Yolanda Girao v. Allstate Insurance Company of Canada, 2011 ONFSCDRS 38

Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 38 Appeal: P11-00006

Office of the Director of Arbitrations

Yolanda Girao, Appellant and Allstate Insurance Company of Canada, Respondent

Before: Delegate Lawrence Blackman

Representatives: Mr. Victor Mesta for the Appellant, Yolanda Girao Mr. Eric K. Grossman for the Respondent, Allstate Insurance Company of Canada

Hearing Date: By written submissions due March 23, 2011

Preliminary Appeal Order

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

1. This appeal of Arbitrator Richards' January 14, 2011 decision on a preliminary issue is rejected pursuant to Rule 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010) as being from a preliminary or interim order that does not finally decide the issues in dispute.
2. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested within thirty days of this decision, accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as submissions regarding entitlement to and the quantum of such legal expenses.

April 12, 2011

Lawrence Blackman Director's Delegate

Reasons for Decision

I. Nature of the Appeal and Background

The Appellant, Ms. Yolanda Girao, was injured in a motor vehicle accident on June 19, 2002. In his January 14, 2011 decision on a preliminary issue, Arbitrator Richards (the "Arbitrator") addressed in Arbitration File #A07-000288, in part, whether the Appellant was barred by the two-year limitation period under subsection 281(5) of the Insurance Act, R.S.O. 1990, c. I. 8, from pursuing certain claims under the Schedule¹ against the Respondent, Allstate Insurance Company of Canada.

The Appellant is represented in this appeal by her husband, Mr. Victor Mesta. The Appellant states that Mr. Mesta is exempt from the licensing requirements of By-Law 4 of the Law Society of Upper Canada. The exemptions for providing legal services without a license under Part V of By-Law 4 include an individual acting for family "who does not expect and does not receive any compensation, including a fee, gain or reward, direct or indirect, for the provision of the legal services."

The Notice of Appeal pertains first to the Arbitrator's finding that the Appellant is precluded by the limitation period from pursuing at arbitration (1) payment of housekeeping and home maintenance services from June 20, 2002 to October 3, 2003, and (2) whether she has suffered a catastrophic impairment within the meaning of clauses 2(1.1)(f) and (g) of the Schedule.

Second, the Appellant submits that the Arbitrator made a typographical error regarding the housekeeping period in issue. The Appellant submits that the correct claim for housekeeping services is ongoing from June 19, 2004, as set out in her initial Application for Arbitration dated February 8, 2007.

Lastly, the Appellant submits that the Arbitrator's decision failed to address her request for an urgent interim order for dental and transportation expenses.

The Appellant's requested relief, in part, seeks a waiver of her $250 filing fee, as her family's income is limited to the Ontario Disability Support Program.

II. Whether to Accept this Appeal from a Preliminary Order

Rule 50.2 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010) (the "Code") provides that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless the Director (or, in this case, the Director's Delegate appointed under subsection 6(4) of the Insurance Act) orders otherwise. Rule 51.2(c) provides that an appeal may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute.

The Appellant submits that this appeal from a preliminary arbitration decision should be accepted. Regarding the limitation issue, the Appellant accepts the Arbitrator's finding that he had no jurisdiction to grant her relief from forfeiture under section 129 of the Insurance Act, as such relief is an equitable remedy reserved to the courts. Section 129 provides that:

Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.

Thus, the Appellant states that she "will file an application for Judicial Review before the Superior Court immediately after the Appeal decision."

The Appellant's claim for relief from forfeiture flows from her March 20, 2008 complaints to the Licensing and Market Conduct Division ("Market Conduct") of the Financial Services Commission of Ontario (the "Commission") regarding alleged improper conduct and deceptive acts by the Respondent falling under Ontario Regulation 7/00. The Appellant references an April 3, 2008 letter from Market Conduct saying it was its general practice to defer a review of compliance complaints pending the completion of the dispute resolution process.

The Appellant argues that due to the seriousness of her concerns, she felt that she had no choice but to withdraw her earlier arbitration to allow Market Conduct to proceed with its investigation. The Appellant's withdrawal request was allowed by Arbitrator Killoran in Girao and Allstate Insurance Company of Canada, (FSCO A07-000288, June 27, 2008). Thus, the eight-day arbitration hearing scheduled for December 2008 was cancelled.

The Appellant provides a September 5, 2008 letter from Market Conduct to her stating that it was not apparent from the information provided that there had been non-compliance with the Insurance Act or its associated regulations.

A February 20, 2009 letter from the Executive Director of Market Conduct advises the Appellant that if she is dissatisfied with their handling of her complaint, she may wish to contact the Office of the Ombudsman of Ontario. The April 16, 2009 letter from the Chief Executive Officer and Superintendent of Financial Services states that the Appellant's complaints are components of an entitlement dispute and that these matters should be determined by the dispute resolution process or by the courts before the Commission can determine whether it has the complete set of facts to conclude its review of her complaint.

The Appellant submits that immediately after receiving the last letter she wrote the Director of Arbitration May 11, 2009 seeking relief under section 129 of the Insurance Act. The Appellant submits during her exchange with Market Conduct the limitation period had lapsed regarding her catastrophic impairment and housekeeping claims.

The Appellant's new Application for Arbitration was received by the Commission on January 11, 2010. On April 26, 2010, a Senior Arbitrator wrote her that contrary to the Appellant's belief, her requested relief had not been granted, nor was it available. The Senior Arbitrator stated that the preliminary issues were to be dealt with on May 19 and 20, 2010. The Arbitrator's January 14, 2011 decision held that he did not have the jurisdiction to grant relief from forfeiture under section 129 of the Insurance Act.

The Appellant submits that the Arbitrator failed to consider that the limitation period had been missed due to the Appellant's endeavor to proceed with her Market Conduct complaint, the delay in that process and the delay before the Director. She also argues that none of the cases cited by the Arbitrator in his decision pertain to a claimant seeking a catastrophic impairment designation who has exceeded the limitation period due to a market conduct complaint.

Regarding the alleged typographical error, the Appellant submits that the housekeeping claim up to June 19, 2004 was settled on February 28, 2006. Hence, her claim is after that date.

Lastly, the Appellant argues that her motion for interim benefits was recorded on May 20, 2010, before the end of the hearing day, that the claimed expenses were not disputed by the Respondent, there was abundant medical evidence in support of her entitlement and that she was suffering economic hardship. The Appellant's Notice of Appeal seeks an interim order of $12,469.78; her written submissions seek $8,678.19.

The Respondent submits that the Notice of Appeal does not raise a question of law, as required by subsection 283(1) of the Insurance Act and by Rules 50.1 and 51.2(b) of the Code. The Respondent cites L.C. and Pafco Insurance Company Limited, (FSCO P02-00019, June 18, 2003) that:

Subsection 283(1) of the Insurance Act says that either party to an arbitration can appeal the Arbitrator's order "on a question of law." A question of law is a question about how to interpret the Insurance Act, the SABS, or other authority. Questions of fairness or jurisdiction are also questions of law. Disagreements about the Arbitrator's factual findings based on the evidence are questions of fact, not law. They are not appealable. However, in some circumstances, the Arbitrator's application of the law to the evidence, or his inferences based on the evidence, may raise questions of law, or mixed fact and law.

The Respondent submits that the Appellant has not taken issue with the Arbitrator's interpretation of any legislation, nor has she raised questions of fairness or jurisdiction. Rather, the Appellant accepts that the Arbitrator did not have jurisdiction to grant relief from forfeiture. Noting Bissoon and Pilot Insurance Company, (OIC P96-00084, October 8, 1997), the Respondent submits that the case law is clear that adjudicators at the Commission cannot grant relief from forfeiture as it is an equitable remedy granted only to the courts.

The Respondent further argues that having elected under section 281 of the Insurance Act to proceed to arbitration rather than to the courts, the Appellant cannot "now seek to effectively circumvent this forum to seek relief in the Superior Court," citing Salmon v. Toronto Transit Commission (Markel Insurance), (OIC No. P-000235, June 15, 1992).

Regarding the housekeeping claims, the Respondent argues that a typographical error is not an error of law and that Rules 65.6 and 65.6 of the Code permit an arbitrator to correct a typographical error. The Respondent further notes that the Arbitrator concluded that the Appellant was precluded by the limitation period from pursuing any housekeeping claims.

The Respondent submits that the Arbitrator's decision precluded the Appellant from making claims for various dental expenses. The Respondent argues that, in any event, the Appellant presented no evidence at the preliminary issue arbitration hearing as to why an interim order was justified. The Respondent, therefore, requests that this appeal on a preliminary issue be rejected and that it be awarded its legal expenses. The Respondent takes no position regarding the requested waiver of the filing fee.

Delegate Naylor held in Allstate Insurance Company of Canada and Al-Obaidi, (FSCO P99-00009, May 2, 2000), that the general thrust of the Code is to defer appeals from preliminary or interim orders until the arbitration is over. However, such appeals have been allowed to proceed where it made sense to do so before the parties were put to the expense and time of a full arbitration hearing. This case-by-case determination reflected, in part:

… the apparent strength of the appeal, the importance of the issue, whether the ruling represents a departure from the approach taken in previous cases and whether hearing the appeal in the interim would result in significant savings in time and expense or streamline the process in some way. The preference of the parties is an important factor.

Delegate Makepeace, in Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), held that the purpose of what is now Rule 50.2 of the Code is to:

… facilitate the most cost-effective resolution of disputes by minimizing the time and money spent on procedural or collateral matters. The decision whether to hear an appeal of a preliminary order is discretionary … the over-arching principle guiding the exercise of the discretion is that the rule "should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute." The criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether rejecting the appeal or hearing it will prejudice either party.

I am exercising my discretion not to accept this appeal from the Arbitrator's January 14, 2011 decision on a preliminary issue for the following reasons:

1. I am not persuaded as to the strength of this present appeal regarding the limitation issue.

Subsection 283(1) of the Insurance Act limits appeals from an arbitrator's order to questions of law. The Appellant submits that the Arbitrator failed to consider what she says are unique facts in her case. However, the Appellant accepts that the Arbitrator had no jurisdiction to afford her relief from forfeiture under section 129 of the Insurance Act.

There is no argument that an appellate officer at the Commission has any greater power regarding section 129 of the Insurance Act than an arbitrator. Rather, the Appellant submits that:

As an arbitrator appointed under the Insurance Act has no jurisdiction to grant relief from forfeiture under section 129 of the Insurance Act. And the Relief from forfeiture is an equitable remedy reserved to the courts then my wife will file an application for Judicial Review before the Superior Court immediately after your decision Mr. Blackman. [emphasis in the original]

Hence, at this appeal level, there is no issue of law regarding the limitation issue.

2. I am further not persuaded as to the strength of the ground of the alleged typographical error in the Arbitrator's decision.

Rule 65.5 of the Code provides that an adjudicator may, at any time, correct amongst other things, a typographical error. The time and expense of an appeal is not warranted in addressing matters that can easily be remedied by the Arbitrator.

However, the current Application for Arbitration contains no request for housekeeping benefits. Arbitrator Renahan's April 7, 2010 pre-hearing letter states that the identified and agreed preliminary hearing issues included housekeeping entitlement from June 20, 2002 to October 3, 2002. I do not see any correspondence from either party to the pre-hearing arbitrator submitting that he was in error regarding the period in dispute.

Further, under section 22 of the Schedule, housekeeping expenses cannot be claimed more than 104 weeks after the onset of disability, in the absence of a catastrophic impairment designation. The housekeeping claim the Appellant asserts starts at 104 weeks after her claimed onset of disability. As the Arbitrator found the Appellant's claim of catastrophic impairment statute barred and the Appellant seeks to pursue that issue before the Divisional Court, there is no logic in appeals presently addressing this issue.

3. Lastly, I am not persuaded as to the strength of this appeal regarding the Appellant's alleged motion for interim benefits.

Subsection 279(4.1) of the Insurance Act provides that "[t]he Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator." If the Arbitrator had erred in not addressing an issue properly before him, the appropriate remedy would be to refer that issue back to arbitration for a determination.

In this case, however, the transcript of the arbitration hearing was not provided. I have no independent means of determining what exact request for interim benefits, if any, took place at arbitration. While Arbitrator Renahan's April 7, 2010 pre-hearing letter notes an issue of a requested interim order for the cost to update certain medical reports, there is no reference to any request for an interim order for the medical and transportation expenses the Appellant now claims. The quickest and least expensive resolution of this issue is to refer the Appellant to her ongoing arbitration for any proper motion for interim benefits.

I note, however, that the Arbitrator held that the Appellant was precluded from pursuing her claims for dental treatments in the amount of $40,654.20 and the transportation to the office of Dr. Mancuso in the amount of $3,000. These orders are not appealed. The Appellant's claims for an interim order would have no basis to the extent that they are encompassed by the Arbitrator's January 14, 2011 preclusion orders.

4. I am not persuaded that the Arbitrator's decision, specifically regarding section 129 of the Insurance Act, represented a departure from prior case law. Rather, Delegate Draper, in Bissoon, stated that:

The only authority to relieve against a failure to meet a time limit is found in section 129. However, arbitrators have consistently held that they have no authority to grant relief from forfeiture under this section. I agree. The section specifically gives authority to "the court." This wording is significant in legislation that sets out the powers of "the arbitrator" in other sections.

Nor am I persuaded that an implicit authority can be found. The Insurance Act establishes arbitration as an alternative to the court for resolving disputes about accident benefits. In this sense, arbitrators and judges have concurrent jurisdiction. However, I find nothing in the structure of the Insurance Act to suggest that arbitrators are meant to share all the powers given to judges. The insured person's decision to choose court or arbitration may well include a consideration of the remedies available.

5. It is obvious that this appeal is of great personal importance to the Appellant. I am not, however, persuaded as to the broader import or the novelty of the issues the Appellant raises that would justify accepting, at this time, this appeal from a preliminary decision.

6. Lastly, and perhaps most importantly, the considerations of producing the quickest, most just and least expensive resolution of this dispute and of avoiding prejudicing either party all weigh against accepting this appeal. The Respondent asks that this appeal be rejected. The Appellant wishes to move as quickly as possible to judicial review. Refusing to accept this appeal from a preliminary decision at this time satisfies the wishes of both parties.

Regarding the Appellant's request that I waive the $250 filing fee, Part D of the Code states in part, that:

3.4 Filing fees may not be waived under the Insurance Act, the Financial Services Commission of Ontario Act, 1997, or Ontario Regulations.

3.5 Payment of filing fees may not be deferred under the Insurance Act, the Financial Services Commission of Ontario Act, 1997, or Ontario Regulations.

In light of these provisions, I do not see that I have any authority or discretion to waive the Appellant's $250 filing fee. Accordingly, this request is denied. This is without prejudice to the $250 filing fee being claimed as a legal expense of this present appeal proceeding.

III. Expenses

If the parties are unable to agree on the legal expenses of this appeal, pursuant to Rule 79.2 of the Code an expense hearing shall be requested within thirty days of the date of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, services received and the costs, as well as submissions regarding entitlement to and the quantum of such legal expenses.

April 12, 2011

Lawrence Blackman Director's Delegate

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.