Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 184

Appeal P04-00040

OFFICE OF THE DIRECTOR OF ARBITRATIONS

CITADEL GENERAL ASSURANCE COMPANY

Appellant

and

JERZY OLSZEWSKI

Respondent

Before:

David Evans

Representatives:

Claude Blouin for Citadel General

Philip B. Morrissey for Mr. Olszewski

Hearing Date:

June 7, 2005, in London, Ontario.

APPEAL ORDER*

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Citadel General Assurance Company’s appeal is allowed. The arbitration order dated December 16, 2004, is revoked and replaced by the following order:

Mr. Olszewski is precluded from proceeding to arbitration in this matter.

2. If the parties are unable to agree on appeal or preliminary issue expenses, they may contact me in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 23, 2005

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Citadel General appeals the arbitrator’s order that Mr. Olszewski may proceed with the arbitration despite earlier arbitration and appeal decisions that concluded his application was untimely.

II. BACKGROUND

Mr. Olszewski and his wife were injured in a motor vehicle accident on November 27, 1990 and received weekly benefits pursuant to the SABSB-1990.¹ By letters dated October 18, 1993, Citadel General advised them it was terminating their benefits effective November 26, 1993. This matter arises because the Olszewskis only applied for mediation on January 29, 1996, more than two years after this refusal to pay.² A preliminary issue hearing was held on September 22, 1997, to determine whether the Olszewskis were precluded from proceeding to arbitration pursuant to 281(5) of the Insurance Act on the basis that they were out of time. The Olszewskis submitted that the limitation period only bars claims originating more than the prescribed period before the commencement of the action or proceeding — a “rolling time limit.” In her decision,³ the arbitrator held that there were no such rolling time limits⁴ for weekly income replacement benefits, and so the claims of the Olszewskis were dismissed. The arbitrator’s decision was upheld by the Director’s Delegate.⁵

However, Mr. Olszewski applied for arbitration on May 26, 2003,⁶ regarding the same weekly benefits that these decisions had precluding him from claiming. He submitted that the Supreme Court in Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, 210 D.L.R. (4th) 443, 158 O.A.C. 1, effectively changed the law regarding notice of termination, so that the notice of termination he received ten years earlier was ineffective and the time limit against him never started to run.

The arbitrator agreed,⁷ finding that even though Smith involved the SABSB-1994,⁸ Smith

is relevant to the question of termination of accident benefits under all the different statutory regimes and, indeed, has had the effect of altering the law and practice at the Commission with regard to the termination of accident benefits.

In reaching this conclusion, the arbitrator relied extensively on the Divisional Court decision in Turner v. State Farm Mutual Automobile Insurance Co., [2004] O.J. No. 731 (QL), [2004 CanLII 13402](https://www.canlii.org/en