Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2014 ONFSCDRS 63
Appeal P13-00015
OFFICE OF THE DIRECTOR OF ARBITRATIONS
FADIA KHALIL
Appellant
and
ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Stephen S. Newell for Ms. Fadia Khalil
Joseph Griffiths for Royal & SunAlliance Insurance Company of Canada
HEARING DATE:
February 13, 2014 by teleconference call, followed by written submissions received by March 7, 2014
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The Arbitrator’s order of March 28, 2013 is confirmed and this appeal is dismissed.
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 – January 2014), but as set out below and within sixty days of the date of this decision.
April 11, 2014
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Ms. Khalil appeals the Arbitrator’s order that she is precluded from proceeding with her claims for income replacement benefits (IRBs) by failing to meet either the two-year limitation period or the notification and disclosure obligations under the SABS–1996.1
II. BACKGROUND
On September 11, 2002, Ms. Khalil was involved in a motor vehicle accident. At the time of the accident she worked at – and continued working at – CAA as a travel consultant.
On February 5, 2008, CAA terminated her employment, for what Ms. Khalil says were accident-related cognitive impairments. Ms. Khalil claims entitlement to IRBs from February 2008.
Royal & SunAlliance (RSA) submitted that Ms. Khalil was statutorily barred from advancing a claim in arbitration for recovery of IRBs on the grounds that RSA denied the benefit on January 21, 2003 and that
i. she missed the two year limitation period for challenging RSA’s denial, or,
ii. she failed to comply with the notification and disclosure obligations under the SABS
Ms. Khalil argued that RSA could not deny benefits until her claim crystallized in 2008, so the only valid denial was the one issued on February 2, 2010 (in response to notice that she lost her job in 2008 and a request by her counsel to reinstate IRBs).
The Arbitrator found that, in response to an application for accident benefits Ms. Khalil submitted on September 25, 2002, RSA issued a valid denial of benefits on January 21, 2003, so the two-year limitation period began to run on January 21, 2005. She found that s. 11 of the SABS, which deals with a temporary return to work, did not apply to the circumstances of this case. She also found that Ms. Khalil failed to comply with her notice and disclosure obligations in ss. 32 and 33 of the SABS.
III. ANALYSIS
Ms. Khalil cannot succeed even if the Arbitrator erred because she never met the eligibility criteria for IRBs. These are set out in ss. 4 and 5 of the SABS, and in particular s. 4(1)1:
4 (1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:
- The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment. [Emphasis added.]
Here, Ms. Khalil never claimed any benefits during those 104 weeks and, indeed, continued working after the accident for more than five years. Furthermore, pursuant to s. 5, benefits are not payable more than 104 weeks after the accident if the insured did not qualify for benefits within 104 weeks of the accident. I covered similar ground in Ladhar and Economical Mutual Insurance Company, (FSCO P09-00035, April 24, 2012), and the point was confirmed by the Court of Appeal in Wadhwani v. State Farm Mutual Automobile Insurance Company, 2013 ONCA 662:
11The second ground of appeal challenges the correctness of the trial judge’s interpretation of the interplay between ss. 4(1) and 5 of the Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996, O. Reg. 462/96 (the “SABS”).
12The trial judge decided that to qualify for income replacement benefits under s. 5 of the SABS beyond a period of 104 weeks, an insured must establish eligibility for the benefits within the first 104 weeks after the accident under s. 4(1) of the SABS. The trial judge framed the first question for the jury accordingly.
13In our view, the trial judge was correct in her interpretation of the relationship between the two provisions.
14The argument for the appellant is that an insured can return to work during the initial 104-week period (as the appellant did here) and, if at some time thereafter she or he is entirely unable to work because of accident-related injuries, she or he can reassert a claim for income replacement benefits at any time, with the limitation period beginning to run only when the insurer refuses to pay the further benefits claimed.
15This argument was rejected by this court in Haldenby v. Dominion of Canada General Insurance Co. 2001 CanLII 16603 (ON CA), (2001), 55 O.R. (3d) 470. A similar conclusion was reached by the Appeal Division of the Financial Services Commission of Ontario in Ladhar v. Economical Mutual Insurance Co., 2012 CarswellOnt 5805.
RSA submits that Wadhwani is directly applicable to the Appellant’s circumstances and disposes of the appeal. I agree. The Court of Appeal decision in Wadhwani is binding and applies in Ms. Khalil’s situation.
As for s. 11, the provision that deals with a temporary return to work, it only applies where “A person [is] receiving an income replacement benefit...” The Arbitrator correctly held that it does not apply because Ms. Khalil never received IRBs nor, for the reasons just cited, was she ever entitled to them.
There was no error in law, and the Arbitrator’s order of March 28, 2013 is confirmed and this appeal is dismissed.
IV. EXPENSES
If the parties are unable to agree on the legal expenses of this appeal, applying the procedure set out in Rule 79.2 of the Dispute Resolution Practice Code, an expense hearing shall be requested, within sixty days of the date 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 and/or the quantum of legal expenses, as are in dispute.
April 11, 2014
David Evans Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.