan, calling for an additional ten treatment sessions and two follow-up sessions, was not reasonable and necessary. Allstate relied on this second report and called its author, Dr. Elaine MacNiven, a registered psychologist, to testify at the hearing.⁷⁷ Ms. Horvath called Dr. Jordan as a witness.⁷⁸

The evidence establishes that in preparing her report dated October 18, 2002,⁷⁹ Dr. MacNiven made three arguably important errors. First, Dr. MacNiven's report referred to Dr. Lawrence's clinical note of February 9, 1999 as evidence that Ms. Horvath suffered from depression before the accident. In fact, it was Dr. Lawrence's clinical note of February 9, 2001 which indicated that Ms. Horvath was suffering from depression and this note was obviously made after the accident. Second, Dr. MacNiven's report stated that, as of the date of the assessment on October 1, 2002, Ms. Horvath had only attended eleven of the sixteen treatment sessions recommended by Dr. Jordan in his first treatment plan. In fact, Allstate's record of payments to Dr. Jordan,⁸⁰ and Dr. Jordan's oral evidence, confirmed that Ms. Horvath completed the sixteen treatment sessions sometime in early July 2002, approximately three months before Dr. MacNiven's assessment. Third, Dr. MacNiven acknowledged thinking that Dr. Jordan had provided Ms. Horvath with a book entitled Managing Pain Before It Manages You. In fact, Dr. Jordan testified that he only provided Ms. Horvath with chapters of this book as his treatment sessions proceeded and that, by July 2002, he had not yet provided Ms. Horvath with all chapters.

I should note that it was only the first of these errors which can be attributed to Dr. MacNiven herself. The other two were caused primarily by a lack of precision in the information provided to her. Nevertheless, the question remains whether these errors rendered Dr. MacNiven's opinion unreliable.

The opinion portion of Dr. MacNiven's report reads as follows:

Ms. Horvath presented indicating that she continued to suffer from anger about pain that she deals with on a daily basis that she attributed to a motor vehicle accident which occurred on June 15, 1999. She denied that there was any emotional distress and pain prior to this event. However, a review of her Family Physician's records indicated that there was evidence of reduced concentration and self-esteem, and depressive symptomatology prior to this event. Even on February 9, 1999 at a point only four months prior to the motor vehicle accident, Dr. Lawrence documented such symptoms. It was also noted on April 27, 1999 that Ms. Horvath was dealing with low back pain that had been present for about six months. Therefore, there was evidence of both emotional concerns and chronic pain prior to the motor vehicle accident.

The Physician's clinical notes also appear to indicate that Ms. Horvath suffered some depressive symptomatology following the accident, but it is difficult to determine to what it could be attributed.

Ms. Horvath's personality style suggests that she is the kind of person who tends to see herself positively and she uses defense [sic] mechanisms to deal with stressors. Therefore, the anger about the occurrence of the accident and the subsequent pain could have been internalized and aggravated the pain and a vicious cycle ensued, whereby the pain caused emotional distress which exacerbated the pain. It would not be surprising if the motor vehicle accident, therefore, caused some adjustment effects on Ms. Horvath. Indeed, Dr. Jordan's test results indicate that she was having adjustment difficulties. The treatment proposed by Dr. Jordan (i.e., sixteen cognitive behavioural psychotherapy sessions) was reasonable and necessary. This was determined as a result of a Designated Assessment as documented in the report of Dr. L. Triano-Antidormi, dated July 11, 2001. Based on Dr. Jordan's report and Dr. Triano-Antidormi's report, I concur with this.

By the time of this assessment, Ms. Horvath had attended eleven of the sixteen approved sessions. She had also been provided with many chapters from a self-help book designed to provide bibliotherapy for individuals dealing with chronic pain. I would suggest that Ms. Horvath continue with the remaining approved psychotherapy sessions in order to address Dr. Jordan's goals, which are to help her with regard to relapse prevention, to consolidate the gains made in therapy thus far, and to finally resolve the anger associated with the pain. No further treatment beyond that is reasonable. Research has indicated that up to fifteen psychotherapy sessions are generally sufficient to deal with adjustment issues and to cover the psychological components of pain management.

In addition, it should be noted that the purpose of pain management treatment is to assist the patient in learning how to return to all of his or her normal activities of daily living as best as he or she can, despite ongoing pain. From the information presented by Ms. Horvath during the interview, it is apparent that she has been utilizing pain management strategies that she has learned and she has been applying for jobs that she feels are commensurate with her physical capabilities. In addition, Ms. Horvath's psychological test results indicate that she is dealing well with the residual pain. There is no evidence of clinical levels of depression, anxiety, or other concerns that would require further treatment. Therefore, the treatment extension proposed by Dr. Jordan for ten additional psychotherapy sessions should be rejected, as it is unnecessary.⁸¹

Dr. MacNiven testified that her belief that Ms. Horvath suffered from pre-accident depression played a "minor" but "not irrelevant" role in the formulation of her opinion. She confirmed that she thought that Ms. Horvath was going to receive further treatment, namely, the five remaining treatment sessions authorized under the first treatment plan. She acknowledged that she had not seen Dr. Jordan's notes in respect of the last five treatment sessions and that she did not "know what was covered in those sessions."⁸² Nevertheless, Dr. MacNiven testified that the five remaining treatment sessions would have been sufficient to allow Dr. Jordan to both give Ms. Horvath the balance of the book and to include members of Ms. Horvath's family in her treatment. She stated that involving the family in the final treatment sessions was "customary."

Dr. Jordan's testimony confirmed his written opinion that Ms. Horvath required treatment beyond the sixteen sessions which she had already received. His evidence did nothing, however, to explain why he thought Ms. Horvath needed ten additional treatment sessions and two follow-up sessions. While Dr. Jordan's report dated December 5, 2002 reviewed Dr. MacNiven's report in some detail, its conclusion was simply: "...in my opinion, her gains were tenuous and she requires further treatment in order to sustain improvement on her own."⁸³

In my view, the errors made by Dr. MacNiven in preparing her report do not nullify the evidentiary value of her opinions. Her error in thinking that Ms. Horvath suffered from pre-accident depression did not prevent her from recognizing the accident's important impact on Ms. Horvath's post-accident psychological state. Similarly, her error in thinking that Ms. Horvath was still entitled to five additional treatment sessions did not prevent her from addressing the issue of whether additional treatment, beyond that already received, was reasonable and necessary. This was the question she was required to answer. As I read her report, Dr. MacNiven expressed the opinion that while ten additional treatment sessions were not reasonable or necessary, five additional treatment sessions were reasonable and necessary "in order to address Dr. Jordan's goals, which are to help her with regard to relapse prevention, to consolidate the gains made in therapy thus far, and to finally resolve the anger associated with the pain." Dr. MacNiven's report also clearly implied that five additional sessions would also be sufficient to allow Dr. Jordan to give Ms. Horvath the remaining chapters of the book. Dr. MacNiven's opinion in this regard was confirmed at the hearing as was her opinion that five additional sessions would permit Dr. Jordan to include members of Ms. Horvath's family in her treatment. In my view, Dr. Jordan's evidence did nothing to counter these opinions or to justify his own opinion that twelve additional sessions were reasonable and necessary.⁸⁴

Relying upon Dr. MacNiven's opinions, I find that Ms. Horvath is entitled to receive five additional treatment sessions from Dr. Jordan at Allstate's expense.

Issue 5: agreement made at mediation

As previously indicated, the first MedRehab DAC report, dated July 23, 2001, did more than express the opinion that Dr. Jordan's first treatment plan was reasonable and necessary. Allstate also denied the treatment plan submitted by Mel Perera of Welland Physiotherapy Centre, recommending instead a three-month gym membership and four instruction sessions with a kinesiologist.⁸⁵ Despite the recommendation of the MedRehab DAC, this issue was the subject of further discussion at the mediation. The Mediator's Report, dated October 1, 2001, stated that "Allstate Insurance agreed to resolve the issue of the treatment plan from Welland Physiotherapy Centre with the following payments to Ms. Horvath: $465.00 for a membership at the YMCA for a year; $400 for four sessions with a Kinesiologist."⁸⁶

In his testimony, Mr. Morgan explained that Allstate had not paid these amounts to Ms. Horvath for several reasons. First, he stated that Allstate did not receive invoices or receipts of payments in relation to the services to be provided by the YMCA and a kinesiologist. He acknowledged that Allstate did eventually receive a document from the YMCA, dated August 12, 2002,⁸⁷ and an invoice from Ms. Allison Kares, a registered pilates trainer, for three of the four "YMCA program" sessions, dated September 30, 2002.⁸⁸ However, Mr. Morgan maintained that by the time Allstate received these documents, Ms. Horvath had entered into a new agreement with Allstate under which she agreed to pay for the YMCA membership herself in return for Allstate's agreeing to pay for a new treatment plan submitted by Ms. Kares. This new treatment plan recommended ten weeks of bi-weekly training in pilates.⁸⁹

To substantiate the existence of a new agreement, Mr. Morgan first referred to Ms. Thompson's adjuster's note dated August 7, 2002 which stated: "Ins. [Ms. Horvath] said she will pay for a Gym Membership herself once [the pilates] treatment is finished, agreed to same."⁹⁰ According to Mr. Morgan, this note should be interpreted as confirming that Ms. Thompson spoke to Ms. Horvath herself. Indeed, he testified that he had confirmed with Ms. Thompson herself that she had spoken to both Ms. Horvath and Ms. Kares on August 7, 2002. To further substantiate the existence of a new agreement, Mr. Morgan referred to an Explanation of Benefits form, dated August 9, 2002⁹¹ sent to Ms. Horvath, and to his own letters dated November 20, 2002 and March 3, 2003,⁹² sent to Ms. Horvath's legal representative. These documents all refer to a new agreement. The first of these two letters had also stated: "Regardless, section 37 clearly indicates that we are not responsible for treatment incurred more than 30 days prior to notification." This was a apparently a reference to section 38(17) of the Schedule.

The first problem with Allstate's position on this issue is that the evidence does not establish that the new agreement was intended to replace the agreement reached at mediation. Ms. Horvath testified that the $465 figure agreed to at mediation was intended to cover the cost of her YMCA membership prior to the mediation on October 1, 2001. Her testimony is consistent with the YMCA document entered into evidence which confirmed that Ms. Horvath's membership started in March 2000 and went until at least August 12, 2002 at a cost of about $350 per year. Ms. Horvath's membership expenses to the date of mediation would, therefore, have been about $465. Ms. Horvath's testimony also provided a foundation for Mr. Richard's argument that the new agreement was intended to trade off the cost of the new treatment plan submitted by Ms. Kares, which Allstate agreed to pay, against Ms. Horvath's ongoing YMCA membership expenses, which she agreed to pay.

But, in my view, a more fundamental problem with Allstate's position is that it was not supported by the evidence of Ms. Thompson herself, the person who allegedly entered into the new agreement with Ms. Horvath. Mr. Morgan testified that she was "off at the moment" but this did not explain why she could not have testified at the hearing or provided her evidence through some other means. I am not prepared to accept Ms. Thompson's evidence through Mr. Morgan, particularly when Ms. Horvath denied ever agreeing to waive the agreement made at mediation.

I also reject Mr. Morgan's contention that Allstate was entitled to refuse to pay the amounts agreed to at mediation until it received supporting invoices or receipts. Again, it was Ms. Thompson who conducted the mediation on Allstate's behalf, not Mr. Morgan. Ms. Thompson could have made it clear that Allstate would not pay the amounts agreed to without supporting invoices or receipts. Since she did not do so, Allstate was obliged to pay the amounts agreed to without supporting invoices or receipts. In my view, section 38(17) of the Schedule has no application to this case as the treatment at issue had already been recommended by a MedRehab DAC.

I conclude that Ms. Horvath is entitled to the payment of $865 pursuant to the agreement made at mediation, plus interest payable under section 46. I find that this amount became overdue one week after the date of mediation, a date which will be known to the parties but which was not indicated in the Mediator's Report.

EXPENSES:

The parties did not address the issue of expenses in their submissions. They will inform me in writing within 30 days of the date of this decision in the event they are unable to resolve the issue of expenses.

I should note that Part C of the document brief, Exhibit 1, was not referred to by either party during the course of the hearing. When I came upon it after the hearing, I discovered that the first document contained therein was a letter dated July 16, 2002 between counsel. I was immediately concerned that a letter of this kind might contain settlement proposals. Given that Part C of the document brief had not been referred to at the hearing, I decided not to read any of the documents contained therein until I had finished the final draft of this decision. I followed this procedure. I then learned that the letter of July 16, 2002 did contain a settlement proposal. I wish to assure the parties that my decision in this matter has not been influenced in any way by this proposal.

June 9, 2003

David Leitch

Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 92

FSCO A02-000482

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

CATHERINE HORVATH

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Ms. Horvath is entitled to the payment of housekeeping expenses in the amount of $6,165, plus interest from October 15, 2002.

2. Ms. Horvath is entitled to five additional treatment sessions with Dr. Jordan at Allstate's expense.

3. Ms. Horvath is entitled to the payment of $865 pursuant to the agreement made at mediation plus interest from one week after the date of mediation.

June 9, 2003

David Leitch

Arbitrator

Date

Your failure to return the application forms within 30 days of receiving them from the insurer may result in the rejection of all your claims to statutory accident benefits unless you provide a reasonable explanation for your delay. A determination as to whether you returned the application forms within 30 days or as to whether your explanation for not doing so was reasonable can be the subject of mediation and arbitration. In the event it is determined that you failed to return the application forms within 30 days without reasonable explanation, you will not be entitled to any statutory accident benefits as a result of your accident and may be required to repay benefits already made by the insurer to you or to your service providers.

Footnotes

1. 1Under 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.
2. 2(OIC A-951897, December 29, 1995), affirmed on appeal (OIC P96-000026, January 31, 1997).
3. 3(FSCO Appeal P99-00060, June 7, 2000).
4. 4(FSCO A99-000923, May 30, 2002), affirmed on appeal for unrelated reasons (FSCO P02-00015, April 10, 2003).
5. 5(FSCO A02-000461, February 14, 2003).
6. 6Exhibit 1. Tab A2.
7. 7Exhibit 30.
8. 8Exhibit 1, Tab A7. A typed version of the statement is found at Tab A6.
9. 9While it is not relevant for the present case, I should note that the Application for Accident Benefits Package which Ms. Horvath later received provided instructions on which insurer a claimant should apply to in different situations. The instructions appear to assume that a struck pedestrian would be able to identify the vehicle that hit him/her. Ms. Horvath, for example, identified herself as a struck pedestrian but then put a question mark beside the instruction: "send your forms to the insurance company of the automobile that struck you." In fact, a more careful reading of the form indicates that she should have simply ignored the pedestrian category because she was both a spouse of an owner of an insured vehicle and a listed driver. In my view, the form should be redrafted to eliminate this potential for confusion.
10. 10Exhibit 1, Tab A3.
11. 11Exhibit 18 is a blank copy of the package.
12. 12Exhibit 17.
13. 13Exhibit 30.
14. 14Exhibit 1, Tab A4.
15. 15Exhibit 1 Tab A5, 6 and 7.
16. 16Exhibit 20.
17. 17Exhibit 9.
18. 18Exhibit 6.
19. 19Dr. Lawrence's CV is Exhibit 12.
20. 20Exhibit 21.
21. 212002 SCC 30, [2002] S.C.J. No. 34, 2002 S.C.C. 30.
22. 22Still, the Package would be an obvious vehicle through which insurers could provide written information about the potential consequences of non-compliance with section 32(3). With that in mind, I offer the following suggestions about what could be added to the Package. I do not think the added information needs to quote or specifically refer to any section number of the Schedule. In fact, given that section 31 contains a double negative and only implies that the failure to comply with a time limit may lead to disentitlement, it would probably be better for the Package not to quote that section. Moreover, disentitlement is not the only potential consequence of non-compliance with section 32(3). An insurer which successfully relies upon section 32(3) may also seek repayment of benefits paid to, or on behalf of, the insured person. Taking these points into consideration, I would suggest that the following text, in bold or capital letters, be added to the cover page of the Package:
23. 23Exhibit 1, Tab A17.
24. 24Exhibit 1, Tab A18.
25. 25Exhibit 1, Tab A19.
26. 26Exhibit 1, Tab A14.
27. 27Exhibit 1, Tab A16.
28. 28Exhibit 1, Tab A20.
29. 29Exhibit 11.
30. 30Exhibit 24.
31. 31Exhibit 3.
32. 32Exhibit 1, Tab A22.
33. 33Exhibit 1, Tab A23.
34. 34This letter was not made an exhibit at the hearing but was sent to both parties after the pre-hearing discussion.
35. 35Exhibit 1, Tab 24.
36. 36This letter was not filed as an exhibit at the hearing but both parties obviously received copies.
37. 37Exhibit 31.
38. 38Exhibit 1, Tab A4.
39. 39see Offeh and Allstate Insurance Company of Canada (OIC P-006494, July 3, 1996) appeal.
40. 40Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), 115 D.L.R. (4th) 478 (SCC).
41. 411992 CanLII 31 (SCC), [1992] 3 S.C.R. 6.
42. 42see Zeppieri and Royal Insurance Company of Canada (OIC P-005237, December 22, 1994)appeal, confirming OIC A-005237, February 17, 1994.
43. 43Branchaud and Co-operators General Insurance Company (OIC P96-00048, May 2, 1997) appeal.
44. 44paragraph 97.
45. 45(FSCO A00-000126, July 30, 2001).
46. 46(FSCO P01-00023, October 9, 2001) appeal.
47. 47Budd and Personal Insurance Company of Canada, (FSCO P99-00032, January 8, 2000) appeal.
48. 48Exhibits 7a,b and c.
49. 49Exhibit 2.
50. 50Exhibit 1, Tab A11 and Exhibit 21.
51. 51Exhibit 1, Tab A16.
52. 52(Appeal P01-00045, March 31, 2003).
53. 53Exhibit 30.
54. 54Exhibit 21and Exhibit 14.
55. 55(FSCO P02-00015, April 10, 2003) appeal.
56. 56Carruthers (supra)
57. 57(OIC P97-00025A, December 8, 1997) appeal.
58. 58Exhibit 21and Exhibit 14.
59. 59Exhibit 13.
60. 60Exhibit 1, Tab B3.
61. 61Exhibit 1, Tab B7.
62. 62Exhibit 1, Tab B6.
63. 63Exhibit 1, Tab B7.
64. 64Exhibit 1, Tab B6.
65. 65Exhibit 1, Tab A1
66. 66Exhibit 22.
67. 67Exhibit 1, Tab A19.
68. 68Exhibit 2.
69. 69Exhibit 1, Tab A19.
70. 70Dr. Lawrence also testified that Ms. Horvath never mentioned to him that her sister and friend were helping with housework but, since he gave this testimony after Ms. Horvath had already testified, she was not confronted with this evidence.
71. 71Exhibit 1, Tab A7.
72. 72Exhibit 11, p. 9 of the report of Dr. Lori Triano-Anitdormi.
73. 73Exhibit 8, p. 6.
74. 74Exhibit 15.
75. 75Zurich North America Canada and Stargratt appeal (P01-00045, March 31, 2003).
76. 76Ibid.
77. 77Dr. MacNiven's CV is Exhibit 16.
78. 78Dr. Jordan's CV is Exhibit 10.
79. 79Exhibit 1, Tab A24.
80. 80Exhibit 23.
81. 81Exhibit 1, Tab A24, p.23.
82. 82Only Dr. Jordan's clinical notes for the first eleven treatment sessions were put into evidence, see Exhibit 1, Tab B5. Since his notes from the five last sessions were not put into evidence, Dr. MacNiven was obviously not able to review them at the hearing.
83. 83Exhibit 1, Tab B5.
84. 84I acknowledge that Dr. MacNiven's report did not explicitly state her opinions that the five remaining sessions could be used to complete the book and to include Ms. Horvath's family in her treatment. Still, there was no objection to her stating these opinions as a witness at the hearing and there was no attempt to call Dr. Jordan in reply (he had testified first). In any event, I note that Dr. MacNiven's report clearly stated her opinion that Dr. Jordan could achieve his "goals" in five additional sessions.
85. 85Exhibit 11, p. 6 of Dr. Kumbhare's report.
86. 86Exhibit 3.
87. 87Exhibit 5.
88. 88Exhibit 29.
89. 89Exhibit 25.
90. 90Exhibit 28.
91. 91Exhibit 26.
92. 92Exhibits 4 and 31, respectively.