Dominion of Canada General Insurance Company v. Jodi Monks, 2009 ONFSCDRS 169

Financial Services Commission of Ontario

Neutral Citation: 2009 ONFSCDRS 169 Appeal P09-00018 OFFICE OF THE DIRECTOR OF ARBITRATIONS

DOMINION OF CANADA GENERAL INSURANCE COMPANY Appellant

and

JODI MONKS Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Ms. Jane Cvijan for the Appellant, Dominion of Canada General Insurance Company Mr. Robert A. Zigler for the Respondent, Mrs. Jodi Monks

HEARING DATE: November 20, 2009

APPEAL ORDER

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

1. The Arbitrator’s May 1, 2009 decision is confirmed and the Notice of Appeal herein is dismissed.

2. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003).

December 10, 2009

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND SUBMISSIONS OF THE PARTIES

The Respondent, Ms. Jodi Monks, was injured in a September 28, 2003 motor vehicle accident and applied to her first party insurer, the Appellant, Dominion of Canada General Insurance Company, for statutory accident benefits payable under the Schedule.¹

The parties came before Arbitrator Ashby (the “Arbitrator”) for a determination whether the Respondent was precluded from proceeding to arbitration on the basis that her application for arbitration on certain claims was filed beyond the statutory limitation period.

Subsection 281.1(1) of the Insurance Act, R.S.O. 1990, c. I.8, provides, in part, that a mediation or an arbitration shall be commenced “within two years after the insurer’s refusal to pay the benefit claimed.” This wording is echoed in subsection 51(1) of the Schedule. The Arbitrator, citing Turner and State Farm Mutual Automobile Insurance Company, (FSCO P00-00046, February 1, 2002),² held that “a valid refusal requires that the denial be clear and unequivocal.”

Clause 281.1(2)(b) of the Insurance Act provides, in part, that despite subsection 281.1(1), if mediation fails, an arbitration may be commenced “within 90 days after the mediator reports to the parties under subsection 280(8).” This is echoed in subsection 51(2) of the Schedule.

The specific benefit claims in question for which arbitration was sought are:

1. An April 12, 2005 OCF-18 Treatment Plan from Inter-Action Rehabilitation Inc. (“Inter-Action”) totalling $2,862, sent by fax to the Appellant on April 20, 2005. The Arbitrator found that the Appellant did not provide a clear and unequivocal denial of this claim. Hence, the claim was not barred by the limitation period. The Appellant submits that it provided a clear and unequivocal refusal of this claim in its December 30, 2005 OCF-9 (standardized “Explanation of Benefits Payable by Insurance Company”), based on an enclosed West Park Health Designated Assessment Centre (“DAC”) medical-rehabilitation report and that this claim is statute-barred.

2. A March 23, 2005 OCF-18 Treatment Plan from Dr. J. Schacher for $6,075 regarding orthodontic treatment, received by the Appellant on September 8, 2005. The Arbitrator found that the Appellant did provide clear and unequivocal denial of this benefit on January 12, 2006 and that the two-year limitation period ran from that date. Neither party appeals this finding. The Appellant, however, submits that the Arbitrator erred in law in finding that the Respondent commenced her arbitration on June 2, 2008 and that her arbitration was commenced in time.

3. The Arbitrator found that the Respondent’s claims for housekeeping and home maintenance expenses were not validly refused by the Appellant. Hence, the limitation period did not begin to run. The Appellant submits that it provided clear and unequivocal refusal of this claim in its November 10, 2005 OCF-9 Explanation of Benefits and that these claims are statute barred.

4. The Arbitrator found that the Appellant’s November 10, 2005 OCF-9 Explanation of Benefits did provide clear and unequivocal refusal of the Respondent’s claims for attendant care, and that the limitation period commenced on that date. Neither party appeals this finding. The Appellant, however, submits that the Arbitrator erred in law in finding that the Respondent commenced her arbitration on June 2, 2008 and that her arbitration was commenced in time.

The parties agree that the Respondent applied for mediation at the Financial Services Commission of Ontario (the “Commission”) by Application for Mediation dated October 22, 2007 (marked received by the Commission’s “Dispute Resolution Services” on October 25, 2007) for the Inter-Action ($2,862) and Dr. Schacher ($6,075) Treatment Plans.

The parties further agree that the Respondent, by Application for Mediation dated November 9, 2007 (stamped received by the Commission’s 14th Floor Reception the same date), applied for mediation of the $11,000 housekeeping and the $49,454.74 attendant care claims.

The Report of Mediator regarding all of the above claims is dated February 29, 2008. The Arbitrator found that both parties received the Report of Mediator on March 4, 2008. This finding is not appealed.

The Application for Arbitration herein is dated June 2, 2008 and is marked as received by the Commission’s “Reception on 17” on June 2, 2008. The Arbitration Unit’s Case Administrator wrote the parties June 5, 2008 advising that the Application for Arbitration was registered that same day and that a copy of the Application was sent to the Appellant. The Application for Arbitration does not have a date of receipt stamped by the Dispute Resolution Group.

The Appellant argues that the Arbitrator erred in law:

1. In finding that the Appellant failed to provide clear and unequivocal refusal of the Inter-Action Treatment Plan and the housekeeping claims. The Appellant submits that its refusals were clear and unequivocal, complied with Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, and met the requirement of section 49 of the Schedule in providing written notice of the Respondent’s right to dispute. The Appellant submits that the Arbitrator failed to distinguish between a clear and unequivocal refusal to pay benefits and the reasons given for a refusal to pay the benefits claimed.

2. In failing to correctly apply Kurichh and Allstate Insurance Company of Canada, (FSCO A97-002118, May 6, 1999)³ that the 90-day limitation period extension runs from the date the Report of Mediator was sent (in this case, February 29, 2008), not when the Respondent received the Report of Mediator (March 4, 2008).

3. In finding that the Commission received the Application for Arbitration on June 2, 2008 (when the document was left with the Commission’s legal services branch on the 17th Floor) rather than on June 5, 2008 (based on the only evidence available) when received by the Commission’s Dispute Resolution Group (“DRG”) as required by the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003) (the “Code”).

4. In failing to give adequate reasons for her decision and in failing to consider or distinguish the case law put before her.

Accordingly, the Appellant requests that there be a finding that the claims herein are barred by the limitation period and that an order be forthcoming rescinding the Arbitrator’s decision and awarding the Appellant its expenses of this appeal, including the preliminary appeal decision of July 3, 2009.

The Respondent submits that the Arbitrator’s determinations that certain refusals were not clear and unequivocal are findings of fact and, pursuant subsection 283(1) of the Insurance Act, are not appealable.

Regarding the 90-day extension of the limitation period, the Respondent submits that the Arbitrator’s decision accords with Graham and State Farm Mutual Automobile Insurance Company, (FSCO A04-002268, December 7, 2005) and with Bhambi and State Farm Mutual Automobile Insurance Company, (FSCO A07-001075, March 27, 2008). Further, the Arbitrator’s decision was consistent with the wording of the Appellant’s own OCF-9 termination of benefits. The Respondent submits that Kurichh did not specifically find that the date on a Mediator’s Report is “set in stone” as the date the limitation period commences.

Finally, the Respondent argues that the delivery of the Application for Arbitration on the Commission’s 17th Floor rather than on the DRG’s 14th Floor is, in accordance with Rule 1.3 of the Code, a “defect in form or other technical breach” that “will not make a proceeding invalid.”

II. ANALYSIS

I will address, in turn, the Appellant’s grounds for appeal.

Was a clear and unequivocal refusal given of the housekeeping claim?

The Ontario Court of Appeal in Turner confirmed that the proper legal test for the commencement of the limitation period is a clear and unequivocal refusal of benefits by an insurer. The Court held than an adjudicator should avoid any possible inference that the test is being diluted. The Court held that the “purpose of the requirement to give reasons is to permit the insured to decide whether or not to challenge the cancellation. If the reasons given are legally wrong the insured will succeed in that challenge. Requiring that the reasons be legally correct goes beyond both the requirement in the relevant regulation, and the purpose of such a notice.”

The Supreme Court of Canada, in Smith v. Co-operators, addressed an insurer’s duty to inform the insured person of the dispute resolution process. Gonthier J., speaking for the majority, held that such information must be provided “in straightforward and clear language, directed towards an unsophisticated person.”

The Concise Oxford Dictionary of Current English, Eighth Edition, Clarendon Press, Oxford, 1990, defines “unequivocal” as “not ambiguous, plain, unmistakable.” The word “clear” is defined, in part, as “manifest; not confused or doubtful.” The Arbitrator found that the insurer’s November 10, 2005 OCF-9 “does not contain a denial of the housekeeping benefit.”

The Appellant’s November 10, 2005 OCF-9 addresses, in part, the Respondent’s $11,000 claim for housekeeping and home maintenance expenses. Under the heading “Amount Payable” in the OCF-9, the amount of “$0.00” is typed in by the Appellant. However, in the second column to the right of “Amount Payable,” the Appellant has left the box entitled “Item Not Payable,” blank. Under the box in the form entitled “Reasons why expenses are not payable,” the Appellant requests further information regarding the names and contact information of those who provided assistance to the Respondent, as well as supporting proof of payment.

In the same OCF-9, regarding attendant care, Appellant also did not tick off the box under the heading “Item Not Payable.” However, unlike its explanation in respect of housekeeping benefits, with respect to attendant care (separated from the housekeeping explanation by three short dashes), the Appellant (a) states that it does not agree that the attendant care expenses are reasonable and necessary, (b) states that no consideration will be given to the attendant care expenses, and (c) in the immediate context of attendant care expenses, advises as to the next steps to be taken if the Respondent disagrees with this assessment. Unlike the housekeeping expenses explanation, the explanation regarding attendant care requested confirmation of the incurred expenses only if “it is your intention to dispute these expenses.”

In the specific circumstances of this case, having the next page of the OCF-9 set out the standard form language regarding the applicant’s right to dispute is, with respect to the housekeeping expenses, confusing, rather than providing clarity and consistency. Objectively, the Appellant’s response regarding housekeeping expenses is ambiguous and neither plain or manifest, especially for an unsophisticated person, that this claim is being denied and that the limitation period has begun to run. Rather, there is at least an equally reasonable, alternative interpretation that the claim is simply being held in abeyance pending receipt of the requested information and that limitation concerns are not at this point relevant.

It is to be noted that subsection 32(3.1) of the Schedule provides that:

If an insurer receives an incomplete application for a benefit under this Regulation, the insurer shall notify the person within 10 business days after receiving the incomplete application that the application is incomplete and shall indicate what is missing.

Subsection 32(3.2) of the Schedule provides that:

(3.2) Subsection (3.1) applies only if,

(a) the insurer, after a reasonable review of the incomplete application, is unable to determine without the missing information if a benefit is payable; or

(b) the application has not been signed by the person.

[emphasis added]

Section 32 is distinct from section 49 of the Schedule. The latter provides that:

If an insurer refuses to pay a benefit under this Regulation or reduces the amount of a benefit that a person is receiving under this Regulation, the insurer shall provide the person with a written notice concerning the person’s right to dispute.

Section 49 does not pertain to an insurer obtaining additional information because it is “unable to determine without the missing information if a benefit is payable.” Rather, section 49 pertains to an insurer having made a determination that a benefit is not payable and advising its insured of a process that, if followed, will result in additional (often considerable) dispute resolution expense for both sides.

An insurer may have the intent to “kill two birds with one stone” in a single piece of correspondence, that is, both requesting further, clarifying information under section 32 and simultaneously denying the claim under section 49 that triggers the dispute resolution process (and the accompanying limitation period). Such expeditiousness cannot undermine the insurer’s obligation that a denial of benefits must be clear and unequivocal. I am not persuaded that the November 10, 2005 OCF-9 was a clear and unequivocal denial of the housekeeping claim such that the limitation period had begun to run. I am not persuaded that the Arbitrator erred in law in her result.

Was a clear and unequivocal refusal given of Inter-Action Treatment Plan?

Regarding the Inter-Action Treatment Plan, the Arbitrator found that the Appellant did provide the Respondent with the requisite notice of her right to dispute. The Arbitrator, however, found that the Appellant did not provide a clear and unequivocal refusal of the Inter-Action Treatment Plan. This finding was based, in part, on the Appellant’s OCF-9 stating unconditionally that it would not fund treatment but in the next sentence authorizing certain treatment. The Appellant submits that the Arbitrator erred in law in failing to distinguish between a clear and unequivocal refusal and the reasons given for the refusal to pay the benefits claimed.

The Appellant, in oral argument, submitted that the Arbitrator had erred in her findings of fact and that there was no ambiguity or lack of clarity in its OCF-9. Rather, the Appellant argued that it was clear that it was denying payment of the Inter-Action Plan based on the West Park Health DAC, but, in accordance with the DAC’s alternative recommendations, agreeing to fund two physiotherapy treatments.

I find that the Arbitrator’s critique of the Appellant’s OCF-9 was not that the reasons for denial were legally incorrect, as addressed by the Court of Appeal in Turner. The Appellant is really disputing the Arbitrator’s analysis of the evidence and her finding of fact that this OCF-9 did not provide a clear and unequivocal denial. As noted by the Respondent, internal appeals from the decision of an arbitrator under subsection 283(1) of the Insurance Act are limited to questions of law. Delegate McMahon, in Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO P01-00022, February 26, 2003), held that “a finding of fact made in the complete absence of supporting evidence amounts to an error of law.”

I am not persuaded that there was a complete absence of supporting evidence for the Arbitrator’s finding that this OCF-9 was not clear and unequivocal. Nor am I persuaded by the Appellant’s oral argument that there was an absence of “reasonable evidence,” which is simply a different way of arguing that the evidence ought to have been weighed differently by the Arbitrator.

The Appellant further submitted that the Arbitrator erred in law in providing a subjective standard regarding the Respondent’s understanding of the OCF-9, contrary to Delegate Makepeace’s statement in Turner that:

There are also sound policy reasons for applying an objective test. It promotes certainty in ascertaining the date when time began to run, avoiding a factual enquiry into the parties’ dealings over an extended period of time.

The Arbitrator stated that the Appellant failed “to provide information which might assist Ms. Monks.” The Respondent states that the Arbitrator had no evidence before her as to what the Respondent knew or did not know. Rather, the Respondent submits that the Arbitrator put herself in the shoes of an unsophisticated claimant, applied the correct test and came to a finding of fact that is not appealable.

I find that by her use of the words “might assist Ms. Monks,” the Arbitrator indicates that she is not looking at what the Respondent subjectively thought but, rather, at an objective standard.

I am not persuaded that the Arbitrator erred in law regarding the absence of a valid refusal of the Inter-Action Treatment Plan.

Does the 90-day limitation extension run from the date the Report of Mediator was sent?

As noted above, where a mediation proceeding is commenced within the requisite two-year period and fails, clause 281.1(2)(b) of the Insurance Act allows an arbitration to be commenced “within 90 days after the mediator reports to the parties under subsection 280(8)” (emphasis added).

Subsection 280(8) of the Insurance Act states that:

(8) If mediation fails, the mediator, in addition to any notice required to be given, shall prepare and give to the parties a report,

(a) setting out the insurer’s last offer and the mediator’s description of the issues that remain in dispute;

(b) containing a list of materials requested by the parties that have not been produced and that, in the opinion of the mediator, were required for the purpose of discussing a settlement of the issues; and

(c) containing a recommendation as to whether or not the issues in dispute should be referred for an evaluation under section 280.1

(emphasis added)

The standardized “Explanation of Benefits Payable by Insurance Company” (OCF-9) states, in part, under the section entitled “WARNING TWO YEAR TIME PERIOD,” that the insured person “may have longer than two years if the arbitration or lawsuit is commenced 90 days from the date the mediator provides his or her mediation report” (emphasis added).

The Mediator’s covering letter to the Respondent, includes when discussing the next steps in the dispute resolution process, standard language information that an arbitration or court action must be filed within two years after the insurer refused to pay the benefit or within 90 days of the Mediator’s Report, whichever is longer. The word “Report” is different from the statutory language of the Insurance Act as the word has been changed from an active verb to a capitalized noun. In addition to being inconsistent with the legislative language, the letter is also ambiguous whether one is looking at the date the report is received (as argued by the Respondent), the date the report is sent (as argued by the Appellant) or the date the report is simply dated (which neither party argues).

The Appellant argues that when the limitation period starts is governed by the actions of the mediator, not the parties. The Appellant submits that the verbs “reports” in clause 281.1(2)(b), “prepare and give” in subsection 280(8) of the Insurance Act and “provides” in the OCF-9 all mean “send.”

There is no allegation in this case that the Mediator verbally reported to the parties at the February 29, 2008 mediation the requisite elements of subsection 280(8) of the Insurance Act. Indeed, the use of the words “the mediator … shall prepare and give to the parties a report” indicates that a written, not an oral report, is contemplated.

The Appellant submits that the Mediator herein “prepared and gave,” that is, sent, his Report to the parties on February 29, 2008, as evidenced by the Report and by related correspondence. Ninety days after the Mediator reported to the parties expired on May 29, 2008. The Respondent commenced her arbitration on June 5, 2008. June 5, 2008 is more than 90 days after the Mediator reported to the parties in accordance with subsection 280(8) of the Insurance Act.

The Appellant references Rule 59.01 of the Rules of Civil Procedure that provides that an order takes effect the date on which it is made, not when it is issued or entered. This eliminates ambiguity by providing a specific, consistent starting date from which to calculate the time for commencing an appeal.

The Appellant further cites Delegate Makepeace in Turner that providing an objective test promotes certainty in ascertaining the date when time begins to run. If the limitation period is held to run from the date the Report of Mediator is received, a factual enquiry into the parties’ dealings would be warranted each time a limitation defence was raised, including how the Report of Mediator was sent, whether it was sent correctly and when it was received.

The Appellant agreed that it, as insurer, had the onus regarding a limitation defence. It further agreed with West and Aviva Canada Inc., (FSCO A08-000170, December 18, 2008) that limitation periods should be construed narrowly. The Appellant, however, submitted that needed to be balanced with a defendant’s right to certainty and that matters not linger indefinitely.

I am not persuaded that the words “reports” in clause 281.1(2)(b), “prepare and give” in subsection 280(8) or “provides” in the subsidiary OCF-9 mean send in the same sense as “the cheque is in the mail.”

I am persuaded that the focus of these provisions is not on the mediator merely sending off his or her written report. This would make the issuance of the report essentially pro forma. Indeed, the Appellant’s oral argument was that the insured does not need the report as the insured knows at the mediation itself whether the event failed or not.

I am persuaded that the Report of Mediator is important and that its importance fundamentally rests in the parties receiving specific information statutorily required by subsection 280(8) of the Insurance Act. The requisite information is far more varied and more detailed than simply whether the mediation has failed, which by itself, is sometimes a matter of dispute.

A fundamental purpose of automobile insurance legislation, as stated by the Supreme Court of Canada in Smith, is consumer protection. A fundamental purpose of the mediator reporting, giving or providing information required under the automobile insurance legislation, to paraphrase the Ontario Court of Appeal in Turner, is to permit the insured person to decide whether or not to continue to challenge an insurer’s denial of accident benefits.

It would make little sense to require an insurer’s refusal to be clear and unequivocal, yet have the limitation period start to run before the insured person received a clear and unequivocal refusal. Therefore, Arbitrator Bayefsky held in Bhambi that the initial limitation period ran from the date of deemed receipt of the OCF-9, allowing five business days for delivery. It would be equally inconsistent, and inconsistent with the consumer protection and remedial nature⁴ of the Insurance Act, that the limitation period begin to run prior to an insured person receiving the Report of Mediator.

The Appellant, responding to my inquiry, stated that if a mediator sends his or her report to the wrong address, the limitation period does not begin to run. Thus, the mediator cannot be said to have reported and the Report of Mediator cannot be said to have been given. Accordingly, factual inquiries are not eliminated by using the date the document was sent.

I agree with the Respondent that, reading clause 281.1(2)(b) and subsection 280(8) of the Insurance Act together, the mediator prepares and gives the report to the parties when the parties receive or are deemed to have received the Report of Mediator. It is agreed that the parties in this case received the Report of Mediator on March 4, 2008.

Such a view is consistent with Arbitrator Wilson’s decision in Graham that the additional 90-day grace period under clause 282.1(2)(b) followed the delivery of the Report of Mediator. It is also consistent with Arbitrator Bayefsky’s decision in Bhambi that the 90-day limitation extension commenced when the Report of Mediator was received or was deemed to have been received.

These decisions are consistent with the plain meaning of the words “reports,” “prepare and give” and “provide.” The Concise Oxford Dictionary of Current English defines “report,” as a transitive verb (one that takes a direct object, whether expressed or implied), in part as “bring back or give an account.” The word “give,” in the connotation of a transitive verb, is defined, in part, as “transfer,” “hand over” and “deliver.” “Provide,” in the context of a transitive verb, is defined as “supply, furnish.” Transfer, hand over, deliver, supply, furnish, et cetera, are all consistent with the requirement that the Report of Mediator must be conveyed or deemed to have been conveyed into the insured’s hands before the limitation period begins to run. It is not sufficient that the Report of Mediator has simply gone out.

The Appellant relies on Arbitrator Hale’s decision in Kurichh, upheld on appeal, that the limitation period ran from the date of the Report of Mediator, which was also the date the document was sent. The Appellant further relies in this regard on Greenidge v. State Farm Mutual Insurance Company, [1997] O.J. No. 5243 (upheld by the Court of Appeal, [1999] O.J. No. 232), and Kanapathipillai and Personal Insurance Company of Canada, (FSCO A07-0002597, April 6, 2009), the latter being decided by the Arbitrator herein. The Appellant submits that the appeal decision in Kurichh is binding on me.

I agree with Delegate Makepeace in Coachman Insurance Company and Hejnowicz, (FSCO P05-00024, August 3, 2006) and Delegate Evans in Aboufarah and Allstate Insurance Company of Canada, (FSCO P03-00038, February 1, 2006) that a Director’s Delegate is not bound by other appeal decisions, including those of the Director.

In Kurichh, the factual situation was different. There, the applicant argued that neither he nor his counsel received the Report of Mediator for almost a year. Arbitrator Hale, however, found that the Report of Mediator was received within a week. On appeal, it made no difference whether one looked at the date of the Report (September 23, 1996), the date it was sent (the same) or the date the Report was found to have been received (by the end of September 1996), the application for arbitration was out of time with regard to all three alternative triggering events.

The Kurichh appeal alleged bias and an error in the Arbitrator’s finding of when the Report of Mediator was received. Finding no error that the Report was received the end of September 1996, the Director’s Delegate simply accepted Arbitrator Hale’s finding that the limitation period ran from the September 23, 1996 date of the Report. The Director’s Delegate did not find it necessary to provide any detailed analysis, although he did note that the “rules simply do not contemplate the kind of long-term, open-ended extension claimed by Mr. Kurichh.”

However, the Delegate presumed the Commission’s obligation, enunciated in Rule 22.3 of the prior version of the Code, that it provide a copy of the Report of Mediator to the parties. The Director’s Delegate noted that while the Code did not specify a method for providing the Report, Rule 7 deemed service to have taken place on the fifth day after the day a document was mailed.

On judicial review, the Divisional Court did not address whether the limitation period ran from the date of sending or the date of receipt, but rather the questions of bias and when the Report of Mediator was received. Leave to appeal to the Court of Appeal was dismissed with costs.

In Greenidge, the mediator’s report was dated February 7, 1996. The judge at first instance held that ninety days ran from the date the mediator reported, being February 7, 1996. As in Kurichh, there was no analysis regarding the date the Report of Mediator was sent versus the date it was received. In Greenidge, the statement of claim was issued months after the 90-day extension had expired, either from the date of mailing or the date of receipt. The Court of Appeal did not address the issue before me.

In Kanapathipillai, the Arbitrator found that ninety days from the “release” of the Report of Mediator on September 7, 2007 was December 5, 2007. The word “release” is not used in the sections of the Insurance Act under consideration. Thus, the assistance of this case is questionable. In any event, the Arbitrator found that the applicant in that case filed for arbitration within ninety days of the release of the report. Therefore, there was no need to consider when the Report of Mediator was received.

I am not persuaded that having the limitation period run from the date of receipt leaves a long-term, open-ended extension or creates significantly more ambiguity than determining when the Report of Mediator was sent. As noted above, a deemed date of receipt was determined in Kurichh. In Bhambi, Arbitrator Bayefsky allowed five business days for delivery of the Report of Mediator when sent by regular mail, consistent with Rule 7.3(b) of the Code. Rule 5.7 of the Code provides that:

5.7 Where these Rules require the delivery of a document by the Dispute Resolution Group, delivery will be deemed to have occurred where: (a) one of the methods of delivery permitted underRule 7 is used; and (b) the document is sent to the last known address of the party, contained in the records of the Dispute Resolution Group.

Consistent with the comments of Laskin J. in Bapoo v. Co-operators General Insurance Company, 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616, it is important to look at the legislation in its total context. Considering plausibility (that is, compliance with legislative text), efficacy (promotion of the legislative purpose) and acceptability (whether the outcome is reasonable and just), I find that the clause 281(1.1)(b) limitation period runs from the date the Report of Mediator is received or, where it is appropriate, is deemed to have been received by the insured person.

Is an arbitration proceeding commenced when the Dispute Resolution Group receives the application for arbitration?

The Appellant states that neither the Schedule nor the Insurance Act defines how an arbitration is commenced. However, Rules 4.1 and 6.1 of the Code mandate that filing a document means filing with the Commission’s Dispute Resolution Group (“DRG”). The DRG is located on the 14th Floor of 5160 Yonge Street in Toronto. Until a completed Application for Arbitration is delivered to the DRG at that location, it is submitted that the arbitration has not been commenced. The Appellant submits that the Application for Arbitration was only delivered to the DRG on June 5, 2009, more than 90 days either after the Mediator sent or when the parties received the Report of Mediator.

Rule 81.1(b) of the Code provides that, subject to the requirements of the Insurance Act and the Statutory Powers Procedure Act, the adjudicator may, on such terms as he or she considers just, decide that any Rule does not apply in respect of a proceeding.

Such discretion must be exercised fairly. Fairness includes consideration of Rule 1.1 of the Code that the Rules are to be interpreted to produce the most just, quickest and least expensive resolution of the dispute, as well as the respective prejudice to the parties. Justice also entails some reasonable measure of common sense.

I am not persuaded that the exercise of such discretion is strictly limited to cases where a party is entirely blameless and a third party is at fault, such as in Huynh and Allstate Insurance Company of Canada, (FSCO A98-001309, November 21, 2000), where it was held that the Commission was at fault for failing to contact the applicant about a defect in form.

In this case, the Application for Arbitration was delivered to the Commission, but to the wrong floor, the 17th Floor being the Commission’s main, general reception area accommodating the offices of the CEO and Superintendent of Financial Services for the Financial Services Commission of Ontario, as well as the legal branch. It is unknown whether the Application was sent to the correct (14th) floor (a) the same day, being Monday, June 2, 2008, (b) three days later on Wednesday, June 5, 2008 when the document was acknowledged by the Arbitration Case Assistant, or (c) sometime in between.

In this case, there is no prejudice to the Appellant in the manner of delivery to the Commission, other than not being able to take advantage of the limitation defence that it concedes should be construed narrowly. The delay in acknowledging the application, if any, was a maximum of three days. In this case, there was substantive compliance with the technical requirement under the Code regarding the manner of filing. There is no requirement in the Insurance Act as to where precisely with the Commission the Application for Arbitration is to be filed. Hence, the application of Rules 81 and 1.3 of the Code (the latter regarding technical breaches) are not ousted.

The Appellant noted that the Arbitrator’s earlier decision in Walia and Certas Direct Insurance Company, (FSCO A06-002513, October 5, 2007) held that an “arbitrator has no discretion to apply principles of equity to alter the result reached by application of the rules of statutory interpretation.” It is not relief from forfeiture under the Courts of Justice Act or equitable relief that would be provided in this case. Nor, is the limitation period being extended. Rather, an internal technical rule of the Commission regarding filing on the 14th Floor rather than on the 17th is being waived within the narrow confines of Rules 81 and 1.3 of the Code.

I am persuaded that weighing the relative prejudice to the parties, the relatively minor error by the Respondent, that the 17th Floor of the Commission accepted the Application for Arbitration by stamping the document itself and common sense as to what is just, it is appropriate to exercise discretion pursuant to Rule 81.1(b) of the Code, especially in light of Rule 1.3, to decide that Rule 6.1(a) is amended in the specific circumstances of this case to mean that the Application for Arbitration was delivered to the DRG when delivered to the main reception desk of the Commission on the 17th Floor.

The Arbitrator failed to give adequate reasons for her decision

The Appellant submits that the Arbitrator failed to consider, distinguish or mention the case law regarding the 90-day limitation extension and failed to give any reason for determining that the arbitration proceeding was commenced on June 2 and not June 5, 2008, although the arguments herein were also put before her.

The Appellant does not request, however, that these issues be returned to arbitration. Rather, both parties made full argument on all of the grounds of appeal. The Appellant specifically seeks on appeal an order that the Respondent is precluded from pursuing her claims regarding the disputed benefits because she failed to commence the mediation and arbitration proceedings within two years of the Appellant’s refusal to pay same.

Having addressed each of the grounds of appeal and not being persuaded by same, pursuant to my powers under subsection 283(5) of the Insurance Act, as delegated by the Director of Arbitrations under subsection 6(3), I confirm the Arbitrator’s May 1, 2009 decision and dismiss this appeal.

III. EXPENSES

I wish to thank counsel for their helpful submissions. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 10, 2009

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Overturned on judicial review in Turner v. State Farm Mutual Automobile Insurance Co., 731 (QL), 2004 CanLII 13402, the application for judicial review subsequently being dismissed in 2005 CanLII 2551 (ON C.A.).
3. 3Upheld on appeal (FSCO P99-00027, November 26, 1999) and on judicial review, [2001] O.J. No. 2523, leave to the Court of Appeal refused, [2001] O.J. No. 5750.
4. 4Pursuant to subsection 64(1) of the Legislation Act, 2006, S.O. 2006, c. 21, that an “ Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects.”