Dominion of Canada General Insurance Company v. Nancy Beltrame, 2014 ONFSCDRS 139

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2014 ONFSCDRS 139

Appeal P14-00027

OFFICE OF THE DIRECTOR OF ARBITRATIONS

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Appellant

and

NANCY BELTRAME

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Ms. Jane Cvijan for the Appellant, Dominion of Canada General Insurance Company

Mr. Francis J. Burns for the Respondent, Ms. Beltrame

HEARING DATE:

By written submissions due August 21, 2014

PRELIMINARY APPEAL ORDER

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

1. Pursuant to Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated January 2014), I presently reject this appeal from the Arbitrator’s June 13, 2014 decision. This appeal file shall be administratively closed. Once a final arbitration decision is issued regarding all of the substantive issues in dispute, at the Appellant’s request, this appeal file shall be administratively reopened.

2. The Appellant’s request for a stay under subsection 283(6) of the Insurance Act, R.S.O. 1990, is denied.

3. An appeal expense hearing of this appeal decision shall be requested within thirty days of issuance of a final arbitration decision determining all of the substantive issues in dispute.

August 26, 2014

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

This preliminary appeal decision concerns whether this appeal should be rejected pursuant to Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated January 2014) (the “Code”) on the basis that the appeal is from a preliminary arbitration order that does not finally decide all of the issues in dispute. Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), held that the purpose of the present Rule 50.2 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.

The Respondent, Ms. Nancy Beltrame, was injured in a motor vehicle accident on July 2, 2009. As a result, she sought benefits pursuant to the 1996 Schedule¹ from her first-party insurer, the Appellant, Dominion of Canada General Insurance Company.

The October 31, 2011 Report of Mediator noted the Respondent’s entitlement to non-earner benefits (“NEBs”) as one of the issues in dispute. On April 3, 2012, the Commission registered the Respondent’s Application for Arbitration. A pre-hearing discussion was held May 14, 2013. At that time, the main arbitration hearing in which benefit entitlement would be determined was scheduled to be heard June 16 to 19, 2014.

The Appellant requested a preliminary issue hearing to determine whether the Respondent “was precluded from proceeding with her claim for non-earner benefits, because she did not submit a disability certificate stating that she suffered a complete inability to carry on a normal life, within 104 weeks of the accident.” The preliminary issue hearing was to proceed by written submissions only. These were filed by July 11, 2013.

In its arbitration submissions, the Appellant referenced subsection 35(13) of the 1996 Schedule:

If an insured person fails to submit a completed disability certificate with his or her application for a specified benefit, no specified benefits are payable for the period after the day the insurer receives the application and before the day the insurer receives the completed disability certificate.

The Appellant argued that subsection 35(1) includes NEBs as a specified benefit. Subsection 12(1) provides that for the insurer to pay NEBs, the insured person must suffer a complete inability to carry on a normal life “as a result of and within 104 weeks after the accident.”

The Appellant submitted that at no time within the first 104 weeks after the accident did the Respondent submit a disability certificate indicating that her accident injuries resulted in a complete inability to carry on a normal life. The Appellant argued at paragraph 35 of its arbitration submissions that the Respondent was, therefore, “precluded from proceeding to arbitration regarding her claim for a non-earner benefit.”

At paragraph 14 of its reply arbitration submissions, the Appellant stated it was “not raising a two-year limitation defence regarding the non-earner claim.” Rather, it was arguing that the Respondent had failed to apply for NEBs within the time stipulated and in the manner required by the 1996 Schedule.

Arbitrator Alves (the “Arbitrator”), in her June 13, 2014 decision, answered two questions. First, she held that the Respondent was not precluded from proceeding to arbitration with her NEB claim. The Arbitrator found that the Respondent had provided sufficient information that by the end of 2009 the Appellant “was able to identify that [the Respondent] might be entitled to a non-earner benefit and to ask her to provide disability certificates in relation to this benefit.”

The Arbitrator found that rather than doing so, the Appellant delayed crystallizing the NEB dispute until June 8, 2011 when it wrote the Respondent that she did qualify for NEBs. The Arbitrator found that this triggered the two-year limitation period. The Respondent’s subsequent applications for mediation and arbitration were found to be within the requisite time periods.

In the event that she was wrong regarding the first question, the Arbitrator answered a second question, finding that the Appellant should have arranged a neuropsychological insurer medical examination (“IME”) as part of a proper claims investigation. That, coupled with the Appellant’s delay in crystallizing the dispute, provided a reasonable explanation for the Respondent’s delay in providing evidence establishing her NEB entitlement.

II. THE PARTIES’ POSITIONS

The Appellant seeks leave to appeal the June 13, 2014 preliminary issue order. It submits, in part:

1. The Arbitrator exceeded her jurisdiction. The Respondent first raised in her responding arbitration submissions a new issue of whether the Appellant was obliged to arrange a neuropsychological IME to assist the Appellant in applying for benefits. This was an entirely separate and unrelated issue that was not identified or agreed to at the pre-hearing discussion. Accordingly, the Arbitrator erred in law in ruling on this issue.

2. The Arbitrator further erred in law in denying the Appellant procedural fairness by not giving it an opportunity to respond to the new issue.

3. The Arbitrator also erred in law in interpreting subsection 42(1) of the 1996 Schedule as requiring the Appellant to arrange IMEs for a benefit for which no application had been submitted. This reversed the insured’s onus of proving that he or she fit within the scope of coverage. Further, it placed an unreasonable burden on an insurer of having to substantiate ineligibility on the part of an insured person.

The Respondent submits, in part:

1. The Appellant did not, either in its arbitration reply submissions or thereafter while awaiting the Arbitrator’s decision, provide submissions on whether it should have arranged a neuropsychological IME. Nor did it seek clarification from the Arbitrator on whether she would rule on this issue.

2. Rather than using its discretion under the 1996 Schedule to properly and fairly adjust this file in accordance with the consumer protection intention of the legislation, the Appellant denied the Respondent’s claim based on a technicality.

3. The issue of the Respondent’s NEB entitlement was heard June 16 to 19, 2014 before Arbitrator Muzzi. That decision is pending.

The Appellant, in the form of the Notice of Appeal, checked off that it was requesting a stay of the Arbitrator’s order. However, the Appellant did not support that request in its submissions accompanying its Notice of Appeal or in its reply submissions.

III. ANALYSIS

My July 21, 2014 letter noted that Rule 56.5 of the Code provides that an appeal may be decided in any manner considered appropriate. Applying Rule 1.1 of the Code, I was of the view, subject to the parties’ submissions and the material filed, that the most expeditious, least costly and most just means of determining the preliminary appeal issues was by written submissions. The parties were to advise if, and why, oral submissions were reasonably necessary.

The Appeals Unit has not received a request for oral submissions. I am not persuaded that oral submissions, in addition to the written submissions received, are reasonably necessary. Accordingly, I am rendering my decision based on the written submissions filed.

Exercising my discretion under Rules 50.2 and 51.2(c) of the Code, I am presently rejecting this appeal from the Arbitrator’s June 13, 2014 decision for the following reasons:

(1) One primary reason for preliminary issue arbitration hearings is to avoid a possibly unnecessary full hearing when the determination of a narrow issue may decide the entire proceeding. The Arbitrator, however, issued her decision three days before the scheduled main hearing. It is not disputed the main hearing, including determination of NEB entitlement on the merits, was completed and that a decision is now pending.

If Arbitrator Muzzi finds that the Respondent is not entitled to NEBs based on the substantive criteria under section 12 of the 1996 Schedule, this present appeal issue on a procedural point becomes moot. It is not the least expensive, most expeditious or most efficient resolution of the dispute to proceed with a preliminary appeal issue that may be rendered a non-issue by the final decision.

(2) If Arbitrator Muzzi finds that the Respondent is not entitled to NEBs or any other benefits in dispute, the Respondent has a right to appeal on questions of law. If Arbitrator Muzzi finds that the Respondent is entitled to any of the disputed benefits, the Appellant has a right to appeal on questions of law. It is not the least expensive or most efficient resolution of the dispute to presently accept this appeal and to proceed with possible multiple appeals arising from the same proceeding, but at different times.

In the specific circumstances of this case, with the main arbitration decision pending, rather than dismissing this present appeal I am ordering that the appeal file be administratively closed. Once a final arbitration decision is issued that determines all of the substantive issues in dispute, this appeal file shall be administratively reopened at the Appellant’s request.

Such a process, when the main decision is pending, will save the expense of further filing fees and assessments for the same appeal, as well as saving time in not requiring the parties to resubmit a Notice of Appeal and a Response to Appeal for this particular matter. It will also allow for the legal expenses of this appeal to be subsequently addressed, if necessary, as set out below. The usual process, fees and assessments, however, will apply to any appeal that may arise from Arbitrator Muzzi’s decision.

For completeness, turning to the question of a stay, subsection 283(6) of the Insurance Act, R.S.O. 1990, provides that an appeal does not stay the order of an arbitrator, unless decided otherwise. Given that this appeal is being presently rejected, that the Arbitrator’s decision did not award any benefits and that the decision on the Respondent’s entitlement to the benefits in dispute is pending, I decline to exercise my discretion under subsection 283(6) of the Insurance Act to order a stay of the Arbitrator’s order.

IV. EXPENSES

At this juncture I am of the view that it is premature to address the legal expenses of this present appeal.

If the parties cannot ultimately agree on the legal expenses of this present appeal, this appeal file shall be administratively reopened should either party, within thirty days of issuance of a final arbitration decision determining all of the substantive issues in dispute, request of the Appeals Unit an appeal expense hearing of this appeal order.

August 26, 2014

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.