Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 129
FSCO A06-002188
BETWEEN:
BOTAN MOHAMMED-AMIN
Applicant
and
RBC GENERAL INSURANCE COMPANY
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
Rosemary Muzzi
Heard:
March 9, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Jeffrey D. Gray for Mr. Mohammed-Amin
James V. Leone for RBC General Insurance Company
Issues:
The Applicant, Botan Mohammed-Amin, was injured in a motor vehicle accident on September 22, 2003. He applied for statutory accident benefits from RBC General Insurance Company ("RBC"), payable under the Schedule1. RBC did not pay the claimed benefits in part because Mr. Mohammed-Amin failed to provide information as required by section 33 of the Schedule. The parties were unable to resolve their disputes through mediation. At mediation RBC took the position that Mr. Mohammed-Amin was precluded from proceeding with his application because he failed to meet the time limits imposed by the Insurance Act and the Schedule. Mr. Mohammed-Amin 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:
Is Mr. Mohammed-Amin precluded from proceeding to arbitration because his Application for Arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act and subsection 51(1) of the Schedule?
Should Mr. Mohammed-Amin's Application for Arbitration be dismissed on account of his failure to provide the information sought by RBC in accordance with section 33 of the Schedule?
Result:
Mr. Mohammed-Amin is precluded from proceeding to arbitration because his Application for Arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act and subsection 51(1) of the Schedule.
It is unnecessary for me to answer this question given my finding with respect to issue 1.
Is Mr. Mohammed-Amin precluded from proceeding to arbitration because his Application for Arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act and subsection 51(1) of the Schedule?
Section 51 of the Schedule requires that a mediation or arbitration proceeding be commenced within two years after the insurer refused to pay benefits:
51(1) a mediation proceeding or evaluation under section 280 of 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281(1)(a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer's refusal to pay the amount claimed.
Arguments
RBC argues that it is clear that Mr. Mohammed-Amin failed to commence the proceedings within the time limits imposed by the Insurance Act and Schedule and that the following facts support their contention. RBC informed Mr. Mohammed-Amin by Explanation of Benefits Payable dated December 10, 2003 that his entitlement to IRBs would be terminated as of December 29, 2003, and his entitlement to attendant care benefits and housekeeping expenses would be terminated as of November 27, 2003, because orthopaedic and FAE reports indicated that he did not suffer a substantial inability to engage in his pre-accident activities. Mr. Mohammed-Amin did not file his Application for Mediation of these issues until May 29, 2006, two years and five months after the latest date of termination of entitlement.
Mr. Mohammed-Amin does not dispute any of the facts relied upon by RBC. Instead he argues that the Explanation of Benefits Payable does not constitute a valid refusal and cannot therefore start the limitation period running. He contends that the refusal is not valid for the following reasons:
The reason for refusal is not clear and is, in fact, incorrect. While the Explanation of Benefits Payable indicates that the reason for refusal is that Mr. Mohammed-Amin did not suffer a substantial inability to engage in his pre-accident activities, the actual reason for refusal was Mr. Mohammed-Amin's failure to provide information as evidenced by a letter dated October 20, 2003 informing him that no benefits were payable commencing 14 days after receipt of the letter until such time as he provided further information regarding his pre-accident employer, and his dates of employment and wage.
The refusal was not unequivocal and indeed RBC revoked its refusal as evidenced by the fact that RBC continued to communicate with Mr. Mohammed-Amin, invited him to deliver more information, and, by letter dated February 14, 2006, indicated a willingness to reexamine the issues.
RBC failed to offer Mr. Mohammed-Amin a DAC in respect of the findings of the orthopaedic and FAE assessments as required by section 37(3) of the Schedule.
There are other facts which are undisputed and relevant to an analysis of this issue: Mr. Mohammed-Amin has been represented throughout this process. His Application for Accident Benefits was filed with RBC on October 7, 2003 through his agent at the time. In early 2004, Mr. Mohammed-Amin retained new counsel who corresponded for the first time with RBC by letter dated January 15, 2004. Counsel then sent subsequent correspondence to RBC, dated June 14, 2004, October 14, 2004, December 16, 2004, and August 31, 2005. RBC appears not to have replied to any of counsel's inquiries until January 25, 2006.
Analysis and Conclusions
It is well established that arbitrators do not have the discretion to extend the time limits for commencing mediation and arbitration proceedings that are prescribed in the Insurance Act. However, it is also recognized that the limitation period defence must be strictly construed because the result is to deny an applicant the opportunity to have his or her claim adjudicated. Section 51 of the Schedule requires that a mediation proceeding be commenced within two years after the insurer's refusal to pay the amount claimed. As an arbitrator does not have the discretion to extend the time limits, cases like this one are generally decided on the basis of the validity of the refusal. If the insurer's refusal is not valid, the limitation period does not begin to run. The following are the well-established principles relevant to determining the validity of the insurer's refusal to pay in this case:
the insurer's refusal itself must be in writing and must be clear and unequivocal notice of the insurer's refusal to pay the benefits in issue;
the refusal must provide sufficient or complete reasons for the refusal to pay;
a proper refusal must also inform the insured of the dispute resolution process; and
ongoing negotiations or requests for further information between an insured and the insurer do not extend the time limits for disputing an otherwise clear and unequivocal refusal.
In addition, some arbitrators have said that one must look at the entire series of events leading up to the refusal notice as well as the actions of the parties after the refusal in order to properly determine if the necessary notice was given.
I find that RBC delivered a clear and unequivocal refusal to pay benefits to Mr. Mohammed-Amin.
I find that the Explanation of Benefits Payable dated December 10, 2003 constitutes RBC's refusal to pay benefits to Mr. Mohammed-Amin. RBC refused to pay benefits to him on the basis of two insurer's examinations that found him not substantially unable to engage in his pre-accident activities. The Explanation of Benefits Payable also clearly indicates on which dates his entitlement to the benefits ends. RBC's earlier letter of October 20, 2003 merely explained to Mr. Mohammed-Amin that income replacement benefit payments would not be forthcoming until he provided the employment information it sought. This letter does not render any information contained in the Explanation of Benefits Payable incorrect or unclear.
Moreover, I find that RBC's refusal was unequivocal. I find nothing in the subsequent actions of RBC to satisfy me that it contemplated revoking or did revoke the refusal of December 2003. In fact, the evidence is that RBC did not communicate with Mr. Mohammed-Amin at all following the Explanation of Benefits Payable, despite counsel's numerous attempts to engage the adjuster2, until it sent a fax to counsel on January 25, 2006, more than 2 years after the date of termination of the IRBs. In these circumstances, I fail to understand why counsel did not pursue mediation at any time during this period. Attempts had been made at negotiation and resolution of the disputes with RBC, yet Mr. Mohammed-Amin could not elicit any kind of response whatsoever. There were no actions on the part of RBC during this entire period that could be viewed as attempts to lull Mr. Mohammed-Amin into believing that it was planning to revoke its refusal. Surely, RBC's silence cannot be interpreted as a revocation.
Furthermore, there is nothing in the January 2006 correspondence itself to indicate that RBC had changed its mind about its conclusion that Mr. Mohammed-Amin was not entitled to benefits as of December 29, 2003. In fact, RBC reiterates its position when it states:
Your client's IRB benefits were terminated on December 29, 2003. Your client has two years from the date of our denial to dispute stoppage. Your client has missed the deadline. Additionally, your client would be entitlement (sic) to IRB benefits from September 22, 2003 to November 8, 2003 (October 20, 2003 plus 19 days notice for the information requested under section 33). Therefore, there is a six week entitlement period to your client. We will issue that payment once we receive the requested documented (sic) outline in our October 20, 2003 letter.
RBC's subsequent correspondence of February 9, 2006 and February 14, 2006, in my view, both refer back to RBC's original request for information confirming Mr. Mohammed-Amin's employment details pursuant to section 33 of the Schedule, and did nothing to alter its refusal.
Finally, with respect to the DAC issue, I have several concerns with Mr. Mohammed-Amin's argument which lead me to find it unpersuasive.
Mr. Mohammed-Amin asserted that, in his particular circumstances, he would have been entitled to a DAC according to the provisions of section 37(3)2 of the Schedule. Section 37 is a procedural section, establishing the steps an insurer must take in refusing or stopping the payment of weekly benefits, including IRBs. Mr. Mohammed-Amin's argument is that because RBC failed to follow the necessary procedural steps to refuse him the IRBs, the refusal is invalid. RBC did not specifically respond to this argument.
I find that even if Mr. Mohammed-Amin was entitled to be offered a DAC pursuant to the provisions of section 37, I am not satisfied on the facts that RBC failed to do so. There was no direct evidence from Mr. Mohammed-Amin himself attesting to this omission nor was any other direct evidence led on this point. Furthermore, counsel would have known long before this motion date that a DAC had not been offered and could have and should have raised this objection, at least with RBC, long before now. In fact, in none of the correspondence with RBC does counsel ever raise this issue . Essentially, counsel is asking me to infer that no DAC was offered simply because there is no reference to a DAC in one document, the Explanation of Benefits Payable provided to Mr. Mohammed-Amin. In light of the dearth of direct evidence on the point and given the other problems identified, I find that Mr. Mohammed-Amin has failed to satisfactorily prove this allegation.
RBC's refusal of December 2003 to pay benefits to Mr. Mohammed-Amin is clear and unequivocal. Mr. Mohammed-Amin is precluded from proceeding to arbitration because his application in respect of this refusal was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act and subsection 51(1) of the Schedule.
EXPENSES:
The parties did not address the issue of expenses. I urge the parties to resolve this issue. Should they be unable to do so, either party may request an assessment of expenses in accordance with the provisions of the Dispute Resolution Practice Code before me within 30 days from the date that this decision is issued.
June 25, 2007
Rosemary Muzzi
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 129
FSCO A06-002188
BETWEEN:
BOTAN MOHAMMED-AMIN
Applicant
and
RBC 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:
- Mr. Mohammed-Amin is precluded from proceeding to arbitration because his application for arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Act and subsection 51(1) of the Schedule.
June 25, 2007
Rosemary Muzzi
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- By January 25, 2006, Mr. Mohammed-Amin's counsel had sent five separate letters to RBC, dated January 14, 2004, June 14, 2004, October 14, 2004, December 16, 2004 and August 31, 2005.