Neutral Citation: 1995 ONICDRG 104

P-001840

OFFICE OF THE DIRECTOR OF ARBITRATIONS

BETWEEN:

RICHARD ROY

Applicant

(Appellant)

and

ROYAL INSURANCE COMPANY OF CANADA

Insurer

(Respondent)

APPEAL DECISION PRELIMINARY ISSUE - EXTENSION OF TIME

I. NATURE OF PROCEEDINGS

In a decision dated March 8, 1993, Arbitrator Palmer dismissed Mr. Roy’s claim for weekly income benefits. She concluded that he was disentitled under section 17(1)(f) of the Schedule¹ because he knew or ought reasonably to have known that he was driving a vehicle without the owner's consent. Mr. Roy appealed this decision. The Royal Insurance Company of Canada (“Royal Insurance”) submits, however, that he is not entitled to proceed because he did not file a proper Notice of Appeal within the statutory time period.

The preliminary issue to be determined is whether the time limit for the appeal should be extended to allow Mr. Roy to proceed. This decision is based on the record.

II. ANALYSIS AND FINDINGS

An arbitrator’s decision may be appealed by delivering a Notice of Appeal to the Ontario Insurance Commission (“the Commission”) within 30 days after the date of the decision². Although the legislation establishes a 30-day time limit, it is not absolute. The Director, or her delegate, may extend the time period for appealing an arbitration decision if satisfied that:

(a) there are reasonable grounds for applying for the extension; and

(b) there are apparent grounds for granting the relief sought³.

This is a discretionary decision that depends on the particular facts of each case. The facts in this case are as follows.

In January 1991, Mr. Roy was working at Scenic Productions as a production assistant. His duties included driving the company van. On January 20, 1991, he was injured while driving the van outside of business hours. Royal Insurance denied his claim for weekly income benefits on the basis of section 17(1)(f) of the Schedule, which relieves the insurer from paying if “the driver knew or ought reasonably to have known that he or she was operating the automobile without the owner’s consent.”

The dispute was not resolved through mediation and, therefore, Mr. Roy applied for arbitration. A pre-hearing was held on December 17, 1992. Mr. Roy did not participate, but was represented by his mother, Ms. Paulette Gauthier-Roy. The pre-hearing arbitrator sent a letter to Mr. Roy summarizing the discussion and providing some information about legal services.

The arbitration hearing took place before Arbitrator Palmer on February 4, 1993. Mr. Roy was again represented by his mother. Mr. Roy and his brother, who also worked at Scenic Productions, testified that the company van was available for their personal use. Contrary testimony was provided by two other employees and the company president. In her decision, dated March 8, 1993, the arbitrator stated that she preferred the evidence of the latter three witnesses, and found that Mr. Roy knew, or ought reasonably to have known, that he was operating the van without the owner’s consent. She concluded, therefore, that he was not entitled to weekly income benefits.

According to the covering letter, dated March 9, 1993, copies of the arbitration decision were sent to both Mr. Roy and Ms. Gauthier-Roy at the same address. In order to comply with the appeal rules set out in the legislation, Mr. Roy had to deliver a written Notice of Appeal to the Ontario Insurance Commission within 30 days of March 8, 1993, the date of the arbitration decision. The Dispute

Resolution Practice Code (“the Code”) states that the Notice of Appeal must be in Form 7, and include the following:

(i) a statement of the reasons for the appeal;

(ii) a description of the remedy sought, including the reasons for any stay of the arbitration order, if one is requested;

(iii) a list of the documents relied upon for the appeal; and

(iv) a statement whether the appellant requests and oral hearing and, if one is requested, setting out the arguments in support of an oral rehearing.

The Code also provides that within 15 days of filing the Notice of Appeal, the appellant must serve the other party with all of the material and submissions upon which he intends to rely.

On April 16, 1993, the Commission received a letter from Mr. Roy stating that he wanted to appeal the arbitration decision. Enclosed was a Notice of Appeal, dated April 8, 1993, together with the proper filing fee. The Notice of Appeal, however, might be described as preliminary. It is signed by Ms. Gauthier-Roy and indicates that although Mr. Roy plans to hire a lawyer, she remains his representative in the interim. It does not set out the reasons for the appeal, the remedy being sought, or the documents which will be relied upon. Instead, it states that this information will be forwarded by Mr. Roy’s lawyer.

Ms. Helen Silveira represented Royal Insurance at the arbitration hearing and continues to act on the appeal. She completed a Response to Appeal form, stating that Royal Insurance was unable to respond because of the lack of information in the Notice of Appeal. In her covering letter to the Commission, Ms. Silveira took the position that Mr. Roy’s appeal was deficient, and asked for directions on how to proceed.

Mr. Jim Malcolm, the Registrar at the Commission, contacted Ms. Gauthier-Roy and was advised that she expected to be able to retain a lawyer for her son shortly. In a letter dated April 22, 1993, Mr. Malcolm conveyed this information to Ms. Silveira. On May 17, 1993, Ms. Silveira wrote to Mr. Malcolm noting that she still had no indication that a lawyer had been retained, and asked that a strict time limit be imposed. Again, Mr. Malcolm contacted Ms. Gauthier-Roy. She advised him that a lawyer had agreed to represent Mr. Roy, but he needed to obtain authorization from legal aid. On June 2, 1993, Mr. John Zuber wrote to the Commission, stating that he had been retained to represent Mr. Roy on the appeal, but was awaiting final authorization from legal aid which he expected within 10 to 14 days.

On August 4, 1993, the legal aid area committee refused Mr. Roy's application for legal services for his appeal. Notice of the refusal was sent to Mr. Roy at his mother's address and to Mr. Zuber. Neither the Commission nor Royal Insurance was advised of this development.

Mr. Malcolm asked for a status report in a letter to Ms. Gauthier-Roy, dated September 17, 1993. On September 29, 1993, she responded that she had forwarded Mr. Malcolm’s letter to Mr. Zuber, who had moved to a new law firm. I accept that Ms. Gauthier-Roy was not attempting to mislead the Commission. Apparently, she was unaware that her son had been refused a legal aid certificate almost two months earlier.

In a letter dated October 4, 1993, Ms. Silveira again asked for a status report. She explained that the delay was affecting a related law suit. The Municipality of Metropolitan Toronto had sued the owner of the van and Mr. Roy for damages to its property caused by the accident. Ms. Silveira advised that one of the issues in the court action is whether Mr. Roy had the owner's consent to drive the vehicle. Royal Insurance is taking the position that this issue has been determined by the arbitrator, and cannot be re-litigated. The possibility of an appeal of the arbitrator's decision, however, has an impact on this argument.

According to Ms. Silveira, Mr. Zuber was acting for Mr. Roy in the court action, but had not confirmed whether he was also acting on the appeal. She asked that Mr. Roy be given a strict time limit for filing a proper Notice of Appeal. In my view, this request was entirely reasonable. Seven months had passed since the arbitrator's decision, but no material of any substance had been filed on the appeal.

On November 9, 1993, Mr. Zuber responded to Ms. Gauthier-Roy's letter of September 29, 1993, and also wrote to Ms. Silveira and the Commission. By this time, he was practising in Kingston, Ontario, which apparently came as a surprise to Ms. Gauthier-Roy. Mr. Zuber advised that legal aid had given him limited approval to proceed in the court action, but had refused coverage for the arbitration appeal. Therefore, he was not acting for Mr. Roy on the appeal.

After receiving Mr. Zuber’s letter, Mr. Malcolm phoned Ms. Gauthier-Roy on November 23, 1993. He sent a confirming letter the same day, which states:

I am writing to confirm our telephone conversation of November 23, 1993.

We discussed the November 9, 1993 letter from Mr. John Zuber of Zuber and Associates (copy attached) and the delay in bringing this matter forward. I advised we would consider the appeal abandoned, unless we receive written confirmation of your intention to proceed within two weeks including a properly completed appeal form. A blank copy is attached.

It is the Director's intent to hear oral submissions on this matter during the week of January 4, 1994. If you intend to proceed, please contact Ms. Silveira of Brown & Forbes immediately to arrange a mutually convenient date and confirm with the Director's secretary, Ms. Tina Werner, at 590-7020. Please note that you will be required to serve any material upon which you intend to rely on Ms. Silveira no less than 10 days in advance of the scheduled date.

I would describe this letter as offering Mr. Roy one last chance to proceed with his appeal. The directions given by Mr. Malcolm are clear and unambiguous. The appeal would be considered abandoned unless a properly completed Notice of Appeal was received within two weeks. When nothing further was received in more than three weeks, Mr. Malcolm wrote to Ms. Gauthier-Roy on December 15, 1993, stating: “The two weeks have elapsed without written confirmation from you and we are therefore closing the file.”

On January 13, 1994, the Commission received a letter from Ms. Gauthier-Roy, enclosing a Notice of Appeal that she had completed. In her covering letter, Ms. Gauthier-Roy advises that due to unforseen circumstances, she was out of the province on business from November 26, 1993 to January 5, 1994. She states that she did not intend to abandon her son's appeal, and that they are available to attend for the appeal immediately.

According to his second Notice of Appeal, Mr. Roy is seeking an order for weekly income benefits, interest and costs. The reasons for appeal are as follows:

1. The lawyer for the Royal Insurance questioned Richard Roy at length on his alleged past criminal record; nothing was tabled or presented in terms of proof of this “criminal record”; the arbitrator allowed the questions and these unsubstantiated allegations affected his credibility during the entire proceedings; it is our position that the lawyer for Royal Insurance should not have been allowed this line of questioning;

2. The witnesses for Royal Insurance were characterized as “independent witnesses” by the arbitrator; at the hearing, they admitted to still being on the employer's payroll. It is our position that they were not independent;

3. Robert Saxberg, one of the witnesses relied upon by the arbitrator, admitted at the hearing he had once hired the arbitrator as his lawyer for a previous accident matter; at that time she was in private practice; it is our position she should have volunteered to disqualify herself and close the hearing. It is our position that there was a bias on her part in favour of that witness. As Richard Roy did not have legal counsel, there was an added burden on the arbitrator to disqualify herself.

4. It is unfair and unjust that Royal Insurance has “in-house” legal counsel representing the company and Richard Roy cannot afford a lawyer, or obtain legal aid to pay for legal representation. He should be entitled to legal representation and lack of it means he is denied a fair hearing.

Royal Insurance takes the position that Mr. Roy’s appeal should not be reopened. In a letter dated January 24, 1994, Ms. Silveira submits that there have been inordinate delays, and that there are no reasonable grounds for extending the time period. Further, she submits that there are no apparent grounds for granting the relief that Mr. Roy is seeking.

III. CONCLUSIONS

The dispute resolution process is meant to be relatively informal, and recognizes that not all applicants will be represented by lawyers. In this case, however, Mr. Roy has been treated with considerable flexibility. It is understandable that he might have needed some time to retain a lawyer. Therefore, his appeal was not dismissed initially, even though he did not file a proper Notice of Appeal or serve his appeal materials within the required time periods. The obligation was on him, however, to arrange for representation and proceed with his appeal in a timely manner. This he failed to do.

By early August 1993, Mr. Roy knew that he had been refused legal aid, and that Mr. Zuber was not representing him on the appeal. There is no indication, however, that he took any further steps to arrange for representation. He did not advise the Commission that he had been unable to retain a lawyer and, apparently, did not even advise his mother, who was listed as his interim representative on the Notice of Appeal. It was not until early November 1993 that the Commission was advised that Mr. Roy did not have a lawyer. Even then, Ms. Gauthier-Roy was told that her son could proceed with his appeal, but only if he filed a proper Notice of Appeal within two weeks. He failed to do so.

Ms. Gauthier-Roy’s explanation is that she had to leave the province unexpectedly on November 26, 1993, and did not return until January 5, 1994. In my opinion, this simply is not an adequate excuse given the history of the matter. The submissions focus on the difficulties faced by Ms. Gauthier-Roy. This appeal, however, is Mr. Roy’s. It was his responsibility to proceed with it, either on his own, or through a representative. He cannot rely on his failure to communicate with his representative as a legitimate excuse for his delays. Therefore, I am not persuaded that there are reasonable grounds for applying for an extension of the time periods for Mr. Roy's appeal.

Even if there were reasonable grounds for extending the time, there must also be “apparent grounds for granting the relief sought.” After reviewing the material, I am not satisfied that there are.

Mr. Roy's second Notice of Appeal lists four grounds for the appeal, set out above. First, he claims that the Arbitrator erred in allowing counsel for Royal Insurance to ask him questions about his criminal record. The difficulty with this objection is that the Evidence Act⁴ specifically provides that a witness may be asked whether he has been convicted of a criminal offence. If the witness denies any convictions or refuses to answer, the questioner is allowed, but not required, to prove the convictions. I also note that there is no indication in Arbitrator Palmer's decision that she found the answers to these questions of any significance.

The second ground for the appeal is that the arbitrator erred in characterizing the witnesses for Royal Insurance as “independent,” even though they were still employed by Scenic Productions. The suggestion is that they felt pressure from their employer to say the van was not available for Mr. Roy’s personal use. The relevant paragraph in the decision states as follows:

The Insurer argued that the credibility of the witnesses was the key in this arbitration. Normand Roy, the Applicant’s brother, was not an independent witness and his testimony should be viewed accordingly. The two independent witnesses, Robert Saxberg and Rod James, gave compelling testimony. All the witnesses agreed the work atmosphere was somewhat relaxed, but they disagreed about the use of the van. The Applicant had the perfect opportunity to take the van without anyone knowing, since he was the first at work in the morning and the last to lock up at night.

The strength of a witness's testimony may be affected by his or her interest in the outcome of the case. In my view, Arbitrator Palmer's characterization of Mr. Saxberg and Mr. James as “independent” was meant to distinguish them from the other witnesses. After hearing the testimony of all five witnesses, she concluded that Mr. Saxberg and Mr. James had a detachment from the case that Mr. Roy, his brother, and Mr. Sheehan, the president of Scenic Productions, lacked. She found no indication that their testimony was affected by pressure from their employer and, in fact, found it “compelling.” I find no reason to question this finding. Third, it is claimed that Arbitrator Palmer should have disqualified herself when she learned that she had previously met Mr. Saxberg, one of the witnesses called by Royal Insurance. The material provided by Royal Insurance states that Mr. Saxberg “knew” the arbitrator, while Mr. Roy’s submissions assert that Mr. Saxberg once retained the arbitrator with respect to an accident matter. This is a matter of some concern. I find, however, that it was addressed during the hearing, as it should have been.

Mr. Roy did not contest Ms. Silveira’s assertion that Arbitrator Palmer disclosed the situation and offered either party an adjournment if there were any concerns about her involvement. His decision to proceed certainly weakens his position. There may be cases where the conflict is so extreme that the decision should not stand in spite of an agreement to proceed. I am not convinced, however, that this is such a case. Mr. Roy has not presented evidence that the prior contact between Mr. Saxberg and the arbitrator was such that it would prevent her from evaluating the evidence objectively. In reaching this conclusion, I am influenced by the fact that the decision is not based on Mr. Saxberg's testimony alone. Arbitrator Palmer also relied on her evaluation of the testimony of Mr. Roy and his brother, and that of Mr. Sheehan and Mr. James.

Finally, it is submitted that Mr. Roy was denied a fair hearing because he did not have a lawyer, while Royal Insurance had “in-house” counsel. Ms. Silveira is not “in-house” counsel, but is a member of a law firm retained by Royal Insurance. The question, however, is whether Mr. Roy was denied a fair hearing because he did not have a lawyer. I cannot find that he was.

Although his feeling that he was disadvantaged by not having counsel may be understandable, nothing in the common law or the legislation governing arbitration hearings requires that he be provided with a lawyer.

For all of these reasons, I conclude that Mr. Roy has not met either of the requirements for extending the appeal period set out in section 283(2) of the Insurance Act. Therefore, I am not prepared to grant his request for an extension of time to allow him to proceed with his appeal.

IV. ORDER

1. Mr. Roy's appeal from the decision of Arbitrator Palmer, dated March 8, 1993, is dismissed.

2. Mr. Roy is not entitled to his expenses related to the appeal.

August 3, 1995

David R. Draper Director’s Delegate

Date

Footnotes

1. 1The term “Schedule” is used to refer to Ontario Regulation 672. Before January 1, 1994, this Regulation was called the No-Fault Benefits Schedule. After that date, it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994.
2. 2Section 283(2) of the Insurance Act, R.S.O. 1990, c.I-8.
3. 3Section 283(3) of the Insurance Act, R.S.O. 1990, c.I-8.
4. 4R.S.O. 1990, c.E.23.