Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 5

Appeal P15-00031

ANDREW REICHERT Appellant

and

GORE MUTUAL INSURANCE COMPANY Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Ms. Corina A. Bachmann for the Appellant, Mr. Andrew Reichert Mr. Arthur R. Camporese for the Respondent, Gore Mutual Insurance Company

HEARING DATE: December 8, 2015. Appeal Order issued December 23, 2015.

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The Arbitrator’s April 14, 2015 order is rescinded. It is replaced by an order that the Appellant, Andrew Reichert, may proceed in arbitration with his claim for attendant care benefits.
The Respondent, Gore Mutual Insurance Company, shall pay the Appellant, Andrew Reichert, his legal expenses of this appeal fixed in the amount of $4,989.80, inclusive of all fees, disbursements and taxes.

January 6, 2016

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal properly pertains to the statutory limitation period under subsection 281.1(1) of the Insurance Act, R.S.O. 1990, c. I.8. That provision provides:

A mediation proceeding or evaluation under section 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed. [Emphasis added]

Subsection 51(1) of the 1996 Schedule¹ reiterates same:

A mediation proceeding or evaluation under section 280 or 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281(1)(a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer’s refusal to pay the amount claimed. [Emphasis added]

In oral appeal submissions, both parties agreed Arbitrator Matheson of ADR Chambers (the “Arbitrator”) had erred in law in his April 14, 2015 decision. The Respondent, Gore Mutual Insurance Company, agreed and/or argued that the Arbitrator had erred in all of his findings other than the ultimate result of his decision dismissing the claim of the Appellant, Mr. Andrew Reichert, for additional past attendant care benefits.

I find the Arbitrator erred in law in his April 14, 2015 decision in finding that the Appellant was “not entitled to any retroactive Attendant Care Benefits” notwithstanding the Arbitrator’s finding, at page nine of his decision, that “a ‘proper refusal’ to pay ACBs wasn’t issued by the Insurer which would trigger the limitation period.”

For the reasons set out below, under the authority of subsection 283(5) of the Insurance Act, I rescind the Arbitrator’s April 14, 2015 order. It is replaced by an order that the Appellant may proceed in arbitration with his claim for attendant care benefits.

II. BACKGROUND

The parties agree that the Appellant was catastrophically injured in a July 22, 2006 motor vehicle accident. The Appellant filed for mediation at the Commission on April 19, 2013. The Report of Mediator, dated May 31, 2013, states that the Appellant was seeking attendant care benefits from July 22, 2006 to January 1, 2013 of $7,352.01 a month, less what the Respondent had paid. The Appellant filed for arbitration on August 2, 2013, mediation having failed to resolve this matter.

The Respondent submits that the Appellant missed the limitation period and, therefore, rejects the Appellant’s claim for further past attendant care benefits.

The Arbitrator agreed Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, held that “the limitation period clock begins to tick after the Insurer properly refuses to pay a benefit.” The Arbitrator determined that the Respondent had not issued a proper refusal to pay Attendant Care Benefits that would trigger the limitation period. The Arbitrator found that the Respondent’s refusal did not materialize because the Respondent did not know there was a dispute in order to refuse a higher level of benefits. The Arbitrator stated:

I also agree with the Insurer’s position that Smith v. Co-operators does, through the Insurance Act and the SABS, provide for a positive obligation for the Applicant to notify the Insurer of the circumstances giving rise to a disagreement of a benefit being claimed, which in turn, allows for the immediate adjustment of a claim or, if refused by the Insurer, the mediation or litigation of same.

The Arbitrator further held:

In my view, the Applicant must communicate their benefit claim in a timely manner and allow the Insurer to adjust the claim on an on-going basis. Once denied, after the Applicant’s new evidence has been considered, the limitation clock begins to tick. This regimen is designed to prevent the litigation of benefit disputes by ambush. This process did not happen in this case.

The Arbitrator noted subsection 32(1) of the 1996 Schedule. This provision states that a “person shall notify the insurer of his or her intention to apply for a benefit under this Regulation.” The Arbitrator found that this sets a positive obligation for insured persons to identify their intentions in respect to any benefit being claimed. Allowing retroactive attendant care benefits would prevent the Respondent from the “opportunity to adjust the file in real time.”

The Arbitrator cited S.M. and Intact Insurance Company, (FSCO A11-000666, November 8, 2013), that “the insurer cannot be faulted for paying attendant care in accordance with the last Form 1 it had received.” The Arbitrator found no evidence the Appellant had disputed the Respondent’s then current July 30, 2009 Form 1 (Assessment of Attendant Care Needs) by producing his own Form 1 or an OCF-6 (Application for Expenses) showing additional attendant care benefits until January 2013.

The Arbitrator found that the Respondent had properly adjusted the claim and, when notified of the Appellant’s January 9, 2013 Form 1, paid the maximum $6,000 per month available under the 1996 Schedule in a timely manner.

III. ANALYSIS

The Appellant’s Submissions

The Appellant argues that this appeal is about whether the limitation period for disputing the quantum of attendant care benefits can run notwithstanding the absence of the Respondent’s clear and unequivocal denial of this benefit. He submits that the Arbitrator erred in creating a limitation period that runs from the date the Respondent determined the amount of attendant care benefits it was prepared to pay, rather than from a refusal to pay the benefit or amount claimed.

The Appellant submits the Insurance Act and the 1996 Schedule are a complete code regarding statutory first-party automobile accident benefits. He argues that there is no provision in either that obliges an insured to notify an insurer in a timely manner “that he disagrees with the assessment of ACBs submitted on his behalf.”

The Appellant argues that a denial of benefits cannot be by implication. He submits that an insurer agreeing to pay a benefit and advising the insured of the right to disagree with its determination is not a clear and unequivocal denial of a benefit. The Appellant argues that the limitation period in this case runs from the Respondent’s first clear and unequivocal denial, being its March 26, 2013 OCF-9 (Explanation of Benefits). The Appellant thus submits that his Application for Mediation for attendant care benefits filed April 19, 2013, less than one month after the Respondent’s March 26, 2013 OCF-9, was in time.

The Appellant argues that the 1996 Schedule allows retroactive attendant care benefits, citing T.N. and Personal Insurance Company of Canada, (FSCO A06-000399, July 26, 2012), in support. In T.N., Arbitrator Bayefsky accepted the insured’s claim for retroactive attendant care benefits, awarding the difference between the amount claimed retroactively and the amount the insurer had paid.

Ms. M.G. and The Economical Mutual Insurance Company, (FSCO A09-002443, November 23, 2012), held that subsection 39(3) of the 1996 Schedule precluded retroactive assessments, that one could only assess attendant care benefits “going forward.” The Appellant notes that this arbitration decision was overturned in Economical Mutual Insurance Company and Ms. M.G., (FSCO P13-00001, July 21, 2014). Subsection 39(3) of the 1996 Schedule states:

An insurer may, but is not required to, pay an expense incurred before an assessment of attendant needs that complies with subsection (1) is submitted to the insurer.

On appeal, Delegate Evans held:

I point out that the subsection refers to an assessment of attendant care needs, not the assessment of attendant care needs. When Ms. Duffus delivered the second Form 1, there was already an assessment of attendant care needs in place, so the insurer was already aware of the claim and had been paying it, which suggests that s. 39(3) does not apply in the circumstances of this case.

[Emphasis in the original]

The Appellant states that Delegate Evans further disagreed with Subramaniam and Wawanesa Mutual Insurance Company, (FSCO A09-002594, July 13, 2012), also relied upon by the Respondent. The Appellant notes Arbitrator Mills’ decision in Whyte and State Farm Mutual Automobile Insurance Company, (FSCO A12-005721, July 24, 2015):

I do not agree with Arbitrator Matheson’s reasoning in Reichert and Gore Mutual that by allowing a retroactive claim for Attendant Care Benefits, this prevents the Insurer from having the opportunity to adjust the file in real time, the implication being that this prejudices the Insurer. The onus remains on the Applicant to demonstrate his or her entitlement to the Attendant Care Benefit and the quantum of that entitlement, [citing Stranges v. Allstate Insurance Company of Canada, 2010 ONCA 457, at paragraph 9]] which would mitigate any prejudice to the Insurer.

Arbitrator Mills held there was nothing in the 1996 schedule that prohibited a claim from being paid retroactively. She agreed with Arbitrator Bayefsky’s statement in T.N:

…section 39(3) of the Schedule does not displace an insurer’s basic obligation to pay reasonable and necessary attendant care benefits determined in accordance with a duly prepared Form 1. Section 39(3) established an insured’s obligation to claim attendant care benefits in accordance with a Form 1, and an insurer’s right to await a Form 1 before assessing an insured’s entitlement to attendant care benefits. Section 39(3) allows an insurer to pay attendant care benefits without a Form 1. It states that an insurer is not required to pay attendant care benefits before a Form 1 is submitted. This does not, in my view, mean that an insured forfeits their right to attendant care benefits, or that an insurer is released of any obligation to pay attendant care benefits, prior to the Form 1 being submitted. In my view, significantly stronger statutory language would be required to affect this purpose. The section as it now reads simply ensures the orderly determination of a person’s need for attendant care (in accordance with a proper attendant care needs assessment), and protects an insurer from having to determine what it should pay in the absence of a specific and legitimate attendant care needs assessment.

The Respondent’s Submissions

The Respondent’s June 1, 2015 Response to Appeal submits that “the Arbitrator correctly applied the 2 year limitation period” under the Insurance Act and the 1996 Schedule which, together with the Limitations Act, 2002, S.O. 2002, c 24, Sch. B, “place a positive obligation on an insured to dispute an Insurer’s Form 1 within 2 years of when the insured has or ought to have had knowledge of his potential claim.”

The Respondent’s September 3, 2015 written submissions state, at paragraph 5, that “the Appellant failed to notify the Respondent in a timely manner of the circumstances giving rise to a disagreement of benefits being claimed.” Therefore, the Respondent argued that the Appellant’s claims are barred by section 51 of the 1996 Schedule and subsection 281.1(1) of the Insurance Act.

However, the Respondent’s oral appeal submissions conceded that the jurisprudence was clear

that the Limitations Act does not apply. The Respondent retracted its arguments in its Notice of Appeal set out above, conceding that the only triggering event for the two-year limitation period is an insurer’s clear and unequivocal refusal to pay the benefit claimed.

In its oral appeal submissions the Respondent further conceded the only issue at the arbitration preliminary issue hearing was whether “the Appellant failed to mediate within two years of the Respondent’s refusal to pay the amount claimed.” The question of whether the Appellant was entitled to receive attendant care of $7,352.01 from July 22, 2006 to February 28, 2013 would be decided only if it was found that the Appellant had not missed the limitation period and would be decided at some subsequent date. The Respondent agreed that the preliminary issue it put before the Arbitrator was correct, subject to two technical errors, as stated in the Arbitrator’s December 8, 2014 pre-hearing letter:

The insurer has requested that a preliminary issue hearing be undertaken with the following question: “Whether or not retroactive claims for attendant care benefits is statute barred as per the SABS section 51(now section 56) and under 281.6 of the Insurance Act.” [Emphasis added]

The Respondent agrees the relevant provision of the Insurance Act is actually paragraph 281.1(1) and that section 56 references the inapplicable 2010 Schedule. Both parties agree that the 1996 Schedule applies. The Respondent concedes that the Arbitrator’s subsequent April 14, 2015 decision incorrectly stated the question before him as being whether the Appellant is “entitled to claim Attendant Care Benefits retroactively” and, if so, “for how far back can he claim?”

The Respondent, in oral appeal submissions, stated that while sections 32 and 33 of the 1996 Schedule provide notice requirements for the insured person, those provisions were not argued nor were they in issue before the Arbitrator. Further, the Respondent conceded in its oral appeal submissions that at arbitration it did not dispute that attendant care benefits could be paid retroactively nor did it not argue that the appeal decision in Ms. M.G. was wrong.

The Respondent argued, at paragraph 62 of its written submissions, that S.M. (that found that the insurer could not be faulted for paying attendant care in accordance with the last Form 1 it had received) was “authoritative on the applicability of section 51 of the SABS in the context of claims for retroactive attendant care.” It submitted, at paragraph 66 of its written submissions, that it could not be faulted for paying attendant care in accordance with the Form 1s submitted by the Applicant. The Respondent withdrew this argument in its oral appeal submissions.

The Respondent’s written appeal submissions repeated its reliance at arbitration on Katanic v. State Farm Mutual Automobile Insurance Co. 2013 ONSC 5103, [2013] O.J. No. 3605, as to the importance of limitation periods in ensuring plaintiffs do not sleep on their rights, particularly when represented by counsel (as in the present case). The Respondent also relied on a breach of contract case, Oakville Hydro Electricity Distribution Inc. v. Tyco Electronics Canada Ltd., 2004 CanLII 13633 (ON SC), 71 O.R. (3d) 330, where the Court found that as of a certain date the plaintiff had sufficient facts to recognize and did recognize that the splice kits in question were not performing as represented.

The Respondent’s oral appeal submissions, however, conceded that these cases do not support a less strict interpretation of the limitation period than that of a clear and unequivocal refusal by the insurer to pay the benefit claimed.

The Respondent’s written appeal submissions argued that an insured person may not submit multiple applications for attendant care benefits for the same time period. It relied on Somerville and State Farm Mutual Automobile Insurance, (FSCO A12-006767, September 11, 2014), that cited Haldenby v. Dominion of Canada General Insurance Co., 2001 CanLII 16603 (ON CA), where housekeeping benefits were applied for after the same benefit had been terminated. The Respondent withdrew this argument in its oral appeal submissions.

The Respondent argues that this present case differs from both T.N. and Ms. M.G. In those cases, the insurer did not raise a limitation defence in respect of the applicant’s claim for retroactive attendant care. The Respondent noted that in T.N., Arbitrator Bayefsky stated that the insurer never clearly denied the attendant care benefits nor did it suggest that the insured was precluded from claiming them by operation of any limitation period.

In oral appeal submissions, the Respondent stated it was not disputing the Appellant’s position that retroactive attendant care benefits are available under the 1996 Schedule or that there is no limitation period running for retroactive attendant benefits in the absence of the insurer’s refusal to pay a benefit.

In oral appeal submissions, the Respondent eventually reduced its response to this appeal to two arguments and two arguments only.

The first was that the Respondent’s OCF-9s (Explanation of Benefits) dated January 10, 2007, June 22, 2007, March 11, 2008 and April 7, 2008 set out what it was paying. It argued that by agreeing to pay the monthly amounts set out in its OCF-9, it had denied payment of “the Appellant’s claim for additional attendant care benefits for the same period.”

The Respondent submits, at paragraph 58 of its written submissions, that all benefits now in dispute “were properly denied by the Respondent and the Appellant was advised of his right to dispute the Respondent’s decision” in accordance with Smith. Accordingly, the Respondent argues that the Appellant is barred from disputing the “Respondent’s determination of the attendant care benefits owing as a result of the Appellant’s failure to submit an Application for Mediation within two years of the Respondent’s Explanation of Benefits” [emphasis added].

The Respondent submits the Appellant did not dispute the September 1, 2006 Form 1 prepared by Ms. L. Bolton-Watson. The Respondent does not know who retained Ms. Bolton-Watson. It subsequently retained Ms. H. White of Crawford Healthcare Management whose October 16, 2006 Form 1 calculated monthly attendant care expenses to be $5,109.49. The Respondent states that it paid the Appellant monthly attendant care benefits in accordance with that Form 1 until February 2008. The Respondent submits that the Appellant did not dispute this determination, notwithstanding the Respondent’s January 10, 2007 OCF-9 set out the process for so doing.

The Respondent states that based on Ms. White’s May 1, 2007 Form 1, it paid the Appellant monthly attendant care expenses of $4,424.64. The Appellant did not dispute its June 22, 2007 OCF-9 agreement to pay this amount, notwithstanding being advised of the dispute process. Nor did the Appellant dispute the Respondent’s March 11, 2008 and April 7, 2008 OCF-9s agreeing to $2,597.85 in monthly attendant care benefits based on Ms. White’s February 25, 2008 Form 1.

The Respondent states that if it is not accepted that its January 10, 2007, June 22, 2007, March 11, 2008 and April 7, 2008 OCF-9 determinations of what it would pay were clear and unequivocal implicit refusals to pay anything else, then it relies on its September 11, 2009 letter.

The Respondent submits the Appellant’s August 29, 2009 OCF-6 Application for Expenses included $2,597.86 for a month of attendant care. The Respondent’s September 11, 2009 letter stated it was paying monthly attendance care benefits of $1,641.45 based on Ms. White’s September 10, 2009 report, and advised the Appellant of his right to dispute this decision.

The Appellant argues that its September 11, 2009 letter was a clear and unequivocal refusal to pay the Appellant’s August 2009 request for $2,597.85 in monthly attendant care benefits, that the Appellant could not be in any doubt regarding the Respondent’s refusal to pay such monthly benefits and that nothing could be clearer. The Respondent maintains that the Arbitrator failed to deal with this issue.

The Respondent stated it was content that I, as an appellate officer, rule on whether its September 11, 2009 letter constituted a clear and unequivocal refusal to pay the benefit claimed.

The Respondent’s September 3, 2015 written submissions, at paragraph 68, argued that should it not be successful on its limitation argument, the Appellant should not be found to be entitled to interest prior to receipt of a Form 1 for the payment of retroactive attendant care benefits as it could not be said that payment was overdue before that time. The Respondent withdrew this argument in its oral appeal submissions.

Decision

To remedy what the Arbitrator perceived as “litigation of benefit disputes by ambush” that prevented an insurer the opportunity to adjust the file in real time, the Arbitrator rewrote the Insurance Act and the 1996 Schedule while overturning the Supreme Court of Canada as well as long-standing Court and Commission jurisprudence. In doing so, the Arbitrator appears to have ignored, was unaware of or misquoted, in part, the following:

The Arbitrator stated that subsection 32(1.1) of the 1996 Schedule continues to clarify the time for claiming a benefit as the “circumstances arose that gave rise to the entitlement to the benefit.”

The provision actually states that for accidents occurring on or after October 1, 2003 that a person shall notify the insurer of the intention to apply for a benefit no later than the 7th day after the circumstances arose that give rise to the entitlement to the benefit (for pre-October 1, 2003 accidents it was 30 days) “or as soon as practicable after that day.”

The Respondent states at paragraph eight of its appeal submissions that the Appellant applied for first-party no-fault automobile accident benefits on August 2, 2006. That is, eleven days after the July 22, 2006 catastrophic motor vehicle accident.

In Whiten v. Pilot Insurance Co., 2002 SCC 18, the Supreme Court of Canada cited Andrusiw v. Aetna Life Insurance Co. of Canada (2001), 2001 CanLII 61004 (AB KB), 289 A.R. 1 (Q.B.):

A great deal has been made in the case law, to which this court was referred, of the fact that insurers vis-à-vis their insureds are in a superior bargaining position and one which places the insureds in positions of dependency and vulnerability. Equally, insurers must not be looked upon as fair game. It is a two-way street founded upon the principle of utmost good faith arising from the very nature of the contract …

Paragraph 33(1)1 of the 1996 Schedule allows an insurer to request from the insured, amongst other information, “any information reasonably required to assist the insurer in determining the applicant’s entitlement to a benefit.” The insured person is required to provide that information within ten business days of receiving that request. Subsection 33(2) provides that an insurer is not liable to pay a benefit in respect of any period during which the insured person fails to comply with this provision.
Subsection 33(1.1) of the 1996 Schedule permits an insurer to require an applicant to submit to an examination under oath. Subsection 33(2) provides that an insurer is not liable to pay a benefit in respect of any period during which the insured person fails to comply with this provision.
Subsection 39(5) of the 1996 Schedule provides that if an insurer wants to determine if an insured person is “still entitled to attendant care benefits, wants to determine if the benefits are being paid in the appropriate amount or wants to determine both” (emphasis added) the insurer shall give notice to the insured person requesting that a new assessment be prepared and received within 10 business days of the insurer’s notice.
Subsection 42(1) of the 1996 Schedule provides that for “the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit,” it may require as often as is reasonably necessary that the insured person be examined by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation. Under subsection 39(10), after 104 weeks from the accident, the right for an assessment is limited to once a year.
Pursuant to its rights under the 1996 Schedule to request insurer medical examinations, the Respondent had at least four Form 1s prepared by a person of its choice. As noted, these Form 1s are dated October 16, 2006, May 1, 2007, February 25, 2008 and July 30, 2009. The insurer’s assessments successively reduced the Appellant’s monthly attendant care benefit from $5,109.49 to $4,424.64 to $2,597.86 to $1,641.45.
Ms. R. Breen prepared a January 15, 2013 Occupational Therapy Assessment and Attendant Care Report for the Appellant. As neither side says it retained Ms. Bolton-Watson, who prepared a September 1, 2006 Form 1, Ms. Breen’s January 9, 2013 Form 1 appears to be the first Form 1 prepared at the Appellant’s request. Ms. Breen states that as a result of the accident the Appellant suffered, in part, a burst fracture T10 through T12 followed by fusion surgery, and paraplegia. A secondary diagnosis is noted as bilateral lower limb neuropathic pain related to his spinal cord injury.

Ms. Breen opined that due to the Appellant’s physical and functional limitations, his frequent falls and spasms in his lower limbs, he was not currently physically capable of being self-sufficient in the event of an emergency. Therefore, 24-hour attendant care was deemed to be reasonable and necessary and indeed essential to optimize his safety. Ms. Breen’s January 9, 2013 Form 1 assessed $6,956.15 in monthly attendant care needs.

The Form 1 most previous to this was that prepared by the Respondent’s Ms. White, dated July 30, 2009, that calculated attendant care at $1,641.45 a month.

The next Respondent’s Form 1 appears to be more than four and a half years later. The February 17, 2014 Form 1 prepared by Ms. J. Turgeon, O.T., of Rapid Interactive Disability Management Ltd., calculated attendant care needs at $6,538.22 per month. Ms. Turgeon’s February 20, 2013 Occupational Therapy In-Home Insurer’s Examination, addressed to her client, the Respondent, states at page eight:

… Mr. Reichert sustained a spinal cord injury as a result of an ATV accident on July 22, 2006 … He is reported to have ongoing issues with significant pain which has yet to be medically controlled … He is currently under imposed medical restrictions for sitting (not more than 3 hours at a time) and as such he has required more assistance with his daily activities, especially assistance / supervision with transfers as well as monitoring his skin.

The assessment revealed that his needs have increased over time based on information provided by the evaluee and his spouse … he requires an increased amount of supervision when completing all transfers, whether at home or in the community …

At the present time, he requires 24-7 due to changes in his physical condition, including increased tone / spasms in the lower extremities, decreased abilities to transfer independently (and thus be self-sufficient in an emergency), as well as skin breakdown requiring frequent positional changes and skin monitoring. The increase in assistance is deemed to be temporary and should be reviewed in 4-6 months.

Ms. Turgeon described the Appellant as pleasant and co-operative throughout the insurer medical assessment. She noted no inconsistencies in effort. Ms. Turgeon stated the same in her follow-up February 21, 2014 assessment a year later. Notwithstanding her earlier optimism that the necessary increase in assistance was temporary, she concluded:

Mr. Reichert continues to require a high amount of Attendant Care assistance at the present time given ongoing difficulties with transfers, poor equipment condition, and being at risk for skin breakdown; his needs should be reviewed with the next 9 months.

The Respondent’s February 17, 2014 Form 1 states that the Appellant requires some 86 hours a week of attendant care to ensure his comfort, safety and security in his environment. The Respondent’s prior July 30, 2009 Form 1 had found that the paraplegic Appellant required zero attendant care in this regard.

The Respondent’s 2014 Form 1 states the Appellant requires eight hours a week in mobility assistance. Its 2009 Form 1 stated he required no assistance. The Respondent’s 2014 Form 1 states the Appellant requires 48 hours a week in basic supervisory care. Its 2009 Form 1 allowed the Appellant less than two hours a week in this regard.

The Arbitrator further appears to have misunderstood, was unaware of or ignored:

As argued by the Appellant, as eventually conceded by the Respondent in oral appeal submissions and as stated by the Arbitrator himself in his December 8, 2014 pre-hearing letter, the question the Respondent before the Arbitrator was whether the Appellant’s retroactive claims for attendant care benefits were statute barred by the limitation period set out in the Insurance Act and the 1996 Schedule.

The question before the Arbitrator was not, as the Arbitrator stated in his April 14, 2015 decision, whether the Appellant was entitled to claim attendant care benefits retroactively and if so, how far back can he claim?

Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, is binding. Gonthier J. specifically held:

Since a proper refusal was not given, and since the limitation period under s. 281(5) of the Insurance Act only begins to run upon a refusal, that limitation period was not triggered by the notice sent on May 8, 1996.

[Emphasis added]

Gonthier J. held there “is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance.”

Gonthier J. further stated that “[t]rue to that purpose of consumer protection, no refusal under [the then Schedule] can be said to have been given by an insurer if there has not been adequate compliance with that section.” Protection of the consumer “obliges the courts to impose bright-line boundaries between the permissible and the impermissible without undue solicitude for particular circumstances that might operate against claimants in certain cases.”

More than two decades ago, Zeppieri and Royal Insurance Company of Canada, (February 17, 1994, OIC A-005237), affirmed on appeal (December 22, 1994, OIC P-005237), developed a two-step approach to limitation defences, as stated by Delegate Draper in Derman and State Farm Mutual Automobile Insurance Company and Kirkham, (OIC P-009521, January 29, 1997):

First, the arbitrator must determine if and when the insurer provided notice of its clear and unequivocal refusal to pay the benefits claimed. Second, the arbitrator must ask if the insurer is estoppel from raising the limitation period because the insured person reasonably relied on its actions to his or her detriment.

The Ontario Court of Appeal, in Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA), confirmed the “clear and unequivocal” notice test.

As argued by the Appellant and as eventually agreed by the Respondent in oral appeal submissions, the Limitations Act, 2002, S.O. 2002, c. 24, does not apply. Section 4 of the Limitations Act provides.

Basic limitation period

Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

Pursuant to its subsection 19(1), the Limitations Act does not pertain to other legislation listed in its Schedule. That Schedule specifically lists section 281.1 of the Insurance Act.

In Guarantee Company of North America and Do, (FSCO P12-00037, October 11, 2013) (application for judicial review dismissed in The Guarantee Company v. Dong Do et al., 2015 ONSC 1891), I stated:

The Appellant was unable to find a case that addressed a bifurcation of limitation periods when legislation having its own limitation period is listed in the Schedule under the Limitations Act. I am not persuaded that the Appellant can defeat the Legislative intent of the Schedule and the Insurance Act, including consumer protection highlighted in Smith, by carving out a new limitation period under section 4 of the Limitations Act.

The appeal decision in Do cited Sullivan and Driedger on the Construction of Statutes, Fourth Edition (Markham Ontario, Butterworths, Canada Ltd. 2002), at page 399:

It is presumed that the legislature does not intend to abolish, limit or otherwise interfere with the rights of subjects. Legislation designed to curtail the rights that may be enjoyed by citizens is strictly construed.

Do noted that Sullivan also cited Martin v. Listowel Memorial Hospital (1992), O.R. (3d) 65 (C.A.), that the “presumption against interfering with rights applies to the right to bring an action or an appeal.”

I find that the Arbitrator erred in his April 14, 2015 decision as follows:

The Arbitrator relied on S.M. that denied retroactive attendant care benefits because the insurer could not “be faulted” for paying attendant care benefits in accordance with the last Form 1 it had received.

Delegate Evans, after specifically noting the arbitration decision in S.M., among other cases, in his appeal decision in Ms. M.G., held that retroactive attendant care benefits were payable. The Arbitrator noted the appeal decision in Ms. M.G. under the heading “Authorities Considered” as well as under the Appellant’s arguments, but did not address the appeal decision in his reasons.

In any event, as argued by the Appellant and as conceded by the Respondent in oral appeal submissions, the question of retroactive attendant care benefits being payable was not before the Arbitrator. Only the limitation period defence was before him. The Arbitrator erred in law most fundamentally in answering the wrong question.

M.G. pertained, in part, to a discussion of subsection 39(3) of the 1996 Schedule, that an “insurer may, but is not required to, pay an expense incurred before an assessment of attendant needs that complies with subsection (1) is submitted to the insurer.” Subsection 39(1) provides:

An application for attendant care benefits for an insured person must be in the form of an assessment of attendant care needs for the insured person that is prepared and submitted to the insurer by a member of a health profession who is authorized by law to treat the person’s impairment.

Following Delegate Makepeace’s reasoning in Iankilevitch and CGU Insurance Company of Canada, (FSCO P03-00013, August 31, 2004), Delegate Evans found that “the subsection speaks more to the timing of payment rather than entitlement.”

The Arbitrator did not address these decisions directly. Rather, he created a new notice period or periods for insured persons. Neither party could assist me as to exactly what these notice periods might be, other than that an insured person must communicate his or her benefit claim “in a timely manner.” However, as the Appellant, and the Supreme Court in Smith at paragraph 11, note, subsection 279(2) of the Insurance Act provides:

Any restriction on a party’s right to mediate, litigate, appeal or apply to vary an order as provided in sections 280 to 284, or on a party’s right to arbitrate under section 282, is void except as provided in the regulations.

I find that the Arbitrator erred in law in creating a new limitation period not provided for in the regulations that restricted the Appellant’s right to litigate. The Arbitrator further erred in law in barring the Appellant from proceeding with his attendant care benefits claim notwithstanding the Arbitrator’s own explicit finding that “a ‘proper refusal’ to pay ACBs wasn’t issued by the Insurer which would trigger the limitation period”.

Regarding the Respondent’s arguments it submits were not addressed or properly addressed by the Arbitrator:

The Arbitrator noted that the Respondent’s February 28, 2013 OCF-9 set out the Appellant’s claim for February 2013 attendant care of $6,956.66 in Part 4 of the form and that the Respondent was only paying $6,000, the maximum allowed. The Respondent’s March 26, 2013 OCF-9 noted in Part 4 the Appellant’s claim for a “Retroactive Attendant Care Form 1” of $7,352.01 and stated that it was paying zero. One month later, on April 19, 2013, the Appellant filed an Application for Mediation. The Appellant subsequently filed for arbitration on August 2, 2013, mediation having failed May 31, 2013.

Distinct from the Respondent’s February 28 and March 26, 2013 OCF-9s, there is no amount noted as being claimed by the Appellant for attendant care (or for anything else) in Part 4, or elsewhere, of the Respondent’s June 22, 2007 OCF-9. Rather, that OCF-9 simply states that the Respondent is paying $4,424.64 in monthly attendant care in accordance with Ms. White’s May 1, 2007 report.

Likewise, the Respondent’s March 11, 2008 OCF-9 does not note in Part 4, or elsewhere, an amount the Appellant is claimed for attendant care or anything else. The OCF-9 simply states the Respondent is paying $2,597.85 in monthly attendant care as per the enclosed report of Ms. White. The Respondent’s April 7, 2008 OCF-9 shows the amount of $2,597.86 being claimed in attendant care benefits for the month ending April 5, 2008 and that same amount being payable in accordance with Ms. White’s most recent Form 1.

I am not persuaded by the Respondent’s argument that its determination of what it is paying is an implicit refusal to pay anything else. The Latin maxim of statutory interpretation is expressio unius est exclusion alterius, to express one thing is to exclude another. The word “determination” appears 63 times in the 1996 Schedule. If the Legislature had wanted the limitation period to run from the time of an insurer’s determination rather than from the insurer’s “refusal to pay the benefit claimed,” the Legislature would have said so.

Also as a matter of statutory interpretation, as stated in the Do appeal decision:

Both Simcoe & Erie Insurance Company and Wiggan, (OIC P-004204, June 12, 1996) and Francis and Allstate Insurance Company of Canada, (FSCO A97-001109, January 26, 1999), upheld on appeal (FSCO P99-00014, June 11, 1999), hold that limitation periods must be strictly construed as the result is to deny an applicant the opportunity to have their claim adjudicated.

Nor am I persuaded, if I am incorrect and a determination is indeed an implicit refusal, that an implicit refusal constitutes a clear and unequivocal refusal to pay the benefit claimed, as required by the Insurance Act and the 1996 Schedule, as stated in twenty years of jurisprudence and as confirmed by the Ontario Court of Appeal in Turner. Accordingly, I find that none of the Respondent’s June 22, 2007, March 11, 2008 and April 7, 2008 OCF-9s triggered the limitation period.

As for the January 10, 2007 OCF-9, the form states that “regarding the attendant care submitted [for December 5, 2006 to January 5, 2007] no cost was enclosed with the breakdown of duties performed. Please resubmit. Also ensure dates of submission do not overlap.” I am not persuaded that this is a clear and unequivocal to pay the benefit claimed. Rather, it is the Respondent’s endeavour to figure out what the Appellant is claiming.

The Respondent’s September 11, 2009 letter enclosed a copy of Ms. White’s September 10, 2009 assessment. It also enclosed a further OCF-6 for completion. The Respondent asked that the Appellant complete the OCF-6 indicating the monthly expenses he incurred, advising it would pay up to the amount indicted in the assessment, if the Appellant continued to be eligible to receive the benefit.

The Respondent states that the Appellant had submitted an August 29, 2009 OCF-6 that included a claim for $2,597.86 for the month of August 2009. The Respondent argues that its September 11, 2009 letter is an implicit refusal to pay that amount.

The Respondent concedes its September 11, 2009 letter does not mention the Appellant’s August 29, 2009 OCF-6. The Respondent concedes its September 11, 2009 letter does refuse to pay any specific amount claimed.

The Appellant strenuously argues there is no evidence the Respondent in fact did not pay the Appellant’s August 29, 2009 OCF-6 claim for attendant care benefits that month. The Respondent has not referred me to anything to the contrary.

I find that the Respondent’s September 11, 2009 letter is a further statement or determination of what it was paying. I am not persuaded that this determination is a refusal to pay the benefit claimed, as required to start the limitation period running. Nor am I persuaded that an implicit refusal constitutes a clear and unequivocal to pay the benefit claimed. Nor am I persuaded that a clear and unequivocal refusal is to be pasted together from multiple pieces of correspondence. Accordingly, I am not persuaded that the Respondent’s September 11, 2009 letter triggered the limitation period.

Accordingly, I am not persuaded that the Arbitrator erred in law in his finding at first instance, at page nine of his decision, that “a ‘proper refusal’ to pay ACBs wasn’t issued by the Insurer which would trigger the limitation period,” at least prior to the Respondent’s February 28, 2013 Explanation of Benefits. The Appellant filed for Mediation in April 2013. The Appellant filed for arbitration in August 2013. Both actions were within the requisite limitation period.

Accordingly, I find, in answer to the question that the Respondent actually put to the Arbitrator for his determination, that the Appellant’s retroactive claims for attendant care benefits are not statute barred by the Insurance Act and the 1996 Schedule.

Therefore, the Arbitrator’s April 14, 2015 order is rescinded and replaced by an order that the Appellant may proceed with his claim for attendant care benefits to be determined on the merits as to whether the attendant care claimed (less the amounts paid) was reasonable and necessary.

IV. LEGAL EXPENSES

Subsection 12(2) of R.R.O. 1990, Reg. 664 (the “Expense Regulation”) sets out the criteria to be considered in awarding legal expenses.

The Appellant submits that legal expenses should follow the cause.

The Respondent states that both parties agreed the Arbitrator erred in law in not addressing the agreed issue of whether the Respondent gave a clear and unequivocal refusal to pay the attendant care benefit claimed. The Respondent thus argues that irrespective of who is successful in this appeal, legal expenses should not be awarded.

Both parties provided their respective Bill of Costs at the oral appeal hearing.

I find the first criterion of the Expense Regulation most relevant to this appeal, that is, the Appellant’s complete success in this appeal. I also find relevant criterion #4 (the conduct of a party in hindering the proceeding) and #5 (whether any aspect of the proceeding was improper).

As noted above, the Respondent’s oral appeal submissions largely repudiated its prior written appeal argument. The Respondent stated that it maintained its initial position until the oral appeal hearing in case the law changed in the interim. I am not persuaded the Appellant should pay the price of the Arbitrator’s errors in law or the Respondent’s strategic decision to keep its options open. Accordingly, I find the Appellant entitled to his reasonable legal expenses of this appeal.

In Henri and Allstate Insurance Company of Canada, (OIC A-007954, August 8, 1997), Arbitrator Makepeace confirmed that the overriding consideration in fixing legal expenses is reasonableness. The Appellant’s Bill of Cost totals $4,989.80. This includes 25.5 hours at $150 an hour. The Respondent’s Bill of Costs claimed 22.5 hours. The Respondent did not object to the Appellant’s claimed hours or hourly rate.

Rule 78.1 of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”) states that a higher hourly rate of up to $150 may be awarded to an insured person if the adjudicator is satisfied that is justified. The Respondent’s claim in its Bill of Costs of $150 an hour for its senior counsel is not recoverable, insurer’s counsel being subject under Rule 78.1 to the rates set out in the Legal Aid Services Act, 1998 for professional services in civil matters.

I find the Appellant’s claimed hours entirely reasonable and allow same. I am satisfied that an hourly rate of $150 for Ms. Bachmann, counsel for the Appellant, is reasonable and justified. Ms. Bachmann was well-prepared, concise and professional throughout. In accordance with Principles 65 and 66 of the Advocates’ Society’s Principles of Professionalism for Advocates (2009), she was most competent to handle this matter and assisted in doing justice to the case.

The Appellant claims $667.55 in disbursements for courier and photocopying expenses. The Respondent’s Bill of Costs noted $618.97 for similar types of expenses. The Respondent did not object to the Appellant’s claimed disbursements. I find the Appellant’s claimed disbursements reasonable and allow same.

Accordingly, I find that the Respondent, Gore Mutual Insurance Company, shall pay the Appellant, Andrew Reichert, his legal expenses of this appeal fixed in the amount of $4,989.80, inclusive of all fees, disbursements and taxes.