Certas Direct Insurance Company v. Gonsalves, 2011 ONSC 3986

Certas Direct Insurance Company v. Gonsalves

CITATION: Certas Direct Insurance Company v. Gonsalves, 2011 ONSC 3986

DIVISIONAL COURT FILE NO.: 87/11

DATE: 20110623

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

JENNINGS, ASTON AND LEDERER JJ.

BETWEEN:

CERTAS DIRECT INSURANCE COMPANY

Applicant

– and –

DENISE GONSALVES and THE FINANCIAL SERVICES COMMISSION OF ONTARIO

Respondents

Todd J. McCarthy and Aimee Draper, for the Applicant

Amin Sachedina, for the Respondent, Gonsalves

Stephen Scharbach, for the Respondent, Financial Services Commission of Ontario

HEARD at Toronto: June 23, 2011

LEDERER J. (orally)

Background

1This proceeding is governed by the Insurance Act, R.S.O. 1990, c.I.8 and the Statutory Accident Benefits Schedule, O.Reg. 403/96, which has been incorporated into that legislation (see Aviva Canada Inc. v. Pastore 2011 ONSC 2164, [2011] O.J. No. 2153 at para. 15).

2In this case, the respondent, Denise Gonsalves seeks the benefits available when, as a result of a motor vehicle accident, an insured person is “completely unable to live a normal life”.

3An arbitration was scheduled to commence on September 21, 2009. One month prior to the commencement of the arbitration two new orthopedic opinions were delivered on behalf of Denise Gonsalves. These opinions suggested that Denis Gonsalves satisfied this requirement. In the absence of an indulgence by the arbitrator, the applicant (her insurer) would have no ability to respond to these opinions. Not surprisingly, it sought an adjournment and an order that Denise Gonsalves attend for a further orthopedic examination. The arbitrator granted the adjournment and made the order. The arbitration was rescheduled for February, 2010. Rather than allow the matter to proceed on this basis, Denise Gonsalves appealed to the Director’s Delegate and refused to attend the orthopedic assessment scheduled for October, 2009.

4In a decision released on January 4, 2011, the Director’s Delegate overturned the arbitrator’s decision. The insurer applies for judicial review of the decision of the Director’s Delegate.

Prematurity

5The decision is interlocutory and would, in the normal course, be left to stand until the arbitration has been completed.

6We are acutely aware of the general practice of this Court not to interfere in the interlocutory decisions of the many Boards and Tribunals at work in the province of Ontario. (see Ontario College of Art v. Ontario (Human Rights Commission), [1992] CarswellOnt. 721 (Ont. Div. Ct.) at para. 6; Lahtinen v. Wawanesa Mutual Insurance Co., [2011] O.J. No. 1825 at para. 4 and Howe v. Institute of Chartered Accountants (Ontario), 1994 3360 (ON CA), [1994] CarswellOnt. 1019 (Ont. C.A.) at para. 13).

7Notwithstanding the general practice, the final determination as to whether to proceed in the face of an argument that the matter is premature, is in the discretion of the Court. In the circumstances, we have chosen to exercise our discretion to proceed.

8Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.

9In the circumstances of this case, if this arbitration is allowed to proceed in the absence of a further orthopedic examination by a doctor of the insurer’s choosing, the insurer will have no practical ability to respond to the opinions with which it was provided thirty-one days before the commencement of the arbitration.

10In our view, the insurer would be denied the right to make a full response and would not be heard as the dictates of procedural fairness require. It is not enough to say that the delivery of these reports was made within the permitted time frame (in this case one day before the last day the Code, clause 39.1 says is acceptable) when, as the arbitrator found, they provide new evidence supporting a new position. This is trial by ambush. This is not overcome, as counsel for Denise Gonsalves suggested by saying that we are adjusting a claim, rather than resolving a dispute between the insurer and the insured.

11In understanding our concern, it is helpful to consider what is likely to happen in the absence of the adjournment. The arbitration will proceed. The most recent orthopedic reports will be presented. The insurer will have nothing current with which to respond.

12In the absence of any alternative, it does not seem unreasonable to project a determination in favour of Denise Gonsalves and an application brought by the insurer arguing a denial of its right to be heard. We will then be where we are now. The arbitration has not yet begun. It is better that this issue be resolved today.

13Finally, in respect of the submission that this judicial review is premature, we note the general responsibility that matters be completed within a reasonable period of time.

14In the circumstances of this case, had the two new orthopedic reports been delivered sooner, this arbitration could have been completed during September, 2009. Had Denise Gonsalves not appealed and attended the further orthopedic examination, the arbitration could have been concluded during February, 2010.

15If this judicial review remains unresolved, it is reasonable to predict that it will be at least another year before this matter is finally resolved. It is simply not in keeping with the intention of the applicable legislation or our general resolve to deal with these matters with appropriate expedition to fail to resolve it today.

16We cannot help but observe the irony in the submission that this application should be set aside on the basis that, to deal with it will lead to fragmentation and delay when it took sixteen months to proceed from the arbitrator’s decision to that of the Director’s Delegate.

17For these reasons, we decline to dismiss this application as premature. Accordingly, we turn now to the merits.

Merits

18An appeal to the Director’s Delegate can only be made on a question of law (see Insurance Act, s.283). The Director’s Delegate found that the failure of the arbitrator to refer to the criteria she considered in allowing the adjournment, amounted to such an error.

19The determination of the Director’s Delegate that the arbitrator made an error in law in granting a stay to allow for an independent medical examination, essentially an adjournment request, is unreasonable and cannot stand.

20The arbitrator had a wide discretion to ensure a fair hearing. Neither the Dispute Resolution Practice Code, first edition updated October 2003, (the “Code”) nor Practice Note 9 can interfere with that overarching responsibility. Although the arbitrator did not specifically refer to the provisions of the Code or Practice Note 9, the finding of fact by the arbitrator was sufficient to explain why those provisions were not germane to the issue she was deciding.

21Practice Note 9 speaks in generalized terms and its obvious purpose is to avoid wasting time and money on adjournments. However, it is subject to clause 3.2 of the Code which reads:

3.2 Practice notes are designed to guide users in the dispute resolution process at the Commission. However, they are not binding and do not affect the duty of the adjudicator to make decisions based on the circumstances and merits of each case.

22In this case, the Director’s Delegate found:

Respectfully, I am persuaded that the arbitrator erred in law in not applying the appropriate criteria to the respondent’s adjournment request. There is no consideration or finding of extraordinary circumstances or an unavoidable delay. (see Decision of the Director’s Delegate at para. 14).

23In doing so, the Director’s Delegate unreasonably fettered the discretion of the arbitrator by requiring “extraordinary circumstances” or “unavoidable delay” as conditions precedent to the adjournment.

24In essence, the Director’s Delegate heard the matter de novo and substituted his discretion for that of the arbitrator.

25His decision must be quashed and the decision of the arbitrator restored.

26The consequence of this order is that the arbitration will proceed on its merits after Denise Gonsalves has attended at the independent medical examination requested by the applicant.

27The application is granted.

JENNINGS J.

COSTS

Costs

28I have endorsed the back of the Application Record, “This application is allowed for oral reasons of the Court delivered today. The decision of the Director’s Delegate of January 24, 2011 is quashed and that of the arbitrator of October 9, 2009 is restored. Costs payable by respondent Gonsalves to Certas fixed at $5,000 for the appearance before the Director’s Delegate and $5,000 for the appearance in this Court, payable forthwith.”