Neutral Citation: 1994 ONICDRG 91
File Nos. A-006328, A-008175
ONTARIO INSURANCE COMMISSION
BETWEEN:
BLANCA AND CARLOS FERREYRA
Applicants
and
ROYAL INSURANCE COMPANY OF CANADA
Insurer
DECISION
Issues:
The Applicants, Blanca and Carlos Ferreyra, were injured in a motor vehicle accident on July 4, 1990, and injured again in an accident on July 22, 1990. Mrs. Ferreyra was also involved in an accident in September, 1991.
The Applicants received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. The parties dispute Mr. and Mrs. Ferreyra's ongoing entitlement to weekly income benefits, and amount of benefits. The Insurer claims that the Applicants have been overpaid and is seeking repayment.
The Applicants applied for arbitration under the Insurance Act. Pursuant to the procedures described in the Act and the Dispute Resolution Practice Code, various pre-hearing discussions were held, and orders for the production of documents made. Hearing dates were set and subsequently adjourned at the request of the parties. The Applicants retained and discharged two different lawyers before retaining the services of the legal counsel currently acting for them.
The Ferreyras are now seeking to withdraw their application for arbitration. The Insurer's position is that the Applicants cannot withdraw their application at this stage of the process.
The issue in this hearing is:
- May the Applicants withdraw their application for the Appointment of an Arbitrator?
The Insurer also seeks an award of expenses against the Applicants, under section 282 (11.2) of the Insurance Act, R.S.O. 1990, as amended.
Result:
The Applicants may withdraw their application for the Appointment of an Arbitrator.
The Applicants must each pay $1000 to the Insurer, under section 282 (11.2) of the Insurance Act, R.S.O. 1990, as amended.
Hearing:
The hearing was held in North York, Ontario, on August 17, 1994, before me, Frederika Rotter, Senior Arbitrator.
Present at the Hearing:
Applicant's Representative:
Anastasia Lindardatos Law Clerk
Insurer's Representative:
John Aikins Barrister and Solicitor
Documents before the Arbitrator:
Re: Carlos Ferreyra
Report of Mediator, dated January 24, 1994
Application for Appointment of an Arbitrator, dated January 30, 1994
Response by Insurer, dated February 24, 1994
Pre-Hearing Letter, dated April 22, 1994
Re: Blanca Ferreyra
Report of Mediator, dated October 15, 1993
Application for Appointment of an Arbitrator, dated October 17, 1993
Response by Insurer dated November 8, 1993
Pre-Hearing Letter dated January 27, 1994
Pre-Hearing Letter dated May 11, 1994
Evidence and Findings:
Mr. and Mrs. Ferreyra's current legal counsel advised, in a letter dated July 15, 1994, that Mr. and Mrs. Ferreyra were withdrawing their application for arbitration, and would proceed with their claims by way of a court action.
Mr. and Mrs. Ferreyra did not appear before me on August 17, 1994. They were represented by Ms. Lindardatos, a legal clerk from their new counsel's firm, who simply confirmed that they had withdrawn from the arbitration.
The documentation before me indicates that one pre-hearing discussion was held in Mr. Ferreyra's case, and two such discussions were held in Mrs. Ferreyra's case. The hearing originally scheduled in Mrs. Ferreyra's case was adjourned, because Mrs. Ferreyra had failed to comply with orders for production that had been made by the pre-hearing arbitrator.
The file also shows that in Mr. Ferreyra's case production orders had not been complied with as of August 17, 1994, the date I heard this matter.
The pre-hearing discussions in both cases were scheduled to be resumed on August 17, 1994, presumably to again address the outstanding production issues. Counsel for the Applicants then indicated that his clients were withdrawing their applications for arbitration, and both parties agreed that the date scheduled could be utilized to deal with the withdrawal issue.
The Insurer's position is that, under the Insurance Act, the Applicants have elected arbitration, and cannot now revoke or rescind that election. The Insurer has submitted that Mr. and Mrs. Ferreyra should not be permitted to withdraw their applications for the appointment of an arbitrator.
Counsel for the Insurer submitted that an arbitrator has no jurisdiction to allow the withdrawal of an arbitration application. Counsel submitted that, on the contrary, the Act requires, in mandatory language, that the arbitrator determine all issues put before him or her. The relevant sections of the legislation provide:
281.-(1) If mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the matter to an arbitrator.
282.-(1) An insured person seeking arbitration shall file an application for the appointment of an arbitrator with the Commission..
282.-(3) The arbitrator shall determine all issues in dispute and such other issues as the parties may agree.
Further, the Insurer relied on sections 21 and 22 of the Dispute Resolution Practice Code, which provide that an arbitrator shall determine the issues before him or her either by way of an order in writing, after hearing and deciding the case on the merits, or by way of a settlement order at the request of the parties.
Finally the Insurer argued that allowing the Applicants to withdraw would be an abuse of process and referred me to the decision of arbitrator David Draper in Comfort Ayertey and Toronto Transit Commission (Markel Insurance Company of Canada), April 5, 1994, OIC File No. A-004077.
The question of whether an applicant may be permitted withdraw from an arbitration is rather novel. The Commission has indeed allowed many applicants to withdraw from the arbitration process, in situations where this was not opposed by the Insurer.
In this case, I find the concerns expressed by the Insurer have some merit. It is clear from the records that the Insurer has expended considerable resources - in terms of time, effort and actual funds - in order to defend these claims. The Insurer is also seeking a repayment of benefits, and wishes to have this issue resolved in the arbitration.
I have no doubt that once an arbitrator is seized of a matter, he or she may proceed to dispose of it in the absence of the Applicant, where an applicant has had notice of the hearing but chooses not to, or neglects to attend - see for example Felix Charles and Continental Insurance Management, August 21, 1992, OIC File No. A-000599 (upheld on appeal, P-OOO599, March 8, 1993) and Stanley Moxon and State Farm Insurance, March 24, 1992, OIC File No. A-000090.
However, I am aware of no case law or jurisprudence which supports the Insurer's position that Applicants ought not to be permitted to withdraw their claims, where the hearing has not yet begun. In my view, it is unusual for a tribunal to oblige a claimant to proceed in an action, where that claimant has clearly signalled his or her intention not to proceed, and where the adjudicator is not yet seized of the case.
Further, the arbitration cases decided up to this point suggest that the Applicant has the ultimate "say" about what issues, if any, are to proceed to arbitration. The appeal decision in Rosa DeCicco and State Farm Mutual Automobile Insurance Co., February 21, 1992, OIC File No. P-000277) and the decisions in Ayertey (supra) and Peter Kostiakos and State Farm Mutual Automobile Insurance Co., July 26, 1994, OIC File No. A-002354 support the proposition that the Applicant determines the scope of the arbitration, and what matters are to be adjudicated. In Ayertey, Arbitrator Draper held that he had no jurisdiction to force the Applicant to proceed with issues which she had originally raised and withdrawn, and then failed to raise in a subsequent application.
The Rules of Civil Procedure govern parties' ability to discontinue or withdraw matters from the courts. No such rules exist in the Dispute Resolution Practice Code. In the absence of rules providing guidance as to when and under what circumstances an Applicant may be permitted to withdraw from the arbitration process, I conclude that in this case the I ought not prevent the Applicants from withdrawing.
I take the view, however, that my inherent authority to control the hearing process confers on me the ultimate jurisdiction to determine when, and under what circumstances, an applicant may withdraw from the process. One of the factors to be considered, in determining whether an Applicant may withdraw, is the stage of the process at which an applicant seeks to withdraw. Another factor is the prejudice to the Insurer.
While I have allowed the Applicants to withdraw their claims, in this case I retain the authority to make an award of expenses. I find I may do so based on my inherent authority to control the process, and the need to justice as between the parties.
Expenses
The Insurer has asked for an award of expenses, under Section 282 of the Insurance Act, as amended by Section 33 of the Insurance Statutory Law Amendment Act, 1993 which provides:
(Sec 282 (11.2))
If an insured person commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process, the arbitrator may award an amount to be paid by the insured person to the insurer that does not exceed the amount assessed against the insurer in respect of the arbitration under section 14.
The amount assessed against an Insurer in respect of an arbitration is $1000, pursuant to Section 14 of the Act and Ontario Regulation 220/91.
I have no hesitation in concluding that an abuse of process has occurred in these cases.
The conduct of Mr. and Mrs. Ferreyra has resulted in multiple adjournments and rescheduling of pre-hearing and hearing dates. The Applicants have failed to comply with production orders properly made. Both the Insurer and Commission staff have needlessly wasted time and resources in dealing with the Applicants' claims. The Insurer has been prejudiced by the actions of the Applicants, and now faces court actions in the same matters.
In the circumstances, I find that both Mr. and Mrs. Ferreyra should pay $1000 each to the Insurer.
Order:
The Applicants may withdraw their application for the Appointment of an Arbitrator.
The Applicants must each pay $1000 to the Insurer, under section 282 (11.2) of the Insurance Act, R.S.O. 1990, as amended.
September 27, 1994
Frederika Rotter Senior Arbitrator
Date