Nadarajah Kanapathipillai v. Personal Insurance Company of Canada, 2016 ONFSCDRS 54

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 54

FSCO A13-014660

BETWEEN:

NADARAJAH KANAPATHIPILLAI Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Charles Matheson

Heard: By written submissions completed December 14, 2015

Appearances: Ms. Tal Eshel, lawyer, for Mr. Nadarajah Kanapathipillai Ms. Renee Reynolds, lawyer, for Personal Insurance Company of Canada

Issues:

The Applicant, Mr. Nadarajah Kanapathipillai, was injured in a motor vehicle accident on April 12, 2010. He applied for and received statutory accident benefits from Personal Insurance Company of Canada (“Personal”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Kanapathipillai applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this Preliminary Issue Hearing are:

Should the Applicant’s entire Application for Arbitration including income replacement benefits (“IRBs”), housekeeping and home maintenance (“H&H”), attendant care benefits (“AC”), claimed treatment plans and costs of exams be dismissed, as they are all statute barred as per section 51 of the Schedule?
Which party is liable for the payment of the other party’s expenses of this proceeding?

Result:

The Application for Arbitration is dismissed.
The parties shall bear their own expenses of this proceeding.

EVIDENCE AND ANALYSIS:

Legislation and Case Law Considered

Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, O. Reg. 403/96, Sections 31, 32, 33 and 51.

Iankilevitch v. CGU Insurance Co. of Canada, [2002] O.F.S.C.I.D. No. 146

Background

The Applicant, Mr. Kanapathipillai, was 61 years old at the time of the accident. He is 66 years old currently.

In this Preliminary Issue Hearing, the Insurer has requested that the claim for IRB be dismissed on the basis that the Applicant:

a) Failed to apply for mediation within two years of the Insurer’s denial;

b) Failed to comply with a section 37(3) request for an updated disability certificate (“OCF-3”);

c) Failed to comply with a section 33 request for the provision of an authorization form or Permission to Disclose Health Information (“OCF-5”) and/or records from the treating professionals;

d) Failed to provide a reasonable explanation as per section 31 of the Schedule for the delay in providing the OCF-3.

Also the Insurer has requested that the claim for AC and H&H be dismissed on the basis that the Applicant:

a) Failed to apply for mediation within two years of the Insurer’s denial;

b) Failed to comply with the section 32(1) timeline for applying for benefits;

c) Failed to comply with the section 37(3) request for an updated OCF-3;

d) Failed to comply with a section 33 request for the provision of an authorization form or OCF-5 and/or records from the treating professionals;

e) Failed to provide a reasonable explanation as per the Schedule for the delay in providing the OCF-3.

Finally the Insurer is requesting that the Recho Rehab and Wellness Centre treatment plans of November 1, 2010 for $1,791.92 and December 26, 2010 for $1,579.10 and the other expenses claimed via Recho Rehab and Wellness Centre for $186.28 for an in home assessment, dated May 5, 2010, and the $494.15 for completion of a Form 1, dated October 29, 2010, and $811.31 for a work site assessment, dated December 1, 2010, be dismissed on the basis that the Applicant failed to apply for mediation within two years of the Insurer’s denial of the benefits.

Decision

I shall first look at the two questions of:

Whether or not the Applicant failed to apply for mediation within the two years of a benefit denial as per section 51 of the Schedule? and,
Is a suspension of benefits under section 33 subject to the time limitations of section 51 of the Schedule?

If the answer to both of the above questions is yes, the other arguments brought by the parties become unnecessary to examine.

It is the undisputed evidence that the Applicant applied for mediation for all the issues in dispute in this matter on February 12, 2013 and the subsequent mediation took place on September 9, 2013.

It is also undisputed evidence that on October 18, 2010 the Applicant was advised by Explanation of Benefits Payable (“OCF-9”) that IRBs and H&H were suspended based on the pending compliance with a section 33 request for records including an updated OCF-3 and a completed OCF-2.

The evidence shows that a further OCF-9, dated November 25, 2010, gave a second and clear denial of these benefits. This OCF-9 contained the dispute resolution process and the time limits for doing so.

The Insurer claims that the Applicant did receive IRBs from April 12, 2010 to November 18, 2010. The Applicant to date has not provided an employment file from his employer or best efforts to obtain same.

In regards to AC and the treatment plans and costs of examinations as provided by Recho Rehab and Wellness Centre, it is undisputed that the Applicant was advised as early as October 18, 2010 and again as late as February 10, 2011 that AC and medical and rehabilitation benefits were not payable due to their suspension because of the non-compliance with section 32 and 33 of the Schedule, including reports and the clinical notes and records of the treating professionals at this clinic, which have not been supplied to date or best efforts to obtain same.

In regards to the treatment plan of December 26, 2010, which was denied on January 5, 2011 based on an Insurer Examination, this was communicated to the Applicant via OCF-9, dated February 10, 2011. This OCF-9 included reasons for the denial of payment of benefits and the Applicant’s dispute resolution rights.

The Insurer claims that the Applicant did receive a payment of $292.31 for AC prior to the suspension of this benefit.

It is also undisputed evidence that the Applicant did provide a single OCF-5 for the family physician’s clinical notes and records on January 15, 2012.

The Applicant argues that despite the timeframes listed within the original Application for Arbitration, the Applicant is now trying to amend this position by submitting an amended Form C or Arbitration application form. The Applicant is now claiming only the monies owed to the Applicant from the time of the accident to the time of the denial.

In my view, the limitation period for the IRBs, H&H and the treatment plan, dated November 1, 2010, commenced on November 25, 2010 and ended on November 25, 2012.

It is also clear that the treatment plan, dated December 26, 2010, was denied on January 5, 2011 with the limitation period ending on January 5, 2013. The Applicant was also denied further AC and the cost of a job site analysis on February 10, 2011 with the limitation period ending on February 10, 2013.

For the above evidence and reasons, I agree with the Insurer that the Applicant has missed the limitation period and as such is statute barred from proceeding to Arbitration on these matters as found in section 51 of the Schedule, which reads as follows:

(1) 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. O. Reg. 403/96, s. 51 (1).

(2) Despite subsection (1), a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Insurance Act may be commenced within 90 days after the mediator reports to the parties under subsection 280 (8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later. O. Reg. 403/96, s. 51 (2).

It is clear that the Applicant had ample time to address the missing documentation for payment of claimed benefits or provide a reasonable explanation for the lateness of compliance(s) or to file for mediation.

I am in agreement with the Insurer’s argument that the Insurer can rely upon its section 33 reasoning as to why the Insurer suspended or in other words denied payment of certain benefits, as the Schedule does provide the remedy for such non-compliances.

I agree with the Insurer’s arguments that Arbitrator Bayefsky’s decision in Iankilevitch and CGU Insurance Co. of Canada is on point where a section 33 defense is invoked by the Insurer. Arbitrator Bayefsky clearly places the burden of providing “any” of the required documents on the Applicant and when found in non-compliance, the disentitlement to the benefit, absent a “reasonable explanation”. In speaking to a “reasonable explanation”, I continue to agree with Arbitrator Bayefsky that section 31(1) “places the onus on the insured to provide a reasonable explanation for failing to provide reasonably required information under section 33”. Arbitrator Bayefsky’s reasoning can be found at paragraphs 36 to 62.

The relevant portions of section 31 and 33 of the Schedule read as follows:

Failure to Comply with Time Limits

31 (1) A person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation. O. Reg. 403/96, s. 31 (1).

(2) Subsection (1) does not apply to the time limits set out in section 51. O. Reg. 403/96, s. 31 (2).

Duty of Applicant to Provide Information

33 (1) A person applying for a benefit under this Regulation shall, within 10 business days after receiving a request from the insurer, provide the insurer with the following:

Any information reasonably required to assist the insurer in determining the person’s entitlement to a benefit.

(2) The insurer is not liable to pay a benefit in respect of any period during which the insured person failed to comply with subsection (1) or (1.1). O. Reg. 281/03, s. 12 (2).

It is my view that section 31(1) and (2) allow for any reasonable explanations for missing a deadline to be communicated to the Insurer for consideration at any later date, but does not however prevent the limitation clock from starting after a denial has been properly communicated. I have not heard any persuasive evidence that would explain that the Insurer acted in bad faith or any other wrong doing when the Insurer suspended benefits based on section 33 requests. I have not heard any evidence that would suggest that the denials themselves were procedurally incorrect.

I agree with the Insurer’s argument that the suspension of benefits under section 33 continues until compliance is attained or until the limitation period removes the right of the Applicant to arbitrate or litigate same.

For the above reasons, I now find and order that the application in its entirety be dismissed.

There is therefore no reason to explore the other arguments used by the Applicant at this time.

EXPENSES:

As the parties have not asked for costs in association of this Preliminary Issue Hearing, I find that the parties shall bear their own expenses of this proceeding.

February 16, 2016

Charles Matheson Arbitrator

Date