Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2013 ONFSCDRS 120

Appeal P12-00039V

OFFICE OF THE DIRECTOR OF ARBITRATIONS

AHMAD ABBANY Applicant

and

PAFCO INSURANCE COMPANY Respondent

BEFORE: David Evans

REPRESENTATIVES: Ahmad Abbany representing himself Andrew McKague for Pafco Insurance Company

HEARING DATE: By written submissions received by August 13, 2013

VARIATION / REVOCATION ORDER

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

1. The Application for Variation/Revocation is rejected on the basis it does not fall within the grounds set out in subsection 284(3) of the Insurance Act and Rule 61.1 of the Dispute Resolution Practice Code upon which such an application may be brought.

2. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested pursuant to the Dispute Resolution Practice Code (Fourth Edition, Updated - August 2011), but as set out below and within sixty days of the date of this decision.

September 6, 2013

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Arbitrator Miller, in her order dated October 18, 2012, dismissed Mr. Abbany’s Application for Accident Benefits under the SABS–1996.¹ She found that, contrary to s. 32 of the SABS, he had no reasonable explanation for failing to notify his insurer, Pafco Insurance Company, of his intention to apply for accident benefits within the required seven-day period.

Instead of filing an appeal, Mr. Abbany has filed an Application for Variation/Revocation.

II. BACKGROUND

Mr. Abbany was in a motor vehicle accident on July 14, 2007 and reported it to his insurer, Pafco, the same day. The adjuster’s log notes indicate that Mr. Abbany told the adjuster that the accident caused him no injury.

Mr. Abbany filed his Application for Accident Benefits on November 25, 2008.

Subsection 32(1) of the SABS requires an insured person to notify the insurer of his or her intention to apply for an accident benefit. For accidents occurring after October 1, 2003, notification must be given no later than “the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day”: s. 32(1.1)(b). In turn, s. 31(1) provides that a person’s failure to comply with that time limit does not disentitle the person to a benefit if the person has a reasonable explanation. The Arbitrator therefore looked for a reasonable explanation for Mr. Abbany’s 16-month delay in advising Pafco he was intending to apply for benefits.

The Arbitrator noted that the case of Carruthers and Royal and SunAlliance Insurance Company of Canada, (FSCO P02-00015, April 10, 2003), held that in assessing whether an explanation is a “reasonable explanation,” the explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed. The onus is on the insured person to establish a “reasonable explanation.” The Arbitrator was not referred to the amendment to s. 32(1) and the enactment of s. 32(6) of the SABS made after Carruthers, discussed below.

The Arbitrator found Mr. Abbany’s explanation did not meet that test.

The Arbitrator noted that Mr. Abbany did not complain to his doctors for a long time about the accident. She gave little weight to his submissions that he did not advise his doctors about his car accident because they did not ask the right questions, and that it took him time to make the connection between his symptoms and the car accident. She found “The objective evidence indicates numerous contradictions and implausibilities in Mr. Abbany’s claim that he was injured in his car accident.” She noted that the police report indicated there were no injuries, he told the adjuster he was not injured, and there were no reports of dizzy spells and headaches until October 2007 (although Mr. Abbany claimed he had these symptoms immediately after the July 2007 accident). Furthermore, starting in the fall of 2008 and into 2009, Mr. Abbany reported to his doctors some contradictory facts.

The Arbitrator noted that even though he had often seen his family doctor, Dr. Shaw, after the accident, the first time Mr. Abbany mentioned the July 2007 car accident to him was on August 12, 2008, and “Most significant is the fact that it is Mr. Abbany, and not any doctor, that has attributed his symptoms to his car accident.” Although he claimed he suffered whiplash, she found there was no complaint to a medical practitioner of neck pain or any evidence of treatment for whiplash.

The Arbitrator concluded that Mr. Abbany had no reasonable explanation for his delay in notifying Pafco that he was claiming a benefit. She found he was therefore precluded from proceeding to arbitration.

III. ANALYSIS

As already noted, Mr. Abbany filed for a Variation/Revocation instead of an appeal. However, he referred to “interpretation of the law” in his application and also stated, for instance, that Coseco Insurance Co./HB Group/Direct Protect and Novakovic, (FSCO P05-00016, June 22, 2006) “would have been a more appropriate case to argue as my symptoms were latent, severe, and took time to manifest themselves.”

Rule 61.1 of the Dispute Resolution Practice Code sets out the following bases upon which a variation/revocation application may be initiated:

61.1 Either the insured person or the insurer may apply to the Director to vary or revoke an arbitration order or an appeal order if:

(a) there has been a material change in the circumstances of the insured;

(b) evidence not available on the arbitration or appeal has become available; or

(c) there is an error in the order.

I wrote to the parties on December 13, 2012 that it appeared Mr. Abbany was relying on Rules 61.1(b) and (c), adding that, considering the arbitration decision was just issued, Rule 61.1(a) could not apply.

I advised Mr. Abbany that he should have filed an appeal because he raised a question of law in his application by referring to “interpretation of the law.” I noted that questions of law are dealt with by an appeal, as Rule 50.1 states “A party to an arbitration may appeal an order of an arbitrator to the Director only on a question of law.” I noted that, while one of the criteria for a variation application is “an error in the order,” our case law treats that as referring to mathematical errors or the like and not an error on a question of law. I advised him that, if he filed a Notice of Appeal, he would not need to send in another filing fee if he sent in a Notice of Appeal.

However, Mr. Abbany elected to continue with the variation/revocation application instead of bringing an appeal. He also submitted some older medical reports, as well as those of Dr. W.R. Chamoun dated January 15, 2012 and November 11, 2012. Accordingly, I wrote to the parties again on January 18, 2013.

I noted that the “evidence not available on the arbitration or appeal has become available” criterion for variation/revocation in Rule 61.1(b) still requires applicants to put their best case forward at the arbitration hearing. I asked Mr. Abbany to address why materials that he had in his possession prior to the arbitration proceeding were not put before the Arbitrator, and why opinions such as those of Dr. Chamoun were not obtained prior to the arbitration proceeding.

As for Rule 61.1(c), I cited the discussion in Hart and Allstate Insurance Company of Canada, (FSCO P99‑00045, November 7, 2000), to the effect that the term “error in the order” is not intended to duplicate the appeals route and does not encompass an erroneous interpretation of the law. However, on the possibility that the term might include a matter that should have been addressed, I asked the parties to make submissions on the Avdeeva cases, discussed below, which dealt with the amendment to s. 32(1) and the enactment of s. 32(6) since Carruthers.

After the parties provided their submissions, further issues arose. First, Mr. Abbany wrote to me and disclosed the amount of an offer Pafco had earlier made to him. Then, he wrote to me that he wished to withdraw his application because he had started a court action.

In both cases I gave Pafco an opportunity to respond.

While Pafco was prepared for me to continue and to have the letter containing the offer sealed, it opposed the withdrawal request (Rule 70 of the Dispute Resolution Practice Code does not provide for withdrawal as of right).

Finally, Mr. Abbany asked that I recuse myself because I know of the offer, but he also wished the letter disclosing the offer to remain unsealed. It is unclear whether or not he now intends to withdraw the present application.

Regarding the offer, the party that might be prejudiced by my knowledge of the offer is Pafco and not Mr. Abbany, and Pafco is prepared for me to continue with the case. I will not recuse myself. As for Mr. Abbany’s withdrawal request, it is denied, considering the late stage in these proceedings, the fact that it is not even clear what Mr. Abbany wants, and Pafco would be seeking its expenses in any event if I did grant the withdrawal.

Returning to the criteria for a variation/application, I find there is no evidence fitting within the “evidence not available” criterion of Rule 61.1(b). Four of the medical reports Mr. Abbany provided were not new and were available for the Arbitration. As for the reports by Dr. Chamoun, Mr. Abbany has provided no rationale for seeking these reports at this late date other than to bolster his case. The parties are expected to prepare adequately for the hearing. I agree with Pafco’s submission that Mr. Abbany had more than five years to obtain these reports, so he made a reactive decision and elected to secure them only after he had lost the preliminary issue hearing. In any event, none of Dr. Chamoun’s reports address why Mr. Abbany delayed notifying Pafco that he was claiming benefits.

Turning to the remaining criterion, Rule 61.1(c), Mr. Abbany continues to make submissions regarding errors of law by the Arbitrator, contrary to the purpose of that rule, such as again referring to the Novakovic case. As for whether or not Arbitrator Miller should have commented on the amendments to s. 32 enacted after Carruthers, I find that this falls into the area of a possibly erroneous intepretation of the law and not within the purview of a variation/‌‌revocation application. Post-Carruthers, s. 32(1) was split into the requirement to provide notice [s. 32(1)] and the deadline for doing so [s. 32(1.1)]. Subsection 32(6) was also enacted. In Avdeeva and Motor Vehicle Accident Claims Fund, (FSCO A09-000660, December 13, 2010), Arbitrator Bujold noted that in the case of a delayed application, s. 32(6) gives an insurer only the remedy of additional time to determine whether the insured person is entitled to a benefit if the insured has no reasonable explanation for the delay. He held that this removed the insured’s risk of forfeiting a right to pursue a claim for simple delay. On appeal, in Motor Vehicle Accident Claims Fund and Avdeeva, (FSCO P11-00004, November 10, 2011), the Director’s Delegate noted that the appeal was not about the meaning of s. 32 but about procedural fairness. In the end, the arbitration decision was upheld. It should be noted that the Arbitrator in Avdeeva went on to find that the insured had a reasonable explanation for the delay, if delay could still forfeit the right to pursue a claim. This finding was also not overturned on appeal.

In conclusion, I agree with Pafco that the effect of the post-Carruthers amendments is a legal issue that does not fit within a variation/revocation application. I also note that, since Hart, Commission case law has held that variation/revocation is not an opportunity to re-argue that part of the decision that has not been successful and that “an error in the order” has limited application and would not likely be available for an error in law or an error in the arbitrator’s reasoning process: Murtty and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO P12-00035V, June 13, 2013).

To summarize, I offered the option of an appeal to Mr. Abbany, but he refused it. Accordingly, as set out above, this matter has proceeded as a variation/revocation application and has been treated as such.

For that reason, Mr. Abbany’s Application for Variation/Revocation is rejected on the basis it does not fall within the grounds set out in subsection 284(3) of the Insurance Act and Rule 61.1 of the Dispute Resolution Practice Code upon which such an application may be brought.

IV. EXPENSES

If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested within sixty days of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as written submissions regarding entitlement to or the quantum of these expenses, or both, as are in dispute.

September 6, 2013

David Evans Director’s Delegate

Date

Footnotes

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