Abdul Zaher Wahidpur v. Unifund Assurance Company, 2009 ONFSCDRS 34

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2009 ONFSCDRS 34

Appeal P08-00006

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ABDUL ZAHER WAHIDPUR

Appellant

and

UNIFUND ASSURANCE COMPANY

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Mr. Karl Girdhari for Mr. Wahidpur

Mr. Mauro D'Agostino for Unifund Assurance Company

HEARING DATE:

February 26, 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 Appeal herein dated February 27, 2008 is allowed. Paragraph One of the Arbitrator's April 2, 2008 Order is rescinded and substituted with the following:

Mr. Wahidpur is not precluded by section 33 of the Schedule from receiving income replacement benefits from February 27, 2006 to June 6, 2007.

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).

March 25, 2009

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Wahidpur (the “Appellant”) was injured in motor vehicle accidents on December 2 and 15, 2005. In a preliminary issue decision issued April 2, 2008, Arbitrator Kominar (the “Arbitrator”) held that the Appellant was precluded from receiving income replacement benefits (“IRBs”) from February 27, 2006 to June 6, 2007 from his first-party insurer, Unifund Assurance Company (the “Respondent”) as a result of section 33 of the Schedule.¹

The parties agree that the relevant version of the Schedule is the one in effect as of the dates of these two accidents. The parties further agree that in that version of the Schedule section 33 provided, in part, that an insurer was not liable to pay a benefit in respect of any period during which the insured failed to comply with a request to provide information reasonably required to determine his or her entitlement to a benefit, if the insured person did not provide a reasonable explanation for the delay in complying with the request.

In this case, the Respondent requested information concerning collateral benefits.

II. THE APPELLANT’S SUBMISSIONS

The Appellant requests that the Arbitrator’s April 2, 2008 Order precluding IRB payments for the period specified above be set aside.

The Appellant submits that the onus was on the Respondent to prove a valid section 33 request. The Appellant relies on State Farm Mutual Automobile Insurance Company and L.F., (FSCO P02-00026, June 3, 2004) that the “insurer bears the obligation to provide sufficient information to enable the consumer to claim benefits. There is no exemption from this rule where the insured person is represented.”

The Appellant further relies on Hutchinson and Dominion of Canada General Insurance Company, (FSCO A06-000955, April 7, 2008), that:

Rather than constituting a barrier to access, the provisions in section 32(3) must be seen as an incentive for the applicant to provide necessary information on the accident and claims to an insurer on a timely basis and interpreted in that context

Section 33 is not a sort of parlour game where an insured is supposed to guess as to the specific information needed by an insurer to process the claim. An insurer must make the request, with sufficient specificity that its insured can promptly provide the necessary information.

In the absence of evidence of such specific requests, and evidence demonstrating that the requests were necessary for a determination, Dominion cannot avail itself of section 33 of the Schedule as a bar to arbitration …

In a consumer protection scheme such as the accident benefit system, it is perhaps well to remember the need to wherever possible decide entitlement on substantive rather than technical grounds. As was observed in another context:

The court is always reluctant to dismiss a potentially meritorious claim on grounds that do not address its merits. Unless the defendant can demonstrate prejudice in the sense that to grant the plaintiff the indulgence he or she seeks will prejudice the defendant's ability to defend the claim, the indulgence will usually be granted on appropriate terms. Mader v. Hunter 2004 CanLII 17834 (ON CA), [2004] O.J. No. 748 Court of Appeal

The Appellant submits that the Arbitrator erred in law in:

1. exceeding his jurisdiction. The Arbitrator expanded the preliminary hearing issue set by the pre-hearing arbitrator, namely the application of subsections 33(1) and (2) of the Schedule, to include subsection 33(4);

2. allowing testimony regarding discussions at the December 8, 2006 mediation and relying on such evidence. Further, the Arbitrator failed to make an adverse inference against the Respondent in failing to produce its pre-mediation notes.

3. finding that the Respondent did not have the necessary information to determine entitlement. The Appellant further argues that information concerning collateral benefits could have been obtained by the Respondent through the authorization in the January 17, 2006 OCF-2 (“Employer Confirmation Form”). Authorizations to Release Personal Information sent to the Respondent in June 2007 were not acted upon by the latter until in or about October 2007. In any event, clause 47(1)(a) of the Schedule allows an insurer to recover benefits paid by error or as a result of willful misrepresentation or fraud.

4. finding that the Respondent’s OCF-9s (“Explanation of Benefits Payable by Insurance Company”) were explicit notice of section 33 requests. OCF-9s are not proper section 33 notices. Such requests must be set out separately, in clear and unequivocal language, not “buried” in a standard OCF-9. The Respondent’s first two OCF-9s did not address collateral benefits in the context of section 33. The third OCF-9 (unbolded and in smaller font) was deliberately not sent to counsel and did not set out the consequences of a failure to provide the requested information. The fourth OCF-9, in the same undistinguishable print, received an immediate response from the Appellant.

The Appellant relies on the maxim in Holman v. Johnson 1 Cowp. 341, cited in Hutchinson, “Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action on an immoral or an illegal act.”

5. misapprehending the evidence:

(a) The Arbitrator found that the Appellant “had actually received benefits for approximately three to four months from the short-term disability carrier commencing in December 2005.” The February 27, 2006 OCF-1 (“Application for Accident Benefits”) indicated the Appellant had received income from a disability benefit plan pre-accident, not post-accident, for three or four months from December 2003 to March 2004.

(b) The Arbitrator found that it was “eminently sensible” for the Respondent not to send the May 15, 2006 OCF-9 to the Appellant’s representative, Goldentuler & Associates, notwithstanding the latter’s March 30, 2006 letter confirming they were retained by the Appellant and requesting that all future correspondence be directed to their attention.

(c) The Arbitrator found that there was a “pattern of avoidance” for a year and a half by the Appellant in failing to provide requested information clarifying collateral insurance coverage, other than vague information that some form of benefits had been received. Rather, the Appellant’s January 3, 2007 letter (mistakenly dated 2006) confirmed that no payments had been made. In any event, section 33 provides for information, not documents, be provided to an insurer. Further, the Appellant provided the Respondent with his Statement of Claim against the collateral insurer, RBC Insurance (“RBC”), for non-payment of benefits, the latter’s Statement of Defence, as well as RBC’s September 6, 2006 letter denying the claim for disability benefits past January 31, 2006.

6. failing to consider the relevant case law. The Arbitrator held that section 33 of the Schedule allowed benefits to be forfeited, contrary to Iankilevitch and CGU Insurance Company of Canada, (FSCO P03-00013, August 31, 2004), and found that subsection 33(2) was intended only as a delay provision. The Respondent, itself, conceded in its written arbitration submissions that:

… what is at issue in this Preliminary Issue Hearing is the delay of payment to the Applicant of his potential weekly income replacement benefits from Unifund. Unifund is not suggesting that the Applicant’s entitlement to income replacement benefits have been forfeited as a result of his non-compliance with reasonable requests pursuant to section 33 of the SABS, only that the payment of such potential income replacement benefits are delayed for the period during which the Applicant was non-compliant with these requests. According to the SABS, such income replacement benefits could become payable once the Applicant complies with section 33 of the SABS.

… There are numerous Arbitration decisions that have indicated that the ‘teeth’ prescribed in section 33, as a result of non-compliance with reasonable requests made pursuant to section 33 of the SABS, is not forfeiture of entitlement to benefits but delay in payment of benefits.

7. while in the absence of a proper section 33 request, there could be no issue of delay, the Arbitrator still failed to note that the Appellant was out of the country for most of 2006 and that the Respondent failed to provide the Appellant’s counsel with its May 15, 2006 OCF-9. This was the reasonable explanation for any delay in the Appellant responding to the Respondent’s request regarding collateral benefits. The Respondent’s December 27, 2006 OCF-9 received the Appellant’s immediate response that no disability payments had been made in respect of these accidents.

III. THE RESPONDENT’S SUBMISSIONS

The Respondent submits that the Arbitrator’s decision was correct in law. It asks that the

Arbitrator’s decision be confirmed and that it be awarded its expenses of the preliminary issue arbitration hearing and this appeal. It submits that many of the issues now argued were not raised at arbitration or in the Notice of Appeal and that most pertain to the Arbitrator’s factual findings respecting uncontroverted evidence introduced at the arbitration hearing rather than genuine questions of law, contrary to Rule 50.1 of Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003) (the “Code”).

The Respondent specifically submits that:

1. Regarding jurisdiction, the arbitration transcript at page eight confirms that at the beginning of the preliminary issue hearing the parties agreed that the Arbitrator was to determine “whether or not section 33 applies in this case, and if so, in what way?”

2. The Arbitrator’s findings of fact, which cannot be appealed, were based on the only evidence proffered at the arbitration hearing, namely the testimony of the Respondent’s representatives. It was open to the Appellant and/or his counsel to testify, but they chose not to give oral evidence. The evidence of what was discussed at mediation was a response to the Appellant’s written submission that the Respondent did not raise the issue of section 33 non-compliance at mediation. In any event, the Arbitrator stated in his decision that he did not rely heavily on the testimony regarding the mediation.

3. The Arbitrator was clear in his decision that the information requested by the Respondent was relevant. It was not argued otherwise in the Notice of Appeal. In this case, the OCF-2 did not permit the Respondent to obtain the information it required concerning collateral benefits, as highlighted in the oral evidence of its witnesses.

4. The Arbitrator’s finding that explicit notice of the section 33 requests was given to the Appellant is a finding of fact that is not subject to appellate review. In any event, there was ample and uncontroverted evidence that the Appellant was given explicit notice that the requests for information were being made pursuant to section 33 of the Schedule. OCF-9s are approved forms. There is no obligation under the Schedule or the Insurance Act to provide separate notice.

The Respondent noted that the Arbitrator found it particularly troubling that in addition to the written requests for information, the Appellant’s undertakings at both mediation and the pre-hearing to provide information regarding collateral coverage were not honoured.

5. The Arbitrator did not misapprehend the evidence:

(a) Evidence was submitted at the arbitration hearing that the Appellant was clearly paid collateral income continuation benefits after the accidents.

(b) The Arbitrator found that the Respondent “took the eminently sensible position that [the Appellant] could only have one legal representative on any given accident at any given time,” and that the Appellant’s counsel had repeatedly failed to clarify the Respondent’s concern that a separate paralegal was also on the record.

(c) That there was a consistent pattern of avoidance and/or refusal by the Appellant to supply the relevant information requested by the Respondent for a year and a half is a finding of fact that is not subject to appellate review. The Arbitrator was in the best position to hear the witnesses and evaluate the ample and uncontroverted evidence in this regard set out at pages four to nine of his decision. The Appellant failed to testify as to his explanation for the delay in complying with the section 33 requests. In now contending that he provided a prompt response to the fourth OCF‑9, the Appellant is seeking arbitral review of findings of fact.

6. The Arbitrator’s finding that the Applicant is precluded from receiving IRBs is simply a restatement of section 33 itself, that an insurer is not liable to pay a benefit for any period during which non-compliance is established. The relief sought by the Respondent in its arbitration factum, stated more than once, was that:

… as neither the Applicant nor his counsel have provided any reason for the Applicant’s delay and non-compliance with section 33, Unifund is not liable to pay any potential income replacement benefits to the Applicant during the period of non-compliance.

The Respondent submits that there is no case law pertaining to the version of section 33 in dispute. It further submits that the Arbitrator’s decision “was based on his assessment of, and factual findings with respect to, the evidence introduced during the hearing, not on case law.”

7. That no reasonable excuse was given by the Appellant for the delay in providing the requested information is a finding of fact that is not subject to appellate review. In any event, the reference to the Appellant being out of the country was at best, hearsay, based on information given to the Respondent’s representative during a telephone conversation with the Appellant’s employer. Furthermore, this was not raised in the Notice of Appeal.

IV. ANALYSIS

The Schedule is complicated. Its individual provisions are complicated. Those individual provisions, however, do not exist in a vacuum or without a larger purpose.

Rather, I am persuaded that the Schedule is an intricate and finely balanced structure of interdependent rights and obligations of insurers and insureds geared towards expeditiously and efficiently providing statutorily limited, valid, first party, no-fault automobile accident insurance benefits to insured persons.

The Supreme Court of Canada, in Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, confirmed that there was no dispute that one of the main objectives of insurance law, particularly in the field of automobile insurance, is consumer protection. I am not persuaded that the Supreme Court sought to isolate or confine the concept of consumer protection to the limitation provisions of the earlier version of the Schedule it was addressing.

Rather, in this broad environment of consumer protection, clause 32(2)(c) of the Schedule specifically provides that the insurer shall promptly provide the insured person with information to assist the person in applying with benefits. I am not persuaded that this obligation exists only at the commencement of a claim; rather it is a continuing obligation throughout the life of a claim, as is the insured person’s obligation under section 33 of the Schedule to provide, in a timely manner, information reasonably required to assist the insurer in determining the insured person’s entitlement to a benefit and being able to expeditiously pay benefits for which entitlement has been established.

The Arbitrator made important findings in his decision.

The Arbitrator clearly set out the issue at hand, as noted by the Respondent above. I am not persuaded that the Arbitrator exceeded his jurisdiction. Rather, I am unable to follow how one can consider subsections 33(2) and (3) in isolation, specifically excluding subsection 33(4). In any event, clause 33(4)(b) is a saving provision for an insured person to provide a reasonable explanation for any delay on his or her part. It is rather subsection 33(2) that provides, in part, that the insurer is not liable to pay a benefit in respect of any period during which the insured person failed to comply with a request for reasonably required information.

The Arbitrator clearly stated that, in this case, information about collateral insurance benefits was agreed to be reasonably required and was clearly relevant. I see no basis to interfere with this finding of fact, as subsection 283(1) of the Insurance Act limits internal Commission appeals to questions of law.

The Respondent was unable to assist me in its oral submissions as to the basis of the Arbitrator’s finding of fact that the Appellant “had actually received benefits for approximately three to four months from the short-term disability carrier commencing in December, 2005.” As noted by the Appellant above, the February 27, 2006 OCF-1 referred to insurance benefits received for some three or four months starting December 2003. Delegate McMahon, in Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO P01-00022, February 26, 2003), stated that “a finding of fact made in the complete absence of supporting evidence amounts to an error of law.”

The Respondent referred me to portions of RBC’s Statement of Defence. However, both parties agreed that RBC’s Statement of Defence was not before the Arbitrator. I was subsequently able to find, in the Exhibit evidence, RBC’s September 6, 2006 letter stating that the information they had received to date did not support a claim for disability benefits past January 31, 2006. It is not clear, however, what, if any, benefits may have been paid up to that date. I cannot readily find from the documentary evidence when the September 6, 2006 letter was received by the Respondent.

In the specific facts of this case, the Arbitrator found that the Appellant’s present counsel did not clarify what the Arbitrator found to be the Respondent’s legitimate questions regarding representation. When the Commission accepted counsel as the Appellant’s legal representative at the December 8, 2006 mediation, the Respondent followed suit. I see no basis within my restricted jurisdiction to interfere with the Arbitrator’s finding of fact.

Whether or not there was a pattern of avoidance or denial of relevant information is not the issue under clause 33(4)(b) of the Schedule. Rather, the question is whether the Appellant provided a reasonable explanation for the delay in complying with the Respondent’s request for reasonably required information. In this case, at least implicitly, the Arbitrator was not persuaded that such an explanation was forthcoming.

The Appellant did not provide any direct evidence regarding a reasonable explanation; neither he nor anyone on his behalf testified at the arbitration hearing. If one “cherry picks” through the oral testimony of the Respondent’s witnesses and the exhibits entered, one could perhaps cobble together a possible explanation for the Appellant’s delay in responding. That, however, is not my role as an appellate officer.

The Arbitrator was perhaps understandably sympathetic to a frustrated Respondent, the Arbitrator specifically finding that the latter was unable to receive any useful information from the Appellant’s employer regarding collateral benefits. However, frustration, by itself, is not the basis for precluding entitlement. Nor is an insured’s failure to keep undertakings. Nor does an insurer’s alleged failure to keep a separate and distinct undertaking regarding pre-mediation notes necessarily automatically excuse an insured person’s non-compliance.

The Arbitrator held that section 33 of the Schedule was not to be read as being punitive. Rather, he saw its function as providing “insurers with a mechanism to clearly communicate to an insured person their need for relevant information in adjusting claims.” I agree. The Arbitrator found that the Respondent gave the Appellant explicit notice that it was relying on section 33 to obtain this information. What specific notice is required, as in Smith, is a question of law.

I find that there is a prerequisite duty on insurers if they intend to rely on subsection 33(2) in not being liable to pay a benefit for any period the insured fails to comply with a request for reasonably required information under paragraph 33(1)(1) of the Schedule. Consistent with clause 32(2)(c) of the Schedule that they assist their insureds, insurers must explicitly and unambiguously advise, amongst other things, the specific consequences of non-compliance, and, so that an insured is further not under any misapprehension, the “reasonable explanation” provision of clause 33(4)(b) of the Schedule. This must be done, in the words used in Smith, “in straightforward and clear language, directed towards an unsophisticated person.” This obligation applies regardless of the representation of the insured person, or, as stated in Smith:

… insurance law is, in many respects, geared towards protection of the consumer. This approach obliges the courts to impose bright-line boundaries between the permissible and the impermissible without undue solicitude for particular circumstances that might operate against claimants in certain cases.

I see no valid reason that such notice cannot be given in an OCF-9. The pertinent question here is whether the Respondent did explicitly and unambiguously advise the Appellant, amongst other things, of the specific consequences of non-compliance and the possible saving provision “in straightforward and clear language, directed towards an unsophisticated person?”

The Respondent’s first OCF-9, dated January 9, 2006, does mention that it is making production requests under section 33. It further states that if the Appellant fails to respond within 14 days, “no benefit is payable for any period during which [the Appellant is] non-compliant with the request.” However, there is no mention of collateral benefits in this form. Nor is there any mention that if a reasonable explanation for delay is given, the Respondent was required to pay all amounts that were withheld during the period of non-compliance, in accordance with clause 33(4)(b) of the Schedule.

The Respondent’s second OCF-9, dated February 2, 2006, requests of the Appellant pay stubs

from the Short Term Disability Carrier, but does not mention section 33 either expressly or implicitly, nor does it advise the Appellant of the consequences of non-compliance.

The Respondent’s third OCF-9, dated May 15, 2006, for the first time does mention both “Short Term Disability benefits” and section 33 in the same document, on page one. It then refers to “Notes” set out further down in the document. The latter is a paragraph setting out instructions regarding a number of sections of the Schedule. Relevant to this case is the following request:

Please provide a copy of your benefit carrier’s explanation of benefits and copies of your benefit pay stubs. Please note that the insurer is not liable to pay a benefit in respect of any period during which the insured failed to comply with the request.

The OCF-9, again, does not advise that the Respondent is mandated to pay all amounts that were withheld during the period of non-compliance if the insured person provides a reasonable explanation for the delay.

The Appellant argues, citing Delegate Makepeace’s decision in Iankilevitch and CGU Insurance Company of Canada, (FSCO P03-00013, August 31, 2004), that the remedy to an insurer provided by section 33 “is delay, not forfeiture.” Iankilevitch, however, dealt with a prior version of the Schedule, in which subsection 33(2) stated that the “benefit is not payable for any period before the person complies with subsection (1).” The latter provision includes providing information reasonably required to assist the insurer in determining the insured person’s entitlement to a benefit.

Delegate Makepeace was of the view that the key word in subsection 33(2) was “before,” that the provision as it then read, especially when compared with the more explicit forfeiture language found elsewhere in the version of the Schedule before her, was “concerned with the timing of the payment, not entitlement.” Delegate Makepeace saw subsection 33(2) as, in addition to delaying payment of benefits, likely delaying the accrual of interest and almost certainly removing any risk of a special award, based on unreasonable delay by an insurer.

Subsection 33(2) of the Schedule relevant in this case reads:

The insurer is not liable to pay a benefit in respect of any period during which the insured person failed to comply with subsection (1) or (1.1).

The word “before” has been removed from this provision. In addition, subsection 33(4) has been added that provides:

(4) If an insured person who failed to comply with subsection (1) or (1.1) subsequently complies with that subsection, the insurer,

(a) shall resume payment of the benefit, if a benefit was being paid; and

(b) shall pay all amounts that were withheld during the period of non-compliance, if the insured person provides a reasonable explanation for the delay in complying with the subsection.

Sullivan on the Construction of Statutes, 5d ed. (Canada: LexisNexis Canada Inc., 2008), states, at page 579, that it “is presumed that amendments to the wording of a legislative provision are made for some intelligible purpose: to clarify the meaning, to correct a mistake, to change the law … A legislature would not go to the trouble and expense of amending a provision without any reason.”

The author, however, continues that it “is presumed far less strongly that the purpose of amending legislation is to bring about a substantive change in the law” (emphasis in the original). Subsection 56(2) of the Legislation Act, 2006, S.O. 2006, c. 21, Sch. F provides that “[t]he amendment of an Act or regulation does not imply that the previous state of the law was different.” However, this provision was not argued by the Appellant.

Notwithstanding the change in section 33 subsequent to Iankilevitch, the Respondent’s fourth OCF-9, dated December 27, 2006, stated, in a long paragraph that again references various sections of the Schedule, that:

This is your notice under Sec. 33(2) of the SABS that we will not pay the Income Replacement benefit in respect of the period from 17 Feb 2006 until you are compliant with the information request. 2.) This is a request under Sec 33 for a release so that we may obtain a copy of your Disability carrier’s file. Please note that your response is required within 10 business days. Failure to respond will affect your

entitlement to the benefit … [emphasis added]

Unlike the prior OCF-9, this document does not say that “the insurer is not liable to pay a benefit in respect of any period during which the insured failed to comply with the request,” using the words of the relevant subsection 33(2). Rather, benefits back to February 17, 2006 are not being paid until there is compliance with the information request.

The Appellant’s January 3, 2007 letter to the Respondent (as noted, mistakenly dated 2006) attaches a letter from his counsel to RBC indicating an understanding that RBC had not paid anything to the Appellant. Subsection 32(3.1) of the Schedule provides that “[i]f an insurer receives an incomplete application for a benefit under this Regulation, the insurer shall notify the person within 14 days after receiving the incomplete application that the application is incomplete and shall indicate the information that is missing.” The documentary evidence does not show that the Respondent indicated to the Appellant that this response was inadequate.

More fundamentally, the fourth OCF-9 is not consistent with the Respondent’s present contention that the Appellant is now precluded from receiving IRBs for the period in question not because the requested information was not ultimately received, but because a reasonable explanation for the delay in providing the information was not provided. The inconsistency in the Respondent’s written statements as to the consequences of non-compliance makes the overall notice, using the words in Smith, neither clear nor straightforward.

The difficulties in the Respondent’s notices are highlighted in their written submissions before the Arbitrator. As noted above, the Respondent simultaneously argued, on the one hand, that the “teeth” in section 33 is delay not forfeiture, and on the other hand, that it was not liable to pay IRBs for any period the Appellant was non-compliant.

The Respondent argued on appeal that forfeiture is different from preclusion, the former being a complete bar to recovery notwithstanding an insured’s eligibility, whereas preclusion means that there are additional factors to consider. A major difficulty with this argument, if it were to be accepted, is that the Respondent did not provide the Appellant in the OCF-9s noted above with notice about what the Respondent says is the crucial distinction between forfeiture and preclusion, the additional subsection 33(4) consideration regarding a reasonable explanation.

I find, however, that the Respondent was essentially arguing forfeiture,² without actually using the word, perhaps unsure of the status of Iankilevitch which stated that the remedy provided by section 33 “is delay, not forfeiture.” While such subtleties may be permissible in legal argument, I find that regarding provisions such as section 33, notice that is not clear, straightforward, consistent or inclusive of the necessary components is beyond the “bright-line boundaries between the permissible and the impermissible.”

Sullivan states, starting at page 484, that:

In keeping with the current emphasis on purposive analysis, modern courts are particularly concerned that exceptions and exemptions be interpreted in light of their underlying rationale and not be used to undermine the broad purpose of the legislation. In the words of La Forest J. in Air Canada v. British Columbia, 1989 CanLII 95 (SCC), [1989] 1 S.C.R. 1161, at 197 (S.C.C.)] an exception “should not be construed more widely than is necessary to fulfil the values which support it.”

The Arbitrator stated that it “is trite to say that relationships between claimants and first party insurers are not intended to be adversarial.” I agree with Arbitrator Wilson, in Hutchinson, that “section 33 is not a sort of parlour game.” I find that the purpose of subsections 33(2) and (4) is to encourage insured persons to expeditiously provide information reasonably required by the insurer to quickly and proficiently adjust the claim. In short, as stated, section 33 is part of a complex, finely balanced system of interdependent rights and duties of both insurers and insureds to swiftly and efficiently pay valid, first party, no-fault claims which, inherently, have an obvious, more immediate urgency to them.

If one combines the Respondent’s four OCF-9s in question, one finds notice of some of the requisite components of section 33, as long as one ignores any language in the forms contradictory to the version of section 33 upon which the Respondent now relies.

That is not sufficient. Respectfully, I find that the Arbitrator erred on a question of law as to what

notice regarding section 33 was required and that such requisite notice was, in fact, given.

The Arbitrator’s preclusion of IRBs from February 27, 2006 cannot stand as there was no written notice in the first two OCF-9s of the consequences of non-compliance which the Respondent now argues with respect to its request regarding collateral benefits. The preclusion of IRBs to June 6, 2007 cannot stand as there was no written notice by the Respondent that the information provided by the Appellant in January 2007 was inadequate.

The preclusion in the interim period cannot stand as there was contradictory notice whether the consequences were preclusion or delay, and there was no notice that benefits for the period of suspension would be paid if the Appellant provided a reasonable explanation for the delay. I am not persuaded that, within the context of “bright-line boundaries,” gaps or inconsistencies in the written notice can be filled in or remedied by evidence of what may or may not have been verbally communicated during confidential settlement discussions or in other venues.

Accordingly, the Arbitrator's April 2, 2008 Order precluding IRB benefits from February 27, 2006 through June 6, 2007 by reason of section 33 of the Schedule is rescinded, and substituted with an order the Appellant is not so precluded from receiving IRBs for that period.

V. EXPENSES

If the parties are unable to agree on legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Code.

If either party has served a Bill of Costs, the other party should promptly provide a written

response to the account, identifying the items in dispute and the reasons for the dispute, including whether entitlement to legal expenses is contested. If a party seeking its legal expenses has not yet served a Bill of Costs describing the expenses claimed, services received and costs, it should do so forthwith and, in any event, within the time limits of Rule 79.2(a) of the Code.

March 25, 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. 2Forfeiture is defined, in Black's Law Dictionary (8th Edition), as including the “loss of a right, privilege, or property because of a crime, breach of obligation, or neglect of duty.”