FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2004 ONFSCDRS 135

FSCO A03-001122

BETWEEN:

ASHRAF NAJAFI FAR

Applicant

and

ECHELON GENERAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: David Leitch

Heard: July 15 and August 5, 2004, at the offices of the Financial Services Commission of Ontario in Toronto

Appearances: Manoucher Baradaran for Ms. Najafi Far Jamie Pollack for Echelon General Insurance Company

Issue:

The Applicant, Ashraf Najafi Far, was involved in a motor vehicle accident on September 10, 2002. She did not apply to Echelon General Insurance Company ("Echelon") for statutory accident benefits payable under the Schedule¹ until January 2003. Echelon raised the following preliminary issue:

1. Is Ms. Najafi Far disentitled to benefits by reason of her failure to apply for benefits within the time limit imposed by section 32(1) or, pursuant to section 31(1) of the Schedule, to provide a reasonable explanation?

The parties were unable to resolve their disputes through mediation, and Ms. Najafi Far applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Result:

1. Ms. Najafi Far is not disentitled to benefits by reason of her failure to apply for benefits within the time limit imposed by section 32(1) or, pursuant to section 31(1) of the Schedule, to provide a reasonable explanation.

The relevant sections of the Schedule

The relevant sections of the Schedule are sections 31(1), 32(1), 32(1.1)(a), 32(2) and 32(3) as those sections read after the amendments to the Schedule made by Ontario Regulation 281/03. I set forth below all of the aforementioned provisions:

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.

32. (1) A person shall notify the insurer of his or her intention to apply for a benefit under this Regulation. O. Reg. 281/03, s. 11 (1)

(1.1) A person shall notify the insurer under section (1) no later than,

(a) the 30^th day after the circumstances arose that gave rise to the entitlement to the benefit, or as soon as practicable after that date, if those circumstances arose as a result of an accident that occurred before October 1, 2003; or...

(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 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.

The evidence

Ms. Najafi Far was involved in an accident on September 10, 2002, when the vehicle she was driving collided with another vehicle in an intersection. No ambulance was called to the scene and Ms. Najafi Far did not seek any medical attention until many weeks after the accident.² She nevertheless testified that she was unable to continue working in her husband's lighting store after the accident due to dizziness, shivering and emotional problems. She stated that she stayed at home for two or three weeks after the accident, trying to take care of herself, using hot water packs and pain killers. During this initial period, she stated, her husband helped care for the children and performed household tasks, but at the beginning of October her husband hired a housekeeper and caregiver named Amir. Ms. Najafi Far testified that she continues to have shivering and emotional problems which have interfered with her family relationships and made her nervous to drive, forgetful and unable to concentrate. She stated that her two children, aged seven and eleven at the time of the accident, were passengers in the car and have also received some psychological and chiropractic treatment as a result of the accident.

Ms. Najafi Far testified that the accident was reported to Echelon by her husband and that Echelon paid for the rental of a vehicle while theirs was being repaired. She acknowledged that, as a result of an earlier accident, she was aware that she could claim accident benefits from Echelon but she denied knowing that there was any time limit for making such a claim. She testified that she did not want to make a claim for accident benefits because she thought she would get better and did not want to repeat her experience following the earlier accident in which the insurance company questioned her, examined her, re-examined her and generally subjected her to a long and unpleasant process. She stated that it was not until it became clear that she was getting worse, not better, that she changed her mind and decided that she did want to claim accident benefits. The process of determining whether she was getting worse or better was, Ms. Najafi Far explained, prolonged by the following events: her family doctor moved to an unknown location; it took her time to find and see her family doctor, further time to try medication that only provided temporary relief and then further time to get a referral to and see a physiotherapist. It was, she stated, only when she finally spoke to the physiotherapist in December 2002 that she decided that she wanted to claim accident benefits. She then consulted Mr. Baradaran, completed and submitted an Application for Accident Benefits dated January 2, 2003, received by Echelon on January 6, 2003.³

On Ms. Najafi Far's cross-examination, Mr. Pollack pointed to certain inconsistencies between her testimony at the hearing and the written statement Echelon obtained from her with the assistance of an interpreter on January 16, 2003.⁴ In the written statement, Ms. Najafi Far is reported to have stated that she was "not related to the owners" of the lighting store where she worked prior to the accident. When confronted with the inconsistency between this statement and her previous testimony, Ms. Najafi Far maintained that there must have been some misunderstanding as she had no reason to deny that her husband owned the store where she worked and that she did not, in fact, deny it. Mr. Pollack then drew Ms. Najafi Far's attention to the part of her written statement where she allegedly said: "I did not know that I could go through insurance until I went to the physiotherapy which I started in December." Ms. Najafi Far initially agreed that she had said this when she gave her written statement but nevertheless immediately reiterated her previous testimony, maintaining that she knew that she had the right to claim benefits but did not want to do so as long as she thought she would get better. Ms. Najafi Far also acknowledged that while Mr. Baradaran had represented her in connection with her earlier accident, her written statement indicated that she found his name in a newspaper "around the same time in December 2002" when she saw the physiotherapist. Finally, Ms. Najafi Far agreed with Mr. Pollack that her husband had encouraged her to submit a claim on many earlier occasions, even a few weeks after the accident, and that she began to incur caregiver and housekeeping expenses in early October 2002. She nevertheless again reiterated her previous testimony that she did not want to repeat her unpleasant experience following the earlier accident until it was clear that she was getting worse rather than better.

In his testimony, Ms. Najafi Far's husband, Mr. Hamid Mahrou, stated that he informed both his insurance broker (who was not called as a witness) and an adjuster that his wife was in pain, nervous and shaking as a result of the accident. Despite this, he testified, his wife received no Application Benefits Package from Echelon. Mr. Mahrou confirmed that he had encouraged his wife to make a claim but that she did not want to until January 2003. He stated that he was not aware of any time limit for making a claim.

The evidence establishes that Echelon was aware of the accident soon after it happened. Someone at Echelon completed a Notice of Loss form⁵, dated September 23, 2002, and sent it to an outside adjusting firm for further investigation. The Notice of Loss form stated that there were no injuries as a result of the accident but Echelon called no evidence to establish the source of this information.

The adjuster assigned to investigate the claim, Mr. Neil Rathee, gave evidence at the hearing and produced the following documents from his file:

1. the Notice of Loss form he received from Echelon;

2. his letter to Ms. Najafi Far⁶, dated September 25, 2002;

3. a blank Automobile Proof of Loss form⁷ which, he testified, he enclosed in his letter to Ms. Najafi Far;

4. his "claim activity log"⁸ notes relating to the repair of the vehicle involved in the accident;

5. photographs of the vehicle involved in the accident and an appraisal and invoice relating to its repair.⁹

6. his "Small Loss Report" to Echelon dated October 25, 2002.¹⁰

Mr. Rathee emphasized that since the Notice of Loss form received from Echelon indicated that no injuries had been sustained, his involvement was limited to adjusting the property damage claim. He explained that since no injuries were reported, he did not provide Mr. Mahrou with any information about accident benefits and that had any injuries been reported, he would still not have provided any information about accident benefits but would have instead referred the file to an accident benefits adjuster in his firm. He nevertheless maintained that he was careful to ask whether Ms. Najafi Far had sustained any injuries in the accident. He did so, he testified, because his firm stood to make more money from adjusting a claim for accident benefits than from adjusting a claim only for property damage. He stated that when he asked Ms. Najafi Far over the telephone whether she had suffered any injuries in the accident, she did not respond due to "a language problem", and told him to contact her husband. He stated that when he put the same question to Mr. Mahrou, again over the telephone, on September 27, 2002, Mr. Mahrou reported no injuries as a result of the accident. Mr. Rathee maintained that he advised Mr. Mahrou of the "30 day time limit" for reporting injuries and that the Automobile Proof of Loss form enclosed with his letter to Ms. Najafi Far also referred to this time limit. Mr. Rathee explained that since the other driver admitted liability for the accident, he had no reason to obtain the police report of the accident. Mr. Rathee's final report to Echelon contained the following statement: "there were no injuries to be reported in either vehicle."

Analysis and conclusion

Mr. Baradaran submitted that I should accept Mr. Mahrou's evidence that he told Mr. Rathee about Ms. Najafi Far's post-accident complaints. His argument appeared to be that if I were to find that Mr. Mahrou did tell Mr. Rathee about his wife's post-accident complaints in their telephone conversation on or about September 27, 2002, then I should also find that Ms. Najafi Far had, through her husband, notified Echelon within 30 days of the accident that she wanted to apply for accident benefits.

In support of this submission, Mr. Baradaran cited the case of Johnson and GAN Canada Insurance Co. That decision dealt with section 59(1) of the SABS-1994 Schedule, not section 32(1) of the Schedule applicable to this case, but the two sections impose the same time limit using identical language. After finding that the "Mr. MacLeod" referred to in the quote below was acting as agent for GAN when he received notice of the accident, the Arbitrator wrote at paragraphs 13-15:

Subsection 59(1) of the Schedule does not specify the detail which must be provided in the notice. In light of the purpose of the 30-day provision, the brevity of the time period, and the consequence to the insured, I am of the view that the requirement to give notice should not be interpreted too strictly. I am satisfied, based on Mr. MacLeod's evidence, that he was advised of the circumstances of the accident and the fact that Mr. Johnson was seeking medical attention, within 30 days of the accident.¹¹

GAN submitted that Mr. Johnson did not specifically advise that he was making a claim for benefits. I find that this sets too high a standard on the facts of this particular case. Having been advised of the accident and need for medical attention, Mr. MacLeod ought to have treated that information as notice of a claim for benefits and advised GAN to forward the appropriate forms, or at least have advised Mr. Johnson of the 30-day time limit for making a claim.

I conclude that Mr. Johnson did provide the notice required by subsection 59(1) within 30 days of the accident.

The problem with this argument is that it completely ignored Ms. Najafi Far's own evidence. She testified that she was always aware of her right to claim accident benefits as a result of the accident but that she did not want to claim accident benefits until sometime in December 2002. Since I accept her evidence, for reasons set out later in this decision, I find it unlikely that Mr. Mahrou told Mr. Rathee about his wife's post-accident complaints or that, even if Mr. Rathee had been able to speak directly to Ms. Najafi Far, she would have alerted him to a potential claim.

Based on this finding, I might now turn to the legal issue of how sections 32(1) and 32(1.1)(a) should be interpreted. Does the "as soon as practicable" time limit imposed by section 32(1.1)(a) only begin to run once the insured person has formed the "intention to apply for a benefit", even if that intention is formed more than 30 days after the accident? Or, as Mr. Pollack argued, should I soundly reject any interpretation of section 32(1) which would "put the insured person in the driver's seat" as to when he/she is required to apply for a benefit?

In support of this latter submission, Mr. Pollack cited the case of Barr and Canadian Surety Company. That case dealt with the time limit imposed by section 22 of the SABS-1990 Schedule. The Arbitrator stated at p. 9:

It is unreasonable for an insured person to become the arbiter of when it is (finally) appropriate or worthwhile to notify the insurer. The time limits of section 22 exist for many good reasons. Without reasonable excuse, they should be observed.¹²

I note, however, that section 22 of the SABS-1990 Schedule differs from section 32(1) of the Schedule applicable to this case. Section 22 does not contain the expression "intention to apply for a benefit...."¹³

But while the aforementioned arguments may be important for the resolution of other cases, I find that the present case can be and should be decided by reference to the obligation imposed on Echelon by section 32(2)(c) of the Schedule to provide Ms. Najafi Far with information to assist her in applying for benefits.

Both Ms. Najafi Far and Mr. Mahrou testified that they were unaware of what was referred to as the "30 day time limit" for notifying Echelon that Ms. Najafi Far wanted to claim accident benefits. Their evidence was contradicted by Mr. Rathee's evidence that he told Mr. Mahrou about the time limit and that he sent Ms. Najafi Far the Automobile Proof of Loss form which also referred to the time limit.

I accept the evidence of Ms. Najafi Far and Mr. Mahrou over Mr. Rathee's evidence for two reasons. First, contrary to Mr. Rathee's evidence, the Automobile Proof of Loss form does not refer to the time limit or provide any information about accident benefits. Second, Mr. Rathee testified not only that Mr. Mahrou reported no injuries, but that even if Mr. Mahrou had reported any injuries, he would still not have provided any information about accident benefits but would have instead referred the file to an accident benefits adjuster in his firm. Based on this evidence, I find it unlikely that Mr. Rathee told either Ms. Najafi Far or Mr. Mahrou about the time limit.

Of equal importance, in my view, Echelon presented no evidence to establish that it informed either Ms. Najafi Far or Mr. Mahrou of the potential consequence of her failure to either comply with section 32(1) or provide a reasonable explanation.

In the case of Horvath and Allstate Insurance Company of Canada¹⁴, cited by both parties, I held that the objective of consumer protection was best fulfilled by interpreting section 32(2)(c) as requiring the insurer to inform the insured person of both the time limit imposed by section 32(3) of the Schedule and of the potential consequences of his/her failure to either comply with that time limit or provide a reasonable explanation. I reached this conclusion by interpreting sections 32(2)(c) and 32(3) in light of Smith v. Co-operators General Insurance Co., the Supreme Court of Canada decision which establishes that consumer protection is one of the main objectives of insurance law and that the provision of information about time limits is essential to the realization of that objective. I quoted the following comments of the majority at paragraphs 11, 12 and 14 of the Smith decision:

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.¹⁵(my emphasis)

At page 16-17 of the Horvath decision, I wrote:

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).¹⁶

Since I found that Allstate had not discharged 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), I concluded that Allstate was not entitled to rely upon that time limit to defeat Ms. Horvath's claims for accident benefits.

Of course, the Horvath decision dealt with the time limit imposed by section 32(3), not the time limit imposed by section 32(1). Since section 32(2)(a) requires the insurer to provide the insured person with "the appropriate application forms" and since section 32(3) requires the insured person to "submit an application for the benefit to the insurer within 30 days after receiving the application forms" (my emphasis), the time limit imposed by section 32(3) clearly contemplates that the insurer has already been notified of both the happening of the accident and of the fact that the insured person intends to apply for a benefit. In these circumstances, the insurer has a reasonable opportunity to inform the insured person of the section 32(3) time limit and of the potential consequences of non-compliance; it may do so either before or at the same time that it provides the insured person with the appropriate application forms.

But how can an insurer be expected to inform the insured person of the section 32(1) time limit or of the potential consequence of non-compliance with that time limit when the insurer may not have been even notified of either the happening of the accident or of the fact that the insured person intends to apply for a benefit? Indeed, does the obligation under section 32(2)(c) even arise if the insurer has not first been notified of the accident and of the fact that the insured person intends to apply for a benefit? In the case of Syed and Allstate Insurance Company of Canada, the Arbitrator gave the following answer to that question at p. 3:

Subsection 32(2) sets out the insurer's obligations once it has been notified that the insured person intends to apply for benefits. The insurer is required to provide the person with the appropriate application forms, a written explanation of the benefits available, information to assist the person in applying for benefits, and information about possible elections with respect to the various types of weekly benefits available. These obligations do not arise unless the insured person advises the insurer that he or she intends to claim benefits, which normally occurs when the person advises that he was injured in the accident.¹⁷

I would agree that an insurer who has not been notified of an accident cannot be expected or required to inform the insured person of the section 32(1) time limit or of the potential consequence of non-compliance with that time limit. While I am not called upon to decide the point in the present case, it would seem to me that an insurer who had not been notified of the accident would be entitled to invoke the section 32(1) time limit. The insured person might then attempt to present his/her ignorance of the time limit (if any) as part of a "reasonable explanation" under section 31(1) of the Schedule.

I would also agree that an insurer who has not been notified that the insured person intends to apply for a benefit cannot be expected or required to forward the "appropriate application forms" referred to in section 32(2)(a) of the Schedule. This much, at least, was confirmed in the decision of L.F. and State Farm Mutual Automobile Insurance Company where, at p. 20 and 22, a Director's Delegate wrote:

Section 32 of the SABS-1996 creates a three-step process for initiating an accident benefit claim. Section 32(1) requires an insured person to give the insurer notice that he wishes to apply for a benefit within 30 days of the circumstances giving rise to entitlement, "or as soon as practicable thereafter." The next step, described in s. 32(2), is for the insurer to provide the appropriate forms and information for the application for benefits. Section 32(3) requires the claimant to submit "an application for the benefit" within 30 days of receiving the materials described in s. 32(2).

The three-step procedure prescribed in s. 32 makes a great deal of practical sense because at each step, the obligation is placed on the party in the best position to provide the information and documents needed. At the first stage, the insured person is required to give the insurer sufficient particulars of the claim or potential claim to allow it to commence its claims handling procedures. In response, the insurer is obliged to provide sufficient information, explanation and forms to enable the claimant to apply for benefits. That means providing the application package approved by the Superintendent. The claimant must complete and submit the pertinent forms within 30 days of receiving them.¹⁸

However, neither this passage nor the passage quoted from the Syed decision explicitly addressed the insurer's obligations when it has been notified of the accident but has not been notified that the insured person intends to apply for a benefit.¹⁹In that situation, I would not agree that the first step of the procedure (after the insurer has received notice of the accident) is to "require[] the insured person to give the insurer notice that he wishes to apply for a benefit within 30 days" of the accident or "as soon as practicable thereafter." Making that the first step assumes that the insured person will somehow become aware of the time limit imposed by section 32(1) without requiring the insurer to provide the insured person with any information about that time limit.

In my view, the goal of consumer protection is better served if the first step is to require an insurer who has been notified of an accident to promptly inform the insured person of the section 32(1) time limit, of the potential consequence of non-compliance and of the insured person's right to provide a reasonable explanation for non-compliance. I would not agree that the Schedule cannot be interpreted in this way merely because section 32(2)(c) comes after section 32(1). The goal must be to read the Schedule, as a whole, in the way which best achieves the consumer protection objective. As I see it, the present case demonstrates why the insurer should always have the prior obligation once it receives notice of the accident.

I accept Ms. Najafi Far's testimony at the hearing that she delayed in making a claim for accident benefits because she hoped to get better without ever having to submit to what she considered to be an unpleasant claims adjustment process. I acknowledge that this evidence conflicted with the written statement to the effect that she was unaware of her right to claim benefits until she spoke to the physiotherapist in December 2002. However, in my view, if Ms. Najafi Far had intended to mislead Echelon about her awareness of her right to claim benefits, she would not have also acknowledged in her written statement that she had been involved in an earlier accident, that Mr. Baradaran had represented her and that the "claim was settled around a year ago."²⁰ This acknowledgement clearly established that Ms. Najafi Far was well aware of her right to claim benefits. It was, therefore, entirely consistent with her evidence at the hearing.

Moreover, I was struck by the fact that on cross-examination, Ms. Najafi Far at first admitted to telling the person who took her written statement that she was unaware of her right to claim benefits, but then immediately reiterated her previous testimony that she was always aware of her right to claim benefits. Mr. Pollack characterized this as the conduct of a witness who was only prepared to acknowledge an inconsistency when pressed to do so, but it was not clear to me that Ms. Najafi Far actually acknowledged the inconsistency. This left me wondering whether she genuinely did not perceive the inconsistency, perhaps because of some translation or language problem. My concern in this regard was heightened by Ms. Najafi Far's evidence that there must have been some misunderstanding on the issue of who owned the lighting store where she worked. She testified that she had no reason to deny that her husband was an owner and, indeed, no reason was suggested as to why she would have denied this in making the claim.

For these reasons, I accept Ms. Najafi Far's evidence at the hearing over the contents of her written statement. I do so only in the sense that I find that she was telling the truth at the hearing about why she delayed in making a claim for accident benefits, not in the sense that I endorse her delay in making a claim.

I do not consider it necessary or possible to make a finding about what would have happened had Echelon informed Ms. Najafi Far and her husband of the time limit and of the potential consequence of her failure to comply with that time limit. In the case of Antony and RBC General Insurance Company²¹, I rejected the relevance of this kind of enquiry. In doing so, I relied on paragraph 16 of the Smith decision which reads as follows:

The respondent argued that the appellant was informed of the limitation period in any event through the mediator's report. Sharpe J.A. also took note of this, although not for the purpose of invoking it against the appellant as the respondent wishes to do. However, to take this fact into account against the appellant would be to ignore the particular nature of the matter. As I have mentioned above, insurance law is, in many respects, geared towards protection of the consumer. This approach obliges the courts to impose bright-line boundaries between the permissible and the impermissible without undue solicitude for particular circumstances that might operate against claimants in certain cases. Moreover, as previously discussed, the insurer's obligation extends beyond mere communication of the limitation period.²²

In Antony, I referred to the decision in Olivito and Dominion of Canada General Insurance Company²³ where the Arbitrator held that "it would be unfair to undo the election process simply because the Insurer gave wrong advice, without some persuasive evidence that its misrepresentation led the Applicant to apply for a particular benefit." At p. 8 of the Antony decision, I wrote:

In my view, this type of reasoning would now be contrary to the "bright-line boundaries" approach endorsed by the Supreme Court. As I understand it, this approach encourages the judge or arbitrator to focus on the primary question of whether or not the insurer met its obligation to inform the insured person. If satisfied that the insurer did not meet its obligation to inform the insured person, the "bright-line boundaries" approach then discourages the judge or arbitrator from going beyond this finding to entertain arguments based on "undue solicitude for particular circumstances that might operate against claimants in certain cases." In my opinion, the ruling that Ms. Olivito was required to prove that she would have elected differently had she been properly informed should now be regarded as demonstrating "undue solicitude for particular circumstances" operating against the claimant.

In Antony, I also questioned the reliability of speculative reasoning about what an insured person would have done had he/she been provided with correct and complete information by the insurer. I wrote at p. 8:

I also think that the Olivito decision illustrates the inherent risks in speculative reasoning: despite finding that the Applicant had chosen between the two available benefits by simply electing the one that paid the most money, the Arbitrator acknowledged that the evidence did not permit her to find which of the two benefits would, in fact, have paid the most money had the Insurer provided correct information. The decision thus left open the distinct possibility that the insured person would have elected differently had the Insurer provided correct information.²⁴

Applying what I consider to be the correct approach, I find that an insured person, like Ms. Najafi Far, who does not want or intend to file a claim for benefits until he/she has tried to recover from the injuries sustained in the accident, may be assisted in applying for benefits by being informed that he/she risks losing his/her right to claim all accident benefits if he/she waits more than 30 days to notify the insurer of the fact that he/she intends to apply for a benefit. In my view, it is sufficient that this information has the potential to "assist [such an insured] person in applying for benefits." An insured person who is not provided with this information may, for that reason, see his/her claim dismissed, not on the merits, but because it is out of time, thus defeating the goal of consumer protection. It is not necessary to determine whether or not the insured person would have actually submitted a more timely claim had the required information been provided. In any event, there is no reliable basis in the present case (and probably in most cases) to make such a determination after the fact.

The cases cited by the parties demonstrate that Ms. Najafi Far is not the first insured person to delay making a claim for accident benefits in the hope of recovering from accident-related injuries.

In Horvath, I accepted the Applicant's evidence that her delay in reporting the accident and in claiming accident benefits was due, in part, to her unsuccessful attempt to recover from her injuries.²⁵

In Syed, the Insurer was notified of the accident in a timely fashion but the Applicant did not apply for accident benefits until nine months later. The Arbitrator found at p. 10:

Finally, in my view, a fear of medical professionals and a hope that purportedly "serious injuries" (according to Mr. Syed's representative) would subside on their own, might in some circumstances very well be reasonable explanations for failing to seek treatment, but it does not follow that these are reasonable explanations for failing to notify an insurer of injuries arising from a motor vehicle accident.²⁶

In the case of Singh and Dominion of Canada General Insurance Company, the Arbitrator first rejected both the Applicant's evidence that he had reported the accident in a timely fashion and his argument that the time limit imposed by section 59(1) of the 1994-SABS Schedule "only starts to run after the insured becomes aware or knows that he is going to be disabled." She wrote at pp. 12-13:

Subsection 59(1) of the Schedule does state "...within thirty days after the circumstances arose that gave rise to the entitlement to benefits" and I agree that this does not necessarily mean within thirty days of the motor vehicle accident. However, based on Mr. Singh's own evidence in respect of his injuries and disability following the accident and based on the medical evidence tendered at the hearing, I agree with Dominion that this is not a case where Mr. Singh was not aware of his injuries or the extent of his injuries until sometime after they occurred. On the contrary, his injuries were most severe at and immediately following the accident. He was recovering by September 1994. I find that in Mr. Singh's case the circumstances that gave rise to the entitlement to benefits arose on July 23, 1994, the date of the accident. Mr. Singh was required to notify Dominion by August 22, 1994. I find that Mr. Singh notified Dominion on October 18, 1994. He, therefore, failed to meet the requirements of subsection 59(1) of the Schedule?²⁷

These cases, together with the present case, demonstrate the tendency for at least some insured persons to delay making claims for accident benefits while they attempt to recover from, or assess the extent of, their accident-related injuries. Since it is not possible to identify these persons in advance, I find that the goal of consumer protection is best promoted by requiring insurers who have been notified of accidents to promptly inform the insured persons involved in those accidents that there is a time limit for making claims for accident benefits and that there is a potential consequence for not complying with that time limit unless a reasonable explanation is provided. In my view, this qualifies as "information to assist the person in applying for benefits" within the meaning of section 32(2)(c) of the Schedule.

In the present case, I have found that Echelon was notified of the accident in a timely fashion but did not promptly inform Ms. Najafi Far of either the time limit imposed by section 32(1) or of the potential consequence of her failure to comply with it without reasonable explanation. In these circumstances, for the reasons given, I conclude that Echelon is not entitled to rely upon that time limit to defeat her claim for accident benefits.

EXPENSES:

This matter was heard over two days but could have been completed in one day had the first day not been largely wasted by reason of the absence of an interpreter. I exercise my discretion to award Ms. Najafi Far her expenses of this preliminary issue hearing, fixed at $500.

September 14, 2004

David Leitch Arbitrator

Date

FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2004 ONFSCDRS 135

FSCO A03-001122

BETWEEN:

ASHRAF NAJAFI FAR

Applicant

and

ECHELON GENERAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. Ms. Najafi Far is not disentitled to benefits by reason of her failure to apply for benefits within the time limit imposed by section 32(1) or, pursuant to section 31(1) of the Schedule, to provide a reasonable explanation.

2. Echelon is required to pay Ms. Najafi Far's expenses for the preliminary issue hearing, fixed at $500.

September 14, 2004

David Leitch Arbitrator

Date

Footnotes

1. 1The 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. 2In her written statement to Echelon on January 16, 2003 (Exhibit 1, Tab 2), Ms. Najafi Far stated that she did not see her family doctor, Dr. Carrie R. Beallor, "until the end of October" 2002. The OHIP summary entered into evidence, Exhibit 1, Tab 5, indicates that Dr. Beallor saw Ms. Najafi Far on December 18 and 23, 2002 for "lumbar strain, lumbago, coccydynia sciatica."
3. 3Exhibit 1, Tab 1.
4. 4Exhibit 1, Tab 2.
5. 5Exhibit 6.
6. 6Exhibit 3.
7. 7Exhibit 7.
8. 8Exhibit 4.
9. 9Exhibit 8.
10. 10Exhibit 5.
11. 11(FSCO A99-000290, December 9, 1999).
12. 12(FSCO A97-001567, July 16, 1998).
13. 13Section 22(1)(a) reads as follows: "The insured person or the person otherwise entitled to make a claim shall, (a) give initial notice of a claim to the insurer, in writing, within thirty days from the date of the accident or as soon as practicable thereafter...".
14. 14(FSCO A02-000482, June 9, 2003)
15. 152002 SCC 30, [2002] S.C.J. No. 34, 2002 S.C.C. 30.
16. 16See footnote 14.
17. 17(FSCO A02-000461, February 14, 2003)
18. 18(FSCO P02-00026, June 3, 2004).
19. 19That was the fact situation in Syed but the Arbitrator did not, incorrectly in my view, address the issue of the Insurer's obligation to inform the Applicant of the time limit imposed by section 32(1).
20. 20Exhibit 1, Tab 1.
21. 21(FSCO A02-000217, March 12, 2003), affirmed on appeal (FSCO P03-00023, July 22, 2004).
22. 22See footnote 15.
23. 23(OIC A96-001429, October 6, 1997)
24. 24(FSCO A02-000217, March 12, 2003), affirmed on appeal (FSCO P03-00023, July 22, 2004).
25. 25See footnote 14, p. 6-7.
26. 26See footnote 17.
27. 27(FSCO A96-000272, October 3, 1997)