Neutral Citation: 1994 ONICDRG 3
File No. A-003996
ONTARIO INSURANCE COMMISSION
BETWEEN:
JOHN GOULIAEFF
Applicant
and
COMMERCIAL UNION ASSURANCE COMPANY OF CANADA
Insurer
DECISION ON A SECOND PRELIMINARY ISSUE
Issues:
Commercial Union raised a preliminary issue in this arbitration. It submitted that Mr. Gouliaeff's arbitration should be dismissed because he previously elected to proceed by way of a court action. On August 26, 1993, the arbitrator ordered: "Mr. Gouliaeff may proceed with the arbitration, provided he withdraws his related court action forthwith." Commercial Union now seeks an order dismissing the arbitration on the basis that Mr. Gouliaeff has not complied with this order.
This second preliminary issue is:
Should this arbitration be dismissed because Mr. Gouliaeff has not complied with the arbitrator's order on the preliminary issue, dated August 26, 1993?
Result:
The arbitration is not dismissed.
Hearing:
The hearing on the second preliminary issue was held in North York, Ontario, on January 12, 1994, before me, David R. Draper, arbitrator.
Present at the Hearing:
Applicant's Representative:
Nicholas P. Palios Barrister and Solicitor
Insurer's Officer:
Mary Kelly
Insurer's Representative:
Ruth Henneberry Barrister and Solicitor
Documents:
In addition to the documents before the arbitrator on the preliminary issue, Commercial Union presented a written brief, including a memorandum and supporting documents.
Reasons for Decision:
This confirms the oral decision that was given at the hearing on January 12, 1994.
The background facts in this matter are set out in the Decision on Preliminary Issue, dated August 26, 1993. In that decision, I denied the request by Commercial Union that the arbitration be dismissed, and ordered that: "Mr. Gouliaeff may proceed with the arbitration, provided he withdraws his related court action forthwith."
The Decision on Preliminary Issue led to a series of letters between the two lawyers. On September 9, 1993, Mr. Palios wrote to Ms. Henneberry asking Commercial Union to consent to the dismissal of the court action, without costs. On September 16, 1993, Ms. Henneberry advised Mr. Palios that Commercial Union would not agree to waive its costs. Mr. Palios then wrote back on September 29, 1993, stating that he felt the refusal to consent was contrary to my order. In a letter dated October 8, 1993, Ms. Henneberry stated that, in her view, the order required Mr. Gouliaeff to withdraw his court action if he wanted to proceed with the arbitration, but did not require Commercial Union to consent, or to waive its costs. She suggested that the matter could be dealt with by Mr. Palios bringing a motion under Rule 23 of the Rules of Court.
There was further correspondence and discussions between the lawyers, but the situation did not change significantly. Commercial Union now asks that the arbitration be dismissed because Mr. Gouliaeff has not withdrawn his court action forthwith, or at all.
The Decision on Preliminary Issue gave Mr. Gouliaeff a choice for dealing with his entitlement to accident benefits - court or arbitration, but not both. If he wanted to proceed with the arbitration, it was his obligation to withdraw his court action forthwith. My order was not intended to oblige Commercial Union to consent to a dismissal of the action without costs. Despite the passage of time, the real issue remains in which forum the matter should be heard. After hearing the submissions of Mr. Palios, I am satisfied that from the time Mr. Gouliaeff applied for arbitration, it has been his preference to proceed with the arbitration rather than his court action. Further, I am satisfied that his failure to withdraw the court action was not for tactical reasons, but was based on a real misunderstanding of the obligations created by my order. The fact that the Decision on Preliminary Issue was done through written submissions, without an oral hearing, may have contributed to the misunderstanding.
I conclude that the arbitration should not be dismissed, despite Mr. Gouliaeff's delay in withdrawing his court action. In reaching this decision, I am strongly influenced by the fact that, in my view, the court action has not progressed to a point where Commercial Union would be seriously prejudiced by having the matter dealt with in the arbitration.
I would like to be clear that this decision is based on Mr. Palios' assurance that he will prepare a motion to dismiss the court action immediately and set it for an early date that is acceptable to Ms. Henneberry. I advised Ms. Henneberry that if there is any delay in this motion, I will be available to hear further submissions on the dismissal of the arbitration. Further, no pre-hearing will be scheduled in the arbitration until confirmation has been received that the court action has been dismissed.
Finally, it is my view that Commercial Union has raised legitimate concerns about having Mr. Gouliaeff's accident benefits litigated in two forums. It has been put to time and expense to resolve the situation. This may well be relevant to any request for expenses in the arbitration hearing and will be dealt with at that time.
Order:
The arbitration is not dismissed.
January 18, 1994
David R. Draper Arbitrator
Date