Hong Min Xue v. Unifund Assurance Company, 2016 ONFSCDRS 129

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 129

FSCO A14-007350

BETWEEN:

HONG MIN XUE

Applicant

and

UNIFUND ASSURANCE COMPANY

Insurer

REASONS FOR DECISION ON A PRELIMINARY ISSUE

Before: Stuart J. Mutch

Heard: February 11, 2016 by teleconference

Appearances: Pavlos Achlioptas for Mr. Xue

Thomas Elliott for Unifund Assurance Company

Overview:

Hong Min Xue was injured in a motor vehicle accident on September 27, 2012 (“the accident”). Disputes arose between Mr. Xue and his insurer, Unifund Assurance Company (“Unifund”), concerning his entitlement to accident benefits payable under the Schedule¹ and Mr. Xue applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act.²

Issues

At the pre-hearing, Unifund raised a preliminary issue: Under section 55 of the Schedule, is Mr. Xue barred from proceeding to mediation, and therefore arbitration, because of his alleged failure to comply with a Notice of Examination issued under section 44?

Background

On December 20, 2012, Unifund received a treatment plan for a psychological assessment dated December 1, 2012 prepared by Dr. Andrew Shaul, psychologist. Dr. Shaul was of the opinion that Mr. Xue’s impairment was not predominantly a minor injury as referred to in the Minor Injury Guideline (“MIG”). In an Explanation of Benefits dated January 3, 2013, Unifund denied the treatment plan. Unifund stated “[w]e are unable to consider same, as your injuries fall within the Minor Injury Guideline.” Nevertheless, on April 20, 2013 the Applicant underwent the psychological assessment. A report dated May 29, 2013 was sent to Unifund.

In July 2013 Unifund prepared a further Explanation of Benefits form dated July 9, 2013 advising that Unifund was intent on setting up an Insurer’s Examination (“IE”) that “will assist in determining if your accident related impairment would fall within the definition of ‘minor injury’ in accordance with the Accident Benefit Regulation or if the impairment is predominately [sic] a psychological impairment”. Included with this form was a Notice of Examination dated July 8, 2013 for an IE to take place on August 15, 2013.

Position of the Applicant

The Applicant alleges the following:

That the IE scheduled for August 15, 2013 was scheduled without consulting the Applicant or his counsel, as required by subsection 44(9)(2)(i) of the Schedule.
The Notice of Examination was defective as follows:

— The box titled “Profession or Designation” (of the assessor) was left blank;

— The box titled “Specialty” was completed with the word “Psychology” which does not meet the requirements of subsection 44(5)(c);

— There is no reference to the treatment plan of December 1, 2012; and

— It did not provide “the medical reason and all of the other reasons” for requesting the IE, as per subsections 38(8) and 44(5) of the Schedule;

That his counsel informed Unifund that he would be unable to attend the IE. The Applicant alleges that the IE was cancelled by mutual agreement
He was at all times prepared to attend an IE after consultation regarding a date or time
Unifund never made any effort to re-schedule the IE

Unifund alleges the following:

At this point in the proceedings, the Applicant is barred from raising allegations of defects in the Notice of Examination
By failing to attend a scheduled IE, the Applicant did not comply with section 44 of the Schedule and therefore is not entitled to proceed to mediation as per subsection 55.2 of the Schedule. It follows that if the Applicant is banned from mediation, he cannot proceed to arbitration.

The Law

Section 55 of the Schedule states that an insured shall not commence a mediation proceeding (a prerequisite to commencing an arbitration proceeding) if an insurer has provided notice that it requires an examination under section 44 and the insured person has not complied with that section.

Analysis

The Applicant alleges that Unifund scheduled the August 15, 2013 IE without consulting either him or his counsel.

Subsection 44(9)(2)(i) clearly states that an insurer is to make “reasonable efforts to schedule the examination for a day, time and location that are convenient for the insured person”.

There is no evidence that when Unifund prepared and sent the Notice of Examination dated July 8, 2013 there had been any effort made to consult the insured or his counsel, regarding a convenient time for the examination.

The adjuster’s notes³ indicate that when the Applicant’s counsel contacted Unifund on July 17, 2013, his requests regarding rescheduling were noted by the adjuster, who also asked for dates the Applicant would be in Toronto. The log notes for July 23, 2013 indicate that an examination was scheduled for August 6, 2013. Although that date was not a Wednesday or a Friday as requested by the Applicant, it appears that the doctors engaged for the assessment practice in the Greater Toronto area. While Unifund did not consult the Applicant when they set up the initial appointment, it is evident that its adjuster at least took note of Applicant’s counsel’s requests for re-scheduling.

Overriding all this however, is the fact that the IE was cancelled, apparently by mutual consent, on July 25, 2013. The adjuster’s notes of that date read “All IME’s cancelled as CLMT has gone to China until further notice. Rep did not provide a return date. I asked that he advise when CLMT returns and we will re-schedule at that time”. ⁴

According to the affidavit of Denise Yu Jiang⁵, filed on behalf of the Applicant, on or about December 12, 2013, Yeung and Associates advised Unifund that the Applicant had not yet returned from China. Ms. Jiang further deposes that on or about December 11, 2014, Unifund called Yeung and Associates’ offices to enquire if Mr. Xue was still in China. The following day, Yeung and Associates learned that Mr. Xue would be returning to Canada in February of 2015 and advised Unifund of this.

There is no evidence from either party that Unifund took any steps to schedule an IE after the cancellation on July 25, 2013.

Regardless of any of the alleged flaws in the Notice of Examination, or Unifund’s initial failure to consult the Applicant in setting up the IE, the fact is, that as of July 25, 2013, there was no IE to attend. Unifund made no attempts to schedule a further IE and in fact did not enquire as to the Applicant’s whereabouts until some 17 months later.

An insured person is obliged to attend a properly scheduled IE. Beyond that, there is no requirement that an insured take the initiative in setting up an IE or remain in Canada awaiting the scheduling of an IE. In my view, the proper course of action for Unifund would have been to enquire about the Applicant’s expected return within three or four months of his departure and in the absence of a satisfactory reply and the co-operation of the insured’s Applicant’s counsel, schedule an IE on a date that would allow the Applicant adequate time to make arrangements to return to Canada.

The Applicant is not barred from proceeding to arbitration. The Applicant did not fail to comply with the Notice of Examination. The Notice became null and void when the examination was cancelled on July 25, 2013.

EXPENSES

The criteria I may consider in making an order for expenses are set out in the Expense Regulation.⁶

In my view, the only criterion that should be considered is each party’s degree of success in the outcome of the proceedings.

The Applicant was successful in defending this motion.

The Applicant did not provide a Bill of Costs or any other evidence of the costs incurred in defending this motion. The Applicant was represented by counsel at the teleconference hearing of the motion and documentation was submitted on his behalf.

The Applicant is awarded the sum of $500 for his expenses in defending this motion.

April 25, 2016

Stuart J. Mutch

Arbitrator

Date