Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 106

FSCO A05-001126

BETWEEN:

CODY J. LLOYD

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

Before: Denise Ashby

Heard: By telephone conference call on June 5, 2006.

Appearances:

John Zuber for Mr. Lloyd

Fiona Porter for Dominion of Canada General Insurance Company

Issues:

The Applicant, Cody J. Lloyd, was injured in a motor vehicle accident on March 31, 1999. He applied for statutory accident benefits from Dominion of Canada General Insurance Company ("Dominion"). Dominion denied Mr. Lloyd's application for weekly non-earner benefits under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Lloyd applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

Should Mr. Lloyd be required to produce the co-op placement file in respect of his placement at McRae Warehouse Company Limited?
Is it reasonably necessary for Mr. Lloyd to attend an insurer examination to be conducted by Dr. Gavin Shanks, physiatrist, pursuant to section 42 of the Schedule?
Is it reasonably necessary for Mr. Lloyd to attend an insurer examination to be conducted by Dr. Christine Fiedorowicz, psychologist, pursuant to section 42 of the Schedule?
Is it reasonably necessary for Mr. Lloyd to participate in an in-home occupational therapy assessment to be conducted by Mr. Sebastian Ferland, occupational therapist, pursuant to section 42 of the Schedule?

Result:

On consent of the parties, Mr. Lloyd is required to use his best efforts to produce the co-op placement file from McRae Warehouse Company Limited.
It is not reasonably necessary for Mr. Lloyd to attend an insurer examination to be conducted by Dr. Gavin Shanks, physiatrist, pursuant to section 42 of the Schedule.
It is not reasonably necessary for Mr. Lloyd to attend an insurer examination to be conducted by Dr. Christine Fiedorowicz, psychologist, pursuant to section 42 of the Schedule.
It is not reasonably necessary for Mr. Lloyd to participate in an in-home occupational therapy assessment to be conducted by Mr. Sebastian Ferland, occupational therapist, pursuant to section 42 of the Schedule.

INTRODUCTION:

Mr. Lloyd was eleven years old on March 31, 1999 when he was struck by a vehicle while crossing a road. In April 2005, a CAT DAC determined that the accident had left Mr. Lloyd catastrophically impaired. Dominion does not dispute that Mr. Lloyd suffers an impairment as a consequence of the accident. However, it does dispute that as a consequence of the impairment Mr. Lloyd suffers a complete inability to carry on a normal life as required by subsection 12(1)3.i. An arbitration has been scheduled to commence on Monday, August 14, 2006 to determine this and other issues.

PRODUCTION ISSUES:

In its Notice of Motion, Dominion sought a release of Mr. Lloyd's tutor's records and his Wendy's employment file. Dominion withdrew these issues as resolved.

Dominion also sought disclosure of Mr. Lloyd's secondary school co-op placement file relating to his placement with McRae Warehouse Company Limited. The parties agreed that an order requiring Mr. Lloyd to use his best efforts to have the file released by his school would resolve this issue.

EVIDENCE:

Insurer's Examination Pursuant to Section 42 of the Schedule:

Submissions of the Parties:

Dominion seeks an order requiring Mr. Lloyd to attend assessments by Dr. Shanks, physiatrist, Dr. Fiedorowicz, psychologist, and an in-home assessment to be conducted by Mr. Sebastian Ferland, occupational therapist. Dominion submits that as it has not conducted any insurer's examinations in respect of Mr. Lloyd's claim for a non-earner benefit, these assessments are reasonably necessary to adjust the file. Dominion submits the neuro-psychological assessment and in-home occupational therapy assessments are required to determine whether the brain injury Mr. Lloyd sustained in the accident resulted in an impairment which has resulted in him suffering a complete inability to carry on a normal life. Further, there is some evidence that Mr. Lloyd is experiencing lower back pain which was not evident prior to the motor vehicle accident which necessitates an assessment by the physiatrist, Dr. Shanks, to determine whether the source of the pain is accident related.

Mr. Lloyd submits that Dominion is seeking the assessments to bolster its case at arbitration and not to adjust the file. He relies on the chronology respecting his application for a non-earner benefit. Dominion was made aware of the issue of his claim to a weekly non-earner benefit prior to his 16th birthday in 2004. Mr. Lloyd submitted an application for the benefit and Dominion responded by requiring a Disability Certificate supporting his application. It was not until February 2006 that Dominion sought examinations pursuant to section 42 of the Schedule.

Findings of Fact:

There is no significant difference between Dominion's chronology, which follows, and that established by Mr. Lloyd's responding materials. As Dominion has the onus to show that the assessments sought are reasonably necessary, I have relied on its affidavit materials. I make the following findings of fact:

On February 18, 2004, Mr. Lloyd's counsel advised Dominion that Mr. Lloyd would become 16 on March 23, 2004 and, pursuant to section 12 of the Schedule, would become eligible for a non-earner benefit.
On or about May 3, 2004, Dominion requested that Mr. Lloyd participate in a CAT DAC assessment.
On or about May 13, 2004, Mr. Lloyd submitted an Application for Mediation claiming a non-earner benefit, examination expenses and related transportation expenses.
On June 7, 2004, Dominion wrote to Mr. Lloyd's counsel requesting an updated "Disability Certificate" to verify disability, explaining that it was for this reason that no decision had been made in respect of the application for a weekly non-earner benefit.
On August 24, 2004, Dr. Hamilton, the psychologist who conducted a neuro-psychological assessment of Mr. Lloyd the previous year, signed a Disability Certificate stating that in her opinion Mr. Lloyd suffered a complete inability to carry on a normal life.
On September 14, 2004, the Report of Mediator was released indicating that the mediation had not resolved the issues.
On September 14, 2004, Dominion's counsel advised Mr. Lloyd's counsel that Dominion was of the opinion that Mr. Lloyd did not meet the test of a complete inability to carry on a normal life as defined by the Schedule.
In the fall of 2004, Mr. Lloyd had a recurrence of cancer which delayed the conclusion of the CAT DAC until April 2005.
On April 20, 2005, Dominion wrote to Mr. Lloyd acknowledging receipt of the results of the CAT DAC and provided him with a list of eight potential case managers.
In or about November 2005, Dominion requested an in-home assessment to be conducted by Mr. Ferland, occupational therapist.
On December 9, 2005, Dominion's counsel wrote to Mr. Lloyd's counsel requesting an in-home assessment which was to be conducted by Mr. Ferland. The following request was made:

In terms of moving forward with the Application to Arbitrate, as presently before the Financial Services Commission, we would ask for the following:

Firstly, as per Section 42 of the SABS, we require permission for an Occupational Therapist to meet with Mr. Cody Lloyd and his mother to confirm daily activities and functional abilities as this goes directly to the claim for non-earner benefits that is being asserted. It is our intention to have Mr. Sebastien Ferland from CVE Inc. attend for the purposes of conducting this assessment. Attached is a copy of Mr. Ferland's resume as a Senior Occupational Therapist. It is anticipated that the Occupational Therapist will not be asked to have Cody Lloyd undergo any form of testing but simply to answer questions... ²

On December 9, 2005, Mr. Lloyd's counsel responded by requesting that the proper notice be delivered.³
On February 22, 2006, Dominion sent Notice pursuant to section 42 of the Schedule seeking Mr. Lloyd's attendance at the assessments which are the subject of this motion. The Notice stated:

To determine Mr. Cody Lloyd's ongoing entitlement to benefits without limiting the forgoing of his entitlement under:

Part V (Medical, Rehabilitation and Attendant Care) - of the Statutory Accident Benefits Schedule, we have arranged the Insurer's Examinations listed below... ⁴

The Notice went on to list the assessments which are the subject of this motion.

On February 24, 2006, counsel for Mr. Lloyd responded to Dominion submitting that as the only benefit being paid was tutoring for his client claimed pursuant to section 15 of the Schedule, then subsection 42(1.1) applied and his client could not be reasonably required to attend the assessments set out in the notice.⁵
On March 8, 2006, Dominion's counsel responded indicating that Dominion was attempting to determine Mr. Lloyd's eligibility for a non-earner benefit.
On April 21, 2006, Dominion sent a Notice to Mr. Lloyd setting out the times and dates for the assessments which are the subject of this motion and enclosed a copy of section 42 of the Schedule.

ANALYSIS:

On March 1, 2006 the provisions of section 42 of the Schedule were amended to deal with the dissolution of the DAC system. On April 21, 2006, notice of the assessments in respect of Mr. Lloyd's claim for a non-earner benefit was sent to Mr. Lloyd. A copy of section 42 in force February 28, 2006 was enclosed. Neither party made submissions in respect of the amendments. Therefore, I find that the parties construed the April 21, 2006 notice as amending the notice sent on February 22, 2006 and therefore intended to rely on the provisions of section 42 in force on February 28, 2006. Those provisions are:

42.(1) For the purpose of determining whether an insured person is entitled to a benefit for which an application is made, an insurer may give the insured person notice requiring the insured person to be examined by one or more persons specified by the insurer, each of whom is a member of a health profession or a person with expertise in vocational rehabilitation.

(2) The notice shall state the reasons why the insurer requires the examination and shall specify a date for the examination that is at least five business days after the person receives the notice.

(3) The insurer may require examinations as often as is reasonably necessary.

Adequacy of the Notice:

On December 9, 2005, Mr. Lloyd's counsel responded to a request from Dominion's counsel for an in-home assessment and advised that proper notice would be required.

On February 22, 2006, Dominion sent a notice which enumerated the assessments which are the subject of this motion but cited benefits which Mr. Lloyd had not claimed. Mr. Lloyd's counsel advised of the inadequacies of this notice in his letter of February 24, 2006. It was not until April 21, 2006 that Dominion sent its amended notice which stated:

To determine Mr. Cody Lloyd's entitlement to benefits without limiting the forgoing of his entitlement under:

Part III (Non-Earner Benefit) - of the Statutory Accident Benefits Schedule, we have arranged the Insurer's Examinations listed below... ⁶

Dominion's wording of its notice in respect of a section 42 assessment was the subject of consideration in R.B. and Dominion of Canada General Insurance Company.⁷ The arbitrator determined that "merely" referring to the Parts of the Schedule was unhelpful and incompatible with consumer protection legislation as defined by the Supreme Court in Smith v. Co-operators. Dominion's notice of April 21, 2006 refers to the non-earner benefit. It is therefore more explicit than that considered in R.B. However, I find it to be incompatible with Dominion's duty pursuant to Smith to give notice in language which is straightforward, clear and understandable by an unsophisticated person.⁸ The initiating phrase of the notice: "To determine Mr. Cody Lloyd's entitlement to benefits without limiting the forgoing of his entitlement under:..." is incomprehensible. Dominion determined in September 2004 that Mr. Lloyd was not entitled to a non-earner benefit. It is disputing Mr. Cody’s entitlement to a non-earner benefit. Dominion’s belief that no benefit is payable is a limit on those benefits. I find that the inaccurate wording of the notice would be confusing to an unsophisticated person such that it renders the notice invalid. It has been four years since Smith and R.B were released. Perhaps it is time for Dominion to seek assistance in drafting its notice pursuant to section 42 in plain language.

Are the assessments sought reasonably necessary?

It is well established that the onus is on the insurer to show that a proposed medical examination is reasonably necessary to assess entitlement to benefits and not for the purpose of bolstering its case for litigation.⁹

Dominion was advised on February 18, 2004 that Mr. Lloyd intended to make a claim for a non-earner benefit when he turned 16 on March 23, 2004. On June 7, 2004, Dominion sought an updated disability certificate to verify disability. In August 2004, the updated certificate was provided. On September 14, 2004, Dominion, through its counsel, denied Mr. Lloyd's entitlement to a non-earner benefit on the basis that Mr. Lloyd did not suffer a complete inability to carry on a normal life as defined by the Schedule. Following the release of the CAT DAC in April 2005, Dominion did not request assessments to assist in determining Mr. Lloyd's eligibility for a non-earner benefit.

The notice of April 21, 2006 was 26 months after Dominion was first advised of Mr. Lloyd's intention to make a claim for the benefit and four months prior to the scheduled arbitration. It is implausible that the assessments sought on this motion were to aid Dominion's consideration of Mr. Lloyd's eligibility for a non-earner benefit. I find the catalyst for seeking the assessments was the arbitration, and not the adjusting of the claim. Therefore, I conclude that the assessments sought by Dominion pursuant to the Notice of Motion are not reasonably necessary pursuant to subsection 42(3) of the Schedule.

CONCLUSION:

On the basis of the foregoing, I find that the notice sent to Mr. Lloyd on April 21, 2006 is inaccurate such that it renders it invalid and the assessments being sought by Dominion are for the purpose of bolstering its case at arbitration. Therefore, the assessments are not reasonably necessary pursuant to subsection 42(3) of the Schedule.

EXPENSES:

Neither party made submissions in respect of the expenses incurred for this motion. Therefore, this issue will be left to the hearing arbitrator.

June 22, 2006

Denise Ashby Arbitrator

Date