Charles Taylor v. Personal Insurance Company of Canada, 2017 ONFSCDRS 40

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 40

FSCO A16-000560

BETWEEN:

CHARLES TAYLOR

Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Arbitrator Kenneth Conroy

Heard:

By written submissions due November 16, 2016

Appearances:

Mr. Tom Argiropoulos for Mr. Charles Taylor

Ms. Leanne Zabudsky for Personal Insurance Company of Canada

Issues:

The Applicant, Mr. Charles Taylor, was injured in a motor vehicle accident on January 4, 2013 and sought 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. Taylor, 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 issue in this Preliminary Issue Hearing is:

Is the Applicant barred from proceeding with this Arbitration, in relation to his claims for Income Replacement Benefits (“IRBs”) and Non-Earner Benefits (“NEBs”), due to the time limit for proceedings set out under section 56 of the Schedule?

Result:

The Applicant is barred from proceeding with this Arbitration, in relation to his claims for IRBs and NEBs, due to the time limit for proceedings under section 56 of the Schedule.

EVIDENCE AND ANALYSIS:

The Applicant submitted an OCF-2 on February 1, 2013, received by Personal on February 6, 2013. The Insurer corresponded with the Applicant by way of Explanation of Benefit (“EOB”) Letter on February 13, 2013, advising that the Insurer had confirmed with the employer that he was receiving full compensation and no IRB was payable as a result. The Applicant was also advised that he was not eligible for the NEB. The Insurer advised the Applicant of his right to dispute the decision and the procedure and timing for doing so. A denial of the NEB was issued on February 13, 2013 with no further discussions of the benefit between the parties.

Further correspondence was sent April 3, 2013, May 7, 2013, July 2, 2013 and July 3, 2013, indicating that there was no entitlement to benefits and the Applicant had a right to dispute this decision. A request by the Applicant’s representative, dated July 7, 2014, asked that the Insurer review the Applicant’s documentation.

A failed Report of Mediator was issued on the NEB on July 17, 2014, and on the IRB, medical benefit and Minor Injury Guideline (“MIG”) on May 5, 2015.

On August 1, 2014, an EOB was sent to the Applicant advising that the Insurer’s position remained unchanged as a result of an Independent Examination (“IE”) paper review of the medical information provided. On November 12, 2014, the Applicant’s representative corresponded with the Insurer asking that the Insurer review the family physician’s notes, acknowledging awareness of a pending limitation period for filing an Application for Arbitration.

On June 24, 2015, the Insurer responded to the receipt of an OCF-2 and requested a Record of Employment, Declaration of Post-Accident Income and Benefits, a copy of the employment records and an OCF-3.

The Applicant’s representative was again advised that the Applicant did not meet the test of disability for IRBs, that he had returned to work full-time and that the new OCF-2 indicated that he had retired. An EOB was issued on June 26, 2015, advising the Applicant that he was not entitled to IRBs and requested once again the information outlined in the June 24, 2015 letter.

An Application for Arbitration was received by FSCO on January 26, 2016, seeking entitlement to IRBs, NEBs, a psychological assessment and whether the Applicant sustained injuries under the MIG.

The Insurer states that the Applicant did not file his Application for Arbitration until January 26, 2016, alleging this to be outside of the applicable two-year limitation period.

The Law

Time Limit for Proceedings:

56(1) A mediation proceeding or evaluation under section 280 or 280.1 of the Act or court proceeding or arbitration under clause 281(1)(a) or (b) of the Act in respect of a

benefit shall be commenced within two years after the insurer’s refusal to pay the amount

claimed.

56(2) Despite subsection (1), a court proceeding or arbitration under clause 281(1)(a) or (b) of the Act may be commenced within 90 days after the mediation report 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.

The Supreme Court of Canada has clearly stated in the case of M.(K.) v. M.(H.)² that the purpose of a limitation period is to ensure the following:

Certainty (a finite process)
Evidence that is not stale
Diligence so that claims are brought in a timely manner

In order to determine the deadline of a limitation period in the present case, it is necessary to ensure the following, as outlined in the Zeppieri and Royal Insurance Company of Canada decision:³

A valid notice of refusal to pay benefits has been given in writing in a clear and unequivocal manner; and
The Insurer has not done anything that would cause the Applicant to believe that the limitation period had not commenced.

I also considered the Applicant’s position that the ongoing review of additional information (even the Insurer’s request for detailed documentation) would lead a reasonable person to conclude that a new effective refusal/stoppage date had occurred, with the result being that the limitation period would be extended to July 16, 2017. The Applicant’s submissions rely on the adjuster’s letter of June 24, 2015, which sought additional information by July 16, 2015 and further stated that if such information was not received by that date, there would be no consideration for IRBs. (emphasis mine)

I do not see that the above statement can be reasonably interpreted to extend the limitation period to July 16, 2017, or that it in any way altered the running of the existing limitation period. To conclude otherwise would cause unimaginable uncertainty in proceedings where good faith negotiations continue during the running of limitation periods.

In Zeppieri, Arbitrator Naylor stated the following:

Insurance companies are responsible for investigating new information provided after benefits are terminated and must fairly re-evaluate an applicant’s claim in light of the new information provided. The re-evaluation of claims on an ongoing basis is integral to a system of periodic benefits, and is a continuing obligation owed to the applicant.

The fact that an insurance company reconsiders a prior decision to terminate benefits (as it must do) does not mean that a refusal of benefits can only take place at the completion of that process. To interpret the language of s. 281(5) in this manner would largely deprive it of meaning.

I agree with Arbitrator Naylor’s conclusions. To conclude otherwise would compromise both the Insurer’s obligation to consider new information (which is for the Applicant’s benefit) and the underlying reasons for limitation periods. It would be unreasonable to conclude that any discussions or reconsiderations of fresh evidence would reset the running of a limitation period.

For the reasons above, it is my conclusion that the Insurer met its duty to act fairly and in good faith by reviewing information provided or requested. The Applicant, by his representative, was fully aware of the applicable limitation period and it would be an injustice to an Insurer to restart the running of a limitation period. The denial of benefits was clear and unequivocal, and satisfied all the notice requirements. As such, I find the final date for the Applicant to file an Application for Arbitration for the IRB and/or the NEB was February 13, 2015 under section 56(1), or 90 days from the dates of the Reports of Mediator of July 17, 2014 and May 5, 2015. Either way, the January 26, 2016 Application for Arbitration did not meet this.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

February 6, 2017

Kenneth Conroy

Arbitrator

Date