ACCIDENT BENEFITS NEWSLETTER - APRIL 2004

Catherine Zingg

In Anang and Guarantee Company of North America, A02-001734, March 11, 2004, Arbitrator Allen held that the applicants had not been involved in accidents as they claimed. Cornelia Anang, Georgina Ampomah and Agnes Quarshie claimed that they had been injured in a motor vehicle accident on July 15, 2002. In addition, Ms. Anang claimed to have been injured in an accident on July 30, 2002.

Arbitrator Allen found that their testimony lacked credibility and plausibility. The Collision Reporting Centre report which Mrs. Anang completed gave one version of the accident, while the driver of the Ford pickup that was also alleged to have been involved in the accident gave a contrary account. Mr. Sam Kodsi, a mechanical engineer, was accepted as an accident reconstruction expert by the Arbitrator. In his view, the damage to Ms. Anang’s van was consistent with it being driven into a rough masonry surface and was not car to car damage (with respect to the July 15, 2002 accident) (p.9). Mr. Robert Seaton, an investigator with TSI, testified on the insurers behalf with respect to the July 30, 2002 accident in which Ms. Anang was involved. She claimed to have driven into a guard rail on an on ramp to the highway 400. Mr. Seaton, however, concluded that the damage to the Toyota was inconsistent with descriptions of the accident given by Ms. Anang and her passenger (p.10). Ms. Anang estimated that the car she spun out while travelling approximately 30 to 45 km an hour. However, the air bags did not deploy. He concluded that the localized damage to the front bumper and top of the hood was inconsistent with the Toyota hitting a “Jersey barrier” and more consistent with it hitting a pole (p. 11). In making her decision, Arbitrator Allen accepted the evidence of the reconstruction experts.

In Killam and State Farm, A03-000919, March 1, 2004, the applicant was injured when heavy windows fell on him as they were being unloaded from a flat bed trailer (p.3). The Arbitrator held that Mr. Killam had been injured in an accident within the meaning of s.2(1) of the SABS. The tractor trailer was stationary at the time of the incident and the keys had been removed from the truck. In her reasons, Arbitrator Skinner stated:

I do not view the windows’ falling as being an independent external force. Rather, I find that the chain of events beginning with the unloading led directly to Mr. Killam’s injuries (p.6)

The straight facts are these: Mr. Killam had not driven the automobile from Toronto. He had only driven for a few feet from the road into the driveway, and only for the specific purpose of manoeuvring the large vehicle into the driveway. There is no evidence to suggest, and I find it improbable, that he would have driven the truck and trailer out of the driveway. The keys had been removed from the vehicle, although it is unclear whether Mr. Killam kept the keys or handed them back to Kapur (p.8).

In Paunova and Allstate, A02 - 001087, March 10, 2004, the applicant was found to be entitled to reopen the hearing and introduce new evidence pursuant to Rule 43 of the Code. The dispute concerned entitlement to benefits beyond the 104 week mark under the SABS - 1996. The hearing had commenced on May12, 2003 and closing arguments were scheduled to be held on February 26, 2004. On February 10, 2004, Ms. Paunova had an episode of dizziness and fell. She sought to introduce evidence with respect to the fall which resulted in injuries. Arbitrator Muir, in allowing the re-opening of the hearing found that Rule 43 was intended for precisely these kinds of circumstances where, in considering entitlement to an ongoing benefit, a new and unforeseen event occurs upon which entitlement to the benefit can potentially be established (p.5).

In Owusu and Non-Marine Underwriters, Mbrs. Of Lloyd’s, A02-000499, the arbitrator had held that the applicant was not entitled to receive weekly caregiver benefits in accordance with her claim and ordered the applicant to pay Lloyd’s Underwriters its expenses. At the expenses hearing, Arbitrator Miller ruled that she did not have jurisdiction to award expenses for investigators who were on standby for the arbitration. She found that there was no statutory basis on which she could award such an expense as s.5 of the regulation makes no prevision fo such a category as a standby for arbitration (p.9). Lloyd’s was awarded $8,589.46, plus $601.26 GST and disbursements in the amount of $1,461.09, plus $98.03 GST.

In Alfred v. Allstate Insurance Company of Canada, (2004) O.J. No. 848 O.S.C., Judge Himel awarded the plaintiff the cost of home renovations in the amount of $156,720.00 along with interest at the rate of 2% per month from October 19, 2001. In addition, the plaintiff was awarded rent paid of $28,083.00 for 2001 to January 24, 2004; the average increase in renovation costs of $15,000.00; the additional costs of $30,000.00 or $68,866.00 to purchase a house in 2004 and interest.

Mrs. Alferd was paralyzed in a motor vehicle accident on December 30, 1993. At the time of the accident she lived in a one bedroom apartment with her daughter, received social assistance and took courses. She and her fiancée, Mr. Vryamuthu, intended to marry and live in an apartment and, when they could afford to, move into their own house.

Following the accident, Allstate retained Jeffery Baum of Adapt - Able Design Group to conduct an assessment of Mrs. Alferd’s housing needs. His report of May 16, 1994, recommended modifications to her residence. In 1997 the family wished to move into a home of their own, but were unable to afford it. The family was able to afford a house of $150,000.00, but were unable to find a suitable house in that price range.

Mr. Baum completed a further report that recommended that Mrs. Alfred move to a bungalow style house that had modifications which would cost in the range of 70,000 to $80,000.00. Allstate was approached to assist with the modifications. It refused the request, however, and a hearing took place at the Financial Services Commission. The Arbitrator held that Mrs. Alfred was entitled to ongoing weekly benefits, but denied the claim for the purchase and renovations of a house. The decision was not appealed. In August 1999 the family approached Allstate, requesting that the company pay for the cost of renovation only. The adjuster was surprised at the request, having thought that the issue was resolved at arbitration.

Judge Himel found that the plaintiff was entitled to proceed, rejecting Allstate’s argument that the matter had been settled at arbitration. It was found that the arbitrator had considered the question of the cost of renovations to a house that the plaintiff wanted Allstate to purchase. It was found that the trial dealt with a different question, namely funding the cost of renovations of a house purchased by the plaintiff and her husband. The judge went on to find that even if the pre-conditions of res judicata existed in the case, she would exercise her discretion in favour of the interest of fairness (p.9). The judge stated:

In my view, under the contract of insurance, the insurer is obligated to treat the insured with good faith and to approve reasonable expenses that arise as a result of the accident. Mrs. Alfred has proven, on a balance of probabilities, that she requires a house that has been modified to accommodate her needs. Mrs. Alfred and her husband have a right to purchase a house with their own money in order to address the various limitations of the apartment in which they live currently with their daughter and where they have resided for the last almost ten years. Those problems include: that there is no emergency exit, the fire alarm sounds frequently, the apartment is limited in space such that Mrs. Alfred cannot enter the room for worship or enter her daughter’s bedroom; Mrs. Alfred cannot open a window, there is no space for a coffee table in the living room or for the dining room table to be moved from against the wall; the apartment is too small for the storage of equipment Mrs. Alfred requires so that she may become more independent; there is only one bathroom and Mrs. Alfred suffers from problems as a result of the accident, which necessitate she use the bathroom frequently; Mrs. Alfred’s daughter is growing up and has different needs; Mrs. Alfred, after a number of years, now has the desire to socialize and enjoy life by entertaining as others do, and she cannot do so in her apartment (p.9).

A recent decision of the Divisional Court quashed the order of Director’s Delegate Makepeace in Turner and State Farm, Court File NO. 272/03, February 25, 2004. Director’s Delegate Makepeace had found no error in the Arbitrator’s conclusion that State Farm gave clear and unequivocal refusal of weekly benefits on June 19, 1999, and that Mrs. Turner’s Application for Arbitration, filed in June 1999 was out of time. In its reasons the court stated:

It appears to us that the Director’s Delegate was applying a test other than clear and unequivocal notice in her use of the language ‘substantially clear and unequivocal’ and ‘substantially clear’. In our view, she erred in law in so doing. The notice must be clear and unequivocal-period. Nothing less will do. Since the decision of the Supreme Court of Canada in Smith v. Co-Operators, it is clear that a limitation period will not begin to run until there has been a proper refusal to pay benefits, where the commencement of the limitation is fixed by the conduct of the insurer in refusing payment (p.2-3).

The court went on to find that it is not sufficient for the insurer to give notice of its refusal to pay benefits, it must also provide the insurer with the reasons for the refusal (p.3). The limitation period will not begin to run until the insurer has given written notice of its refusal to pay benefits claimed and the correct reasons for its refusal. Costs in the amount of $7500.00 were awarded to the applicant.