Kandavanam Maria-Antony v. RBC General Insurance Company, 2007 ONFSCDRS 190

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2007 ONFSCDRS 190

FSCO A06-000754

BETWEEN:

KANDAVANAM MARIA-ANTONY

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Eban Bayefsky

Heard: February 12 and 13, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: David S. Wilson for Mr. Maria-Antony William A. McClelland for RBC General Insurance Company

Issues:

The Applicant, Kandavanam Maria-Antony, was injured in motor vehicle accidents on October 5, 2000 and June 12, 2001. He applied for and received statutory accident benefits from RBC General Insurance Company (“RBC”), payable under the Schedule.¹ RBC denied Mr. Maria-Antony attendant care benefits from November 1, 2004, as well as benefits for a case management assessment and an in-home assessment. The parties were unable to resolve their disputes through mediation, and Mr. Maria-Antony applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The following are the principal issues in this hearing:

Is Mr. Maria-Antony entitled to attendant care benefits, at a rate of $1,221.56 per week, from November 1, 2004, with respect to either of the motor vehicle accidents of October 5, 2000 and June 12, 2001, pursuant to section 16 of the Schedule?
Is Mr. Maria-Antony entitled to benefits for a case management assessment (in the amount of $1,439.04) and for an in-home assessment (in the amount of $1,669.36), pursuant to section 24 of the Schedule?
Is Mr. Maria-Antony entitled to interest for the overdue payment of benefits, pursuant to section 46(2) of the Schedule?
Is RBC liable to pay a special award because it unreasonably withheld or delayed payments to Mr. Maria-Antony, pursuant to subsection 282(10) of the Insurance Act?
Is either party entitled to their expenses of the arbitration, pursuant to section 282(11) of the Insurance Act?

At the commencement of the hearing, the parties reached the following agreement on the production of RBC’s log notes:

The Insurer agrees to produce all log notes (subject to claims for privilege - the Insurer is to advise if any privilege is being claimed and the date of the privileged document) from the date the OCF-19 was submitted regarding the June 2001 accident up to July 21, 2006 or to September 21, 2006, depending on the arbitral ruling on that date.

Upon hearing submissions from the parties, I ruled orally as follows: The operative date for the disclosure of the log notes under the parties’ agreement is September 21, 2006.

In addition to this production issue, the parties raised the following preliminary issues:

Does RBC have the right to dispute the findings of the Catastrophic Impairment Designated Assessment Centre (the “CAT DAC”) (including the issue of whether RBC waived the right to dispute these findings)?
Is RBC precluded from relying on surveillance evidence of Mr. Maria-Antony because it failed to produce the investigators’ notes and some of their reports at least thirty days before the hearing, contrary to Rule 40.1 of the Dispute Resolution Practice Code?
Is RBC precluded from relying on the reports of Health Impact Multidisciplinary Assessment Centres because they address income replacement benefits and housekeeping benefits, rather than attendant care benefits, and because RBC failed to serve one of the assessors’ reports (that of Dr. L. McFadden) at least thirty days before the hearing, contrary to Rule 39.1 of the Dispute Resolution Practice Code?

The following are my rulings on the preliminary issues. The hearing is scheduled to resume on November 5-8 and 13-16, 2007, at which time the principal issues in the arbitration will be addressed.

Result:

RBC is entitled to dispute the findings of the Catastrophic Impairment Designated Assessment Centre in this arbitration.
RBC is entitled to rely on the surveillance evidence.
RBC is entitled to rely on the reports of Health Impact Multidisciplinary Assessment Centres, including that of Dr. L. McFadden.

EVIDENCE AND ANALYSIS:

Issue 1: Is RBC entitled to dispute the findings of the CAT DAC?

(i) Background

Mr. Maria-Antony was involved in accidents on October 5, 2000 and June 12, 2001. On April 3, 2006, he applied for arbitration in respect of the first accident, claiming attendant care benefits from November 11, 2004 at a rate of $1,221.56 per week, a case management assessment in the amount of $1,439.04 and an in-home assessment in the amount of $1,669.36.

In November 2005, Mr. Maria-Antony had submitted an Application for Determination of Catastrophic Impairment (an “OCF-19” form), on the basis of a report dated October 10, 2005 from Dr. G. Bartolucci, a psychiatrist, who found “unquestionable evidence that the second accident of June 12, 2001 materially contributed to [Mr. Maria-Antony’s] impairments and therefore to his Catastrophic state.” By letter dated December 19, 2005, Ms. Tanya Dixon, RBC’s senior claims representative, advised Mr. Maria-Antony as follows: “We do not agree that you meet the criteria for Catastrophic Impairment, as outlined in Criterion (g) as referred to in the OCF-19 application form.” RBC requested that Mr. Maria-Antony undergo a DAC assessment to determine if he was catastrophically impaired (a “CAT DAC”), which he did in March and April 2006.

On July 7, 2006, the CAT DAC reported that Mr. Maria-Antony met “the definition of catastrophic impairment under the (g) criterion of Part 1, Section 2 of the SABS/59 and that the second accident of June 12, 2001 has made a material contribution to Mr. Maria-Antony’s current mental disorders and related impairments.” RBC subsequently sent Mr. Maria-Antony an Explanation of Benefits form (an “OCF-9”), dated July 21, 2006, in which Part 3 on Catastrophic Impairment Determination was filled out as follows:

We have reviewed your application for determination of catastrophic impairment and have determined:

X You have sustained a catastrophic impairment as a result of the accident

You have not sustained a catastrophic impairment as a result of the accident

Report enclosure: Please see the attached catastrophic report prepared by Work Able Centres dated July 7, 2006.

CC: David Wilson

On July 18, 2006, as a result of the CAT DAC report, Mr. Maria-Antony sought to add the issue of attendant care benefits arising from the June 2001 accident to the arbitration. RBC consented to this.

On September 21, 2006, counsel for RBC, Mr. McClelland, wrote to counsel for Mr. Maria-Antony, Mr. Wilson, as follows:

As you are likely aware, the Ontario Court of Appeal has recently held in its decision in Liberty Mutual v. Fernandes [Liberty Mutual Insurance Company and Fernandes (2006), 2006 CanLII 30212 (ON CA), 82 O.R. (3d) 524] that a CATDAC is not binding upon an insurer.

RBC has instructed me to apply for mediation with respect to the issue of whether or not your client has suffered a catastrophic impairment.

The matter was mediated in December 2006, but did not settle. The Report of Mediator noted that Mr. Maria-Antony maintained that “there [was] no jurisdiction to mediate this issue as it related to an Attendant Care benefit that has been previously mediated an[d] is the subject matter of an arbitration scheduled for February 12, 2007.” By correspondence dated December 12, 2006, RBC sought to file an amended Response by Insurer to an Application for Arbitration, maintaining, in particular, that Mr. Maria-Antony had not sustained a catastrophic impairment as a result of the motor vehicle accident of June 12, 2001 and was, therefore, not entitled to receive attendant care benefits after June 12, 2003. By letter dated December 19, 2006, Mr. Maria-Antony declined to consent to the addition of this issue to the arbitration on the basis that “consenting to [the Insurer’s] filing of the Amended Response might well equate to the insured acknowledging that the insurer has the right to raise the issue set out in paragraph 13 of the Response [on catastrophic impairment] at this late date….”

At the outset of the current hearing, Mr. Maria-Antony submitted that RBC had, in fact, waived any right they might have to dispute the findings of the CAT DAC. RBC sought to call evidence on the issue of waiver and, specifically, its intentions in filling out the OCF-9 in the manner it did. I allowed this request, and RBC called Ms. Tanya Dixon, the adjuster who had filled out the form.

Ms. Dixon testified that she was surprised by the findings of the CAT DAC report given that Mr. Maria-Antony had already been designated catastrophically impaired in respect of the first accident, given the relatively minor nature of the second accident and given the surveillance that RBC had subsequently acquired of Mr. Maria-Antony. Ms. Dixon said that the OCF-9 was to communicate the results of the CAT DAC and had to “reflect the same” as the CAT DAC. She testified that it was not her intention to say that RBC had accepted the findings of the CAT DAC. She stated that the decision to accept or reject the CAT DAC was a major decision that could only be made after discussion with RBC’s director of accident benefits, Mr. Tim Christie. Ms. Dixon stated that she had not yet discussed the matter with Mr. Christie when she sent out the OCF-9. She said that she discussed the issue with Mr. Christie in mid-September 2006, and that, after that, they instructed counsel to proceed to mediation on the issue of whether Mr. Maria-Antony was catastrophically impaired as a result of the June 2001 accident. Ms. Dixon testified that nowhere had RBC indicated that it agreed with the results of the CAT DAC.

In cross-examination, Ms. Dixon testified that she had had the authority to send out the December 2005 letter rejecting Dr. Bartolucci’s findings of catastrophic impairment and that, based on her review of the medical information on file, she had determined that Mr. Maria-Antony had not been catastrophically impaired as a result of the June 2001 accident. Ms. Dixon conceded that the manner in which the OCF-9 was completed was consistent with an acceptance, and inconsistent with a rejection, of the CAT DAC report. While Ms. Dixon stated that she felt she could only fill out the OCF-9 in one of two ways, she also acknowledged that there were other options available to her. For example, she could have left both boxes blank and provided an explanation that RBC rejected the findings of the CAT DAC; she could have checked the second box and stated that RBC rejected the CAT DAC findings; and she could simply have enclosed the CAT DAC report and stated that RBC’s response would follow.

Ms. Dixon testified that, in filling out the OCF-9 in the manner she did, she had simply intended to communicate the results of the CAT DAC and that the form conveyed exactly the opposite of what she had intended. However, Ms. Dixon also testified that the form was clear to her when she filled it out, that she would not have said RBC accepted the CAT DAC report unless she had meant it and that she conveyed what she had intended to convey, namely, that RBC accepted the DAC. Ms. Dixon stated that this was within her authority and that any decision in the documentation (including this one) was with the knowledge of her supervisors. Ms. Dixon stated that she had a discussion “not in any great detail” with her supervisor before she sent out the CAT DAC report to Mr. Maria-Antony and his counsel. Ms. Dixon acknowledged that there was nothing in her notes to suggest that she disagreed with the CAT DAC report at the time she sent it to Mr. Maria-Antony.

(ii) The Parties’ Submissions

RBC submitted that, as a matter of natural justice and fairness, it should be given the opportunity to raise in this arbitration the issue of whether Mr. Maria-Antony was catastrophically impaired as a result of the 2001 accident. RBC maintained that it could not have addressed this matter in its initial Response since, at that time, Mr. Maria-Antony had only applied for arbitration in respect of the first accident and since the CAT DAC had not yet issued its report. RBC argued that, by virtue of Liberty Mutual, supra, (which it submitted was binding on me) and despite the conclusion of the CAT DAC, the issue of whether Mr. Maria-Antony was catastrophically impaired as a result of the 2001 accident was properly considered in the context of this arbitration. RBC maintained that an insured can choose the forum in which to adjudicate the issue of entitlement and should not be able to prevent an insurer from disputing a positive CAT DAC by “sitting back and doing nothing.”

Mr. Maria-Antony submitted that the catastrophic issue was not inherent in the attendant care issue and that I could find entitlement to attendant care benefits without finding that he was catastrophically impaired. Mr. Maria-Antony maintained that Liberty Mutual is not binding on me since the comments in that case concerning an insurer’s right to dispute a CAT DAC were obiter dicta and because the case did not deal with the issue of whether an insurer has a right to dispute a “positive” CAT DAC within the context of an arbitration. Mr. Maria-Antony argued that the Schedule does not give an insurer the right to challenge a positive CAT DAC, that the cases of Smith v. Co-operators General Insurance Company, 2002 SCC 30, [2002] 2 S.C.R. 129 and Sellathamby and Allstate Insurance Company of Canada (FSCO A01-000313, May 8, 2002; upheld on appeal, P02-00009, December 17, 2002) suggest that an insured should not be denied the benefit of such a DAC and that, contrary to RBC’s position on natural justice and fairness, any gap in the legislation should not be filled to the detriment of the insured.

As noted earlier, Mr. Maria-Antony maintained that RBC had waived any right they might have to dispute the findings of the CAT DAC. Specifically, Mr. Maria-Antony submitted that insurers are deemed to know the law and that there was no evidence of mistake on RBC’s part when they sent the OCF-9. Citing the case of Harrison v. Antonopoulos, [2001] O.J. No. 341 (Ont. S.C.J.)², Mr. Maria-Antony also argued that the OCF-9 was, in essence, a “formal admission” by RBC that he was catastrophically impaired and that the relevant criteria for obtaining leave to withdraw such an admission had not been satisfied.

RBC submitted that the fact that it had checked off the first option in the OCF-9 was not determinative and that, in light of the CAT DAC report, it had no choice but to fill out the form this way, since there was no option to say that the CAT DAC had found a catastrophic impairment, but that the Insurer continued to believe that the insured was not catastrophically impaired. Citing various decisions on the issue of waiver³, RBC argued that the criteria for waiver had not been met and that, even if there had been a waiver, RBC was entitled to retract it and had, in fact, retracted it.

(iii) Findings

Pursuant to section 40(4) of the Schedule, a determination by a CAT DAC is “binding on the insured person and the insurer, subject to the determination of a dispute, in accordance with sections 279 to 283 of the Insurance Act, relating to whether the impairment is a catastrophic impairment.”

In Liberty Mutual, the Court of Appeal held that, pursuant to section 40(4) of the Schedule and sections 279 to 283 of the Insurance Act, despite a “positive” CAT DAC, an insurer who wishes to challenge the findings of the CAT DAC may nevertheless avail itself of the dispute resolution process. The Court stated as follows:

…it was not the intent of the legislature that an insurer would be forever bound by a CAT DAC that is favourable to the insured, and that the dispute resolution mechanism is only available to an insured who wishes to dispute an unfavourable CAT DAC finding.

…although the CAT DAC finding is binding on both parties, if the insurer seeks mediation pursuant to s. 280 of the Act [in respect of a positive CAT DAC] and the mediation fails, the insurer need only pay benefits in accordance with the last offer of settlement it made before the failed mediation, until the parties agree or until a court, an arbitrator, or the Director on appeal from the arbitrator under the Act, orders otherwise.

…an insured cannot, in effect, allow the mediation to fail, then claim that the CAT DAC finding is binding on the insurer and take no further action. Rather, the insured would be obliged to use its right in s. 281 to initiate court or arbitration proceedings or to agree to private arbitration in order to seek to obtain the higher benefits that are available to a person with a catastrophic impairment.

In my view, this decision is directly applicable to the present case, and in relation to the cases of Smith and Sellathamby, clarifies the parties’ rights and obligations following a positive CAT DAC.

Pursuant to Liberty Mutual, the July 2006 CAT DAC was binding on RBC, subject to a determination otherwise at an arbitration following a failed mediation. RBC proceeded to mediate the issue of whether Mr. Maria-Antony was catastrophically impaired as a result of the June 2001 accident, the mediation failed and RBC sought to add this issue to the current arbitration.

The only difference between the present case and that of Liberty Mutual is that, upon receiving the CAT DAC report, RBC sent Mr. Maria-Antony and his counsel an OCF-9 specifically stating that it had reviewed Mr. Maria-Antony’s application for a determination of catastrophic impairment and that it had determined that Mr. Maria-Antony had sustained a catastrophic impairment as a result of the accident; RBC also attached the CAT DAC report and drew Mr. Maria-Antony’s attention to it. Two months later, RBC advised Mr. Maria-Antony that, pursuant to the appeal decision in Liberty Mutual, it intended on proceeding to mediation on the issue of whether Mr. Maria-Antony had suffered a catastrophic impairment. The issue is, therefore, whether RBC not only has a general right to avail itself of the dispute resolution process to challenge the findings of the CAT DAC (pursuant to Liberty Mutual), but whether its issuance of the OCF-9 precludes it from adding the issue of catastrophic impairment to the arbitration.

In this regard, Mr. Maria-Antony maintained that, in issuing the OCF-9, RBC had both “formally admitted” that he had been catastrophically impaired as a result of the June 2001 accident, and had waived its right to dispute the CAT DAC findings in the context of this arbitration.

In Harrison, the defendant in a personal injury action brought a motion for an order that the plaintiff could not re-assert her claim for loss of income given her admission at the examination for discovery that she would no longer be pursuing such a claim. The defendant brought the motion under Rules 1.04(1) and (2) and 51.05 of the Rules of Civil Procedure. The first two rules require the rules to be liberally construed, either directly or by analogy. Rule 51.05 allows for the withdrawal of an admission (of the truth of a fact or of the authenticity of a document) on consent or with leave of the court. Leave will be granted if (1) there is a triable issue, (2) the admission was inadvertent or the solicitor was wrongly instructed and (3) if the withdrawal of the admission will not result in an injustice to the other parties to the action, it being understood that if the other parties can be compensated by costs, there is no injustice.⁴ The motion judge found that the statement at the discovery was tantamount to a “formal” or “judicial admission” and that leave to withdraw the admission would cause the defendant an injustice that could not be compensated by costs, since the defendant had relied on the admission and had not sought to secure certain key employment and medical records, and since a number of documents vital to the determination of the loss of income claim had been destroyed following the admission and before the attempt to re-assert the loss of income claim.

Mr. Maria-Antony submitted that the three criteria for granting leave to withdraw RBC’s admission had not been met. He argued that there was no triable issue as to whether he was catastrophically impaired as a result of the June 2001 accident, since there was no evidence that he was not catastrophically impaired for this reason. He maintained that there was no evidence that the admission was inadvertent. And he submitted that the costs of adding the catastrophic issue would be very substantial given the increased length of the hearing and his actual counsel fees; he also stated that he would suffer significant prejudice since he would have obtained new medical reports, had he known that the catastrophic issue would be part of the arbitration.

RBC maintained that Harrison was not applicable to the present case since it involved the Rules of Civil Procedure and since the Dispute Resolution Practice Code does not contain similar provisions. RBC maintained that the issue was not whether it had made a formal admission, but whether it had waived its right to dispute the CAT DAC in this arbitration.

In my view, Harrison is not applicable to the present case. Rule 51.05 of the Rules of Civil Procedure speaks of the withdrawal of an admission “made in response to a request to admit, a deemed admission under Rule 51.03 or an admission in a pleading….” The “deemed admission” refers to a party failing to respond to a request to admit. Even if Rule 51.05 could be said to apply in the arbitration context, I find that none of the enumerated admissions exist in the present case. I acknowledge that the motion Judge took an expansive view of the nature of admissions (considering them to be “made in pleading or otherwise for the purpose of trial”). In my view, however, an insurer’s response to a CAT DAC is significantly different from a statement made in the midst of litigation (and, specifically, during a trial), given that it is made in the adjustment of an insured’s claim and, pursuant to Liberty Mutual, is relevant to the manner in which the parties begin the process of applying or challenging the results of the CAT DAC. I, therefore, find that Harrison does not apply to the present case.

However, even if Harrison applied, and even if the OCF-9 could be described as an “admission”, I would grant leave to withdraw the admission. The principal issue in this case is whether Mr. Maria-Antony is entitled to attendant care benefits, at a rate of $1,221.56 per week (or $4,886.24 per month), from November 1, 2004, with respect to either of the motor vehicle accidents of October 5, 2000 and June 12, 2001, pursuant to section 16 of the Schedule. Section 16(5) of the Schedule states that the maximum amounts potentially payable in this case are “$3,000 per month, if the insured person did not sustain a catastrophic impairment as a result of the accident” and “$6,000 per month, if the insured person sustained a catastrophic impairment as a result of the accident.” In my view, the issue of whether Mr. Maria-Antony is catastrophically impaired as a result of either or both of the motor vehicle accidents is necessarily a part of the issue of his entitlement to attendant care benefits at the rate claimed. It is also a question that must be determined on the basis of all of the evidence before me, not just the reports of Dr. Bartolucci and the CAT DAC. There is, therefore, a triable issue.

Similarly, allowing RBC to withdraw the OCF-9 (and, therefore, to challenge the DAC’s conclusion that Mr. Maria-Antony is catastrophically impaired as a result of the June 2001 accident) would not result in any injustice to Mr. Maria-Antony since, by seeking more than $3,000 per month in attendant care benefits, he assumed the onus of addressing and establishing his catastrophic status, and since he was free to, and in fact intends to, respond to the only evidence obtained by RBC following the CAT DAC, namely, the insurer examinations in respect of income replacement and housekeeping benefits. In these circumstances, I do not find that the hearing will be substantially altered by allowing RBC to dispute the findings of the CAT DAC or that Mr. Maria-Antony would suffer any injustice or prejudice. And, if required, any additional costs incurred by Mr. Maria-Antony could be compensated to the extent permitted under the legislation.

Regarding the issue of whether the admission was “inadvertent” or otherwise erroneous, I find that it is not necessary to decide whether RBC mistakenly issued the OCF-9. Even if RBC initially considered itself bound by the CAT DAC, even if it intended to convey that it had accepted the findings of the CAT DAC, and even if it did, in fact, accept the CAT DAC, I find that, pursuant to Liberty Mutual, it was entitled to alter its position and proceed to mediate the issue of whether Mr. Maria-Antony was catastrophically impaired as a result of the June 2001 accident.

As noted in Liberty Mutual, “a catastrophic impairment designation under s. 40 of the SABS is not a ‘pay pending resolution’ provision….” Nor does the legislation indicate that an insurer must respond to the insured in a particular way following the issuance of a CAT DAC report. In March 2006, RBC had already terminated attendant care benefits on the basis of an attendant care DAC. In these circumstances, I find that RBC was not required to begin paying attendant care benefits following the CAT DAC.

Nor do I find that the OCF-9 precluded RBC from proceeding to mediation. Based on Liberty Mutual, a CAT DAC is presumed to be binding on an insurer pending resolution of the correctness of the CAT DAC’s findings. While RBC issued the OCF-9, it subsequently notified Mr. Maria-Antony that it would proceed to mediation on the issue of whether he was catastrophically impaired as a result of the June 2001 accident. Therefore, even if RBC had initially accepted the CAT DAC, it subsequently notified Mr. Maria-Antony that it no longer accepted the CAT DAC and wished to have the matter resolved through the dispute resolution process. In my view, Liberty Mutual allows RBC to proceed in this manner, particularly in light of the initial denial of attendant care benefits, the conflicting DACs, the fact that Mr. Maria-Antony had already commenced an arbitration that necessarily included the issue of catastrophic impairment, and the fact that between RBC issuing its OCF-9 and the filing of the mediation on catastrophic impairment, the only step taken by either party was the addition, on consent, of the issue of attendant care benefits in relation to the June 2001 accident. In these circumstances, I find that RBC was not precluded from proceeding to mediation on the issue of catastrophic impairment as a result of the OCF-9.

RBC did not make an offer of settlement prior to, or during, the mediation. Mr. Maria-Antony suggested that Liberty Mutual only applied if RBC had made an offer of settlement. However, the Court of Appeal only stated that an insurer must pay benefits in accordance with its last offer “if the insurer seeks mediation…and the mediation fails….” In my view, this pertains to an insurer’s obligations following a failed mediation; it does not mean that an insurer must make an offer following a positive CAT DAC in order to challenge the DAC’s findings through the dispute resolution process. An insurer’s failure to make an offer of settlement or to pay benefits in accordance with its last offer might be grounds for a special award (just as an insurer’s making an unreasonably low offer has been grounds for ordering it to pay more pending the final adjudication of the matter, as was done in Samoila v. Prudential of America General Insurance Co. (Canada), [1999] O.J. No. 2317, 89 A.C.W.S. (3d) 578 (S.C.J.), cited in Liberty Mutual), but it does not preclude an insurer from disputing the findings of the CAT DAC at an arbitration.

I, therefore, conclude that RBC was entitled to proceed to mediation and then to arbitration on the issue of catastrophic impairment despite the CAT DAC and despite its having issued the OCF-9.

As indicated, Mr. Maria-Antony maintained that RBC had waived its right to dispute the CAT DAC. The noted jurisprudence⁵ establishes that waiver will be found where a party fully understood its rights, clearly intended to abandon those rights and expressly did abandon them; a party can also retract a waiver of its rights if it gives reasonable notice to the party in whose favour the waiver operates.

I do not find that RBC waived its right to challenge the findings of the CAT DAC and/or to raise the issue of catastrophic impairment in this arbitration. Even if, through the OCF-9, RBC intended to convey that it had accepted the findings of the CAT DAC, I see no evidence to the effect that it, thereby, understood that it had the right to proceed to arbitration, that it intended on abandoning that right and that it did expressly abandon it. In my view, much clearer and more direct language or conduct would be required to find that, by issuing the OCF-9, RBC intended to abandon its right to proceed to arbitration on the issue of catastrophic impairment.

However, to the extent that it waived that right, I find that by notifying Mr. Maria-Antony that, pursuant to Liberty Mutual and despite the CAT DAC, it was proceeding to mediation on the issue of catastrophic impairment, RBC gave Mr. Maria-Antony reasonable notice of its retraction of the waiver.

In its submissions on waiver, RBC referred to the arbitration decision of McDonald and Guarantee Company of North America (FSCO A01-000399, October 29, 2002) which states that the principle of estoppel applies if a party attempts to do something contrary to what it represented it would do, and the other party relied to its detriment on that representation. In this case, RBC did not represent to Mr. Maria-Antony that it would pay him attendant care benefits at the rate claimed or that it would forego access to the dispute resolution process on the issue of catastrophic impairment. Nor did Mr. Maria-Antony establish that he had relied to his detriment on such representations (if they existed). As discussed in relation to both Liberty Mutual and the issue of waiver, RBC’s issuance of the OCF-9 did not preclude it from disputing the CAT DAC. I, therefore, find that RBC is not estopped from proceeding to arbitration on the issue of catastrophic impairment.

For all of these reasons, I find that RBC is entitled to dispute the findings of the CAT DAC in this arbitration.

Issue 2: Is RBC entitled to rely on the surveillance evidence?

Rule 40.1 of the Dispute Resolution Practice Code states, in part, that if a party intends to rely on any portion of surveillance or investigative evidence, it must, at least thirty days before the hearing, provide copies of all the evidence bearing on the issues in dispute.

RBC provided Mr. Maria-Antony with videotapes and two investigative reports in relation to surveillance in November 2003 and June 2004. Mr. Maria-Antony concedes that this material was provided to him more than thirty days before the hearing. However, he points out that the videotapes contain surveillance from November 2001, and that RBC did not provide any reports in relation to this surveillance or investigator notes from the 2003 and 2004 surveillance. Mr. Maria-Antony also submits that none of the surveillance is relevant to the issues in dispute since it pre-dates the point from which benefits are claimed, namely, November 2004.

RBC acknowledged that there are notes in relation to the 2003 and 2004 surveillance, but that it did not become aware of their existence until the week before the hearing. RBC stated that it only sent the reports and CD ROMs to Mr. Maria-Antony, and that if he had asked about the notes, it would have made inquiries in order to obtain them and provide them in a timely fashion. RBC also noted that there is no surveillance from 2001, and that this was the result of a camera malfunction (to which the investigator can testify).

Mr. Maria-Antony responded that the obligation to provide the notes does not arise only if the notes are requested, that RBC ought to have known that notes were made at the time of the surveillance and that RBC ought to have provided the notes immediately upon becoming aware of their existence. However, Mr. Maria-Antony stated that he only wished to see the notes at this point if they were admitted into evidence, at which time he would also address the issue of prejudice (in the context of admitting the notes within the thirty days prior to the hearing).

I find that RBC is entitled to rely on the surveillance. I find that RBC’s failure to provide the notes along with the reports and the CD ROMs was largely inadvertent. I agree that, once it became aware of the notes, RBC ought to have provided them to Mr. Maria-Antony. However, I find significant that, even at this point, Mr. Maria-Antony does not wish to see the notes, and only wishes to see and address them once they are admitted. In this context, I see no reason to interpret Rule 40.1 of the Code strictly. In fact, I find a basis to interpret it broadly, pursuant to Rules 1.1, 3.2 and 81.1, which speak of applying or setting aside the Rules in relation to the particular circumstances and merits of a case. Contrary to Mr. Maria-Antony’s position, I find the surveillance relevant to his entitlement to benefits beyond November 2004 precisely because it concerns his condition prior to that period. I also accept RBC’s explanation that the apparent reference to surveillance in November 2001 was erroneous and that, if required, it can be addressed by the investigator. Of course, if such surveillance exists, any related reports and notes should be produced to Mr. Maria-Antony (unless Mr. Maria-Antony does not wish to see the reports and notes).

Issue 3: Is RBC entitled to rely on the Health Impact reports?

Rule 39.1 of the Dispute Resolution Practice Code states, in part, that, subject to Rule 39.2, all reports to be introduced at a hearing must be served on the other party at least thirty days before the hearing. Rule 39.2 states, in part, that in extraordinary circumstances, a party may seek leave to serve a report less than thirty days before the hearing.

Mr. Maria-Antony submitted that, because he had already commenced an arbitration in respect of attendant care benefits, and because RBC would, therefore, not be permitted to obtain an insurer examination (“IE”) in relation to these benefits, RBC requested that Mr. Maria-Antony attend IEs in respect of income replacement and housekeeping benefits in June 2006. Mr. Maria-Antony submitted that he essentially had no choice but to attend these IEs (which resulted in the June 2006 reports in dispute) and that, other than the report of Dr. L. McFadden (which he received just under thirty days before the hearing), he was not served these reports until just over thirty days before the hearing (approximately January 9, 2007). However, Mr. Maria-Antony also submitted that the issue was not whether he received the majority of reports in time. He submitted that, in all of the circumstances, even if the reports could be said to be relevant, it would be unfair to allow them to be introduced into evidence.

RBC submitted that there was no evidence of impropriety on its part, that it was not certain that its request for an attendant care IE would have been denied, that the reports eventually obtained are relevant to the issues in this arbitration, and that the only report not served more than thirty days before the hearing (that of Dr. McFadden) was inadvertently provided late, since it was presumed to be included in the package of Health Impact reports served on Mr. Maria-Antony.

I find that RBC is entitled to rely on the Health Impact reports, including that of Dr. McFadden. I find that most of the reports were served in a timely fashion, that Dr. McFadden’s report was inadvertently excluded from the package served on Mr. Maria-Antony and that the relevance of the reports is, at this stage, a question of weight, not admissibility. I also find that, if Mr. Maria-Antony felt the IEs were improper, he should have contested them at the time he received the Notices of Examination, not at the outset of the hearing and not in relation to their exclusion from the evidence in this arbitration. In any event, Mr. Maria-Antony is free to respond to the disputed reports, and has, in fact, indicated that he will be forwarding them to someone for review.

EXPENSES:

If required, the issue of expenses will be addressed at the conclusion of this matter.

October 4, 2007

Eban Bayefsky Arbitrator

Date