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

Neutral Citation: 2017 ONFSCDRS 277

FSCO A16-005038

BETWEEN:

KENROY WILLIAMS

Applicant

and

NORTHBRIDGE GENERAL INSURANCE CORPORATION

Insurer

Before: Arbitrator H. Michael Kelly, Q.C.

Heard: In person at ADR Chambers on August 23, 2017, September 21, 27, and 29, 2017, and by teleconference on September 28, 2017

Appearances: Mr. Andrew Kerr, legal counsel for Mr. Kenroy Williams Mr. Daniel M. Himelfarb, legal counsel for Northbridge General Insurance Corporation

Issues:

The Applicant, Mr. Kenroy Williams, was injured in a motor vehicle accident on August 9, 2012 and sought accident benefits from Northbridge General Insurance Corporation ("Northbridge"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Williams, through his representative, 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:

Is the Applicant precluded from proceeding to Arbitration to address his claim for Income Replacement Benefits ("IRBs"), based upon his failure to provide a reasonable explanation as set out in section 34 of the Schedule for his failure to give notice to Northbridge of his intention to seek accident benefits, within the time parameter set out in section 32(1) of the Schedule?
Is either party entitled to expenses for this Preliminary Issue Hearing?

Result:

The Applicant has provided a reasonable explanation as to why he failed to give notice to Northbridge of his intention to seek accident benefits, within the time parameter set out in section 32(1) of the Schedule, and therefore has the right to proceed to Arbitration.
The issue of expenses for this Preliminary Issue Hearing is deferred to the Hearing Arbitrator.

At the Preliminary Issue Hearing, Northbridge confirmed that it was no longer claiming that the Applicant is not entitled to claim accident benefits due to his receipt of Workplace Safety and Insurance Board (“WSIB”) benefits. As well, Northbridge stated that it is no longer claiming that the Applicant failed to apply for mediation within 2 years from the date of the denial of claim for IRBs. No evidence was called by either party addressing the issue of specific prejudice related to the time of the delivery of the OCF-1 and OCF-3.

EVIDENCE AND ANALYSIS:

On August 9, 2012, at approximately 7:28 a.m., the Applicant was a front seat passenger in a Ford Econoline Super Duty Van ("the Van") owned by Chary Produce Limited ("Chary") and insured by Northbridge. There were nine people in the Van, all of whom were Jamaican migrant workers, employed by Chary, as fruit pickers. They were on their way to work, having been picked up by the Van at the Chary bunkhouse. Chary provided the transportation for its seasonal workers to and from work.

In Brantford, Ontario, on the highway leading to the work destination, the Van swerved to the right shoulder of the roadway, entered a ditch, came into contact with two unattended vehicles, and flipped over. The Applicant, a front-seat passenger, who was not wearing a seatbelt, struck the interior of the Van, and suffered injuries. One of the passengers was killed. The police attended the scene, investigated the accident, and charged the Van driver with (a) failure to remain at the scene of an accident (the driver had exited the vehicle, walked into an adjoining field, but returned to the scene on arrival of police), (b) careless driving, and (c) criminal negligence causing death.

The police report² stated that there was no other motor vehicle involved. The Applicant asserted, early-on, and to the present, that a motor vehicle travelling in the opposite direction to that of the Van, crossed the centre line of the roadway, thereby causing the Van to swerve to the right and go out of control. The Applicant asserted that a number of the passengers in the Van confirmed to him that they had also seen the approaching vehicle cross the centre line. The August 15, 2012, log note of Cecelia Upton, Crisis Intervention Counsellor for the WSIB stated: "All co-workers involved stated that a car had swerved into the lane of their Van, the driver swerved to avoid a collision, and the Van rolled over several times."³ The issue as to who was at fault for the accident was not directly addressed as an issue at the Preliminary Issue Hearing.

The Applicant was a seasonal worker from Jamaica, who obtained a work permit, through the Jamaican Liaison Service, to work as an agricultural worker in Ontario with Chary from August 2, 2012 to December 15, 2012. He arrived in Canada on August 2, 2012 and was housed in the Chary bunkhouse, along with the other seasonal workers. He had engaged in similar seasonal stints, with other Canadian employers in previous years, commencing in or about 2006. He had not been involved in any other motor vehicle accident.

Following the accident, the Applicant was transported to the hospital. He was released from the hospital that evening and returned to the bunkhouse. His immediate reaction was a desire to return to Jamaica, without delay, as he felt he could no longer work at Chary, because of his injuries. However, the Jamaican Liaison Service entered the picture, and initiated his successful application for WSIB benefits on August 14, 2012. The Applicant, upon being advised of his opportunity to claim WSIB, decided to remain in Ontario, as he felt that Jamaica could not provide for him the same degree of paid-for medical attention. He began to receive WSIB benefits, including medical, housing, and income benefits, and shortly thereafter (in or about late September 2012) retained paralegal Ms. Jessica Ponting of the Community Legal Clinic at IAVGO (Industrial Accident Victims Group of Ontario) to handle his WSIB file. On November 15, 2012, Ms. Ponting wrote to WSIB to request that the Applicant be enrolled in the WSIB Mild Traumatic Brain Injury Program as "he had been concussed for three months".⁴

Northbridge, the motor vehicle insurer of the Van, mailed to the Applicant a letter dated August 20, 2012,⁵ addressed to "Kenroy Williams, 18 King Street, Oakland ON" (the address of Chary Produce Limited), with the claim number and date of loss. A summary of the contents of the letter is as follows:

Northbridge is aware that the accident was "work-related" and that the Applicant now has an open Workplace Safety and Insurance Board (WSIB) file, related to the accident;
Pursuant to s. 61(1) of the Schedule, an insurer is not required to pay benefits in respect of any insured person who, as a result of an accident, is entitled to receive benefits from WSIB. The only exception is if the insured person has suffered a permanent injury and has elected to bring legal action against the at-fault party for pain and suffering damages;
If you are not eligible for WSIB benefits, or choose to opt out of WSIB benefits to pursue legal action, Northbridge "would gladly accept your medical claim upon receipt of documents further explaining the situation".

The letter contained the contact particulars for the Northbridge representative; however, the letter did not state that there was an applicable time limit with respect to Northbridge's receipt of confirmation from the Applicant that he intended to claim no fault benefits. Granted, there is no expressed statutory duty for Northbridge to notify the Applicant of the time limit set out in section 32(1) of the Schedule. However, when the issue of "reasonable explanation" for late notice is to be assessed, lack of knowledge by the Applicant of the time limit is a factor to be considered.⁶

Importantly, the letter suggests that at any time, if the Applicant is not eligible for WSIB benefits, or decides to opt out of WSIB benefits to commence an action for damages against the responsible motorist, Northbridge would gladly accept the no-fault claim, upon receipt of "documents further explaining the situation". This text not only fails to suggest a time limit but implies that Northbridge is prepared to wait until the Applicant has decided what legal route to take.

As well, the letter did not particularize the meaning of the word "medical claim" in paragraph 3 cited above. Could those words have been simply interpreted by the Applicant to mean that, if the Applicant decided to opt out of WSIB, the Insurer would only be entertaining reimbursement for medical expenses?

In his affidavit and oral evidence, the Applicant claimed that he did not receive the letter, or could not recall receiving it. On the balance of probability, I find that the Applicant received the letter. Mr. George Pronay, the Applicant's lawyer from December 2012 to April 2013, testified that he received the Northbridge letter from the Applicant. The parties agreed that the Applicant was essentially illiterate in 2012. As well, I was satisfied by the Applicant's testimony that he has a significant memory disability with respect to a number of the procedural events. Northbridge conceded at the Hearing that the Applicant was straight-forward in his testimony.

In or about September 2012, the Applicant retained Ms. Ponting at IAVGO to represent him in his claim for WSIB benefits. The Applicant had no other source of money at that time, and wanted to ensure that the regular flow of WSIB benefits, including medical treatment, would continue. He testified that in September 2012 he was intending to explore the possibility of securing damages as a result of the accident. However, he was more preoccupied, at that point, by his need for physical and psychological medical treatment, and cash flow. He decided in December 2012 to consult with a lawyer to advise him with respect to his potential opportunity to recover tort damages from the driver and owner of the vehicle that he believed was responsible for the accident, or alternatively from Chary. He did not know about no-fault benefits and their procedural relationship with tort. On December 20, 2012, he attended at the offices of a motor vehicle injury specialist, lawyer Mr. Aaron Pronay, and retained Mr. Pronay to advise him in that regard. Mr. Pronay testified that, at that meeting, he directed his mind to the issue of whether or not the Applicant had as yet complied with s. 32 of the Schedule. He noted that the involvement of an unidentified motorist was at issue, and that the driver of the Van had been charged by police. He confirmed at the meeting that the Applicant was receiving WSIB benefits.

Mr. Pronay, of course, had to address the issue as to whether or not the Applicant should elect to opt out of WSIB benefits, and proceed with an action to recover damages and no-fault benefits on the basis that the unidentified driver was the cause of the accident. Whether or not the Applicant's receipt of WSIB benefits persuaded Mr. Pronay, at that time, that filing notice under section 32 of the Schedule was premature pending the decision as to whether or not to opt-out of WSIB, was not specifically addressed in evidence. Mr. Pronay gave oral testimony at the Preliminary Issue Hearing and produced the documentary contents of his file.

Ms. Ponting was continuing to represent the Applicant with respect to his WSIB claim. In March 2013, WSIB terminated some of the Applicant's medical treatment services, but continued to pay the weekly income benefit and the room and board benefit. The Applicant arranged to meet Mr. Pronay to obtain advice as to whether or not he should move forward with a lawsuit for tort damages and Statutory Accident Benefits, based upon the negligence of the unknown driver. Mr. Pronay wrote to WSIB on March 19, 2013 advising that the Applicant would be opting out of WSIB in favour of proceeding with the tort action and no-fault claim. Mr. Pronay received a response from WSIB, by letters dated March 22, 2013 and March 25, 2013, that brought to his attention the criminal and traffic charges that were laid by police against the Van driver. Mr. Pronay, who had not by then obtained the police accident report, decided that he was not interested in pursuing the uncertain tort litigation on behalf of the Applicant, and on April 3, 2013 he wrote again to WSIB retracting the opt out re-election.⁷ He advised the Applicant that he did not do WSIB claims and that he was not prepared to represent the Applicant further with respect to the accident.

I am satisfied on the evidence that, at that point, the Applicant really did not know what to do. He was in limbo. There was no evidence that anyone, other than Mr. Pronay, had discussed with him the tort possibilities, and the related potential Schedule benefits, or the interaction of the WSIB, tort and the Schedule systems. The counselling he received from Ms. Ponting, though quite thorough, was focussed on the WSIB entitlement.

In June 2013, while discussing his procedural dilemma with a casual acquaintance in a restaurant, the Applicant received the recommendation that he retain lawyer Mr. Andrew Kerr to represent him with respect to his belief that he was entitled to damages as a result of the accident. The Applicant retained Mr. Kerr who on June 24, 2013, wrote to the Ontario Provincial Police to request a copy of the police accident report and any witness statements. On August 29, 2013, Mr. Kerr wrote to WSIB requesting a complete copy of its file. Mr. Kerr then retained Dr. John McCall to assess the Applicant, and received the Disability Certificate (OCF-3) completed by the said doctor on October 17, 2013. The OCF-3 was signed by the Applicant on November 29, 2013 and was mailed to Northbridge on December 23, 2013 (received December 31, 2013).⁸

On December 2, 2013, WSIB wrote to the Applicant advising that WSIB was terminating the Applicant's loss of earning benefits; room and board benefit; and health care benefits, effective December 31, 2013.⁹ WSIB had decided that the Applicant had attained maximum medical recovery. In early 2014, Ms. Ponting, who was still representing the Applicant with respect to his WSIB claim, filed an Objection (viz appeal). The appeal was rejected by WSIB on October 17, 2014. IAVGO continued to handle the WSIB file until December, 2016, when IAVGO decided to terminate its professional relationship with the Applicant, on the basis that the Applicant was pursuing the tort action.

DECISION:

Obviously, the very short deadlines set out in sections 32(1) and 32(5) of the Schedule recognize the vital importance to the integrity, fairness, and effectiveness of the no-fault system, that the Insurer has very early notice of an intended claim or potential entitlement to benefits. Section 34(1) of course recognizes that there are cases where a reasonable explanation for the late notice can preserve the Applicant's right to pursue the Schedule claim.

Northbridge's position is that the Applicant had only decided to pursue his tort and Schedule claims when his WSIB benefits were cut off, viz. his delay in pursuing Schedule benefits was deliberate. Therefore, there was no reasonable explanation to justify the late application for Schedule benefits, received by Northbridge approximately 16 months following the accident.

The evidence does not support that assertion. The Applicant was an unsophisticated, illiterate seasonal migrant-worker from Jamaica. There is no evidence that he had any familiarity with the accident benefit system in Ontario, or the interrelationship between the tort, Schedule and WSIB systems at the time of the accident. He obtained immediate assistance from the Jamaican Liaison Service, with respect to immediate successful application for WSIB benefits. That appeased his initial post-accident impulse to return to Jamaica. He was happy to know that he would be receiving medical attention, and income replacement. Northbridge's position focuses on its letter to the Applicant dated August 20, 2012. I found that the Applicant received the letter, but I am not satisfied he understood its significance at the time. The letter advised him that he could not get Schedule benefits if he had entitlement to WSIB benefits, but could potentially receive Schedule benefits if he sustained a permanent injury and elected to bring legal action against the at-fault party and opt out of WSIB. Importantly, the third paragraph of the letter stated that: "In the event that you either are not eligible for WSIB benefits or that you have decided to opt out of WSIB benefits to pursue legal action, we would gladly accept your medical claim upon receipt of documents explaining the situation" (my emphasis). No time limit is mentioned.

As Ms. Ponting carried on assisting him with respect to his WSIB benefits, the Applicant put the tort issue "on the back burner". He testified that in September 2012, he wanted to sue for damages, as he believed that the accident had caused him significant injury. I accept his testimony in that regard. In December 2012, the Applicant and his friend, Denville (who was also a passenger in the Van), retained Mr. Pronay to advise them of the chances of successful recovery of damages related to their injuries. This was not an easy case, as the police had not accepted that there was an unknown vehicle responsible for the accident. The Van driver was charged with serious offences. There was no identification of an unknown driver and vehicle involved, nor evidence as to whether or not any of the other Van occupants were still in Canada and available as witnesses. The Applicant wanted to know what potential success existed with respect to an action seeking damages, and mistakenly believed that Chary would be the likely defendant. Mr. Pronay testified that he explained the situation thoroughly to the Applicant, and initially took instructions from the Applicant to opt out of WSIB, to pursue the tort action and Schedule benefits. Mr. Pronay advised WSIB in that regard. However, shortly thereafter, when he learned the nature of the charges laid by the police against the Van driver, his further involvement was dissuaded, and he advised the Applicant that he was not prepared to proceed with an action on the Applicant's behalf. There was no specific evidence before me that Mr. Pronay discussed with the Applicant the time limits with respect to notice to Northbridge. In the circumstances, he recommended and took instructions from the Applicant to cancel the WSIB opt out and the WSIB benefits continued (less some medical benefits that had been terminated the month before).

However, the Applicant did not abandon his desire to explore the potential success of a tort action and Schedule benefits, as he was still claiming significant post-accident disability, both physical and psychological. He retained Mr. Kerr who took steps in September and October 2013 to have the medical assessment and completion of the OCF-3 achieved and submitted to Northbridge, while the Applicant's WSIB benefits were still flowing until December 31, 2013. Ms. Ponting was still representing the Applicant with respect to the WSIB and conducted the WSIB appeal. In due course the Application for Mediation and Application for Arbitration were filed. The tort action was commenced by Mr. Kerr within the two-year prescription period.

This was not a situation where the Applicant either deliberately or negligently kept the tort and Schedule process in abeyance in order to maintain his WSIB benefits. He did not want to opt out of his WSIB entitlement until he received legal advice that he had a reasonable chance of success in tort. He agreed to opt out at a time when his WSIB benefits were continuing (although partially reduced). He continuously pursued that road and after Mr. Kerr entered the picture, Northbridge was brought up to date. It was a difficult road. Even if his WSIB benefits had been terminated earlier, or not even implemented at the outset, or he was prepared to opt-out of his potential WSIB benefits, he may have had difficulty getting legal representation for the tort action.

I reviewed the legal authorities cited by Northbridge in its Factum and its Book of Authorities, and I summarized the relevant principles disclosed therein, as follows:

(a) Arbitrator Leitch in Horvath and Allstate Insurance Company of Canada (FSCO A02-000482):

An explanation must be found to be credible or worthy of belief before its reasonableness can be assessed.
The Applicant has the onus of establishing that the explanation is reasonable.
Ignorance of the law is not, in itself, a reasonable explanation.
The test of reasonableness is both a subjective and objective test, that takes into account both personal characteristics and a "reasonable person" standard.
Lack of prejudice to the insurer does not make an explanation automatically reasonable.
An assessment of reasonableness requires an analysis of the prejudice to the insurer, hardship to the insured, and whether or not it is equitable to relieve the insured from the consequences of failing to meet a time limit.

(b) Arbitrator Evans in Carruthers and Royal & SunAlliance (FSCO A99-000923):

The Arbitrator is entitled to find that, when a significant passage of time takes place during which an Applicant, though not medically disabled from providing notice, fails to notify the insurer of his intent to claim Schedule benefits, the insurer has suffered prejudice, even though the insurer has not called specific evidence of prejudice.

(c) Justice Labrosse in his majority decision in the Ontario Court of Appeal in Cervo v. Raimondo, 2006 CanLII 37119 (ON CA), O.J. No.4378 (ONCA), p. 13:

Where an insured fails to apply for benefits within the time limit, and asserts that the failure was solely attributable to the fault of his lawyer, who had no limitation imposed with respect to his representation, a reasonable explanation has not been achieved.

(d) Arbitrator Arbus in Reeks and State Farm Mutual Automobile Insurance Co. (FSCO A15-000147):

The Insurer is not required to remind the insured to file an OCF-1.

The Applicant swore a responding affidavit to Northbridge's initial motion materials and attended for a cross-examination on his affidavit. As well, he attended to give testimony at this Hearing. I was satisfied that the Applicant was straight-forward and did his best to be accurate with his testimony. Northbridge conceded that. However, he was clearly hampered by significant memory difficulty.

This case was different from the cases relied upon by Northbridge. The need to assess the likelihood of a viable tort action, given the adverse police report, and the Applicant's vital ongoing dependency on WSIB benefits, created a situation where he desperately needed to receive legal advice as to next steps. He sought that advice within four months post-accident, a reasonable period following the accident, given that the immediate legal advice he received following the accident was focussed entirely upon the WSIB benefits. Mr. Pronay took on his case in December 2012. In March 2013, the Applicant instructed Mr. Pronay that he was prepared to opt out of WSIB and proceed in tort. Mr. Pronay decided to close his file, as the chances of success were quite unclear at that time, and his contingency-fee agreement with the Applicant persuaded his departure. The Applicant did not give up.

CONCLUSION:

I am satisfied that the Applicant has provided a reasonable explanation for his failure to give notice of his intention to seek accident benefits within the time parameter set out in section 32(1) of the Schedule to Northbridge and therefore has the right to proceed to arbitration.

EXPENSES:

The issue of expenses for this Preliminary Issue Hearing is deferred to the Hearing Arbitrator.

October 26, 2017

H. Michael Kelly, Q.C. Arbitrator

Date