Neutral Citation: 1993 ONICDRG 19
File No. A-002185
ONTARIO INSURANCE COMMISSION
BETWEEN:
GHANIMAT-ALLAH FAHANDAZH SAADI
Applicant
and
THE DOMINION OF CANADA GENERAL INSURANCE COMPANY
Insurer
DECISION
The Applicant was injured in a motor vehicle accident on February 2, 1991. He was insured under a standard automobile owner's policy issued by the Insurer. He applied for accident benefits, payable under Ontario Regulation 672 (R.R.O. 1990, the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8. Every motor vehicle policy provides for the no-fault benefits set out in the No-Fault Benefits Schedule.
The Applicant received weekly income benefits from the Insurer until May 18, 1991. The Insurer terminated the payments alleging that the Applicant was no longer entitled to weekly income benefits under the terms of the policy. The Applicant applied for mediation of his dispute with the Insurer. The mediation was unsuccessful and the Applicant subsequently applied for the appointment of an arbitrator.
On March 15, 1993 at the opening of the arbitration hearing, the Applicant stated that he wished to withdraw his application for arbitration.
The Insurer did not oppose the Applicant's motion to withdraw his application. However, the Insurer made submissions with respect to the return of the assessment fee it had paid in respect of the arbitration. The Applicant's counsel also made submissions regarding the expenses of the Applicant.
The issues in this hearing thus became:
Is the Insurer entitled to the return of its assessment paid under section 14(3) of the Insurance Act and Ontario Regulation 220/91 s.4 [formerly O.R.386/90, s.1(1)]?
Is the Applicant entitled to his expenses of the arbitration proceeding?
Result:
The Insurer is not entitled to the return of its assessment.
The Applicant is not entitled to his expenses of the arbitration proceeding.
Hearing:
The hearing was held at Ottawa on March 15, 1993, before me, K. Julaine Palmer, Arbitrator.
Present at the hearing:
Applicant :
Ghanimat-Allah Fahandazh Saadi
Applicant's
J. Marc Lemay
Representative:
Barrister and Solicitor
Insurer's
James W. Touhey
Representative:
Barrister and Solicitor
Brian W. Ward
Barrister and Solicitor
The proceedings were recorded by Barry E. Prouse, International Rose Reporting Inc., Ottawa. An interpreter in the Farsi language, Ali Mashkoori, was present in the event his services were required.
Submissions and Findings:
At the beginning of the hearing, the Applicant's counsel indicated that his client had informed him five minutes previously that he wished to withdraw his application for arbitration. The Applicant spoke, stating that, regrettably, he had lost confidence in both his own lawyer and the Insurer's lawyer. He explained that questions of his own privacy would be raised in the hearing. The Applicant stated he was sorry, but he wished to withdraw his application for arbitration and apply to the courts.
The Insurer submitted that, in these circumstances, the Insurer's assessment fee, which it had paid according to the provisions of section 4 of Ontario Regulation 220/91 [formerly O.R.386/90 s.1], should be refunded, as the arbitration application had been withdrawn. He cited in support of this proposition the arbitration decision in Edward J. Opatowski v. Wawanesa Mutual Insurance (O.I.C. File No. A-000381, dated September 22, 1992).
The Applicant's counsel raised the matter of the Applicant's expenses of the arbitration. He submitted that, although the Applicant wished to withdraw his application for arbitration, he, as counsel, had spent a great deal of time to prepare for the hearing. In awarding expenses to the Applicant, his counsel submitted I would merely be following the usual practice of arbitrators of the Ontario Insurance Commission of awarding costs to Applicants, regardless of the outcome of the hearing, in all cases where an application for arbitration was reasonable. The Applicant's counsel submitted that the withdrawal of the application was a matter of personal choice, not an indication that the application was unreasonable in the first place.
The Insurer further submitted that there was no arbitration application here any longer upon which to award the Applicant his expenses.
1. Return of the Assessment Fee:
In her arbitration decision in the Opatowski case, cited above, Arbitrator Frederika Rotter held that the Applicant in that case had unreasonably failed to attend a medical examination arranged by the Insurer, contrary to the provisions of section 23(2) of the No-Fault Benefits Schedule. That section provides:
In respect of claims under Part IV, the insurer may, on reasonable notice, require an examination of the insured person by a qualified medical practitioner, psychological advisor or chiropractor as often as it reasonably requires, and require an autopsy of a deceased insured person in accordance with the law relating to autopsies.
On the facts of that case, she found that the Applicant was thereby in breach of section 25 of the No-Fault Benefits Schedule, which provides as follows:
No person may commence a mediation proceeding under section 280 of the Insurance Act in respect of benefits under this Schedule unless the requirements of section 22 have been satisfied and the insured person has made himself or herself reasonably available for any examination required under section 23.
In Opatowski, the Applicant had failed to attend a medical examination before his weekly income benefits were terminated. His failure to attend for the examination was part of the reason his benefits were cut off. Arbitrator Rotter held that the Applicant's failure to attend for a medical examination breached both sections 23(2) and 25 of the No-Fault Benefits Schedule. Accordingly, the mediation which had followed was a nullity and she had no jurisdiction to conduct an arbitration. In order for an arbitration to take place, according to the provisions of section 281(2) of the Insurance Act, mediation must first be sought and have failed.
Arbitrator Rotter wrote:
The Insurer is requesting the return of the $1,000.00 assessment fee paid by the Insurer in respect of the arbitration process.
Ontario Regulation 386/90 provides as follows:
1.-(1) Each insurer that is a party to an arbitration under section 242d [now 282] of the Act shall be assessed $1,000 in respect of the arbitration.
Since I have found that I have no jurisdiction to hold an arbitration in this matter, I must conclude that, similarly, no jurisdiction for assessing $1,000.00 exists. The Insurer, in this case, is not a party to an arbitration, since the procedural requirements for commencing an arbitration hearing have not been complied with.
Therefore, the Insurer is entitled to the return of its $1,000.00 assessment.
In this case, however, we are dealing with an Insurer's request that its assessment fee be returned on the basis that the Applicant has withdrawn his application for arbitration at the beginning of the scheduled hearing. Sections 23 and 25 have no application to this issue.
There are no provisions governing the right of an applicant to withdraw his application for arbitration specifically set out in the Insurance Act or its regulations, including the No-Fault Benefits Schedule. Neither is any process whereby an Insurer might continue an arbitration once an Applicant withdraws, for example in the case where an overpayment is alleged.
In this case, the Applicant appeared at the hearing and stated he wished to withdraw his application. The Insurer did not object. It is not necessary for me to decide here whether the hearing might have continued in the Applicant's absence or in the face of his attempted or purported withdrawal had the Insurer objected. The hearing did not proceed in this case. I have only to consider the question of the refund of the assessment to the Insurer.
The Applicant has not overtly requested his filing fee be refunded. This may have been implicit in the request for expenses by his counsel, since the filing fee of $50.00 would be a valid claim for reimbursement. The Insurer's assessment, however, is $1,000.00. There is no corresponding provision for the Insurer to be reimbursed its expenses whatever the outcome of the hearing, even in the face of fraud on the part of the Applicant. Section 282(11) of the Insurance Act limits the authority of an arbitrator to awarding expenses to an Applicant:
The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations. [emphasis added]
The assessment paid by the Insurer is prescribed by regulation. Ontario Regulation 220/91 provides as follows at paragraph 4:
- An insurer's share of an assessment calculated under section 3 shall be increased by,
(a) $1,000 for each arbitration to which the insurer is a party that is commenced under section 282 of the Act during the assessment period; (...)
The assessment is paid to the Treasurer of Ontario [now the Minister of Finance]. The operations of the dispute resolution branch of the Ontario Insurance Commission are, in part, funded by such fees.
In this case, the Applicant commenced an arbitration under section 282 of the Act. The Insurer filed a Response. One pre-hearing conference in person and three pre-hearing teleconferences were held and a hearing date set. Only at the commencement of the hearing did the Applicant move to withdraw his application. In my view, since no provision has been made by which an Insurer's $1,000 fee might be waived, varied or refunded, the Lieutenant Governor in Council has determined that there shall be no discretion in these matters. Only in the case of a complete nullity, such as in the Opatowski situation, would an assessment appear to be refundable.
2. Payment of Applicant's Expenses:
Section 282(11) of the Insurance Act empowers an arbitrator to award insured persons their expenses, in her discretion. The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 674 (R.R.O. 1990).
In the Ralph McCormick v. Economical Mutual Insurance Company case (O.I.C. File No. A-000139), Arbitrator Susan Naylor made the following comments about expenses, with which I agree:
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 the 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.
This statement has been approved by the Director of Arbitrations in an appeal decision in the case of Vito Luigi Calogero v. The Co-Operators General Insurance Company, (O.I.C. File No. P-000251, dated February 13, 1992).
In this case, at the beginning of the hearing, the Applicant moved to withdraw his application. He did this, not because he wished no longer to contest the termination of his benefits, but contending that he will now bring this matter before the civil courts. He has indicated he wishes a change of forum. In my view, his action may be seen as capricious and, in the language of McCormick, he has "unreasonably prolonged the proceedings".
It is not possible for me to grant the Insurer any part of its expenses to be paid by the Applicant -- that is not contemplated by the legislation. However, I do decline to exercise my discretion in the Applicant's favour to award him his expenses.
Order:
The Insurer is not entitled to the return of its $1,000 assessment fee.
The Applicant is not entitled to his expenses incurred in respect of this arbitration proceeding.
April 15, 1993
K. Julaine Palmer Arbitrator
Date