Neutral Citation: 2016 ONFSCDRS 214 FSCO A15-004947

BETWEEN:

JOHN GILLILAND Applicant

and

ECHELON GENERAL INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: James Robinson Heard: January 28, 2016, in London, Ontario Appearances: Andrew W. Schleichkorn and Wendy Highley for Mr. Gilliland Jamie Pollack for Echelon General Insurance Company

Issues:

The Applicant, John Gilliland, was injured in a motor vehicle accident on May 2, 2008. He applied for statutory accident benefits from Echelon General Insurance Company (“Echelon”), payable under the Schedule.¹ No benefits have been paid. The parties were unable to resolve their disputes through mediation, and Mr. Gilliland applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

Is Mr. Gilliland precluded from applying for mediation without a Report of Mediator showing items remaining in dispute?
Is Mr. Gilliland precluded from mediation because he failed to notify Echelon of the circumstances giving rise to a claim for a benefit and failed to submit an application for the benefit within the times prescribed by the Schedule?

Result:

Mr. Gilliland is not precluded from applying for arbitration without a Report of Mediator showing items remaining in dispute;
Mr. Gilliland is not precluded from mediation because he failed to notify Echelon of the circumstances giving rise to a claim for a benefit and failed to submit an application for the benefit within the times prescribed by the Schedule.
Mr. Gilliland is entitled to his expenses of this preliminary issue hearing.

EVIDENCE AND ANALYSIS:

The Evidence

The documentary evidence before me at the preliminary issue hearing was not extensive. I was provided first with a hard copy of three email strings between the applicant’s law firm and the mediation unit at FSCO (Exhibits A-1, A-2 and A-3). A copy of a police report with respect to the applicant’s accident of May 2nd, 2008 was also filed (Exhibit A-4). Finally I had before me the contents of FSCO’s arbitration file, containing documents and correspondence which was either prepared by staff or received from the parties with respect to the arbitration application.

The applicant, Mr. Gilliland, gave oral testimony at the preliminary issue hearing. The claims adjustor for the insurer, Mr. Gaon, attended but did not give evidence. The insurer’s written submission also incorporated some relevant correspondence.

Because there is an administrative firewall between the mediation and arbitration units of the Dispute Resolution Service at FSCO I had and have no direct access to the documents or system notes created or maintained by the mediation unit at FSCO. Therefore, except to the extent that a document or correspondence has been directed by the parties to the arbitration unit and filed by arbitration unit staff, I have no knowledge with respect to the conduct of the present matter at FSCO prior to the issuance of the application for arbitration. There is no Mediator Report in the arbitration file.

The Accident

The circumstances of the accident were straightforward and corroborated by the police report filed in evidence. Mr. Gilliland owned a motorcycle. He had cancelled his motorcycle insurance over the winter to save money on insurance premiums. On the day of the accident he succumbed to the temptation of the fine spring weather and decided to take his motorcycle out on the road, notwithstanding that he was aware that the motorcycle was uninsured. While he was driving along the 16th Sideroad, a paved two-lane roadway outside of Strathroy, the front wheel of the motorcycle hit a ridge or ripple in the road surface. He lost control of the motorcycle and it crashed through a ditch and into an adjacent farm field.

Mr. Gilliland was ejected from the motorcycle. At some point his safety helmet came off. His evidence was that he suffered various injuries including loss of memory, neck pain and continuous headaches as a result of the accident.

The insurer Echelon was at all material times the insurer of a 2002 Pontiac Sunfire automobile which the applicant also owned at the time of the accident. The unusual circumstances of the case have given rise to two preliminary issues.

Is Mr. Gilliland precluded from applying for arbitration without a Report of Mediator showing items remaining in dispute?

In his submissions insurer’s counsel argued that insofar as there was no Report of Mediator in this matter, then as a matter of law there can be no arbitration. He relies principally upon subsection 281(2) of the Insurance Act which provides as follows:

No person may bring a proceeding in any court, refer the issues in dispute to an arbitrator under section 282 or agree to submit an issue for arbitration in accordance with the Arbitration Act, 1991 unless mediation was sought, mediation failed and, if the issues in dispute were referred for an evaluation under section 280.1, the report of the person who performed the evaluation has been given to the parties.

In Hurst v. Aviva Insurance Company², a decision of the Ontario Court of Appeal, Juriansz, J.A. gave the following statement of the law with respect to subsection 281(2):

…the section does not require that a person await the receipt of a mediator’s report before commencing a proceeding. All that is required is that mediation has been sought and mediation has failed. I reiterate that s. 280(7) provides that one of the ways in which mediation can fail is that the 60 days prescribed for mediation expire.

This is the leading authority upon this issue and I find that it is binding upon me in the present case. The presence or absence of a Mediator’s Report is irrelevant, provided that an application for mediation was actually commenced and that the 60 days prescribed for mediation have expired.

No party tendered into evidence a copy of an Application for Mediation against this insurer. It would have been logical of applicant’s counsel to do so but he did not.

That, however, is not an end of the matter. Such evidence as there is demonstrates that this insurer was the first insurer contacted by the applicant’s counsel. This is evident from the OCF‑1 filed in this matter as well as from the references to the mediation file referable to his claim and quoted the emails of Leanne Tran, the FSCO employee who communicated with applicant’s counsel in the email strings filed as Exhibits A-1, A-2 and A-3.

I must take judicial notice of the provisions of section 16 of the Dispute Resolution Practice Code which sets forth the practices and procedures of FSCO in the scheduling and conduct of mediations.

In Kane v. Bd. of Governors of U.B.C.³ the Supreme Court of Canada made the following brief and relevant statement of law:

The Latin maxim "omnia praesumuntur rite acta esse ... " has been interpreted as meaning that where acts are of an official nature or require the concurrence of official persons a presumption arises in favour of their due execution. The maxim is an old one but not I think dead in the administration of our law, and in my view it expresses a principle applicable to the present circumstances…

Absent evidence to the contrary, it must be presumed that acts of an official nature have been properly executed. In the present case, no evidence was adduced which would suggest that the proper procedures were not followed with respect to the mediation. Such evidence as there is – and in particular the refusal of FSCO to schedule a second mediation application against the Motor Vehicle Accident Claims Fund (cf. Exhibits A-1, A-2 and A-3) – creates a reasonable inference that all such procedures were in fact properly followed.

I am also satisfied that the requisite sixty-day period had expired prior to the issuance of the application for arbitration. That application was filed on July 14, 2015 as appears from the original in the arbitration file before me. Exhibit A-1 contains an email from Leanne Tran, a FSCO staff member, dated March 12, 2015, and addressed to Ms. Wendy Highley of the applicant’s law firm.

That emails reads, in part, as follows:

Hi Wendy, I did not realize until now that you had applied for mediation with Echelon last year. You do not need to refile for mediation against Echelon. You may proceed to arbitration or court without a failed report of mediator as per the Court of Appeal Decision of November 29, 2012… [my emphasis]

I find, therefore, that more than 60 days had passed prior to the issuance of the application for arbitration without a Report of Mediator showing items in dispute. In my opinion, on the basis of the available evidence and on the balance of probabilities, the applicant had therefore complied with all legal preconditions for issuance of an application for arbitration prior to so doing.

Is Mr. Gilliland precluded from mediation because he failed to notify Echelon of the circumstances giving rise to a claim for a benefit and failed to submit an application for the benefit within the times prescribed by the Schedule?

It was undisputed at this preliminary issue hearing that the applicant failed to notify the insurer of his claim and failed to submit an application for benefits within the times prescribed by section 32 of the relevant Schedule.

The question for decision is whether or not this is a case in which I should exercise my discretion to grant relief to the applicant on the basis that he had a reasonable excuse for the delay.

The accident occurred on May 2, 2008. The insurer’s written submissions contain copies of two letters from applicant’s counsel directed to the insurer. The first, dated August 15, 2012, confirms their recent retainer, advises of the accident, and confirms that the applicant is not aware of the policy number. The letter refers to an enclosure but does not identify the nature of that enclosure. There was no evidence before me to confirm that the enclosure was an OCF-1.

The second letter provided by the insurer is dated April 18, 2013 and reads, in part, as follows:

Further to our letter of August 15, 2012, we note that we have not heard from you.

Enclosed please find further copy of the OCF1 on behalf of Mr. Gilliland. May we please hear from you with respect to this claim.

No evidence was adduced by the insurer to contradict the assertions in the letter of April 18, 2013 that this was a further copy of an OCF-1, or to demonstrate that there had been any other contact between the parties from August 15, 2012 until April 18, 2013.

I am satisfied on the basis of the available evidence and on the balance of probabilities that the insurer’s letter of August 15, 2012 did in fact contain a copy of the applicant’s OCF-1.

The applicant therefore bears the burden of providing a reasonable explanation for his delay in claiming benefits from June 1, 2008 (thirty days after the accident) to August 15, 2012, the date of submission of his OCF-1 application.

Mr. Gilliland gave oral evidence at the hearing. His testimony was that as a result of the accident he suffered a severe concussion, neck injuries and persistent headaches, as well as a gash on his shin. He testified that he did not apply for accident benefits because the motorcycle was not insured. His evidence was that at the time of the accident he owned a 2002 Pontiac Sunbird motor vehicle which was insured but that he did not know that he could apply for accident benefits based upon that policy. The applicant testified that after the accident he suffered memory loss and that he had no personal recollection of anything from the date of the accident until July or August 2008.

The evidence of the applicant was that since the accident he has had persistent headaches, and that his short term memory is “really bad.” He cannot remember names or people. He has emotional issues, alternatively “angry” or “bummed out.” He consulted initially with his general practitioner and ultimately was referred to a neurologist in London although he did not ultimately receive a report until January 2013.

From 2009 onward his symptoms included headaches, “not feeling well,” fatigue and neck pain. In October 2011 he had at least one episode of dizziness and disorientation including “sweats.” In 2012, there was a worsening of his condition. He began to experience sweats frequently. At first it was every two weeks, then once a week, then once every two to three days. Finally, there were many in any given day. These episodes would include nausea and confusion. He reported that his “memory was shot.” In 2012 it was necessary for him to quit his job and move in with his mother. In August, 2014 he experienced a grand mal seizure. In 2014 he applied for and received ODSP benefits on the basis of these disabilities.

The evidence and demeanour of the applicant were consistent with brain injury. Emotional lability, memory loss and anxiety were evident at various times during his testimony. He struggled visibly to remember things that he felt he should recall, such as the names of his doctors and the locations of their offices. I am satisfied that his testimony was truthful. It was particularly notable that he was concerned to correct himself whenever he felt he had made an error.

His evidence was that it was only in July 2012 that he became aware that he could apply for accident benefits based upon his automotive policy. He testified that he had consulted a solicitor at his present law firm because he was frustrated with the unresponsiveness of his neurologist to his requests that he be provided a copy of a long-outstanding medical report and thought that a lawyer could help him. It was only then, he testified, that he learned that he was entitled to accident benefits under the Echelon policy. He immediately retained counsel, and that retainer resulted in the initial contact to this insurer in August 2012. Although he testified that he might have spoken to one or two other law firms at some point prior to this, the tenor of his evidence was very clear that his subject of concern was the unresponsiveness of his neurologist to his requests for a long-outstanding report. The applicant was in distress and simply wanted treatment. He was unsophisticated but he was never indifferent to his rights.

The insurer submitted that the applicant knew or ought to have known that benefits were available to him. On that basis, it is suggested, the delay in claiming them was unreasonable. I am not persuaded that that was the case here. In my opinion, the applicant suffers from an intellectual and emotional incapacity which he credibly testified was caused by the accident of May 2, 2008. The legislation and the Schedule are remedial in nature. The applicant cannot be denied an opportunity to prove his case simply because, in the nature of his condition, he was unable to function at a level that would have allowed him to comply strictly with the Schedule or to obtain meaningful assistance, at an early date, to help him do so.

In that regard, I was satisfied from the credible testimony of the applicant that the neurologist to whom he was first referred for diagnosis and care was dilatory, evasive and unforthcoming in dealing with the applicant’s injuries and that the applicant’s reliance upon that individual resulted in delay in filing an accident benefits claim for which the applicant should not be held strictly accountable.

I accordingly find that the applicant has provided a satisfactory explanation for his delay in filing and that he was not precluded from filing a claim for mediation by virtue of such delay.

EXPENSES:

The expenses of this preliminary issue hearing are reserved to the Arbitrator who conducts the hearing of this matter.

August 15, 2016

James Robinson Arbitrator

ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

John Gilliland is not precluded from applying for arbitration without a Report of Mediator showing items remaining in dispute;
John Gilliland is not precluded from mediation because he failed to notify Echelon of the circumstances giving rise to a claim for a benefit and failed to submit an application for the benefit within the times prescribed by the Schedule.
John Gilliland is entitled to his expenses of this preliminary issue hearing.