Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 148 FSCO A04-002087

BETWEEN:

ACHILLE COLETTI Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Jeffrey Rogers Heard: By written submissions completed on September 8, 2005.

Appearances: David Carranza, agent for Mr. Coletti Rose Bilash, solicitor for Guarantee Company of North America

Issues:

The Applicant, Achille Coletti, was injured in a motor vehicle accident on October 26, 2003. He applied for statutory accident benefits from Guarantee Company of North America ("Guarantee"), payable under the Schedule.¹ Guarantee denied his claim for housekeeping and home maintenance benefits. The parties were unable to resolve their dispute through mediation, and Mr. Coletti applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

A pre-hearing was held on June 9, 2005. The substantive issue is entitlement to housekeeping and home maintenance benefits for the period of October 26, 2003 to June 4, 2005. The parties identified the following preliminary issues:

1. Mr. Coletti received the application for accident benefit forms on October 31, 2003 and submitted them to Guarantee in February 2004. Subsection 32(3) of the Schedule provides that the person shall submit an application for the benefit to the insurer within 30 days after receiving the application forms. What are the consequences, if any, of Mr. Coletti's failure to comply with this time limit?

2. Section 42 provides for insurer examinations "for the purpose of determining whether an insured person is entitled to a benefit for which an application is made". Guarantee asked for an orthopaedic examination on January 5, 2004 for the purpose of determining Mr. Coletti's entitlement to a housekeeping benefit. Mr. Coletti claimed that he had not made an application for the benefit at that time and therefore Guarantee was not entitled to an examination. Had Mr. Coletti made an application for the housekeeping benefit at the time that Guarantee asked for the examination under section 42?

3. If it is determined that Mr. Coletti had applied for the housekeeping benefit at the time that Guarantee asked for the examination under section 42, was the examination "reasonable and necessary" within the meaning of section 42(3)?

The parties agreed to resolve the preliminary issues by written submissions, subject to further order of the arbitrator hearing the preliminary issues.

Result:

1. Mr. Coletti was not required to attend for examination under section 42 of the Schedule because he had not made an application for housekeeping benefits at the time that Guarantee gave him notice to attend.

2. The decision on the consequences of Mr. Coletti's failure to apply within 30 days of receiving the application, is left to the hearing arbitrator.

EVIDENCE AND ANALYSIS:

Section 42 of the Schedule gives an insurer the right to require an insured to attend for examination by a health professional "as often as is reasonably necessary" in order to determine whether the insured "is entitled to a benefit for which an application is made". An insured is not entitled to the relevant benefit while in breach of the obligation to attend for examination under section 42. If found to have breached section 42, Mr. Coletti would be precluded from receiving any of the benefits in dispute.

Mr. Coletti's position is that he had not made an application for housekeeping benefits when Guarantee sought to have him examined. He applied later, more than 30 days after receiving the application forms, contrary to section 32(3) of the Schedule. However, he has a reasonable explanation for the delay. Section 31 provides that "[a] person's failure to comply with a time limit...does not disentitle the person to a benefit if the person has a reasonable explanation."

The issues are resolved by first determining whether Mr. Coletti had applied for housekeeping benefits when Guarantee requested the orthopaedic examination. If he had not, he was not required to attend the examination, but he is required to explain his delay in applying. If he had applied, it must be determined whether the examination was "reasonable and necessary" and, if it was, what consequences flow from Mr. Coletti's failure to attend.

(a) Had Mr. Coletti applied?

Section 32 of the Schedule establishes a three step process for making an application for benefits:

1. The claimant notifies the insurer of the intention to apply;

2. The insurer provides the appropriate application forms; and

3. The claimant submits the forms.

What happened in this case is not in dispute. Having been notified of the accident, Guarantee sent Mr. Coletti an Accident Benefit Application Package, by letter of October 31, 2003. This package is approved by the Superintendent under section 69 of the Schedule which provides that the application forms referred to in section 32 shall be in a form approved by the Superintendent. The package contains an Application for Accident Benefits and a Disability Certificate. The covering letter informed Mr. Coletti that, if claiming a benefit under section 22 (housekeeping or home maintenance) or other specified benefits, he must furnish a completed Disability Certificate.

By separate letter of the same date, Guarantee sent Mr. Coletti three Applications for Expenses. This letter informs Mr. Coletti that he could claim several specific benefits, including housekeeping and home maintenance expenses, through completion of these forms. Mr. Coletti had given Guarantee an unsigned "statement" on October 31, 2003, in which he indicated that he could perform his usual housekeeping activities but could not perform his usual home maintenance activities.

Mr. Coletti sent Guarantee a completed Disability Certificate dated November 12, 2003. The Disability Certificate indicates that Mr. Coletti suffered a substantial inability to perform his pre-accident housekeeping and home maintenance activities. On November 18, 2003 Guarantee wrote to Mr. Coletti informing him that, "in view of the contents of the Disability Certificate it seems that you have an intention of pursuing a claim for housekeeping and/or home maintenance expenses. To that end we have retained the services of Dr. Robert Grossman and Associates to conduct an Insurer Examination in accordance with Section 42 of the ...to determine your entitlement to housekeeping and home maintenance expenses." The date of the appointment was later confirmed to be December 1, 2003.

On November 26, 2003 Guarantee wrote to Mr. Coletti denying payment for ambulance expenses for which an Application for Expenses had been submitted because a completed Application for Accident Benefits had not yet been submitted. On November 27, 2003 Mr. Coletti informed Guarantee that he would not be attending the proposed examination on December 1, 2003 because Guarantee was only entitled to have him examined once an application for the benefit had been submitted, and he had not applied for housekeeping or home maintenance benefits. Upon receipt of that letter, Guarantee cancelled the appointment with Dr. Grossman, informing him that the appointment would be re-scheduled "upon receipt of the applicant's application form and the application for expenses...".

Guarantee received the Application for Accident Benefits on December 3, 2003. On that date, it again wrote Mr. Coletti informing him that it was arranging an examination to determine his entitlement to housekeeping and home maintenance expenses, because it understood that he "has an intention of pursuing a claim". On December 5, 2003, the date of the examination was confirmed to be January 5, 2004. On December 8, 2003, Mr. Coletti reiterated his position that he would not be attending the examination, since he had not applied for housekeeping and home maintenance benefits.

On December 16, 2003 Guarantee cancelled the appointment for the examination, informing the doctor that it had not yet received an Application for Expenses, that the appointment would be re-scheduled when it was received and, since "the applicant has failed to present us with his claim for housekeeping expenses within 30 days of receiving the claim forms it seems that the applicant may be disentitled to pursue a claim for housekeeping expenses, unless the applicant has a reasonable explanation for not having submitted his claim within 30 days."

Around February 27, 2004, Mr. Coletti submitted an Application for Expenses, claiming reimbursement for housekeeping services and attendant care services, provided from October 27, 2003 to February 7, 2004. By letter and Explanation of Benefits Payable of March 2, 2004, Guarantee denied the claim on the grounds that the application had not been submitted within 30 days, without reasonable explanation. Since then, Guarantee has not sought to have Mr. Coletti attend to be examined. Mr. Coletti later submitted three further Applications for Expenses, claiming housekeeping expenses from February 8, 2004 to July 31, 2004. The record does not disclose the reason Guarantee gave for its refusal to pay these claims.

Many FSCO decisions have considered the issue of what constitutes an application for benefits under section 32 of the Schedule and its predecessors, in circumstances where there has not been strict compliance with the requirements of the Schedule. The issue was comprehensively reviewed in the recent Appeal decision in McIntosh and Allstate Insurance Company of Canada.² The Director’s Delegate concluded that the legislative intent was that claimants should complete the approved forms supplied by the insurer and "drawing a relatively firm boundary around the notion of an application for accident benefits provides for procedural clarity and tends to promote the remedial objectives of the SABS."³ The Director's Delegate nevertheless confirmed that a completed Application for Accident Benefits is not necessary for a finding that the insured had complied with the requirements of section 32, and ruled that the arbitrator had not erred when he considered the entirety of the parties' communications in the early days.

In McIntosh, as in all of the cases it considered, it is the insured who is claiming to have applied, while the insurer denied that an application was made. Therefore, the analysis is focussed on determining whether, in the absence of clear compliance with the formal requirements for application, the exchange of information between the parties and the conduct of the parties, support a finding that an application was nevertheless made.

There is no case where the roles are reversed as they are here. In this case, there is no need to construe the parties' intentions from imprecise conduct. Here, Mr. Coletti had not submitted an Application for Expenses and clearly stated that he had not applied for housekeeping and home maintenance benefits. Without the Application for Expenses, Guarantee was not in a position to know what amount, if any, Mr. Coletti might claim.

In addition, at the relevant time, Guarantee's correspondence reflected an acceptance of Mr. Coletti's position. The letters regarding the appointment with Dr. Grossman refer to Mr. Coletti's "intention of pursuing a claim", not to Mr. Coletti's application for a benefit. The first appointment was cancelled, to be re-scheduled "upon receipt of the applicant's application form and the application for expenses... ." When the second appointment was cancelled, Guarantee noted that since "the applicant has failed to present us with his claim for housekeeping expenses within 30 days of receiving the claim forms it seems that the applicant may be disentitled to pursue a claim for housekeeping expenses, unless the applicant has a reasonable explanation for not having submitted his claim within 30 days." When Mr. Coletti finally submitted the Application for Expenses in February 2003, Guarantee denied the claim for the reason that it had not been submitted within 30 days of receipt of the forms. The first reference I could find in the record to the applicant being disentitled for failure to attend for examination, is in the Response to the Application for Arbitration.

I find that Mr. Coletti had not applied for housekeeping and home maintenance benefits when Guarantee gave him notice to attend for examination to determine entitlement to that benefit. Unless he had been coerced or otherwise improperly induced by Guarantee into making the statement that he had not applied for housekeeping and home maintenance benefits, Mr. Coletti cannot be found to have done so when he clearly states that he has not. I do not accept that this allows Mr. Coletti to later make an application for the benefit, having thwarted Guarantee's efforts to have him examined. As Guarantee correctly pointed out to Dr. Grossman, Mr. Coletti's delay was not without consequence. It has resulted in the prospect that he may be disentitled from receiving the benefit, for breach of section 32(3).

Guarantee could have limited the prejudice of late receipt of the Application by requiring Mr. Coletti to attend for examination, once it received his Application for Expenses, but chose not to do so. Binding an insured to a clear statement that an application has not been made, promotes procedural clarity. On the other hand, Guarantee's approach would require both an insured and an insurer to guess at what benefits are at issue, from hints in the information provided.

b) Reasonable Excuse

Mr. Coletti offered an explanation for his delay, in his written submissions. The explanation includes a lack of facility in English, lack of knowledge of the legislation and not realizing that he needed assistance with his pre-accident housekeeping and home maintenance duties until he had attempted to perform them. According to the Application for Expenses he submitted, Mr. Coletti began incurring expenses for housekeeping assistance on the day after the accident. This is not consistent with his explanation and not consistent with the "statement" that Guarantee took on October 31, 2003, indicating that Mr. Coletti could perform his pre-accident housekeeping duties, but was unable to perform his pre-accident home maintenance tasks. Guarantee disputes Mr. Coletti's allegations.

It would require oral testimony and findings of credibility to resolve this aspect of the dispute. In addition, even without reasonable excuse, Mr. Coletti may not be precluded from receiving the benefits for the period commencing 30 days before submitting the first Application for Expenses. I find that the most just, quickest and least expensive way to proceed is to leave this issue to the main hearing. That avoids the risk of two separate attendances by witnesses when the entire hearing should be completed in about two days. I therefore leave this issue to be decided by the hearing arbitrator.

The parties did not set a date for the main hearing, pending the outcome of this hearing. They may now contact the Case Administrator with dates on which they are available.

EXPENSES:

The only criterion of the Expense Regulation relevant to entitlement to expenses is degree of success. Based on his success, Mr. Coletti is entitled to his expenses of the motion, which I fix at $600.

October 18, 2005

Jeffrey Rogers Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 148 FSCO A04-002087

BETWEEN:

ACHILLE COLETTI Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA Insurer

ARBITRATION ORDER

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

1. Mr. Coletti was not required to attend for examination under section 42 of the Schedule because he had not made an application for housekeeping benefits at the time that Guarantee gave him notice to attend.

2. The decision on the consequences of Mr. Coletti's failure to apply within 30 days of receiving the application, is left to the hearing arbitrator.

3. Guarantee shall pay Mr. Coletti his expenses of the motion in the amount of $600, inclusive of GST.

October 18, 2005

Jeffrey Rogers Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2(FSCO P04-00019, March 15, 2005)
3. 3Ibid., Page 7.