Neutral Citation: 1992 ONICDRG 4

File No. P-000251

ONTARIO INSURANCE COMMISSION OFFICE OF THE DIRECTOR OF ARBITRATIONS

BETWEEN:

VITO LUIGI CALOGERO

Applicant (Appellant)

and

THE CO-OPERATORS GENERAL INSURANCE COMPANY

Insurer (Respondent)

Before:

E. Sachs, Director of Arbitrations

Counsel:

J. Lawlor, Q.C. (Appellant)

S. Malach, Q.C. (Respondent)

APPEAL ORDER

I. NATURE OF PROCEEDING

By Notice of Appeal filed December 18, 1991, the insured person, Vito Luigi Calogero (the appellant) appeals from the Order of Frederika Rotter, Arbitrator, dated November 20, 1991, which found the appellant entitled to weekly income benefits of $185.00 and required repayment to the insurer, The Co-operators General Insurance Company (the respondent) of $67.00 weekly for those weeks that benefits had been paid at a higher rate.

The orders sought by the appellant are:

1. A stay of the repayment provisions of the arbitral order pending the final disposition of the appeal;

2. An oral rehearing of the appeal;

3. An award of $600.00 of weekly income benefits;

4. An award of expenses of the arbitral hearing and this appeal.

II. PRELIMINARY ISSUES

The requests for a stay of the arbitral order and an oral rehearing were dealt with as preliminary issues.

A. Stay of Arbitral Order

The Director was requested to exercise her discretion to stay the arbitral order requiring the appellant to repay benefits to the respondent, pursuant to s.242e(6) of the Insurance Statute Law Amendment Act, S.O. 1990, c.2, now the Insurance Act, R.S.O. 1990, c.I-8, s.283(6).

In the Response by Insurer filed December 30, 1991, the respondent consented to a stay of the arbitral order until the completion of the appeal. Accordingly, a stay was granted and communicated to the parties by letter on January 20, 1992. The stay of the arbitral order expires with this decision.

B. Oral Rehearing

The second preliminary matter is the request by the appellant for an oral rehearing of the appeal pursuant to s.242e(4) of the Insurance Statute Law Amendment Act, 1990, c.2, now the Insurance Act, R.S.O. 1990, c.I-8, s.283(4). That section states:

(4) The Director may determine the appeal on the record or by way of a rehearing of all the issues before the arbitrator or partly on the record and partly by way of rehearing as the Director in his or her opinion may decide.

Counsel were invited to make oral submissions on the request for rehearing and in addition, narrowing of the items in dispute. Both parties' counsel appeared before me on February 4, 1992.

III. FINDINGS

A. Oral Rehearing

Neither appellant nor respondent took issue with the thoroughness and clarity of the arbitrator's decision in recording and summarizing the facts and evidence presented. The appellant could point to no errors in recording of the testimony. The arbitrator's decision comprises 41 pages, the first 33 summarizing the case as presented by the parties, including witnesses heard, exhibits tendered and positions taken.

The hearing lasted 2 1/2 days. In addition to the appellant, 12 witnesses were heard. Each party was represented by counsel. This was not an inexpensive, short or summary proceeding from the point of view of either party.

The appellant's position is that the arbitrator preferred documentary evidence to the oral testimony of the witnesses he called where these disagreed, and made this the sole ground of appeal from the arbitral decision. No error of law is alleged. In essence, the appellant states the arbitrator misdirected herself by preferring certain written to oral evidence (as submitted by the appellant himself) and by so doing, tainted all of the oral evidence. This, it is alleged, is incapable of being cured without an oral rehearing.

The question therefore is, should I exercise my discretion to hold a rehearing and if so, the extent of it.

The appellant states since the documentary evidence was accepted, I should hear those witnesses whose evidence was not, in light of the documentation submitted by or through them. This entails hearing 6 persons as well as 1 additional witness who was not produced at the hearing. I am therefore being asked to receive, with respect to this last witness, fresh evidence on appeal. This witness was not subpoenaed to appear and it is in relation to Exhibit 3 tendered at the arbitral hearing that she would have been called. No argument was addressed to me on the applicability of the general rules relating to the introduction of fresh evidence on appeal.

It is not necessary for me to decide in this case when and if new evidence should be admitted on appeal. This is so because even if Exhibit 3 were impuned, and the purchase order document held not to be persuasive but rather what one can only assume would be contrary evidence of the witness accepted (proving a sale within the statutory four week period prior to the accident), in the ultimate result, it would not affect the calculation of the weekly accident benefits as found at page 40 of the arbitral decision, to increase the benefit.

The respondent's position is that on a rehearing, the Director does not have the discretion to "pick and choose" what evidence to hear. Rather, he states the Director must have the totality of the evidence, the "flavour" of the hearing, rather than just some portion which may be highly prejudicial to the respondent and cannot be compensated for in costs. The appellant did not seriously take issue with this proposition. Also, the respondent states since the witnesses the appellant wishes to have reheard have already given evidence and been cross-examined (save one) their testimony is suspect and will be tailored to rehabilitate their previous appearance.

The Director may determine the appeal partly by way of rehearing and partly on the record as the Director may decide (see s.283(4) of the Act). Should the Director do so in the manner suggested?

While I find the Director does have the discretion in a rare and exceptional case, to hear piecemeal evidence or potentially new evidence which may be relevant, this is not such a case. Instead, given that the ground of appeal put forward boils down to the arbitrator's exercise of her discretion in determining what evidence to accept and the credibility of witnesses, either all or none will be heard.

The Director is required by the legislation to be flexible and has wide powers to rehear cases on appeal. Such power should be used sparingly, to ensure consistency and integrity in the arbitration process. The procedures set out in the Insurance Act and Dispute Resolution Practice Code at Part C are necessarily capable of accommodating diverse situations. A rehearing is not as of right. It can only occur in the proper exercise of discretion, given the nature of the case appealed from and grounds of appeal alleged.

I find the reasons advanced by the appellant for a rehearing are not persuasive. In having himself proffered the documents upon which a decision could reasonably be made, taken no issue with the description of the evidence alleged, introduced no new evidence which affects the outcome or the law applied, a case for rehearing, has not been made out.

Having found an oral rehearing is not appropriate, I will deal with the substantive relief requested, on the record. That record consists of the Arbitral Decision, Notice of Appeal, Response by Insurer, and documents tendered as Exhibits at the arbitral hearing.

B. Weekly Benefits

The appellant appeals the finding of the arbitrator as to the amount of weekly income benefits to which he may be entitled. He argued he was entitled to the maximum of $600.00 weekly. The respondent's position is even if all the appellant's documents and witnesses were accepted, his best position is a weekly amount of $259.71.

The appellant was asked to state what, other than the maximum amount he believed he was entitled to. He could not specify a figure except to say it might be somewhat less than $600.00 weekly. I am therefore left with the task of determining the claim.

The appellant alleges the arbitrator preferred documents submitted by him (as well as by the respondent) to his own oral evidence and that given on his behalf. I received no additional material or written submissions from the appellant or respondent. The Notice of Appeal states the appellant relies on all documents submitted by him at the arbitral hearing.

The appellant further states the arbitrator erred in not giving proper weight to the sworn testimony of his witnesses where it contradicts documentary evidence. At the same time, he concedes the decision appealed from accurately reflects the nature of the evidence and cross-examination on it.

I reviewed the exhibits filed at the arbitral hearing by both parties. I am invited to accept the appellant's documentation over that of the respondent and further, accept the oral evidence of the appellant's witnesses over his own documentation. This makes no sense. Where the document and a witness disagree, the arbitrator, in the exercise of her discretion, chose to rely on the document. She gave numerous reasons why she did so at pages 36 through 39 of the decision. I have found nothing in the record where any error has been made in calculation or in judgment as to why the oral evidence in respect of any specific exhibit might not have been accepted. Counsel did not address the issue of the applicability of the parole evidence rule in this context, either at the hearing or on appeal. As the strict rules of evidence are not necessarily appropriate in these hearings, I do not base my findings on the applicability of that rule to this case.

The arbitrator had a duty to make findings of fact after hearing witnesses, reviewing documents tendered as exhibits, and the submissions of counsel. It is the arbitrator's duty to make findings of credibility based on the evidence presented. It is the arbitrator's duty to weigh and then accept all, part, or none of that evidence. For an appellate function to overturn those findings without a specific error being alleged, either in fact or law, would be to render the arbitral process impotent.

The principle, as generally understood, is one should only interfere in the discretion exercised by the trier of fact if it is so clearly wrong as to amount to an injustice (Elsom v. Elsom, 1989 CanLII 100 (SCC), [1989] 1 S.C.R. 1367). There must be some special reason to doubt the arbitrator's conclusions such that to overturn them would only be found in an extraordinary case which this is not. While the Director is required to re-examine the evidence to ensure no error occurred and that the arbitral findings are supportable given the evidence, it is not the Director's function to substitute her assessment for that of the arbitrator. In order to do that, my assessment must be based on finding that the arbitrator's conclusions have insufficient or no evidence whatsoever to support them. The written decision is exhaustive and is conceded, on its facts to be an accurate reflection of the hearing. The arbitrator had ample grounds for her findings and the conclusions drawn.

C. Expenses

The appellant did not request expenses of the arbitration at the hearing. The respondent is not entitled to expenses under the legislation. Accordingly, the decision is silent on that point.

The appellant requested in the Notice of Appeal that expenses be awarded notwithstanding they were not claimed at the hearing. The respondent agreed I should deal with the matter. I am of the view that if relief is not requested at the hearing, one cannot later, at the appeal level, request it. It requires the Director to exercise what would have been the arbitrator's discretion in permitting or not, the appellant his expenses given, as here, the outcome was not clearly in his favour. Rather, a more realistic view is to treat such a request as a variation of the decision.

Since my dealing with the issue was not opposed, but was requested, I am determining the matter as if it were a variation under s.283(5) of the Act.

Arbitrator Naylor in the case of McCormick and Economical Mutual Insurance Company (at page 23-24), held:

"The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.

Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of a particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings."

In the main, I adopt this statement as to when expenses may be awarded to an applicant.

In this case, credibility of the appellant and his witnesses played a large part. Evidence found to have been created after the fact in order to buttress a series of transactions was found not to be believed. The appellant's own written evidence was contradictory. The appellant was unable to establish his claim of $600.00 per week in benefits and in fact could not, on the most generous view of the evidence, bring himself above the statutory weekly minimum. The appellant applied for arbitration although the insurer, it was found, overpaid benefits to him. The appellant could not quantify his claim. His approach, I find, made the hearing more expensive, longer and contentious than was reasonable. This is not a case where an award of expenses is warranted.

It is common ground the Director may award expenses on appeal in the same manner as an arbitrator at a hearing (O.Reg. 385/90).

This appeal is unsuccessful. It offered no grounds of appeal other than the arbitrator's preferring objective evidence over subjective testimony and hearsay. In other words, the appellant did not like the result of the arbitral hearing but that alone is not a reason for a substitution of the Director's opinion for that of the arbitrator. It was not reasonable to expect the Director to do so. I decline to award expenses to the appellant in this case.

V. ORDER

1. The appeal from the decision of Frederika Rotter, Arbitrator, is dismissed.

2. The stay of the arbitral order in respect of repayment by the appellant to the insurer of $67.00 weekly for the number of weeks that benefits had been paid in error at a higher rate is hereby lifted and the appellant must repay accordingly.

3. The appellant is not entitled to expenses of the arbitration.

4. The appellant is not entitled to expenses of this appeal.

February 13, 1992

Elisabeth Sachs

Director of Arbitrations

Date