Financial Services Commission of Ontario
Neutral Citation: 2011 ONFSCDRS 112
FSCO A11-000658
BETWEEN:
PIRASHANTHINI SHANMUGANATHAN Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer
DECISION ON A MOTION FOR INTERIM BENEFITS
Before: Edward Lee
Heard: October 3, 2011, at the offices of the Financial Services Commission of Ontario in Toronto
Appearances: David S. Wilson for Ms. Shanmuganathan Michael P. Taylor for State Farm Mutual Automobile Insurance Company
The Applicant, Pirashanthini Shanmuganathan, was injured in a motor vehicle accident on January 10, 2009. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.1 State Farm terminated weekly income replacement benefits on December 9, 2009. The parties were unable to resolve their disputes through mediation, and Ms. Shanmuganathan applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Overview:
Ms. Shanmuganathan claims that she is entitled to an interim order for income replacement benefits and housekeeping and home maintenance benefits, because Allstate breached provisions of section 37 when terminating her benefits. The alleged breaches are: (i) of section 37(1)(a) of the Schedule which obliges an insurer to request a disability certificate when requiring an insured to undergo a medical examination, and (ii) of section 37(9) which obliges an insurer to provide a copy of a medical report within a specified time period.
Allstate conceded that it had breached section 37(1)(a) by not specifically “requesting” a new disability certificate from Ms. Shanmuganathan, even though it possessed approximately seven “contemporary” disability certificates at the time,2 including one which was dated one day after the notice to attend a section 42 medical examination was given,3 and another that was dated one day before the notice to attend a section 42 medical examination was given.4
Nevertheless, Allstate argued that because Ms. Shanmuganathan provided no evidence of need or urgency, and did not make out a prima facie case, she was not entitled to an interim order for benefits. Further, any breach, if any, of section 37(9) was incidental and irrelevant because the denial of her benefits took place without reference to the impugned medical report.
Issues:
The following issues arose:
(1) Does the breach of section 37(1)(a) give rise to an interim order for benefits without evidence of a prima facie case, need or urgency?
(2) What is the impact of the decisions in Yogesvaran on this case?
(3) What is the impact of the breach, if any, of section 37(9)?
Result:
(1) This breach of section 37(1)(1)(a) without evidence of prima facie case, need or urgency does not give rise to an interim order for benefits.
(2) The decisions in Yogesvaran do not change my decision.
(3) The breach, if any, of section 37(9) has no impact on this case.
(4) The motion for interim benefits is dismissed.
ANALYSIS:
(1) Does the breach of section 37(1)(a) give rise to an interim order for benefits without evidence of a prima facie case, need or urgency?
FSCO arbitrators have not been in complete agreement as to the criteria for awarding interim benefits, but they have been unanimous in holding that it is extraordinary to grant monetary relief to a party prior to a full hearing, and that the granting of such relief is a discretionary exercise.5
In the present case, the insured provided no evidence of need or urgency, and argued that evidence of a breach of section 37 alone was sufficient to lead an order for interim benefits. I reject that argument for the following reasons.
First, I note that the more recent arbitral jurisprudence demands some examination of evidence of merit (such as a prima facie case or evidence to meet a “whole case approach”6), or compelling need or urgency when granting interim benefits.7 They reiterate the general principle that the issuance of an interim order is a discretionary exercise, and that when complex questions are to be determined, they should be left to the full hearing on the merits.
Second, although Ms. Shanmuganathan cited jurisprudence where an insured was awarded interim benefits without providing evidence of merit, urgency or need, these cases were all decided under previous legislation.8 In that earlier version of the Schedule (which encompassed the now defunct DAC system), the scheme setting out the manner in which an insurer could terminate benefits differed from the current scheme in that it contained a “pay pending” provision.
Under that scheme, when an insured disagreed with a notice of impending termination, he could seek an assessment by a DAC. Under section 64(3), once a person requested a DAC assessment, the insurer was obliged to continue to pay the benefit,