minicounsel

Footnotes

The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended.
Insurance Act, R.S.O. 1990, c.I.8, as amended
Exhibit 1, Tab 1
Exhibit 1, Tab 2
That Paragraph states, "all med/rehab except for items submitted in February 2006 and therafter and items referenced in RMI report dated February 16, 2006."

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 38 FSCO A95-000168

BETWEEN:

BRONWEN NAVAGE Applicant

and

PILOT INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Rosemary Muzzi

Heard: September 22, 2006, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: David S. Wilson for Ms. Navage Robert Barrett for Pilot Insurance Company

Background:

Bronwen Navage, was injured in two motor vehicle accidents, the first on February 8, 1994 and the second on February 17, 1996. She applied for statutory accident benefits from Pilot, payable under the Schedule, in respect of both accidents.¹ The parties were unsuccessful in mediating their disputes and Ms. Navage applied for arbitration at the Financial Services Commission of Ontario.² Ms. Navage's claims never proceeded to arbitration because in March 2006 the parties entered into detailed Minutes of Settlement with respect to the issues for arbitration. Subsequent to the signing of the settlement, Ms. Navage attempted to open discussions with respect to a particular issue, that of special award. Pilot took the position that Minutes resolved the arbitration in its entirety.

The question the parties have put forward is:

Was there a settlement of all of the issues in this arbitration proceeding?

Facts:

The following undisputed facts are derived from the various documents found within the bound volume produced at the hearing and marked as Exhibit 1.

The stage was set for an arbitration between the parties at a pre-hearing discussion held on October 1, 2004 where the parties agreed to the following issues as the subject matter of a hearing set for the week of June 20, 2005:³

Is Ms. Navage entitled to receive a weekly income replacement benefit, and what is the quantum of that benefit, from March 15, 1995 and ongoing, pursuant to sections 7 and 10 respectively of the Schedule?
Is Ms. Navage entitled to weekly loss of earning capacity benefits (LECB) pursuant to section 20 of the Schedule?
Is Ms. Navage entitled to supplementary medical expenses pursuant to section 36(1) of the Schedule?
Is Ms. Navage entitled to rehabilitation benefits pursuant to section 40(5) of the Schedule?
Is Ms. Navage entitled to payments for housekeeping and home maintenance services, pursuant to section 55 of the Schedule?
Is Pilot liable to pay a special award pursuant to subsection 282(10) of the Insurance Act?
Is Ms. Navage entitled to interest for the overdue payment of benefits pursuant to section 68 of the Schedule?

The parties also claimed from each other their expenses of the arbitration process.

Rather than commence the arbitration, the parties spoke to a settlement officer and then appeared to have eventually settled the case on terms specified in Minutes of Settlement signed on March 27, 2006.⁴ The Minutes are very detailed, containing seven separate paragraphs, and are signed by both parties and their legal counsel.

The contents of the Minutes are summarised here:

There is a preamble to the seven specific terms which reads, "The parties agree to res'n of arb. proceeding as follows"
Paragraph 1 specifies the lump sum to be paid to Ms. Navage in respect of all arrears in IRBs, LECBs, attendant care, housekeeping and medical/rehabilitation benefits save those medical benefits items submitted in Febrary 2006 and those items referenced in a RMI report of February 16, 2006.
Paragraph 2 specifies that payment is to be made to Ms. Navage's counsel in trust, to be held in escrow pending a review by Ms. Navage's accountant to be done by April 7, 2006.
Paragraph 3 details the start date and quantum of future/ongoing housekeeping benefits.
Paragraph 4 specifies how future/ongoing weekly LECBs are to be recalculated.
Paragraph 5 resolves Pilot's claim for Ms. Navage's repayment of settlement funds.
Paragraph 6 details the amounts payable by Pilot for Ms. Navage's legal costs and her accountant's review (referred to in Paragraph 2).
Paragraph 7 states, "Arb'n to be adjourned pending confirmation by insured of settlement, FSCO to be advised by Wed. April 12/06 of status.

Pilot (now Aviva) enclosed a cheque for the full amount of the settlement funds in a letter dated March 31, 2006. This letter also confirmed that the funds were to be held in escrow, as agreed, pending the accountant's review as outlined in the Minutes.

On April 3, by letter, Ms. Navage's counsel confirmed the completion of the accountant's review and, therefore, the settlement of IRB arrears. Counsel also requested payment of the accountant's fee. Counsel then wrote, "I intend to release the settlement funds to Ms. Navage, as the escrow has now been satisfied." Counsel reminded Pilot about the terms contained in Paragraphs 3 and 4 of the Minutes. Finally, counsel concluded the letter in this way:

As I advised you in my voice mail message, each of us had apparently overlooked the issue of a Special Award, an issue which my client is not prepared to abandon. We must discuss the same and I look forward to hearing from you in this regard.

Pilot responded by letter asserting that the executed Minutes resolved the arbitration proceeding and enclosing a Partial Release and Acknowledgement in respect of the Minutes for Ms. Navage to sign.

On April 11, 2006, by letter, counsel for Ms. Navage informed Pilot as follows:

Ms. Navage would not execute the Partial Release and Acknowledgment
counsel had asked the Commission to set a hearing date because, though Minutes of Settlement had been executed, Ms. Navage was taking the position that the issue of Special Award remained outstanding as there was no disposition in the Minutes of that particular claim.

A hearing date was then set to deal with this issue.

At the outset of the hearing, the parties agreed and asked that the following note be included at the beginning of my reasons:

Notwithstanding the results of this motion, the parties are content to abide by the provisions for payment as contained in paragraphs 1, 3, 4, 5 and 6 in the Minutes of Settlement as they are satisfied that these matters have been resolved.

ANALYSIS:

Pilot's argument

Pilot asserts that the Minutes are the written document that was created to reflect the agreement made by the parties to resolve the entire arbitration proceeding that was pending before the Commission. Pilot states that significant bargaining and negotiation took place to reduce the issues to settlement.

Ms. Navage's argument

Ms. Navage asserts that Pilot has the burden of proving that the Minutes resolved all issues and that it has failed to meet its burden by relying only on documents and by failing to call evidence that was otherwise available to prove its understanding with respect to the issues that were resolved by way of the Minutes.

Further, Ms. Navage argues that the executed Minutes are ambiguous and do not provide finality on all issues. In particular, Paragraph 7 of the Minutes is wide enough and ambiguous enough to support the argument that additional issues could be brought forward or that all issues were not settled. Because of the ambiguity, it was incumbent on Pilot to proffer evidence of what it understood the terms of settlement to include and exclude. In the absence of such direct evidence, any ambiguity should be read in favour of Ms. Navage.

Findings

Burden of Proof

The burden is on Pilot to establish that the Minutes settle all issues. However, I disagree that, in order to meet its burden, it was incumbent on Pilot to call evidence to prove its understanding of what issues were and were not included in the settlement. Pilot is entitled to rely on the Minutes themselves and any other relevant documents to prove its case. The question is whether the evidence before me is sufficient to prove that there was a settlement of all of the issues in this arbitration proceeding.

Was there a settlement of all of the issues?

Though the parties themselves articulate the problem in this way, I find it helpful to rephrase the question in this way:

Did the parties, by way of the written Minutes, intend to settle all issues pending in the arbitration.

In answering this question, it is important to note that no party is alleging that they were hindered by language barrier, poor education or disability, that they were incapable of understanding the Minutes, that they had inadequate representation, or that the negotiations leading to the Minutes were hostile or coercive. No party relies on fraud, mistake, misrepresentation, undue influence, unconscionability, or other vitiating factor to actually rescind the Minutes. In fact, as evidenced by the specific agreement that I noted above, the truth is that neither party wishes to rescind any part of the Minutes at all. The question is whether all of the issues for arbitration were incorporated into the settlement so that Ms. Navage is now precluded from further pursuing one of those issues.

I am satisfied that the Minutes signed by the parties were intended to comprise their agreement to settle all of the issues pending in the arbitration. I find that the Minutes are clear on their face. Moreover, I find that the subsequent conduct of Ms. Navage, as revealed in the exchange of correspondence, confirms that the parties intended to settle all issues for arbitration by way of the signed Minutes. Furthermore, I am not satisfied that there is any basis upon which I might have been able to alter or somehow add to the terms of a signed agreement Ms. Navage entered into voluntarily with Pilot in the face of Pilot's objection to so doing.

The Minutes and the subsequent Correspondence

As stated, an examination of the contents of the Minutes themselves indicates that the parties had turned their minds to dealing with the merits of the entire arbitration proceeding. Moreover, an analysis of the exchange of correspondence confirms this conclusion.

First, the words used in the Minutes are clear and, therefore, there is little need to go beyond what they plainly state. The preamble in the Minutes, that is the introduction to the settlement document, specifically states that the parties agree to a resolution of the arbitration proceeding. The subsequent paragraphs would appear to set out the specific terms on which the resolution of the arbitration proceeding is to be effected. If the parties had only meant to resolve some of the issues in the arbitration proceeding and leave open other issues for further consideration and negotiation, there would have been no need to include the preamble at all. Some meaning must be given to the words of the preamble.

Furthermore, even a careful reading of the specific terms of the Minutes shows clearly the parties' intentions to address all of the issues and completely resolve the proceeding pending before the Commission. In this regard, the degree of detail is noteworthy. In the details, the parties addressed not only which benefit claims were being settled and in what manner, but also which claims were to be excluded from the settlement. For example, though Paragraph 1 of the Minutes initially appears to deal with all arrears in medical/rehabilitation benefits, in fact specific past medical/rehabilitation benefits are excluded from the settlement.⁵ In contrast, nowhere is it indicated that the special award claim is not included in the settlement. Surely, if Ms. Navage had meant to exclude the special award claim from the settlement, like she did the more recent medical/rehabilitation claims, or if she had meant to reserve the claim to be dealt with outside the parameters of the settlement, she could have clearly so specified. Moreover, I disagree with Ms. Navage that there is any ambiguity in any of the Minutes' terms, and, specifically, I disagree that Paragraph 7 is wide enough and ambiguous enough to suggest that not all of the issues for arbitration, like the special award claim, were settled. Paragraph 7 states that the arbitration is to be adjourned pending the applicant's confirmation of the settlement. Paragraph 7 does not provide an option to either of the parties to change anything in the Minutes. None of the terms of the Minutes allows for additions or changes of any kind to be made. I find that there is nothing ambiguous about the use of the word confirmation. By use of the word confirmation, I understand that the options available to Ms. Navage were either to validate the settlement or not. In fact, Ms. Navage's counsel's subsequent correspondence supports this conclusion.

Ms. Navage's counsel's correspondence of April 3 explicitly confirms several of the terms of the settlement. This letter states that the settlement funds are to be transferred to Ms. Navage given that the escrow has been satisfied. Then, without any reference to or reliance on the alleged ambiguity of Paragraph 7 whatsoever, counsel writes:

This closing paragraph is telling and fortifies my conclusion that there is no ambiguity in Paragraph 7. Ms. Navage's request to discuss the issue of Special Award, which is made at the conclusion of the letter, almost as an afterthought or addendum to the main point of the letter, counsel's casual reference to an earlier voice mail message, and counsel's use of the word overlooked, all indicate to me that Ms. Navage understood that her request was indeed outside the ambit of the settlement terms reached with Pilot. Instead, I find that the paragraph indicates Ms. Navage's attempts to persuade Pilot to reopen discussion of matters that she realized were otherwise concluded.

On the other hand, there is no question from Pilot's correspondence that Pilot had intended for the Minutes to resolve the entire arbitration proceeding and that is what Pilot understood had occurred when the Minutes were negotiated and signed. Indeed, Pilot's conduct following the signing of the Minutes indicates its intention to resolve all matters as per the very terms of the settlement.

I find, therefore, that the Minutes are clear and unambiguous and that the parties intended to settle all issues pending in the arbitration proceeding by way of those Minutes.

Settlement Regulation

Ms. Navage also argued that the parties' failure to comply with the provisions of the Settlement Regulation nullifies the settlement altogether.

Both Ms. Navage's counsel and counsel for Pilot advanced some argument with respect to the applicability of the Settlement Regulation in cases such as this, involving ongoing benefits. However, I am not satisfied that either counsel sufficiently turned their minds to the complexity of the issue or the implications of the positions they advanced. Therefore, I invite each of them, should they wish to pursue the argument, to deliver more fulsome representations.

I impose the following timetable for the delivery of materials:

Counsel for Ms. Navage should serve on Pilot and deliver to the Commission its representations no later than 14 days after the receipt of this decision.
Counsel for Pilot should serve on Ms. Navage and deliver to the Commission its representations no later than 14 days after the receipt of Ms. Navage's representations.
Should a reply be necessary, Ms. Navage may serve and file it 7 days after receipt of Pilot's representations.

Counsel should inform me in writing if they wish to abandon the argument, or if they seek a variance of the time limits I have imposed for the delivery of their representations.

March 2, 2007

Rosemary Muzzi Arbitrator

Date